Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. L-22008 November 3, 1924

THE PEOPLE OF THE PHILIPPINE ISLANDS, plaintiff-appellee,

vs.
JULIO POMAR, defendant-appellant.

Araneta and Zaragoza for appellant.

Attorney-General Villa-Real for appellee.

JOHNSON, J.:

The only question presented by this appeal is whether or not the provisions of sections 13 and 15 of Act No. 3071 are a reasonable and lawful exercise of
the police power of the state.

It appears from the record that on the 26th day of October, 1923, the prosecuting attorney of the City of Manila presented a complaint in the Court of First
Instance, accusing the defendant of a violation of section 13 in connection with section 15 of Act No. 3071 of the Philippine Legislature. The complaint
alleged:

That on or about the 27th day of August, 1923, and sometime prior thereto, in the City of Manila, Philippine Islands, the said accused, being the
manager and person in charge of La Flor de la Isabela, a tobacco factory pertaining to La Campania General de Tabacos de Filipinas, a corporation
duly authorized to transact business in said city, and having, during the year 1923, in his employ and service as cigar-maker in said factory, a
woman by the name of Macaria Fajardo, whom he granted vacation leave which began on the 16th day of July, 1923, by reason of her pregnancy,
did then and there willfully, unlawfully, and feloniously fail and refuse to pay to said woman the sum of eighty pesos (P80), Philippine currency, to
which she was entitled as her regular wages corresponding to thirty days before and thirty days after her delivery and confinement which took
place on the 12th day of August, 1923, despite and over the demands made by her, the said Macaria Fajardo, upon said accused, to do so.

To said complaint, the defendant demurred, alleging that the facts therein contained did not constitute an offense. The demurrer was overruled,
whereupon the defendant answered and admitted at the trial all of the allegations contained in the complaint, and contended that the provisions of said
Act No. 3071, upon which the complaint was based were illegal, unconstitutional and void.

Upon a consideration of the facts charged in the complaint and admitted by the defendant, the Honorable C. A. Imperial, judge, found the defendant guilty
of the alleged offense described in the complaint, and sentenced him to pay a fine of P50, in accordance with the provisions of section 15 of said Act, to
suffer subsidiary imprisonment in case of insolvency, and to pay the costs.

From that sentence the defendant appealed, and now makes the following assignments of error: That the court erred in overruling the demurrer; in
convicting him of the crime charged in the information; and in not declaring section 13 of Act No. 3071, unconstitutional:

Section 13 of Act No. 3071 is as follows:

Every person, firm or corporation owning or managing a factory, shop or place of labor of any description shall be obliged to grant to any woman
employed by it as laborer who may be pregnant, thirty days vacation with pay before and another thirty days after confinement: Provided, That
the employer shall not discharge such laborer without just cause, under the penalty of being required to pay to her wages equivalent to the total
of two months counted from the day of her discharge.

Section 15 of the same Act is as follows:

Any person, firm or corporation violating any of the provisions of this Act shall be punished by a fine of not less than fifty pesos nor more than
two hundred and fifty, or by imprisonment for not less than ten days nor more than six months, or both, in the discretion of the court.

In the case of firms or corporations, the presidents, directors or managers thereof or, in their default, the persons acting in their stead, shall be
criminally responsible for each violation of the provisions of this Act.

Said section 13 was enacted by the Legislature of the Philippine Islands in the exercise of its supposed police power, with the praiseworthy purpose of
safeguarding the health of pregnant women laborers in "factory, shop or place of labor of any description," and of insuring to them, to a certain extent,
reasonable support for one month before and one month after their delivery. The question presented for decision by the appeal is whether said Act has
been adopted in the reasonable and lawful exercise of the police power of the state.
In determining whether a particular law promulgated under the police power of the state is, in fact, within said power, it becomes necessary first, to
determine what that power is, its limits and scope. Literally hundreds of decisions have been promulgated in which definitions of the police power have
been attempted. An examination of all of said decisions will show that the definitions are generally limited to particular cases and examples, which are as
varied as they are numerous.

By reason of the constant growth of public opinion in a developing civilization, the term "police power" has never been, and we do not believe can be,
clearly and definitely defined and circumscribed. One hundred years ago, for example, it is doubtful whether the most eminent jurist, or court, or legislature
would have for a moment thought that, by any possibility, a law providing for the destruction of a building in which alcoholic liquors were sold, was within a
reasonable and lawful exercise of the police power. (Mugler vs. Kansas, 123 U. S., 623.) The development of civilization, the rapidly increasing population,
the growth of public opinion, with a desire on the part of the masses and of the government to look after and care for the interests of the individuals of the
state, have brought within the police power of the state many questions for regulation which formerly were not so considered. In a republican form of
government public sentiment wields a tremendous influence upon what the state may or may not do, for the protection of the health and public morals of
the people. Yet, neither public sentiment, nor a desire to ameliorate the public morals of the people of the state will justify the promulgation of a law which
contravenes the express provisions of the fundamental law of the people — the constitutional of the state.

A definition of the police power of the state must depend upon the particular law and the particular facts to which it is to be applied. The many definitions
which have been given by the highest courts may be examined, however, for the purpose of giving us a compass or guide to assist us in arriving at a correct
conclusion in the particular case before us. Sir William Blackstone, one of the greatest expounders of the common law, defines the police power as "the due
regulation and domestic order of the kingdom, whereby the inhabitants of a state, like members of a well-governed family, are bound to conform their
general behavior to the rules of propriety, good neighborhood, and good manners, and to be decent, industrious, and inoffensive in their respective
stations." (4 Blackstone's Commentaries, 162.)

Mr. Jeremy Bentham, in his General View of Public Offenses, gives us the following definition: "Police is in general a system of precaution, either for the
prevention of crimes or of calamities. Its business may be distributed into eight distinct branches: (1) Police for the prevention of offenses; (2) police for the
prevention of calamities; (3) police for the prevention of endemic diseased; (4) police of charity; (5) police of interior communications; (6) police of public
amusements; (7) police for recent intelligence; (8) police for registration."

Mr. Justice Cooley, perhaps the greatest expounder of the American Constitution, says: "The police power is the power vested in the legislature by the
constitution to make, ordain, and establish all manner of wholesome and reasonable laws, statutes, and ordinances, either with penalties or without, not
repugnant to the constitution, as they shall judge to be for the good and welfare of the commonwealth, and of the subject of the same. . . ." (Cooley's
Constitutional Limitations, p. 830.)

In the case of Commonwealth of Massachusetts vs. Alger (7 Cushing, 53), we find a very comprehensive definition of the police power of the state. In that
case it appears that the colony of Massachusetts in 1647 adopted an Act to preserve the harbor of Boston and to prevent encroachments therein. The
defendant unlawfully erected, built, and established in said harbor, and extended beyond said lines and into and over the tide water of the Commonwealth
a certain superstructure, obstruction and encumbrance. Said Act provided a penalty for its violation of a fine of not less than $1,000 nor more than $5,000
for every offense, and for the destruction of said buildings, or structures, or obstructions as a public nuisance. Alger was arrested and placed on trial for
violation of said Act. His defense was that the Act of 1647 was illegal and void, because if permitted the destruction of private property without
compensation. Mr. Justice Shaw, speaking for the court in that said, said: "We think it is a settled principle, growing out of the nature of well-ordered civil
society, that every holder of property, however absolute and unqualified may be his title, holds it under the implied liability that his use of it may be so
regulated, that it shall not be injurious to the equal environment of others having an equal right to the enjoyment of their property nor injurious to the
rights of the community. All property in this commonwealth, as well that in the interior as that bordering on tide waters, is derived directly or indirectly
from the government and held subject to those general regulations, which are necessary to the common good and general welfare. Rights of property, like
all other social and conventional rights, are subject to such reasonable limitations in their enjoyment, as shall prevent them from being injurious, and to
such reasonable restraints and regulations established by law, as the legislature, under the governing and controlling power vested in them by the
constitution, may think necessary and expedient." Mr. Justice Shaw further adds: ". . . The power we allude to is rather the police power, the power vested
in the legislature by the constitution, to make, ordain and establish all manner of wholesome and reasonable laws, statutes and ordinances, either with
penalties or without, not repugnant to the constitution, as they shall judge to be for the good and welfare of the commonwealth, and of the subjects of the
same."

This court has, in the case of Case vs. Board of Health and Heiser (24 Phil., 250), in discussing the police power of the state, had occasion to say: ". . . It is a
well settled principle, growing out of the nature of well-ordered and civilized society, that every holder of property, however absolute and unqualified may
be his title, holds it under the implied liability that his use of it shall not be injurious to the equal enjoyment of others having an equal right to the
enjoyment of their property, nor injurious to the rights of the community. All property in the state is held subject to its general regulations, which are
necessary to the common good and general welfare. Rights of property, like all other social and conventional rights, are subject to such reasonable
limitations in their enjoyment as shall prevent them from being injurious, and to such reasonable restraints and regulations, established by law, as the
legislature, under the governing and controlling power vested in them by the constitution, may think necessary and expedient. The state, under the police
power is possessed with plenary power to deal with all matters relating to the general health, morals, and safety of the people, so long as it does not
contravene any positive inhibition of the organic law and providing that such power is not exercised in such a manner as to justify the interference of the
courts to prevent positive wrong and oppression."

Many other definitions have been given not only by the Supreme Court of the United States but by the Supreme Court of every state of the Union. The
foregoing definitions, however, cover the general field of all of the definitions, found in jurisprudence. From all of the definitions we conclude that it is
much easier to perceive and realize the existence and sources of the police power than to exactly mark its boundaries, or prescribe limits to its exercise by
the legislative department of the government.
The most recent definition which has been called to our attention is that found in the case of Adkins vs. Children's Hospital of the District of Columbia (261
U. S., 525). In that case the controversy arose in this way: A children's hospital employed a number of women at various rates of wages, which were entirely
satisfactory to both the hospital and the employees. A hotel company employed a woman as elevator operator at P35 per month and two meals a day
under healthy and satisfactory conditions, and she did not risk to lose her position as she could not earn so much anywhere else. Her wages were less than
the minimum fixed by a board created under a law for the purpose of fixing a minimum wage for women and children, with a penalty providing a
punishment for a failure or refusal to pay the minimum wage fixed. The wage paid by the hotel company of P35 per month and two meals a day was less
than the minimum wage fixed by said board. By reason of the order of said board, the hotel company, was about to discharge her, as it was unwilling to pay
her more and could not give her employment at that salary without risking the penalty of a fine and imprisonment under the law. She brought action to
enjoin the hotel company from discharging her upon the ground that the enforcement of the "Minimum Wage Act" would deprive her of her employment
and wages without due process of law, and that she could not get as good a position anywhere else. The constitutionality of the Act was squarely presented
to the Supreme Court of the United States for decision.

The Supreme Court of the United States held that said Act was void on the ground that the right to contract about one's own affairs was a part of the liberty
of the individual under the constitution, and that while there was no such thing as absolute freedom of contract, and it was necessary subject to a great
variety of restraints, yet none of the exceptional circumstances, which at times justify a limitation upon one's right to contract for his own services, applied
in the particular case.

In the course of the decision in that case (Adkins vs. Children's Hospital of the District of Columbia, 261 U. S., 525), Mr. Justice Sutherland, after a statement
of the fact and making reference to the particular law, said:

The statute now under consideration is attacked upon the ground that it authorizes an unconstitutional interference with the freedom
of contract including within the guarantees of the due process clause of the 5th Amendment. That the right to contract about one's affairs is a
part of the liberty of the individual protected by this clause is settled by the decision of this court, and is no longer open to question. Within this
liberty are contracts of employment of labor. In making such contracts, generally speaking, the parties have an equal right to obtain from each
other the best terms they can as the result of private bargaining. (Allgeyer vs.Louisiana, 165 U. S., 578; 591; Adair vs. United States, 208 U. S., 161;
Muller vs. Oregon, 208 U. S., 412, 421.)

xxx xxx xxx

The law takes account of the necessities of only one party to the contract. It ignores the necessities of the employer by compelling him to pay not
less than a certain sum, not only whether the employee is capable of earning it, but irrespective of the ability of his business to sustain the
burden, generously leaving him, of course, the privilege of abandoning his business as an alternative for going on at a loss. Within the limits of the
minimum sum, he is precluded, under penalty of fine and imprisonment, from adjusting compensation to the differing merits of his employees. It
compels him to pay at least the sum fixed in any event, because the employee needs it, but requires no service of equivalent value from the
employee. It (the law) therefore undertakes to solve but one-half of the problem. The other half is the establishment of a corresponding standard
of efficiency; and this forms no part of the policy of the legislation, although in practice the former half without the latter must lead to ultimate
failure, in accordance with the inexorable law that no one can continue indefinitely to take out more than he puts in without ultimately
exhausting the supply. The law . . . takes no account of periods of distress and business depression, or crippling losses, which may leave the
employer himself without adequate means of livelihood. To the extent that the sum fixed exceeds the fair value of the services rendered, it
amounts to a compulsory exaction from the employer for the support of a partially indigent person, for whose condition there rests upon him no
peculiar responsibility, and therefore, in effect, arbitrarily shifts to his shoulders a burden which, if it belongs to anybody, belongs to society as a
whole.

The failure of this state which, perhaps more than any other, puts upon it the stamp of invalidity is that it exacts from the employer an arbitrary
payment for a purpose and upon a basis having no casual connection with his business, or the contract, or the work the employee engages to do.
The declared basis, as already pointed out, is not the value of the service rendered, but the extraneous circumstances that the employee needs to
get a prescribed sum of money to insure her subsistence, health and morals. . . . The necessities of the employee are alone considered, and these
arise outside of the employment, are the same when there is no employment, and as great in one occupation as in another. . . . In principle, there
can be no difference between the case of selling labor and the case of selling goods. If one goes to the butcher, the baker, or grocer to buy food,
he is morally entitled to obtain the worth of his money, but he is not entitle to more. If what he gets is worth what he pays, he is not justified in
demanding more simply because he needs more; and the shopkeeper, having dealt fairly and honestly in that transaction, is not concerned in any
peculiar sense with the question of his customer's necessities. Should a statute undertake to vest in a commission power to determine the
quantity of food necessary for individual support, and require the shopkeeper, if he sell to the individual at all, to furnish that quantity at not
more than a fixed maximum, it would undoubtedly fall before the constitutional test. The fallacy of any argument in support of the validity of
such a statute would be quickly exposed. The argument in support of that now being considered is equally fallacious, though the weakness of it
may not be so plain. . . .

It has been said that the particular statute before us is required in the interest of social justice for whose end freedom of contract may lawfully be subjected
to restraint. The liberty of the individual to do as he pleases, even in innocent matters, is not absolute. That liberty must frequently yield to the common
good, and the line beyond which the power of interference may not be pressed is neither definite nor unalterable, may be made to move, within limits not
well defined, with changing needs and circumstances.

The late Mr. Justice Harlan, in the case of Adair vs. United States (208 U. S., 161, 174), said that the right of a person to sell his labor upon such terms as he
deems proper is, in its essence, the same as the right of the purchaser of labor to prescribe the conditions upon which he will accept such labor from the
person offering to sell. In all such particulars the employer and the employee have equality of right, and any legislation that disturbs that equality is an
arbitrary interference with the liberty of contract, which no government can legally justify in a free land, under a constitution which provides that no person
shall be deprived of his liberty without due process of law.

Mr. Justice Pitney, in the case of Coppage vs. Kansas (235 U. S., 1, 14), speaking for the Supreme Court of the United States, said: ". . . Included in the right of
personal liberty and the right of private property — partaking of the nature of each — is the right to make contracts for the acquisition of property. Chief
among such contracts is that of personal employment, by which labor and other services are exchange for money or other forms of property. If this right be
struck down or arbitrarily interfered with, there is a substantial impairment of liberty in the long established constitutional sense. The right is as essential to
the laborer as to the capitalist, to the poor as to the rich; for the vast majority of persons have no other honest way to begin to acquire property, save by
working for money."

The right to liberty includes the right to enter into contracts and to terminate contracts. In the case of Gillespie vs.People (118 Ill., 176, 183-185) it was held
that a statute making it unlawful to discharge an employee because of his connection with any lawful labor organization, and providing a penalty therefor, is
void, since the right to terminate a contract, subject to liability to respond in a civil action for an unwarranted termination, is within the protection of the
state and Federal constitutions which guarantee that no person shall be deprived of life, liberty or property without due process of law. The court said in
part: ". . . One citizen cannot be compelled to give employment to another citizen, nor can anyone be compelled to be employed against his will. The Act of
1893, now under consideration, deprives the employer of the right to terminate his contract with his employee. The right to terminate such a contract is
guaranteed by the organic law of the state. The legislature is forbidden to deprive the employer or employee of the exercise of that right. The legislature
has no authority to pronounce the performance of an innocent act criminal when the public health, safety, comfort or welfare is not interfered with. The
statute in question says that, if a man exercises his constitutional right to terminate a contract with his employee, he shall, without a hearing, be punished
as for the commission of a crime.

xxx xxx xxx

Liberty includes not only the right to labor, but to refuse to labor, and, consequently, the right to contract to labor or for labor, and to terminate
such contracts, and to refuse to make such contracts. The legislature cannot prevent persons, who are sui juris, from laboring, or from making
such contracts as they may see fit to make relative to their own lawful labor; nor has it any power by penal laws to prevent any person, with or
without cause, from refusing to employ another or to terminate a contract with him, subject only to the liability to respond in a civil action for an
unwarranted refusal to do that which has been agreed upon. Hence, we are of the opinion that this Act contravenes those provisions of the state
and Federal constitutions, which guarantee that no person shall be deprived of life, liberty or property without due process of law.

The statute in question is exactly analogous to the "Minimum Wage Act" referred to above. In section 13 it will be seen that no person, firm, or corporation
owning or managing a factory shop, or place of labor of any description, can make a contract with a woman without incurring the obligation, whatever the
contract of employment might be, unless he also promise to pay to such woman employed as a laborer, who may become pregnant, her wages for thirty
days before and thirty days after confinement. In other words, said section creates a term or condition in every contract made by every person, firm, or
corporation with any woman who may, during the course of her employment, become pregnant, and a failure to include in said contract the terms fixed to
a fine and imprisonment. Clearly, therefore, the law has deprived, every person, firm, or corporation owning or managing a factory, shop or place of labor of
any description within the Philippine Islands, of his right to enter into contracts of employment upon such terms as he and the employee may agree upon.
The law creates a term in every such contract, without the consent of the parties. Such persons are, therefore, deprived of their liberty to contract. The
constitution of the Philippine Islands guarantees to every citizen his liberty and one of his liberties is the liberty to contract.

It is believed and confidently asserted that no case can be found, in civilized society and well-organized governments, where individuals have been deprived
of their property, under the police power of the state, without compensation, except in cases where the property in question was used for the purpose of
violating some legally adopted, or constitutes a nuisance. Among such cases may be mentioned: Apparatus used in counterfeiting the money of the state;
firearms illegally possessed; opium possessed in violation of law; apparatus used for gambling in violation of law; buildings and property used for the
purpose of violating laws prohibiting the manufacture and sale of intoxicating liquors; and all cases in which the property itself has become a nuisance and
dangerous and detrimental to the public health, morals and general welfare of the state. In all of such cases, and in many more which might be cited, the
destruction of the property is permitted in the exercise of the police power of the state. But it must first be established that such property was used as the
instrument for the violation of a valid existing law. (Mugler vs. Kansas, 123 U. S., 623; Slaughter-House Cases, 16 Wall., [U. S.], 36; Butchers' Union, etc.,
Co. vs.Crescent City, etc., Co., 111 U. S., 746 John Stuart Mill — "On Liberty," 28, 29.)

Without further attempting to define what are the peculiar subjects or limits of the police power, it may safely be affirmed, that every law for the restraint
and punishment of crimes, for the preservation of the public peace, health, and morals, must come within this category. But the state, when providing by
legislation for the protection of the public health, the public morals, or the public safety, is subject to and is controlled by the paramount authority of the
constitution of the state, and will not be permitted to violate rights secured or guaranteed by that instrument or interfere with the execution of the powers
and rights guaranteed to the people under their law — the constitution. (Mugler vs. Kansas, 123 U. S., 623.)

The police power of the state is a growing and expanding power. As civilization develops and public conscience becomes awakened, the police power may
be extended, as has been demonstrated in the growth of public sentiment with reference to the manufacture and sale of intoxicating liquors. But that
power cannot grow faster than the fundamental law of the state, nor transcend or violate the express inhibition of the people's law — the constitution. If
the people desire to have the police power extended and applied to conditions and things prohibited by the organic law, they must first amend that
law.1awphil.net

It will also be noted from an examination of said section 13, that it takes no account of contracts for the employment of women by the day nor by the piece.
The law is equally applicable to each case. It will hardly be contended that the person, firm or corporation owning or managing a factory, shop or place of
labor, who employs women by the day or by the piece, could be compelled under the law to pay for sixty days during which no services were rendered.
It has been decided in a long line of decisions of the Supreme Court of the United States, that the right to contract about one's affairs is a part of the liberty
of the individual, protected by the "due process of law" clause of the constitution. (Allgeyer vs. Louisiana, 165 U. S., 578, 591; New York Life Ins.
Co. vs. Dodge, 246 U. S., 357, 373, 374; Coppage vs. Kansas, 236 U. S., 1, 10, 14; Adair vs. United States, 208 U. S., 161; Lochner vs. New York, 198 U. S.; 45,
49; Muller vs. Oregon, 208 U. S., 412, 421.)

The rule in this jurisdiction is, that the contracting parties may establish any agreements, terms, and conditions they may deem advisable, provided they are
not contrary to law, morals or public policy. (Art. 1255, Civil Code.)

For all of the foregoing reasons, we are fully persuaded, under the facts and the law, that the provisions of section 13, of Act No. 3071 of the Philippine
Legislature, are unconstitutional and void, in that they violate and are contrary to the provisions of the first paragraph of section 3 of the Act of Congress of
the United States of August 29, 1916. (Vol. 12, Public Laws, p. 238.)

Therefore, the sentence of the lower court is hereby revoked, the complaint is hereby dismissed, and the defendant is hereby discharged from the custody
of the law, with costs de oficio. So ordered.

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

 Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. L-46892 June 28, 1940

ANTAMOK GOLDFIELDS MINING COMPANY, recurrente,

vs.
COURT OF INDUSTRIAL RELATIONS, and NATIONAL LABOR UNION, INC., recurridos.

Sres.DeWitt, Perkins y Ponce Enrile en representacionde la recurrente.

Sres.Paguia y Lerum en represetacion de la recurrida, National Labor Union.

IMPERIAL, J.:

Esta es una apelacion mediante certiorari interpuesta por la recurrente contra la orden dictada por el Tribunal de Relaciones Industriales el 6 de mayo de
1939 que le obligo a que reponga en sus anteriores trabajos o en otros substancialmente equivalentes a los 45 obreros enumerados en la peticion del 31 de
marzo de 1939 y a los 10 obreros encabezados por A. Haber que fueron excluidos indefinidamente, dentro de 10 dias desde que reciba copia de la orden;
que pague a estos 55 obreros los jornales que debieron haber percibido desde la fecha de su suspension o separacion hasta la de su reposicion; y que
pendiente de resolucion las otras cuestiones que las partes han sometido, la recurrente se abstenga, bajo pena de desacato, de despedir o excluir, sin
permiso previo del tribunal, a cualquier obrero o empleado que se hallaba bajo su servicio en la epoca en que surgio la disputa que este actualmente
trabajando en las minas o que sea repuesto en su trabajo de conformidad con la orden; y contra la resolucion del mismo tribunal del 17 de agosto de 1939
que denego la mocion de reconsideracion de la recurrente presentada el 26 de mayo de 1939.

El 12 de diciembrre de 1938 la recurrida National Labor union, Inc., en representacion de los obreros y empleados de la recurrente que eran miembros de
dicha union obrera, dirigio una carta a la recurrente solicitando 21 reclamaciones en favor de sus afiliados. La carta fue recibida por la oficina de la
recurrente en Manila en un sobre timbrado por la estafeta de Baguio el 30 de mismo mes. Los funcionarios de la recurrente convocaron a un meeting a sus
empleados el 2 de enero de 1939 y en el informaron a todos sus obreros que algunad de las demandas se habian aceptado y se habian puesto ya en
practica, otras serian consideradas y las restantes iban a ser rechazadas por ser irrazonables, y se les aconsejo que no recurrieran a la violencia y observaran
metodos legales en el arreglo de sus diferencias con la recurrentes. En la noche del mismo dia los obreros y empleados de la recurrente se declararon en
huelga y abandonaron sus trabajos. La recurrnte dio cuenta inmediatamente de esta huelga al Departamento del Trabajo y solicito su intervencion con el fin
de solucionarla. El Secretario del Trabajo designo a Adolfo Umengan, Investigador Especial del Departamento, y a Eladio C. Leaño, Defensor Publico de la
Provincia Montañosa, para que intervinieran y vieran la manera de solucionar la huelga. Estos funcionarios convocaron una conferencia a la que acudieron
funcionarios de la recurrente, representante de los huelguistas y Luis Lardizabal, Jefe de la Baguio Federation of Labor, una organizacion obrera afiliada a
National Labor Union, Inc. Como resultado de la conferencia las partes convinieron en el siguiente arreglo amistoso:

AMICABLE SETTLEMENT

In order to have the present strike of the contractors and laborers of the respondent company who staged a walkout on January 3, 1939,
amicably settled, the parties hereby mutually agree to end the said strike under the condition that all laborers will be readmitted upon the
execution of this agreement; provided, that all laborers whose services should be dispensed with due to lack of work in those tunnels where they
are no longer needed will be given not less than fifteen days employment from the date of this settlement or resumption of work, and provided,
further, that as soon as the stopes in 1360 and 1460 levels are opened and the services of men are needed, the company will give preference to
efficient laborers when reducing the personnel as above mentioned in those working places and may transfer them to other division to replace
inefficient men.

In witness hereof, the laborers represented by a committee composed of Messrs. Luis Lardizabal, Tomas Dirige, Victoriano Madayag, Maximo
Conaoi, Daniel Lambinicio, and Juan Cerilo and the Antamok Goldfields Mining Co. as represented by its President, Mr. Andres Soriano, have
hereunto placed their signatures this 4th day of January, 1939.

El convenio fue firmado por las partes el 4 de enero de 1939, pero los obreros no se presentaron sino a las 9 de la mañana del 6 del mismo mes. La gerencia
de la recurrente no permitio, sin embargo, a ningun obrero que entrara en la seccion subterranea conocida como "830 level" por la razon de que el aire se
habia viciado con motivo de la huelga y era necesario renovarlo con aire puro con el fin de evitar desgracias personales. Esta precaucion la tomaron los
obreros como uan negativa de la recurrente a que ellos trabajaran de nuevo, por lo que se declararon otra vez en huelga. A los huelguistas se unieron por
simpatia los obreros que trabajaban en la mina denominada "680 division," que es otra mina separada y situada a 3 kilometros de la fabrica. Otra vez
internivo el Departamento del Trabajo y por la mediacion de Eladio C. Leaño los obreros volvieron al trabajo en la noche del 6 de enero de 1939 en que los
trabajos de mina se reanudaron paulatinamente.

El 9 de enero de 1939 el Departamento del Trabajo endoso la disputa al Tribunal de Relaciones Industriales de conformidad con el articulo 4 de la Ley No.
103 del Commonwealth y dicho Tribunal celebro la primera vista del asunto el 13 del mismo mes en la Ciudad De Baguio. En esta vista se discutieron una
por una las 21 reclamaciones de la recurrida National Labor Union, Inc., y se llego por las partes a un acuerdo sobre algunas de ellas, se sometieron otras a
la decision del Triunal y las demas se dejaron pendientes para ser vistas y resueltas mas tarde.
El 31 de marzo de 1939, hallandose pendiente aun de decision la mayor parte de las reclamaciones antes mencionadas, la recurrida National Labor Union,
Inc., presento una mocion en que alego que el capataz A. Haber y otros 9 obreros de la recurrente habian sido indefinidamente suspendidos el 29 del
mismo mes; que estos obreros habian sido transferidos anteriormente a trabajos exteriores con el fin de proporcionar a la recurrente una excusa para
separarles mas tarde del servicio; que otro grupo de cerca de 30 obreros fueron despedidos por la compañia sin motivo alguno y sin autorizacion del
tribunal; y que las suspensiones y separaciones que asi se hicieron eran actos de venganza y discriminatorios para los obreros, por cuya razon se pidio que
los funcinarios de la recurrente responsables de dichos actos sean castigados por desacato y que la recurrente sea obligada a reponer a los obreros en sus
primitivos trabajos dentro de las minas y a pagarles sus salarios correspondientes al periodo en que fueron separados del sevicio. La recurrente contesto la
mocion negando los hechos imputados y alego que Haber y sus 9 compañeros fueron suspendidos por su continua holgazaneria durante las horas de
trabajo y por haberse negado constantemente a trabajar, y que los 45 obreros encabezados por el capataz Victoriano Madayag fueron despedidos por
haber rehusado señalar a los responsables del maltrato del capataz Juan Moldero en la mañana del 30 de marzo de 1939. La mocion se vio el 3 de abril de
1939 y en la vista las partes presentaron sus testigos. El tribunal designo a uno de sus agentes especiales para que se constituya en las minas de la
recurrente y practicara una investigacion con el fin de suplementar los hechos que se probarondurante la vista. Despues de considerar las pruebas
presentadas ante el y los hechos hallados por el comisionado nombrado, el tribunal en su orden del 6 de mayo de 1939 declaro probados los hechos
siguientes:

1. The discharges and indefinite suspensions alleged in the motion were made by the respondent without first securing the consent of the Court
in violation of the order of this Court of January 23, 1939.

2. The discharges and indefinite suspensions were made by the respondent without just cause.

El la misma orden el Tribunal de Relaciones Industriales hace las siguientes consideraciones que apoyan las conclusiones a que la llegado:

In the order of January 23, 1939, the respondent was enjoined to refrain from discharging any laborer involved in the dispute without just cause
and without previous authority of the Court. It appears and no denial of the fact is made by the respondent that the dismissal is one case and
alleged suspension for an indefinite time in the other, which has all the effects of a discharge, were made without seeking the authority of the
Court.

The charge that Haber and the group of nine laborers were indefinitely suspended of continuous loafing and refusal to work was not established.
The real motive behind the lay was the completion of their work "outside." Under the circumstances, the provision of the order of March 21, to
the effect that these men should be returned to their work underground after the completion of their work "outside" should have been
observed. The respondent instead of complying with the order laid off the men.

The discharge of Victoriano Madayag and his forty-four companions as a result of the Moldero incident also lacks justification. In the case of
Madayag, although he was present with Haber when Moldero was attacked, neither one is accused of the aggression. The two of them were
conversing with Moldero with the latter was stoned from behind without anybody apparently being able to point out the aggressor. Less
justification can be found for the discharge of the forty-four men as a result of the incident. The investigation disclosed that at the time of the
assault, they were at the Creek busy with their work. Both the distance and the topographical situation of the place where the men were working,
which is far and well below the bank of the place of the incident, precluded their hearing of seeing clearly what transpired above them in the
place where Moldero was assaulted. An ocular inspection of the premises made by the investigator confirmed this view. So far as is known,
despite the investigations conducted by the officials of the company and the policeman of the camp and by the constabulary authorities in
Baguio, the person or persons responsible for the stoning has not been determined. The precipitate and unwarranted dismissal of the forty-five
men after the incident seems to have been spurred by an over anxious desire on the part of the company to get rid of these men.

As previously found, in the order of this Court of March 21, 1939, about 134 underground laborers of the respondent were transferred and made
to work 'outside of the mines' or surface work. The majority of these men were muckers, miners, timbermen, trammers, and mine helpers and
had to their favor from 6 months to 5 years service in the mines of the company and not a few of them have done underground work in several
capacities and in different tunnels and divisions of the mine. Among them are found leaders of the movement of the laborers for higher pay and
better working conditions which culminated in the strike called on January 3, 1939. These leaders have been prominent in the formation of the
union its activities and in connection with the strike. The temporary transfer of these men to "outside" work was authorized by the Court in said
order on the strength of the assurance of the respondent that no more work suited for them inside the mines existed. It was directed, however,
in the aforesaid order that as soon as their outside was completed the laborers should be immediately returned to their respective work inside
the mines. Subsequent events and acts of the officials of the respondent in charge of the mines have convinced the Court work existed and exists
for the men inside the tunnels and their transfers were made to provide an opportunity to the company to dispense with their services as soon as
the work is completed. The unwarranted discharges of Haber and nine others and those of Victoriano Madayag and his forty-four companions
amply demonstrated this conclusion. Upon the company's own admission, as shown in its reports in the records and upon the findings of the
investigator of the Court, more than four hundred (400) workers of different classes among them, muckers, miners, timbermen, trammers and
capataces coming from different mines in the region have been employed by the respondent as fresh laborers. Almost all, if not all, of these men
are not members of the petitioner, the National Laborer Union, Inc.

At the same time the work in different tunnels and division in the mines are allegedly being completed, the old workers are being laid off.
Although a small number of the men found transfer to other divisions being operated, the majority are being left without work. Instead of laying
hands on the old men laid off and making them work in the tunnels needing hands and reinstating in the tunnel work those laborers transferred
to the 'outside' department, the respondent preferred to take in and hire other workers coming from different places because evidently they are
not members of the union.
 There is no doubt in the mind of the Court that a good number of the position given of the men who were employed after the strike numbering
more than four hundred to date could have been offered to the strikes who are now doing work "outside" and other who have been laid off on
the allegation that the underground work in which they were engaged had been completed. To believe that not a single man or say a few among
the latter could have met the requirements set by the technical men of the company to perform the different classes of work for which the fresh
men were engaged because they lack the required efficiency, experience, physique. intelligence and skill of the four hundred fresh laborers
would be shutting the eyes of the court to realities. These men prior to the occurence of the dispute, had worked for months and many for years
in the mines of the respondent and it can not be easily accepted that their experience gained in their particular lines in the very property of the
respondent would be inferior to that attained by the other workmen in other mines in the district for an equal period of time. Their inefficiency as
a whole group can not be successfully sustained now because they were not transferred to surface work for this reason but because of the
alleged lack of work or completion of their work underground. Had any of them been inefficient in the past, it can not be explained why the
company laborer continued in the service as the records of the company abound with instance of discharges made in the past of laborers who
were found either inefficient or incompetent or whose services were unsatisfactory.

The company asserts ignorance of the union affiliations of the men in the mine but the evidence stands uncontradicted that before the strike was
called a petition was presented by the men to the management carrying the signatures of about eight hundred (800) worker demanding higher
pay and better working conditions. When the men struck, the operation of the mine was completely paralyzed and there is a strong indication
that a great majority of the workers joined openly the strike. It would not have been difficult for the respondent, with the means at its command,
to find for itself the employees and laborers who remained loyal to the company and to consider those who struck as either members of the
union or its sympathizer.

The respondent's claim as to the motive for the suspension and discharges lacks substance and support in the evidence and the inferences to be
drawn from it. From all what appears, it is inferred that the respondent desire to discourage membership in the union and to rout it if possible.
The wholesale discharges were the expression of such desire. The acts in the mind of the Court, are calculated to have two effects. They will not
only immediately affect the discharged laborers but would also discourage other laborers from joining or remaining members of the union.

The allegation that it has always been policy to consider the laborer's connection with the company terminated upon termination of the working
place in which he is employed is not supported by the facts. It has been shown that as a general rule when work in a place is completed, workers
are transferred to another working place in one level or to another level, although in some instances days may elapse before all the men in a
bunch can be absorbed in different levels.

It is alleged that mining operations in the property vary and involve several types, and that a miner, for example, may be good in one type, but
that it does not necessarily follow that he can do good work in another type. And that the employment of men in particular jobs not suitable for
them increased the cost of production as a result of lower output. Consequently, the respondent vehemently insists in its right of selecting the
men that it should employ and that in the exercise of this right it should not be restrained or interfered with by the Court. It contends that as to
fitness of a laborer to do a particular type of work the opinion of the management or its technical men should be respected. But all these
arguments are meaningless in the face of the finding of the Court that the underground laborers transferred to the 'outside' work are not wanting
in experience, efficiency and other conditions alleged to be found among the fresh laborers. The special qualifications to do particular work can
not rightly be invoked in favor of the employment of new laborers most specially in those cases of common or unskilled labor like muckers,
trammers, helpers, etc.

Under normal circumstances, the exercise of judgment of the employer in selecting men he is to employ should not be interfered with. But when
such judgment is arbitrarily exercised to the prejudice of members of a labor union whose rights should be safeguarded in consonance with the
policies of the law, the Court not only feels it justified but rightly its duty to interfere to afford protection to the laborers affected.

La recurrente presento una extensa mocion de reconsideracion de la indicada orden, mocion que fue denegada por la resolucion del 17 de agosto de 1939.
La orden del 6 de mayo de 1939 y la resolucion del 17 de agosto del mismo año son las que dieron lugar a la apelacion interpuesta por la recurrente.

La recurrente sostiene que la Ley No. 103 del Commonwealth, conforme ha sido enmendada por las leyes Nos. 254 y 355, es anticonstitucional (1) porque
infringe el principio de separacion de poderes; (2) porque por ella la Asamblea Nacional abdico de su facultad legislativa violando la doctrina sobre
delegacion de poderes; (3) porque las facultades judiciales que la ley confiere al Tribunal de Relaciones Industriales, consideradas separadamente, son
arbitrarias e irrazonables y permiten la privacion de la libertad y propiedad sin el debido proceso de ley; y (4) porque suponiendo que la ley es valida y
constitucional en su totalidad, la porcion, por lo menos, del articulo 20 que dispone que el Tribunal de Relaciones Industriales "adoptara sus reglamentos de
procedimiento" debe declararse nula e invalida porque infringe el articulo 13 del Titulo VIII de la Constitucion de Filipinas que obliga al Tribunal de
Relaciones Industriales a observar las reglas generales de procedimiento aplicables a los tribunales de justicia. La recurrente alega en este respecto que
como a ella se le ha sometido a un procedimiento arbitrario y distinto del que se aplica a los demas litigantes en los tribunales de Filipinas, se le ha negado
el debido proceso de ley y el principio de igual proteccion ante las leyes.

La Ley No. 103 del Commonwealth que, como su titulo indica, provee a la proteccion del obrero, creando un Tribunal de Relaciones Industriales facultado
para fijar un jornal minimo para los obreros y la renta maxima que se ha de pagar por los inquilinos; para poner en vigor el arbitraje obligatorio entre
patronos o propietarios y empleados o inquilinos, respectivamente, y prescribe penas por la infraccion de sus decretos, se ha promulgado por la Asamblea
Nacional en virtud de los preceptos contenidos en el articulo 5, Titulo II; articulo 6, Titulo XIII; y articulos 1 y 2, Titulo VIII, de la Constitucion de Filipinas que
disponen:

ART. 5. El Estado cuidara de promover la justicia social a fin de asegurar el bienestar y la estabilidad economica de todo el pueblo.
 ART. 6. El Estado debera proteger a todos los trabajadores, especialmente a las mujeres y a los menores de edad, y debera regular las relaciones
entre propietarios e inquilinos, y entre el trabajo y el capital en la industria y la agricultura. El Estado podra establecer el arbitraje obligatorio.

ART. 1. El Poder Judicial estara investido en un Tribunal Supremo y en otros tribunales inferiores que se establezcan por ley.

ART. 2. La Asamblea Nacional tendra la facultad de definir, prescribir y distribuir la jurisdiccion de los varios tribunales, . . .

En cumplimiento de los preceptos constitucionales transcritos, la Asamblea Nacional promulgo la Ley No. 103 del Commonwealth que crea el Tribunal de
Relaciones Industriales que es un tribunal especial con facultades judiciales (Pambusco Employees Union vs. Court of Industrial Relations et al., G.R. No.
46727; Ang Tibay et al. vs. Court of Industrial Relations et al., G.R. No. 46496, opinion concurrente del Magistrado Jose P. Laurel). El articulo 1 de dicha ley
provee que el Tribunal de Relaciones Industriales ejercera jurisdiccion para considerar, investigar, decidir y zanjar toda cuestion, asunto, conflicto o disputa
que afecte o surja entre patronos y empleados u obreros, y entre propietarios e inquilinos o aparceros, y para regular las relaciones entre los mismos, con
arreglo y sujecion a las disposiciones de la ley. El articulo 4 dispone que el tribunal tomara conocimiento, para fines de prevencion, arbitraje, decision y
ajuste, de cualquier conflicto agrario o industrial que motive o de lugar a una huelga o paro a causa de diferencias que surjan en la cuestion de jornales,
participacion o compensacion, horas de trabajo o condiciones de aparceria o empleo, entre patronos y empleados u obreros, y entre propietarios e
inquilinos o aparceros, siempre que el numero de empleados, obreros, inquilinos o aparceros afectados exceda de treinta, y que el conflicto agrario o
industrial se someta al tribunal por el Secretario del Trabajo, o por una o ambas partes interesadas, cuando el referido Secretario del Trabajo certifique en
cuanto a su existencia y la conveniencia de la intervencion del tribunal en bien del interes publico. Y el articulo 20 preceptua que en la vista, investigacion y
resolucion de cualquier cuestion o conflicto, y en el ejercicio de cualquiera de sus deberes y facultades, el tribunal actuara de acuerdo con la justicia y la
equidad y los meritos substanciales de la causa, sin consideracion a los tecnicismos y formulismos legales, y no estara sujeto a cualesquier reglas tecnicas de
prueba legal, sino que formara juicio de la manera que crea justa y equitativo. La Ley No. 103 confiere al Tribunal de Relaciones Industriales plena facultad
disrecional para resolver y decidir las disputas agrarias e industriales de la manera que crea justo e equitativo, prescindiendo de los tecnicismos y
formulismos legales, y la facultad asi concedida es judicial y no legislativa, por lo que no infringe el principio de separacion de poderes, la prohibicion sobre
delegacion de facultades legislativas ni la proteccion igualitaria ante la ley. Como se ha dicho en el asunto de Cincinnati, W. & Z. R. Co. vs. Comm'rs, of
Clinton County '1852), 1 Ohio St., 88, citado en el asunto de Rubi et al. contra La Junta Provincial de Mindoro, 39 Jur.Fil., 675, "Existe una verdadera
diferencia entre delegar la facultad para dictar leyes, lo cual supone necesariamente discrecion en cuanto a lo que hayan de ser aquellas, y conferir
atribucion o discrecion para hacerlas cumplir, discrecion que debe ejecitarse con arreglo a la ley. La primera no puede hacerse en modo alguno; contra la
segunda no cabe interponer objecion alguna."

Para reforzar los argumentos en favor de la anticonstitucionalidad de la Ley No. 103 la recurrente hace hincapie en lo resuelto en el asunto de Schechter vs.
United States (1935), 295 U. S., 496, 79 Law. ed. 270, en que el Tribunal Supremo de los Estados Unidos declaro anticonstitucional la National Recovery Act.
Existe, sin embargo, una marcada diferencia entre dicho asunto y el que se considera porque la National Recovery Act en vez de crear un tribunal de justicia,
creo juntas con facultades legislativas y autorizo al Presidente de los Estados Unidos a promulgar codigos que prescriban las reglas de precedimiento con el
fin de realizar los propositos de la ley.

El ultimo fundamento que se alega en contra de la validez de la Ley No. 103 se hace consistir en que las facultades judiciales que concede al Tribunal de
Relaciones Industriales son tan artibrarias e irrazonables que permiten la privacion de la libertad y la propiedad sin el debido proceso de ley; y que se
articulo 20, por lo menos, adolece de este defecto fundamental porque confiere al Tribunal de Relaciones Industriales la facultad de dictar sus propias
reglas de procedimiento, lo cual contraviene el articulo 13, Titulo VIII, de la Constitucion que prescribe que el Tribunal Supremo dictara reglas concernientes
a los escritos de alegaciones, practica y procedimiento uniformes para todos los tribunales de la misma categoria.

El articulo 20 de la Ley No. 103 se lee asi:

ART. 20. Reglamentos del Tribunal. — El Tribunal de Relaciones Industriales promulgara sus reglas de procedimiento y tendra las demas
atribuciones que en general corresponden a un tribunal de justicia: Entendiendose, sin embargo, Que en la vista, investigacion y resolucion de
cualquier cuestion o conflicto, y en el ejercicio de cualquier de sus deberes y faculades en virtud de esta Ley, el Tribunal actuara de acuerdo con la
justicia y la equidad y los meritos substanciales de la causa, sin consideracion a los tecnicismos o formulismos legales, y no estara sujeto a
cualquiera reglas, tecnicas de prueba legal, sino que formara juicio de la manera que crea justo y equitativo.

Una simple lectura de dicho articulo demuestra que la ley no ha facultado al Tribunal de Relaciones Industriales a investigar y resolver las cuestiones y
conflictos entre obreros y patronos, e inquilinos y propietarios, de una manera arbitraria y caprichosa sin someterse a una norma de conducta determinada.
El articulo dispone claramente que las reglas de procedimiento que adopte, a las cuales debera ajustarse el tribunal, deberan insperarse en la justicia y la
equidad, y prescribe que el criterio que se forma debera fundarse en los meritos substanciales de la causa sin consideracion a los tecnicismos o formulismos
legales. La Ley No. 103 que crea un tribunal especial denominado Tribunal de Relaciones Industriales con facultad para dictar sus propios reglamentos y
para resolver y decidir los conflictos agrarios e industriales de acuerdo con los dictados de la justicia y equidad, no puede ser impugnada bajo el fundamento
de que auoriza la privacion de la libertad y propiedad sin el debido proceso de ley; ni pugna con el precepto del articulo 13, Titulo VIII, de la Constitucion
porque el Tribunal de Relacines Industriales no es de la misma categoria que los juzgados municipales, juzgados de paz y juzgados de primera instancia para
los cuales se han dictado los reglamenos de los tribunales por el Tribunal Supremo.

En relacion con la validez y constitucionalidad de la Ley No. 103 y sus enmiendas, insertamos a continuacion la opinion concurrente del Magistrado Lauren
en el asunto de Ang Tibay, supra, cuyas observaciones serviran para rebustecer la proposicion sentada de que la referida ley y sus enmiendas es valida y no
infringe la Constitucion.

It should be observed at the outset that our Constitutionwas adopted in the midst of surging unrest and dissatisfaction resulting from economic
and social distresswhich was threatening the stability of governments theworld over. Alive to the social and economic forces atwork, the farmers
of our Constitution boldly met the problems and difficulties which faced them and endeavored to crystallize, with more or less fidelity, the
political, social; and economic proposition of their age, and this they did, with the consciousness that the political and philosophicalaphorism of
their generation will, in the language of a great jurist, "be doubted by the next and perhaps entirely discarded by the third." (Chief Justice
Winslow in Gorgnis v. Falk Co., 147 Wis., 327; 133 N. W., 209.) Embodying the spirit of the present epoch, general provisions were inserted in the
Constitution which are intended to bring about the needed social and economic equilibrium between component elements of society through the
application of what may be termed as the justitia communis advocated by Grotius and Leibnits many years ago to be secured through the
counterbalancing of economic and social forces and opportunities which should be regulated, if not controlled, by the State or placed, as it were,
in custodia societatis. "The promotion of social justice to insure the well-being and economic security of all the people' was thus inserted as vital
principle in our Constitution. (Sec. 5, Art. II, Constitution.) And in order that this declaration of principle may not just be an empty medley of
words, the Constitution in various sections thereof has provided the means towards its realization. For instance, section 6 of Articles XIII declares
that the State "shall afford protection to labor, especially to working women and minors, and shall regulated the relations between landowner
and tenant, and between labor and capital in industry and in agriculture." The same section also states that "the State may provide for
compulsory arbitration." In extraordinary cases mentioned in section 16, Articles VI, of the Constitution, the President of the Philippines may be
authorized by law, for a limited period and subject to such restrictions as the National Assembly may prescribed, to "promulgate rules and
regulations to carry out a declared national policy." Albeit, almost at the same time the Congress of the United States approved the National
Labor Regulations Act (49 Stat., 449) on July 5, 1935, commonly known as the Wagner Act, we were in the Philippines headway towards the
adoption of our fundamental law, pursuant to congressional authority given in the Tydings-McDuffie Independence Act, approved March 24,
1934. In our Bill of Rights we now find the following provision "The right to form associations or societies for purposes not contrary to law shall
not be abridged." (Par. 6, section 1, art. III, Constitution.) What was an agitation in the United States which brought about the recommendation
by the Commission on Industrial Relations created by an Act of Congress in 1912 for the adoption of a Labor Bill of Rights as an amendment to the
United States Constitution is, in our case, virtually an accepted principle, which may be expanded and vitalized by legislation to keep pace with
the development of time and circumstances.

By and large, these provisions in our Constitution all evince and express the need of shifting emphasis to community interest with a view to
affirmative enhancement of human values. In conformity with the constitutional objective and cognizant of the historical fact that industrial and
agricultural disputes had given rise to disquietude, bloodshed and revolution in our country, the National Assembly enacted Commonwealth Act
No. 103, entitled "An Act to afford protection of labor by creating a Court of Industrial Relations empowered to fix minimum wages for laborers
and maximum rental to be paid tenants, and to enforce compulsory arbitration between employers or landlords, and employees or tenants,
respectively; and by prescribing penalties for the violation of the orders" and, later, Commonwealth Act. No. 213, entitled, "An Act to define and
regulate legitimate labor organizations." (Asto this last act, vide "finding and policy," preamble [sec. 1]of the Wagner Act [49 Sta., 449]).

Commonwealth Act No. 103, approved October 29, 1936, was originally Bill No. 700 of the National Assembly. More light is shed by the
explanatory statement of the Bill than by what transpired in the course of the deliberation of the measure in the legislative chamber. "El presente
proyecto de ley," thus the explanatory statement of Bill No. 700, 'crea una Junta de Relaciones Industriales . . . y provee el arbitraje obligatorio. . .
de acuerdo con el Articulo 6, Titulo XIII de la Constitucion, el provee que "El Estado podrs establacerel arbitraje obligatorio." "Incorporating the
conclusion reached by a committee appointed, a year or so before it was observed that 'bajo la legislacion actual' " — evidently referring to Act
No. 4055 — "no existe instrumento adecuado para evitar las huelgas. El Departamentode Trabajo desempeña maramente el papel de
pacificadorentre las partes en controversia y sus decisiones no sonobligatorias ni para los patronos ni para los obreros. El pueblo la allegado a un
grado de desarrollo industrial, quehace imperiosa el que la intervencion del gobierno en estosconflictos sea mas efectiva . . . ." The creation of a
Court of Industrial Relations was thus proposed, endowed "no solamente del poder de arbitrar sino tambien del deberde investigar, decidir, y
hacer recomendaciones sobre las cuestiones en conflicto y los problem as que afectan al Capitaly al Trabajo en la Industria y la Agricultuta bajola
direccion del Presidente de la Mancomunidad de Filipinaso a peticion del Secretario del Trabajo.

xxx xxx xxx

From what has been stated, it appears that the legislation which are now called upon to construe was enacted in pursuance of what appears to
be deliberate embodiment of a new social policy, founded on the conception of a society integrated not by independent individuals dealing at
arms' length, but by interdependent members of a consolidated whole whose interests must be protected against mutual aggression and warfare
among and between divers and diverse units which are impelled by counter vailing and opposite individual and group interests, and this is
particularly true in the relationship between labor and capital. Social and industrial disturbances which fifty years ago were feudal-like and of
isolated importance may now well result in a serious strain upon the entire economic organism of the nation . In the United States labor
legislation has undergone a long process of development too long to nature here, culminating in the enactments of what were commonly known
as the Clayton Act, the Norris-La Guardia Act, and finally, the Wagner Act and the Fair Labor Standards Act of 1938. The Wagner Act created the
National Labor Relations Board as an instrumentality of the Federal Government in the settlement of labor disputes, which device is aimed at the
avoidance of unnecessary friction between labor and capital and the establishment of industrial peace. Scrutiny of legislation in that country and
of pronouncement made by its Supreme Court reveals a continuous renovation and change made necessary by the impact of changing needs and
economic pressure brought about by the irresistible momentum of new social and economic forces developed there. In the light of changes that
have occured, it is doubted if the pronouncement made by the said Supreme Court in 1905 (Lochner v. New York, 198, U.S., 45) or in 1908 (Adair
v. U.S., 52 Law. ed. 430, 208 U.S., 161, and Coppage v. Kansas, 236 U.S., 1) — cases which are relied upon by the petitioner in its printed
memorandum — still retain their virtuality at the present time. In the Philippines, social legislation has had a similar development although of
course to a much smaller degree and of different adaptation giving rise to several attempts at meeting and solving our peculiar social and
economic problems. (See Commonwealth to the National Assembly, September 2,1936; Executive Order No. 49, S. 1936). The system of voluntary
arbitration devised by Act No. 4055 of the defunct Philippine Legislature has apparently been abandoned by the enactment of the
aforementioned Commonwealth Acts Nos. 103 and 213. In the midst of changes that have taken place, it may likewise be doubted if the
pronouncement made by this court in the case of People vs. Pomar (46 Phil., 440) — also relied upon by the petitioner in its printed
memorandum — still retains its virtually as a living principle. The policy of laissez faire has to some extent given way the assumption by the
government of the right of intervention even in contractual relations affected with public interests.
 xxx xxx xxx

In Commonwealth Act No. 103, and it, our Government no longer performs the role of a mere mediator or intervenor but that of the supreme
arbiter.

En su siguiente senalmiento de error la recurrentealega que la conducta del investigador, la investigacion quepracticio y la manera como conocio del asunto
el Tribunalde Relaciobes Industriales le privaron de una vista i,parcialy justa, y constituyen privacion de supropiedad sinel debido proceso de ley. Para
demostrar la carencia de fundamento del senalmiento de error, creemos suficientereproducir a continuacion la forma como se practicio la investigacion por
el comisionado nombrado por el Tribunal de Relacionbes Industriales y la manera como secelebro la vista por dicho tribunal, tal como se expone en laorden
del 6 de mayo de 1939.

Hearing was held on April 3, 1939, where witnessesfor both the petitioners and the respondent testified. To supplement the facts brought out at
the hearing, the Court ordered one of its Special Agents to proceed to the premises of the mines to conduct a further investigation.

El comisionado fue nombrado por el Tribumal de RelacionesIndustriales en el su facultad conferidapor el articulo 10 de la ley No. 103 de Commonwealth yel
la inspeccion y vistas que celebraron el comisionado y eltribunal, respectivamente, las partes estuvieron representadasdebidamente, fueron oidas y
presentaron las pruebasque tenian disponibles y creyeron conveniente ofrecerTales inspeccion y vistas tenian el caracter de una vistajudicial imparcial y
justa y constituyen el debido procesode ley que garantiza la Constitucion.

Sostiene igualmente la recurrente que la orden del 6 demayo de 1939 es arbitraria porque no existen pruebassubstanciales ni competentes que la
sostengan. Sobre esteextremo, las conclusiones de hecho que ha sentado el Tribunalde Relaciones Industriales demuestran que la ordenimpugnada esta
sostenida por el resultado de la investigacion practicada por el comisionado y las pruebas que laspartes presentaron directamente ante el Tribunal.
Endichas conclusiones se han considerado y analizado por elTribunal de Relaciones Industriales todas las pruebas quelas partes presentaron y resulta
inevitable la conclusionde que la orden no es arbitraria y esta justificada y sotenida por los hechos probados.

El ultimo senalmiento de error guarda relacion conla parte de la orden del 6 mayo de 1939 que disponeque la recurrente pague a los 55 obreros repustos
losjornales que dejaron de percibir durante su separaciondel servicio. La recurrente sostiene que esta parte dela orden equivale a una sentencia por danos y
perjuiciosque el Tribunal de Relaciones Industriales no puede pronunciar por carecer de jurisdiccion. La pretension noes meritoria. El Tribunal de Relaciones
Industriales,conforme ya se ha dicho, es un tribunal especial y comotal tiene facultad para disponer que la recurrente paguelos jornales de sus empleados y
obreros que han sido repuestos.Los articulos 1 y 4 de la Ley No. 103 de Commonwealth,segun ha sido enmendado el primero por elarticulo 1 de la Ley No.
254, confieren facultad y jurisdiccion al tribunal de Relaciones Inbdustriales para conocer, resolver y decidir todas las cuestiones, controversiasy disputas
entre patronos y obreros y propietarios y terratenientes, y los jornales de los obreros repuestos, duranteel tiempo en que fueron separados del
servicio,esteban incluidos en las controverias y disputas sometidasal Departamento del Trabajo y certificados por este al Tribunal de Relaciones Industriales.

Se deniega el recurso de certiorari y se confiman laorden del 6 de mayo de 1939 y la resolucion del 17 deagosto del mismo ano, con las costas a la
recurrente. Asise ordena.

Avanceña, Diaz, Laurel y Moran, MM., estan conformes.

 Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. 101083 July 30, 1993

JUAN ANTONIO, ANNA ROSARIO and JOSE ALFONSO, all surnamed OPOSA, minors, and represented by their parents ANTONIO and RIZALINA OPOSA,
ROBERTA NICOLE SADIUA, minor, represented by her parents CALVIN and ROBERTA SADIUA, CARLO, AMANDA SALUD and PATRISHA, all surnamed
FLORES, minors and represented by their parents ENRICO and NIDA FLORES, GIANINA DITA R. FORTUN, minor, represented by her parents SIGRID and
DOLORES FORTUN, GEORGE II and MA. CONCEPCION, all surnamed MISA, minors and represented by their parents GEORGE and MYRA MISA, BENJAMIN
ALAN V. PESIGAN, minor, represented by his parents ANTONIO and ALICE PESIGAN, JOVIE MARIE ALFARO, minor, represented by her parents JOSE and
MARIA VIOLETA ALFARO, MARIA CONCEPCION T. CASTRO, minor, represented by her parents FREDENIL and JANE CASTRO, JOHANNA DESAMPARADO,
minor, represented by her parents JOSE and ANGELA DESAMPRADO, CARLO JOAQUIN T. NARVASA, minor, represented by his parents GREGORIO II and
CRISTINE CHARITY NARVASA, MA. MARGARITA, JESUS IGNACIO, MA. ANGELA and MARIE GABRIELLE, all surnamed SAENZ, minors, represented by their
parents ROBERTO and AURORA SAENZ, KRISTINE, MARY ELLEN, MAY, GOLDA MARTHE and DAVID IAN, all surnamed KING, minors, represented by their
parents MARIO and HAYDEE KING, DAVID, FRANCISCO and THERESE VICTORIA, all surnamed ENDRIGA, minors, represented by their parents BALTAZAR
and TERESITA ENDRIGA, JOSE MA. and REGINA MA., all surnamed ABAYA, minors, represented by their parents ANTONIO and MARICA ABAYA, MARILIN,
MARIO, JR. and MARIETTE, all surnamed CARDAMA, minors, represented by their parents MARIO and LINA CARDAMA, CLARISSA, ANN MARIE, NAGEL,
and IMEE LYN, all surnamed OPOSA, minors and represented by their parents RICARDO and MARISSA OPOSA, PHILIP JOSEPH, STEPHEN JOHN and ISAIAH
JAMES, all surnamed QUIPIT, minors, represented by their parents JOSE MAX and VILMI QUIPIT, BUGHAW CIELO, CRISANTO, ANNA, DANIEL and
FRANCISCO, all surnamed BIBAL, minors, represented by their parents FRANCISCO, JR. and MILAGROS BIBAL, and THE PHILIPPINE ECOLOGICAL
NETWORK, INC., petitioners,
vs.
THE HONORABLE FULGENCIO S. FACTORAN, JR., in his capacity as the Secretary of the Department of Environment and Natural Resources, and THE
HONORABLE ERIBERTO U. ROSARIO, Presiding Judge of the RTC, Makati, Branch 66, respondents.

Oposa Law Office for petitioners.

The Solicitor General for respondents.

DAVIDE, JR., J.:

In a broader sense, this petition bears upon the right of Filipinos to a balanced and healthful ecology which the petitioners dramatically associate with the
twin concepts of "inter-generational responsibility" and "inter-generational justice." Specifically, it touches on the issue of whether the said petitioners have
a cause of action to "prevent the misappropriation or impairment" of Philippine rainforests and "arrest the unabated hemorrhage of the country's vital life
support systems and continued rape of Mother Earth."

The controversy has its genesis in Civil Case No. 90-77 which was filed before Branch 66 (Makati, Metro Manila) of the Regional Trial Court (RTC), National
Capital Judicial Region. The principal plaintiffs therein, now the principal petitioners, are all minors duly represented and joined by their respective parents.
Impleaded as an additional plaintiff is the Philippine Ecological Network, Inc. (PENI), a domestic, non-stock and non-profit corporation organized for the
purpose of, inter alia, engaging in concerted action geared for the protection of our environment and natural resources. The original defendant was the
Honorable Fulgencio S. Factoran, Jr., then Secretary of the Department of Environment and Natural Resources (DENR). His substitution in this petition by
the new Secretary, the Honorable Angel C. Alcala, was subsequently ordered upon proper motion by the petitioners. 1 The complaint2 was instituted as a
taxpayers' class suit3 and alleges that the plaintiffs "are all citizens of the Republic of the Philippines, taxpayers, and entitled to the full benefit, use and
enjoyment of the natural resource treasure that is the country's virgin tropical forests." The same was filed for themselves and others who are equally
concerned about the preservation of said resource but are "so numerous that it is impracticable to bring them all before the Court." The minors further
asseverate that they "represent their generation as well as generations yet unborn."4 Consequently, it is prayed for that judgment be rendered:

. . . ordering defendant, his agents, representatives and other persons acting in his behalf to —

(1) Cancel all existing timber license agreements in the country;

(2) Cease and desist from receiving, accepting, processing, renewing or approving new timber license agreements.

and granting the plaintiffs ". . . such other reliefs just and equitable under the premises." 5

The complaint starts off with the general averments that the Philippine archipelago of 7,100 islands has a land area of thirty million (30,000,000) hectares
and is endowed with rich, lush and verdant rainforests in which varied, rare and unique species of flora and fauna may be found; these rainforests contain a
genetic, biological and chemical pool which is irreplaceable; they are also the habitat of indigenous Philippine cultures which have existed, endured and
flourished since time immemorial; scientific evidence reveals that in order to maintain a balanced and healthful ecology, the country's land area should be
utilized on the basis of a ratio of fifty-four per cent (54%) for forest cover and forty-six per cent (46%) for agricultural, residential, industrial, commercial and
other uses; the distortion and disturbance of this balance as a consequence of deforestation have resulted in a host of environmental tragedies, such as (a)
water shortages resulting from drying up of the water table, otherwise known as the "aquifer," as well as of rivers, brooks and streams, (b) salinization of
the water table as a result of the intrusion therein of salt water, incontrovertible examples of which may be found in the island of Cebu and the Municipality
of Bacoor, Cavite, (c) massive erosion and the consequential loss of soil fertility and agricultural productivity, with the volume of soil eroded estimated at
one billion (1,000,000,000) cubic meters per annum — approximately the size of the entire island of Catanduanes, (d) the endangering and extinction of the
country's unique, rare and varied flora and fauna, (e) the disturbance and dislocation of cultural communities, including the disappearance of the Filipino's
indigenous cultures, (f) the siltation of rivers and seabeds and consequential destruction of corals and other aquatic life leading to a critical reduction in
marine resource productivity, (g) recurrent spells of drought as is presently experienced by the entire country, (h) increasing velocity of typhoon winds
which result from the absence of windbreakers, (i) the floodings of lowlands and agricultural plains arising from the absence of the absorbent mechanism of
forests, (j) the siltation and shortening of the lifespan of multi-billion peso dams constructed and operated for the purpose of supplying water for domestic
uses, irrigation and the generation of electric power, and (k) the reduction of the earth's capacity to process carbon dioxide gases which has led to
perplexing and catastrophic climatic changes such as the phenomenon of global warming, otherwise known as the "greenhouse effect."

Plaintiffs further assert that the adverse and detrimental consequences of continued and deforestation are so capable of unquestionable demonstration
that the same may be submitted as a matter of judicial notice. This notwithstanding, they expressed their intention to present expert witnesses as well as
documentary, photographic and film evidence in the course of the trial.

As their cause of action, they specifically allege that:

CAUSE OF ACTION

7. Plaintiffs replead by reference the foregoing allegations.

8. Twenty-five (25) years ago, the Philippines had some sixteen (16) million hectares of rainforests constituting roughly 53% of the
country's land mass.

9. Satellite images taken in 1987 reveal that there remained no more than 1.2 million hectares of said rainforests or four per cent
(4.0%) of the country's land area.

10. More recent surveys reveal that a mere 850,000 hectares of virgin old-growth rainforests are left, barely 2.8% of the entire land
mass of the Philippine archipelago and about 3.0 million hectares of immature and uneconomical secondary growth forests.

11. Public records reveal that the defendant's, predecessors have granted timber license agreements ('TLA's') to various corporations
to cut the aggregate area of 3.89 million hectares for commercial logging purposes.

A copy of the TLA holders and the corresponding areas covered is hereto attached as Annex "A".

12. At the present rate of deforestation, i.e. about 200,000 hectares per annum or 25 hectares per hour — nighttime, Saturdays,
Sundays and holidays included — the Philippines will be bereft of forest resources after the end of this ensuing decade, if not earlier.

13. The adverse effects, disastrous consequences, serious injury and irreparable damage of this continued trend of deforestation to the
plaintiff minor's generation and to generations yet unborn are evident and incontrovertible. As a matter of fact, the environmental
damages enumerated in paragraph 6 hereof are already being felt, experienced and suffered by the generation of plaintiff adults.

14. The continued allowance by defendant of TLA holders to cut and deforest the remaining forest stands will work great damage and
irreparable injury to plaintiffs — especially plaintiff minors and their successors — who may never see, use, benefit from and enjoy this
rare and unique natural resource treasure.

This act of defendant constitutes a misappropriation and/or impairment of the natural resource property he holds in trust for the
benefit of plaintiff minors and succeeding generations.

15. Plaintiffs have a clear and constitutional right to a balanced and healthful ecology and are entitled to protection by the State in its
capacity as the parens patriae.

16. Plaintiff have exhausted all administrative remedies with the defendant's office. On March 2, 1990, plaintiffs served upon
defendant a final demand to cancel all logging permits in the country.

A copy of the plaintiffs' letter dated March 1, 1990 is hereto attached as Annex "B".

17. Defendant, however, fails and refuses to cancel the existing TLA's to the continuing serious damage and extreme prejudice of
plaintiffs.
 18. The continued failure and refusal by defendant to cancel the TLA's is an act violative of the rights of plaintiffs, especially plaintiff
minors who may be left with a country that is desertified (sic), bare, barren and devoid of the wonderful flora, fauna and indigenous
cultures which the Philippines had been abundantly blessed with.

19. Defendant's refusal to cancel the aforementioned TLA's is manifestly contrary to the public policy enunciated in the Philippine
Environmental Policy which, in pertinent part, states that it is the policy of the State —

(a) to create, develop, maintain and improve conditions under which man and nature can thrive in productive and enjoyable harmony
with each other;

(b) to fulfill the social, economic and other requirements of present and future generations of Filipinos and;

(c) to ensure the attainment of an environmental quality that is conductive to a life of dignity and well-being. (P.D. 1151, 6 June 1977)

20. Furthermore, defendant's continued refusal to cancel the aforementioned TLA's is contradictory to the Constitutional policy of the
State to —

a. effect "a more equitable distribution of opportunities, income and wealth" and "make full and efficient use of natural resources
(sic)." (Section 1, Article XII of the Constitution);

b. "protect the nation's marine wealth." (Section 2, ibid);

c. "conserve and promote the nation's cultural heritage and resources (sic)" (Section 14, Article XIV, id.);

d. "protect and advance the right of the people to a balanced and healthful ecology in accord with the rhythm and harmony of nature."
(Section 16, Article II, id.)

21. Finally, defendant's act is contrary to the highest law of humankind — the natural law — and violative of plaintiffs' right to self-
preservation and perpetuation.

22. There is no other plain, speedy and adequate remedy in law other than the instant action to arrest the unabated hemorrhage of
the country's vital life support systems and continued rape of Mother Earth. 6

On 22 June 1990, the original defendant, Secretary Factoran, Jr., filed a Motion to Dismiss the complaint based on two (2) grounds, namely: (1) the plaintiffs
have no cause of action against him and (2) the issue raised by the plaintiffs is a political question which properly pertains to the legislative or executive
branches of Government. In their 12 July 1990 Opposition to the Motion, the petitioners maintain that (1) the complaint shows a clear and unmistakable
cause of action, (2) the motion is dilatory and (3) the action presents a justiciable question as it involves the defendant's abuse of discretion.

On 18 July 1991, respondent Judge issued an order granting the aforementioned motion to dismiss. 7 In the said order, not only was the defendant's claim —
that the complaint states no cause of action against him and that it raises a political question — sustained, the respondent Judge further ruled that the
granting of the relief prayed for would result in the impairment of contracts which is prohibited by the fundamental law of the land.

Plaintiffs thus filed the instant special civil action for certiorari under Rule 65 of the Revised Rules of Court and ask this Court to rescind and set aside the
dismissal order on the ground that the respondent Judge gravely abused his discretion in dismissing the action. Again, the parents of the plaintiffs-minors
not only represent their children, but have also joined the latter in this case.8

On 14 May 1992, We resolved to give due course to the petition and required the parties to submit their respective Memoranda after the Office of the
Solicitor General (OSG) filed a Comment in behalf of the respondents and the petitioners filed a reply thereto.

Petitioners contend that the complaint clearly and unmistakably states a cause of action as it contains sufficient allegations concerning their right to a sound
environment based on Articles 19, 20 and 21 of the Civil Code (Human Relations), Section 4 of Executive Order (E.O.) No. 192 creating the DENR, Section 3
of Presidential Decree (P.D.) No. 1151 (Philippine Environmental Policy), Section 16, Article II of the 1987 Constitution recognizing the right of the people to
a balanced and healthful ecology, the concept of generational genocide in Criminal Law and the concept of man's inalienable right to self-preservation and
self-perpetuation embodied in natural law. Petitioners likewise rely on the respondent's correlative obligation per Section 4 of E.O. No. 192, to safeguard
the people's right to a healthful environment.

It is further claimed that the issue of the respondent Secretary's alleged grave abuse of discretion in granting Timber License Agreements (TLAs) to cover
more areas for logging than what is available involves a judicial question.

Anent the invocation by the respondent Judge of the Constitution's non-impairment clause, petitioners maintain that the same does not apply in this case
because TLAs are not contracts. They likewise submit that even if TLAs may be considered protected by the said clause, it is well settled that they may still
be revoked by the State when the public interest so requires.
On the other hand, the respondents aver that the petitioners failed to allege in their complaint a specific legal right violated by the respondent Secretary for
which any relief is provided by law. They see nothing in the complaint but vague and nebulous allegations concerning an "environmental right" which
supposedly entitles the petitioners to the "protection by the state in its capacity as parens patriae." Such allegations, according to them, do not reveal a
valid cause of action. They then reiterate the theory that the question of whether logging should be permitted in the country is a political question which
should be properly addressed to the executive or legislative branches of Government. They therefore assert that the petitioners' resources is not to file an
action to court, but to lobby before Congress for the passage of a bill that would ban logging totally.

As to the matter of the cancellation of the TLAs, respondents submit that the same cannot be done by the State without due process of law. Once issued, a
TLA remains effective for a certain period of time — usually for twenty-five (25) years. During its effectivity, the same can neither be revised nor cancelled
unless the holder has been found, after due notice and hearing, to have violated the terms of the agreement or other forestry laws and regulations.
Petitioners' proposition to have all the TLAs indiscriminately cancelled without the requisite hearing would be violative of the requirements of due process.

Before going any further, We must first focus on some procedural matters. Petitioners instituted Civil Case No. 90-777 as a class suit. The original defendant
and the present respondents did not take issue with this matter. Nevertheless, We hereby rule that the said civil case is indeed a class suit. The subject
matter of the complaint is of common and general interest not just to several, but to all citizens of the Philippines. Consequently, since the parties are so
numerous, it, becomes impracticable, if not totally impossible, to bring all of them before the court. We likewise declare that the plaintiffs therein are
numerous and representative enough to ensure the full protection of all concerned interests. Hence, all the requisites for the filing of a valid class suit under
Section 12, Rule 3 of the Revised Rules of Court are present both in the said civil case and in the instant petition, the latter being but an incident to the
former.

This case, however, has a special and novel element. Petitioners minors assert that they represent their generation as well as generations yet unborn. We
find no difficulty in ruling that they can, for themselves, for others of their generation and for the succeeding generations, file a class suit. Their personality
to sue in behalf of the succeeding generations can only be based on the concept of intergenerational responsibility insofar as the right to a balanced and
healthful ecology is concerned. Such a right, as hereinafter expounded, considers
the "rhythm and harmony of nature." Nature means the created world in its entirety. 9 Such rhythm and harmony indispensably include, inter alia, the
judicious disposition, utilization, management, renewal and conservation of the country's forest, mineral, land, waters, fisheries, wildlife, off-shore areas
and other natural resources to the end that their exploration, development and utilization be equitably accessible to the present as well as future
generations. 10Needless to say, every generation has a responsibility to the next to preserve that rhythm and harmony for the full enjoyment of a balanced
and healthful ecology. Put a little differently, the minors' assertion of their right to a sound environment constitutes, at the same time, the performance of
their obligation to ensure the protection of that right for the generations to come.

The locus standi of the petitioners having thus been addressed, We shall now proceed to the merits of the petition.

After a careful perusal of the complaint in question and a meticulous consideration and evaluation of the issues raised and arguments adduced by the
parties, We do not hesitate to find for the petitioners and rule against the respondent Judge's challenged order for having been issued with grave abuse of
discretion amounting to lack of jurisdiction. The pertinent portions of the said order reads as follows:

xxx xxx xxx

After a careful and circumspect evaluation of the Complaint, the Court cannot help but agree with the defendant. For although we
believe that plaintiffs have but the noblest of all intentions, it (sic) fell short of alleging, with sufficient definiteness, a specific legal right
they are seeking to enforce and protect, or a specific legal wrong they are seeking to prevent and redress (Sec. 1, Rule 2, RRC).
Furthermore, the Court notes that the Complaint is replete with vague assumptions and vague conclusions based on unverified data. In
fine, plaintiffs fail to state a cause of action in its Complaint against the herein defendant.

Furthermore, the Court firmly believes that the matter before it, being impressed with political color and involving a matter of public
policy, may not be taken cognizance of by this Court without doing violence to the sacred principle of "Separation of Powers" of the
three (3) co-equal branches of the Government.

The Court is likewise of the impression that it cannot, no matter how we stretch our jurisdiction, grant the reliefs prayed for by the
plaintiffs, i.e., to cancel all existing timber license agreements in the country and to cease and desist from receiving, accepting,
processing, renewing or approving new timber license agreements. For to do otherwise would amount to "impairment of contracts"
abhored (sic) by the fundamental law. 11

We do not agree with the trial court's conclusions that the plaintiffs failed to allege with sufficient definiteness a specific legal right involved or a specific
legal wrong committed, and that the complaint is replete with vague assumptions and conclusions based on unverified data. A reading of the complaint
itself belies these conclusions.

The complaint focuses on one specific fundamental legal right — the right to a balanced and healthful ecology which, for the first time in our nation's
constitutional history, is solemnly incorporated in the fundamental law. Section 16, Article II of the 1987 Constitution explicitly provides:

Sec. 16. The State shall protect and advance the right of the people to a balanced and healthful ecology in accord with the rhythm and
harmony of nature.
 This right unites with the right to health which is provided for in the preceding section of the same article:

Sec. 15. The State shall protect and promote the right to health of the people and instill health consciousness among them.

While the right to a balanced and healthful ecology is to be found under the Declaration of Principles and State Policies and not under the Bill of Rights, it
does not follow that it is less important than any of the civil and political rights enumerated in the latter. Such a right belongs to a different category of
rights altogether for it concerns nothing less than self-preservation and self-perpetuation — aptly and fittingly stressed by the petitioners — the
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 humankind. If they are now explicitly mentioned in the fundamental charter, it is
because of the well-founded fear of its framers that unless the rights to a balanced and healthful ecology and to health are mandated as state policies by
the Constitution itself, thereby highlighting their continuing importance and imposing upon the state a solemn obligation to preserve the first and protect
and advance the second, the day would not be too far when all else would be lost not only for the present generation, but also for those to come —
generations which stand to inherit nothing but parched earth incapable of sustaining life.

The right to a balanced and healthful ecology carries with it the correlative duty to refrain from impairing the environment. During the debates on this right
in one of the plenary sessions of the 1986 Constitutional Commission, the following exchange transpired between Commissioner Wilfrido Villacorta and
Commissioner Adolfo Azcuna who sponsored the section in question:

MR. VILLACORTA:

Does this section mandate the State to provide sanctions against all forms of pollution — air, water and noise
pollution?

MR. AZCUNA:

Yes, Madam President. The right to healthful (sic) environment necessarily carries with it the correlative duty of
not impairing the same and, therefore, sanctions may be provided for impairment of environmental balance. 12

The said right implies, among many other things, the judicious management and conservation of the country's forests.

Without such forests, the ecological or environmental balance would be irreversiby disrupted.

Conformably with the enunciated right to a balanced and healthful ecology and the right to health, as well as the other related provisions of the
Constitution concerning the conservation, development and utilization of the country's natural resources, 13 then President Corazon C. Aquino promulgated
on 10 June 1987 E.O. No. 192, 14 Section 4 of which expressly mandates that the Department of Environment and Natural Resources "shall be the primary
government agency responsible for the conservation, management, development and proper use of the country's environment and natural resources,
specifically forest and grazing lands, mineral, resources, including those in reservation and watershed areas, and lands of the public domain, as well as the
licensing and regulation of all natural resources as may be provided for by law in order to ensure equitable sharing of the benefits derived therefrom for the
welfare of the present and future generations of Filipinos." Section 3 thereof makes the following statement of policy:

Sec. 3. Declaration of Policy. — It is hereby declared the policy of the State to ensure the sustainable use, development, management,
renewal, and conservation of the country's forest, mineral, land, off-shore areas and other natural resources, including the protection
and enhancement of the quality of the environment, and equitable access of the different segments of the population to the
development and the use of the country's natural resources, not only for the present generation but for future generations as well. It is
also the policy of the state to recognize and apply a true value system including social and environmental cost implications relative to
their utilization, development and conservation of our natural resources.

This policy declaration is substantially re-stated it Title XIV, Book IV of the Administrative Code of 1987,15 specifically in Section 1 thereof which reads:

Sec. 1. Declaration of Policy. — (1) The State shall ensure, for the benefit of the Filipino people, the full exploration and development as
well as the judicious disposition, utilization, management, renewal and conservation of the country's forest, mineral, land, waters,
fisheries, wildlife, off-shore areas and other natural resources, consistent with the necessity of maintaining a sound ecological balance
and protecting and enhancing the quality of the environment and the objective of making the exploration, development and utilization
of such natural resources equitably accessible to the different segments of the present as well as future generations.

(2) The State shall likewise recognize and apply a true value system that takes into account social and environmental cost implications
relative to the utilization, development and conservation of our natural resources.

The above provision stresses "the necessity of maintaining a sound ecological balance and protecting and enhancing the quality of the environment."
Section 2 of the same Title, on the other hand, specifically speaks of the mandate of the DENR; however, it makes particular reference to the fact of the
agency's being subject to law and higher authority. Said section provides:
 Sec. 2. Mandate. — (1) The Department of Environment and Natural Resources shall be primarily responsible for the implementation
of the foregoing policy.

(2) It shall, subject to law and higher authority, be in charge of carrying out the State's constitutional mandate to control and supervise
the exploration, development, utilization, and conservation of the country's natural resources.

Both E.O. NO. 192 and the Administrative Code of 1987 have set the objectives which will serve as the bases for policy formulation, and have defined the
powers and functions of the DENR.

It may, however, be recalled that even before the ratification of the 1987 Constitution, specific statutes already paid special attention to the "environmental
right" of the present and future generations. On 6 June 1977, P.D. No. 1151 (Philippine Environmental Policy) and P.D. No. 1152 (Philippine Environment
Code) were issued. The former "declared a continuing policy of the State (a) to create, develop, maintain and improve conditions under which man and
nature can thrive in productive and enjoyable harmony with each other, (b) to fulfill the social, economic and other requirements of present and future
generations of Filipinos, and (c) to insure the attainment of an environmental quality that is conducive to a life of dignity and well-being." 16 As its goal, it
speaks of the "responsibilities of each generation as trustee and guardian of the environment for succeeding generations." 17 The latter statute, on the
other hand, gave flesh to the said policy.

Thus, the right of the petitioners (and all those they represent) to a balanced and healthful ecology is as clear as the DENR's duty — under its mandate and
by virtue of its powers and functions under E.O. No. 192 and the Administrative Code of 1987 — to protect and advance the said right.

A denial or violation of that right by the other who has the corelative duty or obligation to respect or protect the same gives rise to a cause of action.
Petitioners maintain that the granting of the TLAs, which they claim was done with grave abuse of discretion, violated their right to a balanced and healthful
ecology; hence, the full protection thereof requires that no further TLAs should be renewed or granted.

A cause of action is defined as:

. . . an act or omission of one party in violation of the legal right or rights of the other; and its essential elements are legal right of the
plaintiff, correlative obligation of the defendant, and act or omission of the defendant in violation of said legal right. 18

It is settled in this jurisdiction that in a motion to dismiss based on the ground that the complaint fails to state a cause of action, 19 the question submitted
to the court for resolution involves the sufficiency of the facts alleged in the complaint itself. No other matter should be considered; furthermore, the truth
of falsity of the said allegations is beside the point for the truth thereof is deemed hypothetically admitted. The only issue to be resolved in such a case is:
admitting such alleged facts to be true, may the court render a valid judgment in accordance with the prayer in the complaint? 20 In Militante vs.
Edrosolano, 21 this Court laid down the rule that the judiciary should "exercise the utmost care and circumspection in passing upon a motion to dismiss on
the ground of the absence thereof [cause of action] lest, by its failure to manifest a correct appreciation of the facts alleged and deemed hypothetically
admitted, what the law grants or recognizes is effectively nullified. If that happens, there is a blot on the legal order. The law itself stands in disrepute."

After careful examination of the petitioners' complaint, We find the statements under the introductory affirmative allegations, as well as the specific
averments under the sub-heading CAUSE OF ACTION, to be adequate enough to show, prima facie, the claimed violation of their rights. On the basis
thereof, they may thus be granted, wholly or partly, the reliefs prayed for. It bears stressing, however, that insofar as the cancellation of the TLAs is
concerned, there is the need to implead, as party defendants, the grantees thereof for they are indispensable parties.

The foregoing considered, Civil Case No. 90-777 be said to raise a political question. Policy formulation or determination by the executive or legislative
branches of Government is not squarely put in issue. What is principally involved is the enforcement of a right vis-a-vis policies already formulated and
expressed in legislation. It must, nonetheless, be emphasized that the political question doctrine is no longer, the insurmountable obstacle to the exercise of
judicial power or the impenetrable shield that protects executive and legislative actions from judicial inquiry or review. The second paragraph of section 1,
Article VIII of the Constitution states that:

Judicial power includes the duty of the courts of justice to settle actual controversies involving rights which are legally demandable and
enforceable, and to determine whether or not there has been a grave abuse of discretion amounting to lack or excess of jurisdiction on
the part of any branch or instrumentality of the Government.

Commenting on this provision in his book, Philippine Political Law, 22 Mr. Justice Isagani A. Cruz, a distinguished member of this Court, says:

The first part of the authority represents the traditional concept of judicial power, involving the settlement of conflicting rights as
conferred as law. The second part of the authority represents a broadening of judicial power to enable the courts of justice to review
what was before forbidden territory, to wit, the discretion of the political departments of the government.

As worded, the new provision vests in the judiciary, and particularly the Supreme Court, the power to rule upon even the wisdom of
the decisions of the executive and the legislature and to declare their acts invalid for lack or excess of jurisdiction because tainted with
grave abuse of discretion. The catch, of course, is the meaning of "grave abuse of discretion," which is a very elastic phrase that can
expand or contract according to the disposition of the judiciary.

In Daza vs. Singson, 23 Mr. Justice Cruz, now speaking for this Court, noted:
 In the case now before us, the jurisdictional objection becomes even less tenable and decisive. The reason is that, even if we were to
assume that the issue presented before us was political in nature, we would still not be precluded from revolving it under the
expanded jurisdiction conferred upon us that now covers, in proper cases, even the political question. Article VII, Section 1, of the
Constitution clearly provides: . . .

The last ground invoked by the trial court in dismissing the complaint is the non-impairment of contracts clause found in the Constitution. The court a
quo declared that:

The Court is likewise of the impression that it cannot, no matter how we stretch our jurisdiction, grant the reliefs prayed for by the
plaintiffs, i.e., to cancel all existing timber license agreements in the country and to cease and desist from receiving, accepting,
processing, renewing or approving new timber license agreements. For to do otherwise would amount to "impairment of contracts"
abhored (sic) by the fundamental law. 24

We are not persuaded at all; on the contrary, We are amazed, if not shocked, by such a sweeping pronouncement. In the first place, the respondent
Secretary did not, for obvious reasons, even invoke in his motion to dismiss the non-impairment clause. If he had done so, he would have acted with utmost
infidelity to the Government by providing undue and unwarranted benefits and advantages to the timber license holders because he would have forever
bound the Government to strictly respect the said licenses according to their terms and conditions regardless of changes in policy and the demands of
public interest and welfare. He was aware that as correctly pointed out by the petitioners, into every timber license must be read Section 20 of the Forestry
Reform Code (P.D. No. 705) which provides:

. . . Provided, That when the national interest so requires, the President may amend, modify, replace or rescind any contract,
concession, permit, licenses or any other form of privilege granted herein . . .

Needless to say, all licenses may thus be revoked or rescinded by executive action. It is not a contract, property or a property right protested by
the due process clause of the Constitution. In Tan vs. Director of Forestry, 25 this Court held:

. . . A timber license is an instrument by which the State regulates the utilization and disposition of forest resources to the end that
public welfare is promoted. A timber license is not a contract within the purview of the due process clause; it is only a license or
privilege, which can be validly withdrawn whenever dictated by public interest or public welfare as in this case.

A license is merely a permit or privilege to do what otherwise would be unlawful, and is not a contract between the authority, federal,
state, or municipal, granting it and the person to whom it is granted; neither is it property or a property right, nor does it create a
vested right; nor is it taxation (37 C.J. 168). Thus, this Court held that the granting of license does not create irrevocable rights, neither
is it property or property rights (People vs. Ong Tin, 54 O.G. 7576).

We reiterated this pronouncement in Felipe Ysmael, Jr. & Co., Inc. vs. Deputy Executive Secretary: 26

. . . Timber licenses, permits and license agreements are the principal instruments by which the State regulates the utilization and
disposition of forest resources to the end that public welfare is promoted. And it can hardly be gainsaid that they merely evidence a
privilege granted by the State to qualified entities, and do not vest in the latter a permanent or irrevocable right to the particular
concession area and the forest products therein. They may be validly amended, modified, replaced or rescinded by the Chief Executive
when national interests so require. Thus, they are not deemed contracts within the purview of the due process of law clause
[See Sections 3(ee) and 20 of Pres. Decree No. 705, as amended. Also, Tan v. Director of Forestry, G.R. No.L-24548, October 27, 1983,
125 SCRA 302].

Since timber licenses are not contracts, the non-impairment clause, which reads:

Sec. 10. No law impairing, the obligation of contracts shall be passed. 27

cannot be invoked.

In the second place, even if it is to be assumed that the same are contracts, the instant case does not involve a law or even an executive issuance declaring
the cancellation or modification of existing timber licenses. Hence, the non-impairment clause cannot as yet be invoked. Nevertheless, granting further that
a law has actually been passed mandating cancellations or modifications, the same cannot still be stigmatized as a violation of the non-impairment clause.
This is because by its very nature and purpose, such as law could have only been passed in the exercise of the police power of the state for the purpose of
advancing the right of the people to a balanced and healthful ecology, promoting their health and enhancing the general welfare. In Abe vs. Foster
Wheeler Corp. 28 this Court stated:

The freedom of contract, under our system of government, is not meant to be absolute. The same is understood to be subject to
reasonable legislative regulation aimed at the promotion of public health, moral, safety and welfare. In other words, the constitutional
guaranty of non-impairment of obligations of contract is limited by the exercise of the police power of the State, in the interest of
public health, safety, moral and general welfare.

The reason for this is emphatically set forth in Nebia vs. New York, 29 quoted in Philippine American Life Insurance Co. vs. Auditor General,30 to wit:
 Under our form of government the use of property and the making of contracts are normally matters of private and not of public
concern. The general rule is that both shall be free of governmental interference. But neither property rights nor contract rights are
absolute; for government cannot exist if the citizen may at will use his property to the detriment of his fellows, or exercise his freedom
of contract to work them harm. Equally fundamental with the private right is that of the public to regulate it in the common interest.

In short, the non-impairment clause must yield to the police power of the state. 31

Finally, it is difficult to imagine, as the trial court did, how the non-impairment clause could apply with respect to the prayer to enjoin the respondent
Secretary from receiving, accepting, processing, renewing or approving new timber licenses for, save in cases of renewal, no contract would have as of yet
existed in the other instances. Moreover, with respect to renewal, the holder is not entitled to it as a matter of right.

WHEREFORE, being impressed with merit, the instant Petition is hereby GRANTED, and the challenged Order of respondent Judge of 18 July 1991 dismissing
Civil Case No. 90-777 is hereby set aside. The petitioners may therefore amend their complaint to implead as defendants the holders or grantees of the
questioned timber license agreements.

No pronouncement as to costs.

SO ORDERED.

Cruz, Padilla, Bidin, Griño-Aquino, Regalado, Romero, Nocon, Bellosillo, Melo and Quiason, JJ., concur.

Narvasa, C.J., Puno and Vitug, JJ., took no part.

Separate Opinions

FELICIANO, J., concurring

I join in the result reached by my distinguished brother in the Court, Davide, Jr., J., in this case which, to my mind, is one of the most important cases
decided by this Court in the last few years. The seminal principles laid down in this decision are likely to influence profoundly the direction and course of the
protection and management of the environment, which of course embraces the utilization of all the natural resources in the territorial base of our polity. I
have therefore sought to clarify, basically to myself, what the Court appears to be saying.

The Court explicitly states that petitioners have the locus standi necessary to sustain the bringing and, maintenance of this suit (Decision, pp. 11-12). Locus
standi is not a function of petitioners' claim that their suit is properly regarded as a class suit. I understand locus standi to refer to the legal interest which a
plaintiff must have in the subject matter of the suit. Because of the very broadness of the concept of "class" here involved — membership in this "class"
appears to embrace everyone living in the country whether now or in the future — it appears to me that everyone who may be expected to benefit from
the course of action petitioners seek to require public respondents to take, is vested with the necessary locus standi. The Court may be seen therefore to be
recognizing a beneficiaries' right of action in the field of environmental protection, as against both the public administrative agency directly concerned and
the private persons or entities operating in the field or sector of activity involved. Whether such beneficiaries' right of action may be found under any and
all circumstances, or whether some failure to act, in the first instance, on the part of the governmental agency concerned must be shown ("prior exhaustion
of administrative remedies"), is not discussed in the decision and presumably is left for future determination in an appropriate case.

The Court has also declared that the complaint has alleged and focused upon "one specific fundamental legal right — the right to a balanced and healthful
ecology" (Decision, p. 14). There is no question that "the right to a balanced and healthful ecology" is "fundamental" and that, accordingly, it has been
"constitutionalized." But although it is fundamental in character, I suggest, with very great respect, that it cannot be characterized as "specific," without
doing excessive violence to language. It is in fact very difficult to fashion language more comprehensive in scope and generalized in character than a right to
"a balanced and healthful ecology." The list of particular claims which can be subsumed under this rubic appears to be entirely open-ended: prevention and
control of emission of toxic fumes and smoke from factories and motor vehicles; of discharge of oil, chemical effluents, garbage and raw sewage into rivers,
inland and coastal waters by vessels, oil rigs, factories, mines and whole communities; of dumping of organic and inorganic wastes on open land, streets and
thoroughfares; failure to rehabilitate land after strip-mining or open-pit mining; kaingin or slash-and-burn farming; destruction of fisheries, coral reefs and
other living sea resources through the use of dynamite or cyanide and other chemicals; contamination of ground water resources; loss of certain species of
fauna and flora; and so on. The other statements pointed out by the Court: Section 3, Executive Order No. 192 dated 10 June 1987; Section 1, Title XIV, Book
IV of the 1987 Administrative Code; and P.D. No. 1151, dated 6 June 1977 — all appear to be formulations of policy, as general and abstract as the
constitutional statements of basic policy in Article II, Section 16 ("the right — to a balanced and healthful ecology") and 15 ("the right to health").

P.D. No. 1152, also dated 6 June 1977, entitled "The Philippine Environment Code," is, upon the other hand, a compendious collection of more "specific
environment management policies" and "environment quality standards" (fourth "Whereas" clause, Preamble) relating to an extremely wide range of
topics:

(a) air quality management;

(b) water quality management;

 (c) land use management;

(d) natural resources management and conservation embracing:

(i) fisheries and aquatic resources;

(ii) wild life;

(iii) forestry and soil conservation;

(iv) flood control and natural calamities;

(v) energy development;

(vi) conservation and utilization of surface and ground water

(vii) mineral resources

Two (2) points are worth making in this connection. Firstly, neither petitioners nor the Court has identified the particular provision or provisions (if any) of
the Philippine Environment Code which give rise to a specific legal right which petitioners are seeking to enforce. Secondly, the Philippine Environment Code
identifies with notable care the particular government agency charged with the formulation and implementation of guidelines and programs dealing with
each of the headings and sub-headings mentioned above. The Philippine Environment Code does not, in other words, appear to contemplate action on the
part of private persons who are beneficiaries of implementation of that Code.

As a matter of logic, by finding petitioners' cause of action as anchored on a legal right comprised in the constitutional statements above noted, the Court is
in effect saying that Section 15 (and Section 16) of Article II of the Constitution are self-executing and judicially enforceable even in their present form. The
implications of this doctrine will have to be explored in future cases; those implications are too large and far-reaching in nature even to be hinted at here.

My suggestion is simply that petitioners must, before the trial court, show a more specific legal right — a right cast in language of a significantly lower order
of generality than Article II (15) of the Constitution — that is or may be violated by the actions, or failures to act, imputed to the public respondent by
petitioners so that the trial court can validly render judgment granting all or part of the relief prayed for. To my mind, the Court should be understood as
simply saying that such a more specific legal right or rights may well exist in our corpus of law, considering the general policy principles found in the
Constitution and the existence of the Philippine Environment Code, and that the trial court should have given petitioners an effective opportunity so to
demonstrate, instead of aborting the proceedings on a motion to dismiss.

It seems to me important that the legal right which is an essential component of a cause of action be a specific, operable legal right, rather than a
constitutional or statutory policy, for at least two (2) reasons. One is that unless the legal right claimed to have been violated or disregarded is given
specification in operational terms, defendants may well be unable to defend themselves intelligently and effectively; in other words, there are due process
dimensions to this matter.

The second is a broader-gauge consideration — where a specific violation of law or applicable regulation is not alleged or proved, petitioners can be
expected to fall back on the expanded conception of judicial power in the second paragraph of Section 1 of Article VIII of the Constitution which reads:

Section 1. . . .

Judicial power includes the duty of the courts of justice to settle actual controversies involving rights which are legally demandable and
enforceable, and to determine whether or not there has been a grave abuse of discretion amounting to lack or excess of jurisdiction on
the part of any branch or instrumentality of the Government. (Emphasis supplied)

When substantive standards as general as "the right to a balanced and healthy ecology" and "the right to health" are combined with remedial
standards as broad ranging as "a grave abuse of discretion amounting to lack or excess of jurisdiction," the result will be, it is respectfully
submitted, to propel courts into the uncharted ocean of social and economic policy making. At least in respect of the vast area of environmental
protection and management, our courts have no claim to special technical competence and experience and professional qualification. Where no
specific, operable norms and standards are shown to exist, then the policy making departments — the legislative and executive departments —
must be given a real and effective opportunity to fashion and promulgate those norms and standards, and to implement them before the courts
should intervene.

My learned brother Davide, Jr., J., rightly insists that the timber companies, whose concession agreements or TLA's petitioners demand public respondents
should cancel, must be impleaded in the proceedings below. It might be asked that, if petitioners' entitlement to the relief demanded is not dependent
upon proof of breach by the timber companies of one or more of the specific terms and conditions of their concession agreements (and this, petitioners
implicitly assume), what will those companies litigate about? The answer I suggest is that they may seek to dispute the existence of the specific legal right
petitioners should allege, as well as the reality of the claimed factual nexus between petitioners' specific legal rights and the claimed wrongful acts or
failures to act of public respondent administrative agency. They may also controvert the appropriateness of the remedy or remedies demanded by
petitioners, under all the circumstances which exist.

I vote to grant the Petition for Certiorari because the protection of the environment, including the forest cover of our territory, is of extreme importance for
the country. The doctrines set out in the Court's decision issued today should, however, be subjected to closer examination.

# Footnotes

1 Rollo, 164; 186.

2 Id., 62-65, exclusive of annexes.

3 Under Section 12, Rule 3, Revised Rules of Court.

4 Rollo, 67.

5 Id., 74.

6 Rollo, 70-73.

7 Annex "B" of Petitions; Id., 43-44.

8 Paragraph 7, Petition, 6; Rollo, 20.

9 Webster's Third New International Dictionary, unabridged, 1986, 1508.

10 Title XIV (Environment and Natural Resources), Book IV of the Administrative Code of 1987, E.O. No. 292.

11 Annex "B" of Petition; Rollo, 43-44.

12 Record of the Constitutional Commission, vol. 4, 913.

13 For instance, the Preamble and Article XII on the National Economy and Patrimony.

14 The Reorganization Act of the Department of Environment and Natural Resources.

15 E.O. No. 292.

16 Section 1.

17 Section 2.

18 Ma-ao Sugar Central Co. vs. Barrios, 79 Phil. 666 [1947]; Community Investment and Finance Corp. vs. Garcia, 88 Phil. 215 [1951];
Remitere vs. Vda.de Yulo, 16 SCRA 251 [1966]; Caseñas vs. Rosales, 19 SCRA 462 [1967]; Virata vs. Sandiganbayan, 202 SCRA 680
[1991]; Madrona vs. Rosal, 204 SCRA 1 [1991].

19 Section 1(q), Rule 16, Revised Rules of Court.

20 Adamos vs. J.M. Tuason and Co., Inc. 25 SCRA 529 [1968]; Virata vs. Sandiganbayn, supra; Madrona vs. Rosal, supra.

21 39 SCRA 473, 479 [1971].

22 1991 ed., 226-227.

23 180 SCRA 496, 501-502 [1989]. See also, Coseteng vs. Mitra, 187 SCRA 377 [1990]; Gonzales vs. Macaraig, 191 SCRA 452 [1990];
Llamas vs. Orbos, 202 SCRA 844 [1991]; Bengzon vs. Senate Blue Ribbon Committee, 203 SCRA 767 [1991].

24 Rollo, 44.
25 125 SCRA 302, 325 [1983].

26 190 SCRA 673, 684 [1990].

27 Article III, 1987 Constitution.

28 110 Phil. 198, 203 [1960]; footnotes omitted.

29 291 U.S. 502, 523, 78 L. ed. 940, 947-949.

30 22 SCRA 135, 146-147 [1968].

31 Ongsiako vs. Gamboa, 86 Phil. 50 [1950]; Abe vs. Foster Wheeler Corp. supra.; Phil. American Life Insurance Co. vs. Auditor
General, supra.; Alalayan vs. NPC, 24 SCRA 172[1968]; Victoriano vs. Elizalde Rope Workers' Union, 59 SCRA 54 [1974]; Kabiling vs.
National Housing Authority, 156 SCRA 623 [1987].
 Republic of the Philippines
SUPREME COURT
Manila

THIRD DIVISION

G.R. No. 110120 March 16, 1994

LAGUNA LAKE DEVELOPMENT AUTHORITY, petitioner,

vs.
COURT OF APPEALS, HON. MANUEL JN. SERAPIO, Presiding Judge RTC, Branch 127, Caloocan City, HON. MACARIO A. ASISTIO, JR., City Mayor of Caloocan
and/or THE CITY GOVERNMENT OF CALOOCAN, respondents.

Alberto N. Hidalgo and Ma.Teresa T. Oledan for petitioner.

The City Legal Officer & Chief, Law Department for Mayor Macario A. Asistio, Jr. and the City Government of Caloocan.

ROMERO, J.:

The clash between the responsibility of the City Government of Caloocan to dispose off the 350 tons of garbage it collects daily and the growing concern
and sensitivity to a pollution-free environment of the residents of Barangay Camarin, Tala Estate, Caloocan City where these tons of garbage are dumped
everyday is the hub of this controversy elevated by the protagonists to the Laguna Lake Development Authority (LLDA) for adjudication.

The instant case stemmed from an earlier petition filed with this Court by Laguna Lake Development Authority (LLDA for short) docketed as G.R. No. 107542
against the City Government of Caloocan, et al. In the Resolution of November 10, 1992, this Court referred G.R. No. 107542 to the Court of Appeals for
appropriate disposition. Docketed therein as CA-G.R. SP No. 29449, the Court of Appeals, in a decision 1 promulgated on January 29, 1993 ruled that the
LLDA has no power and authority to issue a cease and desist order enjoining the dumping of garbage in Barangay Camarin, Tala Estate, Caloocan City. The
LLDA now seeks, in this petition, a review of the decision of the Court of Appeals.

The facts, as disclosed in the records, are undisputed.

On March 8, 1991, the Task Force Camarin Dumpsite of Our Lady of Lourdes Parish, Barangay Camarin, Caloocan City, filed a letter-complaint2 with the
Laguna Lake Development Authority seeking to stop the operation of the 8.6-hectare open garbage dumpsite in Tala Estate, Barangay Camarin, Caloocan
City due to its harmful effects on the health of the residents and the possibility of pollution of the water content of the surrounding area.

On November 15, 1991, the LLDA conducted an on-site investigation, monitoring and test sampling of the leachate3that seeps from said dumpsite to the
nearby creek which is a tributary of the Marilao River. The LLDA Legal and Technical personnel found that the City Government of Caloocan was maintaining
an open dumpsite at the Camarin area without first securing an Environmental Compliance Certificate (ECC) from the Environmental Management Bureau
(EMB) of the Department of Environment and Natural Resources, as required under Presidential Decree No. 1586, 4 and clearance from LLDA as required
under Republic Act No. 4850,5 as amended by Presidential Decree No. 813 and Executive Order No. 927, series of 1983.6

After a public hearing conducted on December 4, 1991, the LLDA, acting on the complaint of Task Force Camarin Dumpsite, found that the water collected
from the leachate and the receiving streams could considerably affect the quality, in turn, of the receiving waters since it indicates the presence of bacteria,
other than coliform, which may have contaminated the sample during collection or handling. 7 On December 5, 1991, the LLDA issued a Cease and Desist
Order8 ordering the City Government of Caloocan, Metropolitan Manila Authority, their contractors, and other entities, to completely halt, stop and desist
from dumping any form or kind of garbage and other waste matter at the Camarin dumpsite.

The dumping operation was forthwith stopped by the City Government of Caloocan. However, sometime in August 1992 the dumping operation was
resumed after a meeting held in July 1992 among the City Government of Caloocan, the representatives of Task Force Camarin Dumpsite and LLDA at the
Office of Environmental Management Bureau Director Rodrigo U. Fuentes failed to settle the problem.

After an investigation by its team of legal and technical personnel on August 14, 1992, the LLDA issued another order reiterating the December 5, 1991,
order and issued an Alias Cease and Desist Order enjoining the City Government of Caloocan from continuing its dumping operations at the Camarin area.

On September 25, 1992, the LLDA, with the assistance of the Philippine National Police, enforced its Alias Cease and Desist Order by prohibiting the entry of
all garbage dump trucks into the Tala Estate, Camarin area being utilized as a dumpsite.

Pending resolution of its motion for reconsideration earlier filed on September 17, 1992 with the LLDA, the City Government of Caloocan filed with the
Regional Trial Court of Caloocan City an action for the declaration of nullity of the cease and desist order with prayer for the issuance of writ of injunction,
docketed as Civil Case No. C-15598. In its complaint, the City Government of Caloocan sought to be declared as the sole authority empowered to promote
the health and safety and enhance the right of the people in Caloocan City to a balanced ecology within its territorial jurisdiction.9
On September 25, 1992, the Executive Judge of the Regional Trial Court of Caloocan City issued a temporary restraining order enjoining the LLDA from
enforcing its cease and desist order. Subsequently, the case was raffled to the Regional Trial Court, Branch 126 of Caloocan which, at the time, was presided
over by Judge Manuel Jn. Serapio of the Regional Trial Court, Branch 127, the pairing judge of the recently-retired presiding judge.

The LLDA, for its part, filed on October 2, 1992 a motion to dismiss on the ground, among others, that under Republic Act No. 3931, as amended by
Presidential Decree No. 984, otherwise known as the Pollution Control Law, the cease and desist order issued by it which is the subject matter of the
complaint is reviewable both upon the law and the facts of the case by the Court of Appeals and not by the Regional Trial Court. 10

On October 12, 1992 Judge Manuel Jn. Serapio issued an order consolidating Civil Case No. C-15598 with Civil Case No. C-15580, an earlier case filed by the
Task Force Camarin Dumpsite entitled "Fr. John Moran, et al. vs. Hon. Macario Asistio." The LLDA, however, maintained during the trial that the foregoing
cases, being independent of each other, should have been treated separately.

On October 16, 1992, Judge Manuel Jn. Serapio, after hearing the motion to dismiss, issued in the consolidated cases an order 11 denying LLDA's motion to
dismiss and granting the issuance of a writ of preliminary injunction enjoining the LLDA, its agent and all persons acting for and on its behalf, from enforcing
or implementing its cease and desist order which prevents plaintiff City of Caloocan from dumping garbage at the Camarin dumpsite during the pendency of
this case and/or until further orders of the court.

On November 5, 1992, the LLDA filed a petition for certiorari, prohibition and injunction with prayer for restraining order with the Supreme Court, docketed
as G.R. No. 107542, seeking to nullify the aforesaid order dated October 16, 1992 issued by the Regional Trial Court, Branch 127 of Caloocan City denying its
motion to dismiss.

The Court, acting on the petition, issued a Resolution12 on November 10, 1992 referring the case to the Court of Appeals for proper disposition and at the
same time, without giving due course to the petition, required the respondents to comment on the petition and file the same with the Court of Appeals
within ten (10) days from notice. In the meantime, the Court issued a temporary restraining order, effective immediately and continuing until further orders
from it, ordering the respondents: (1) Judge Manuel Jn. Serapio, Presiding Judge, Regional Trial Court, Branch 127, Caloocan City to cease and desist from
exercising jurisdiction over the case for declaration of nullity of the cease and desist order issued by the Laguna Lake Development Authority (LLDA); and (2)
City Mayor of Caloocan and/or the City Government of Caloocan to cease and desist from dumping its garbage at the Tala Estate, Barangay Camarin,
Caloocan City.

Respondents City Government of Caloocan and Mayor Macario A. Asistio, Jr. filed on November 12, 1992 a motion for reconsideration and/or to
quash/recall the temporary restraining order and an urgent motion for reconsideration alleging that ". . . in view of the calamitous situation that would arise
if the respondent city government fails to collect 350 tons of garbage daily for lack of dumpsite (i)t is therefore, imperative that the issue be resolved with
dispatch or with sufficient leeway to allow the respondents to find alternative solutions to this garbage problem."

On November 17, 1992, the Court issued a Resolution13 directing the Court of Appeals to immediately set the case for hearing for the purpose of
determining whether or not the temporary restraining order issued by the Court should be lifted and what conditions, if any, may be required if it is to be so
lifted or whether the restraining order should be maintained or converted into a preliminary injunction.

The Court of Appeals set the case for hearing on November 27, 1992, at 10:00 in the morning at the Hearing Room, 3rd Floor, New Building, Court of
Appeals.14 After the oral argument, a conference was set on December 8, 1992 at 10:00 o'clock in the morning where the Mayor of Caloocan City, the
General Manager of LLDA, the Secretary of DENR or his duly authorized representative and the Secretary of DILG or his duly authorized representative were
required to appear.

It was agreed at the conference that the LLDA had until December 15, 1992 to finish its study and review of respondent's technical plan with respect to the
dumping of its garbage and in the event of a rejection of respondent's technical plan or a failure of settlement, the parties will submit within 10 days from
notice their respective memoranda on the merits of the case, after which the petition shall be deemed submitted for resolution. 15Notwithstanding such
efforts, the parties failed to settle the dispute.

On April 30, 1993, the Court of Appeals promulgated its decision holding that: (1) the Regional Trial Court has no jurisdiction on appeal to try, hear and
decide the action for annulment of LLDA's cease and desist order, including the issuance of a temporary restraining order and preliminary injunction in
relation thereto, since appeal therefrom is within the exclusive and appellate jurisdiction of the Court of Appeals under Section 9, par. (3), of Batas
Pambansa Blg. 129; and (2) the Laguna Lake Development Authority has no power and authority to issue a cease and desist order under its enabling law,
Republic Act No. 4850, as amended by P.D. No. 813 and Executive Order
No. 927, series of 1983.

The Court of Appeals thus dismissed Civil Case No. 15598 and the preliminary injunction issued in the said case was set aside; the cease and desist order of
LLDA was likewise set aside and the temporary restraining order enjoining the City Mayor of Caloocan and/or the City Government of Caloocan to cease and
desist from dumping its garbage at the Tala Estate, Barangay Camarin, Caloocan City was lifted, subject, however, to the condition that any future dumping
of garbage in said area, shall be in conformity with the procedure and protective works contained in the proposal attached to the records of this case and
found on pages 152-160 of the Rollo, which was thereby adopted by reference and made an integral part of the decision, until the corresponding restraining
and/or injunctive relief is granted by the proper Court upon LLDA's institution of the necessary legal proceedings.

Hence, the Laguna Lake Development Authority filed the instant petition for review on certiorari, now docketed as G.R. No. 110120, with prayer that the
temporary restraining order lifted by the Court of Appeals be re-issued until after final determination by this Court of the issue on the proper interpretation
of the powers and authority of the LLDA under its enabling law.
On July, 19, 1993, the Court issued a temporary restraining order 16 enjoining the City Mayor of Caloocan and/or the City Government of Caloocan to cease
and desist from dumping its garbage at the Tala Estate, Barangay Camarin, Caloocan City, effective as of this date and containing until otherwise ordered by
the Court.

It is significant to note that while both parties in this case agree on the need to protect the environment and to maintain the ecological balance of the
surrounding areas of the Camarin open dumpsite, the question as to which agency can lawfully exercise jurisdiction over the matter remains highly open to
question.

The City Government of Caloocan claims that it is within its power, as a local government unit, pursuant to the general welfare provision of the Local
Government Code, 17 to determine the effects of the operation of the dumpsite on the ecological balance and to see that such balance is maintained. On
the basis of said contention, it questioned, from the inception of the dispute before the Regional Trial Court of Caloocan City, the power and authority of
the LLDA to issue a cease and desist order enjoining the dumping of garbage in the Barangay Camarin over which the City Government of Caloocan has
territorial jurisdiction.

The Court of Appeals sustained the position of the City of Caloocan on the theory that Section 7 of Presidential Decree No. 984, otherwise known as the
Pollution Control law, authorizing the defunct National Pollution Control Commission to issue an ex-parte cease and desist order was not incorporated in
Presidential Decree No. 813 nor in Executive Order No. 927, series of
1983. The Court of Appeals ruled that under Section 4, par. (d), of Republic Act No. 4850, as amended, the LLDA is instead required "to institute the
necessary legal proceeding against any person who shall commence to implement or continue implementation of any project, plan or program within the
Laguna de Bay region without previous clearance from the Authority."

The LLDA now assails, in this partition for review, the abovementioned ruling of the Court of Appeals, contending that, as an administrative agency which
was granted regulatory and adjudicatory powers and functions by Republic Act No. 4850 and its amendatory laws, Presidential Decree No. 813 and
Executive Order No. 927, series of 1983, it is invested with the power and authority to issue a cease and desist order pursuant to Section 4 par. (c), (d), (e),
(f) and (g) of Executive Order No. 927 series of 1983 which provides, thus:

Sec. 4.Additional Powers and Functions. The authority shall have the following powers and functions:

xxx xxx xxx

(c) Issue orders or decisions to compel compliance with the provisions of this Executive Order and its implementing rules and
regulations only after proper notice and hearing.

(d) Make, alter or modify orders requiring the discontinuance of pollution specifying the conditions and the time within which such
discontinuance must be accomplished.

(e) Issue, renew, or deny permits, under such conditions as it may determine to be reasonable, for the prevention and abatement of
pollution, for the discharge of sewage, industrial waste, or for the installation or operation of sewage works and industrial disposal
system or parts thereof.

(f) After due notice and hearing, the Authority may also revoke, suspend or modify any permit issued under this Order whenever the
same is necessary to prevent or abate pollution.

(g) Deputize in writing or request assistance of appropriate government agencies or instrumentalities for the purpose of enforcing this
Executive Order and its implementing rules and regulations and the orders and decisions of the Authority.

The LLDA claims that the appellate court deliberately suppressed and totally disregarded the above provisions of Executive Order No. 927, series of 1983,
which granted administrative quasi-judicial functions to LLDA on pollution abatement cases.

In light of the relevant environmental protection laws cited which are applicable in this case, and the corresponding overlapping jurisdiction of government
agencies implementing these laws, the resolution of the issue of whether or not the LLDA has the authority and power to issue an order which, in its nature
and effect was injunctive, necessarily requires a determination of the threshold question: Does the Laguna Lake Development Authority, under its Charter
and its amendatory laws, have the authority to entertain the complaint against the dumping of garbage in the open dumpsite in Barangay Camarin
authorized by the City Government of Caloocan which is allegedly endangering the health, safety, and welfare of the residents therein and the sanitation
and quality of the water in the area brought about by exposure to pollution caused by such open garbage dumpsite?

The matter of determining whether there is such pollution of the environment that requires control, if not prohibition, of the operation of a business
establishment is essentially addressed to the Environmental Management Bureau (EMB) of the DENR which, by virtue of Section 16 of Executive Order No.
192, series of 1987,18 has assumed the powers and functions of the defunct National Pollution Control Commission created under Republic Act No. 3931.
Under said Executive Order, a Pollution Adjudication Board (PAB) under the Office of the DENR Secretary now assumes the powers and functions of the
National Pollution Control Commission with respect to adjudication of pollution cases. 19

As a general rule, the adjudication of pollution cases generally pertains to the Pollution Adjudication Board (PAB), except in cases where the special law
provides for another forum. It must be recognized in this regard that the LLDA, as a specialized administrative agency, is specifically mandated under
Republic Act No. 4850 and its amendatory laws to carry out and make effective the declared national policy 20 of promoting and accelerating the
development and balanced growth of the Laguna Lake area and the surrounding provinces of Rizal and Laguna and the cities of San Pablo, Manila, Pasay,
Quezon and Caloocan21 with due regard and adequate provisions for environmental management and control, preservation of the quality of human life and
ecological systems, and the prevention of undue ecological disturbances, deterioration and pollution. Under such a broad grant and power and authority, the
LLDA, by virtue of its special charter, obviously has the responsibility to protect the inhabitants of the Laguna Lake region from the deleterious effects of
pollutants emanating from the discharge of wastes from the surrounding areas. In carrying out the aforementioned declared policy, the LLDA is mandated,
among others, to pass upon and approve or disapprove all plans, programs, and projects proposed by local government offices/agencies within the region,
public corporations, and private persons or enterprises where such plans, programs and/or projects are related to those of the LLDA for the development of
the region. 22

In the instant case, when the complainant Task Force Camarin Dumpsite of Our Lady of Lourdes Parish, Barangay Camarin, Caloocan City, filed its letter-
complaint before the LLDA, the latter's jurisdiction under its charter was validly invoked by complainant on the basis of its allegation that the open dumpsite
project of the City Government of Caloocan in Barangay Camarin was undertaken without a clearance from the LLDA, as required under Section 4, par. (d),
of Republic Act. No. 4850, as amended by P.D. No. 813 and Executive Order No. 927. While there is also an allegation that the said project was without an
Environmental Compliance Certificate from the Environmental Management Bureau (EMB) of the DENR, the primary jurisdiction of the LLDA over this case
was recognized by the Environmental Management Bureau of the DENR when the latter acted as intermediary at the meeting among the representatives of
the City Government of Caloocan, Task Force Camarin Dumpsite and LLDA sometime in July 1992 to discuss the possibility of
re-opening the open dumpsite.

Having thus resolved the threshold question, the inquiry then narrows down to the following issue: Does the LLDA have the power and authority to issue a
"cease and desist" order under Republic Act No. 4850 and its amendatory laws, on the basis of the facts presented in this case, enjoining the dumping of
garbage in Tala Estate, Barangay Camarin, Caloocan City.

The irresistible answer is in the affirmative.

The cease and desist order issued by the LLDA requiring the City Government of Caloocan to stop dumping its garbage in the Camarin open dumpsite found
by the LLDA to have been done in violation of Republic Act No. 4850, as amended, and other relevant environment laws, 23 cannot be stamped as an
unauthorized exercise by the LLDA of injunctive powers. By its express terms, Republic Act No. 4850, as amended by P.D. No. 813 and Executive Order No.
927, series of 1983, authorizes the LLDA to "make, alter or modify order requiring the discontinuance or pollution." 24 (Emphasis supplied) Section 4, par. (d)
explicitly authorizes the LLDA to make whatever order may be necessary in the exercise of its jurisdiction.

To be sure, the LLDA was not expressly conferred the power "to issue and ex-parte cease and desist order" in a language, as suggested by the City
Government of Caloocan, similar to the express grant to the defunct National Pollution Control Commission under Section 7 of P.D. No. 984 which,
admittedly was not reproduced in P.D. No. 813 and E.O. No. 927, series of 1983. However, it would be a mistake to draw therefrom the conclusion that
there is a denial of the power to issue the order in question when the power "to make, alter or modify orders requiring the discontinuance of pollution" is
expressly and clearly bestowed upon the LLDA by Executive Order No. 927, series of 1983.

Assuming arguendo that the authority to issue a "cease and desist order" were not expressly conferred by law, there is jurisprudence enough to the effect
that the rule granting such authority need not necessarily be express. 25 While it is a fundamental rule that an administrative agency has only such powers as
are expressly granted to it by law, it is likewise a settled rule that an administrative agency has also such powers as are necessarily implied in the exercise of
its express powers.26 In the exercise, therefore, of its express powers under its charter as a regulatory and quasi-judicial body with respect to pollution cases
in the Laguna Lake region, the authority of the LLDA to issue a "cease and desist order" is, perforce, implied. Otherwise, it may well be reduced to a
"toothless" paper agency.

In this connection, it must be noted that in Pollution Adjudication Board v. Court of Appeals, et al.,27 the Court ruled that the Pollution Adjudication Board
(PAB) has the power to issue an ex-parte cease and desist order when there isprima facie evidence of an establishment exceeding the allowable standards
set by the anti-pollution laws of the country. The ponente, Associate Justice Florentino P. Feliciano, declared:

Ex parte cease and desist orders are permitted by law and regulations in situations like that here presented precisely because stopping
the continuous discharge of pollutive and untreated effluents into the rivers and other inland waters of the Philippines cannot be made
to wait until protracted litigation over the ultimate correctness or propriety of such orders has run its full course, including multiple and
sequential appeals such as those which Solar has taken, which of course may take several years. The relevant pollution control statute
and implementing regulations were enacted and promulgated in the exercise of that pervasive, sovereign power to protect the safety,
health, and general welfare and comfort of the public, as well as the protection of plant and animal life, commonly designated as the
police power. It is a constitutional commonplace that the ordinary requirements of procedural due process yield to the necessities of
protecting vital public interests like those here involved, through the exercise of police power. . . .

The immediate response to the demands of "the necessities of protecting vital public interests" gives vitality to the statement on ecology embodied in the
Declaration of Principles and State Policies or the 1987 Constitution. Article II, Section 16 which provides:

The State shall protect and advance the right of the people to a balanced and healthful ecology in accord with the rhythm and harmony
of nature.

As a constitutionally guaranteed right of every person, it carries the correlative duty of non-impairment. This is but in consonance with the declared policy
of the state "to protect and promote the right to health of the people and instill health consciousness among them." 28 It is to be borne in mind that the
Philippines is party to the Universal Declaration of Human Rights and the Alma Conference Declaration of 1978 which recognize health as a fundamental
human right. 29

The issuance, therefore, of the cease and desist order by the LLDA, as a practical matter of procedure under the circumstances of the case, is a proper
exercise of its power and authority under its charter and its amendatory laws. Had the cease and desist order issued by the LLDA been complied with by the
City Government of Caloocan as it did in the first instance, no further legal steps would have been necessary.

The charter of LLDA, Republic Act No. 4850, as amended, instead of conferring upon the LLDA the means of directly enforcing such orders, has provided
under its Section 4 (d) the power to institute "necessary legal proceeding against any person who shall commence to implement or continue
implementation of any project, plan or program within the Laguna de Bay region without previous clearance from the LLDA."

Clearly, said provision was designed to invest the LLDA with sufficiently broad powers in the regulation of all projects initiated in the Laguna Lake region,
whether by the government or the private sector, insofar as the implementation of these projects is concerned. It was meant to deal with cases which
might possibly arise where decisions or orders issued pursuant to the exercise of such broad powers may not be obeyed, resulting in the thwarting of its
laudabe objective. To meet such contingencies, then the writs of mandamus and injunction which are beyond the power of the LLDA to issue, may be
sought from the proper courts.

Insofar as the implementation of relevant anti-pollution laws in the Laguna Lake region and its surrounding provinces, cities and towns are concerned, the
Court will not dwell further on the related issues raised which are more appropriately addressed to an administrative agency with the special knowledge
and expertise of the LLDA.

WHEREFORE, the petition is GRANTED. The temporary restraining order issued by the Court on July 19, 1993 enjoining the City Mayor of Caloocan and/or
the City Government of Caloocan from dumping their garbage at the Tala Estate, Barangay Camarin, Caloocan City is hereby made permanent.

SO ORDERED.

Feliciano, Bidin, Melo and Vitug, JJ., concur.

#Footnotes

1 Jorge S. Imperial, J., ponente, Vicente V. Mendoza and Quirino D. Abad Santos, Jr., JJ., concurring.

2 Annex "C", Petition, G.R. No. 107542, Rollo, pp. 47-51.

3 Webster's Third International Dictionary (1986) defines "leachate" as the liquid that has percolated through soil or other medium.

4 Establishing An Environmental Impact Statement System, Including Other Environmental Management Related Measures And For
Other Purposes
(June 11, 1978).

5 An Act Creating The Laguna Lake Development Authority, Prescribing Its Powers, Functions and Duties, Providing Funds Therefor, And
For Other Purposes
(July 18, 1966).

6 Annex "D", Petition, G.R. No. 107542, Rollo, pp. 52-54.

7 Ibid.

8 Annex "G", Petition, G.R. No. 107542, Rollo, pp. 58-63.

9 Annex "M", Petition, G.R. No. 107542, Rollo, pp. 77-81.

10 Annex "O", Petition, G.R. No. 107542, Rollo, pp. 83-90.

11 Annex "A", Petition, G.R. No. 107542, Rollo, pp. 29-37.

12 G.R. No. 107542, Rollo, pp. 93-95.

13 G.R. No. 107542, Rollo, pp. 98-99.

14 Ibid, p. 97.
15 G.R. No. 107542, Rollo, pp. 129-130.

16 G.R. No. 110120, Rollo, p. 70.

17 Section 16, Republic Act No. 7160, otherwise known as "The Local Government Code of 1991."

18 Providing For The Reorganization Of The Department Of Environment, Energy And Natural Resources, Renaming It As The
Department of Environment and Natural Resources, And For Other Purposes (June 10, 1987).

19 Section 19, Executive Order No. 192, series of 1987.

20 Section 1, Republic Act No. 4850, as amended by P.D. No. 813 and Executive Order No. 927, series of 1983.

21 Section 41, par. (4), Republic Act No. 4850, as amended by P.D. No. 813 and Executive Order No. 927, series of 1983.

22 Section 4, par. (d), Republic Act No. 4850, as amended by P.D. No. 813 and Executive Order No. 927, series of 1983. (Emphasis
supplied)

23 Sections 45 and 48, Presidential Decree No. 1152, otherwise known as Philippine Environment Code which requires that solid waste
disposal shall be by sanitary landfill, incineration, composting and other methods as may be approved by competent government
authority and, that the sites shall conform with existing zoning, land use standards, and pollution control regulations, respectively;
Section 4, Presidential Decree No. 1586.

24 Section 4, par. (d), Executive Order No. 927, series of 1983.

25 Motor Transit Co. v. Railroad Com., 189 CAL 573, 209 P 586.

26 Republic v. Court of Appeals, G.R. No. 90482, August 5, 1991, 200 SCRA 266; Guerzon v. Court of Appeals, et al. G.R. No. 77707,
August 8, 1988, 164 SCRA 182.

27 G.R. No. 93891, March 11, 1991, 195 SCRA 112.

28 Art. II, Section 15, 1987 Constitution.

29 Record of the Constitutional Commission, Proceedings and Debates, Vol. III,

p. 119.
 Republic of the Philippines
SUPREME COURT
Manila

FIRST DIVISION

G.R. Nos. 120865-71 December 7, 1995

LAGUNA LAKE DEVELOPMENT AUTHORITY, petitioner,

vs.
COURT OF APPEALS; HON. JUDGE HERCULANO TECH, PRESIDING JUDGE, BRANCH 70, REGIONAL TRIAL COURT OF BINANGONAN RIZAL; FLEET
DEVELOPMENT, INC. and CARLITO ARROYO; THE MUNICIPALITY OF BINANGONAN and/or MAYOR ISIDRO B. PACIS, respondents.

LAGUNA LAKE DEVELOPMENT AUTHORITY, petitioner,

vs.
COURT OF APPEALS; HON. JUDGE AURELIO C. TRAMPE, PRESIDING JUDGE, BRANCH 163, REGIONAL TRIAL COURT OF PASIG; MANILA MARINE LIFE
BUSINESS RESOURCES, INC. represented by, MR. TOBIAS REYNALD M. TIANGCO; MUNICIPALITY OF TAGUIG, METRO MANILA and/or MAYOR RICARDO D.
PAPA, JR., respondents.

LAGUNA LAKE DEVELOPMENT AUTHORITY, petitioner,

vs.
COURT OF APPEALS; HON. JUDGE ALEJANDRO A. MARQUEZ, PRESIDING JUDGE, BRANCH 79, REGIONAL TRIAL COURT OF MORONG, RIZAL; GREENFIELD
VENTURES INDUSTRIAL DEVELOPMENT CORPORATION and R. J. ORION DEVELOPMENT CORPORATION; MUNICIPALITY OF JALA-JALA and/or MAYOR
WALFREDO M. DE LA VEGA, respondents.

LAGUNA LAKE DEVELOPMENT AUTHORITY, petitioner,

vs.
COURT OF APPEALS; HON. JUDGE MANUEL S. PADOLINA, PRESIDING JUDGE, BRANCH 162, REGIONAL TRIAL COURT OF PASIG, METRO MANILA; IRMA
FISHING & TRADING CORP.; ARTM FISHING CORP.; BDR CORPORATION, MIRT CORPORATION and TRIM CORPORATION; MUNICIPALITY OF BINANGONAN
and/or MAYOR ISIDRO B. PACIS, respondents.

LAGUNA LAKE DEVELOPMENT AUTHORITY, petitioner,

vs.
COURT OF APPEALS; HON. JUDGE ARTURO A. MARAVE, PRESIDING JUDGE, BRANCH 78, REGIONAL TRIAL COURT OF MORONG, RIZAL; BLUE LAGOON
FISHING CORP. and ALCRIS CHICKEN GROWERS, INC.; MUNICIPALITY OF JALA-JALA and/or MAYOR WALFREDO M. DE LA VEGA, respondents.

LAGUNA LAKE DEVELOPMENT AUTHORITY, petitioner,

vs.
COURT OF APPEALS; HON. JUDGE ARTURO A. MARAVE, PRESIDING JUDGE, BRANCH 78, REGIONAL TRIAL COURT OF MORONG, RIZAL; AGP FISH
VENTURES, INC., represented by its PRESIDENT ALFONSO PUYAT; MUNICIPALITY OF JALA-JALA and/or MAYOR WALFREDO M. DE LA VEGA, respondents.

LAGUNA LAKE DEVELOPMENT AUTHORITY, petitioner,

vs.
COURT OF APPEALS; HON. JUDGE EUGENIO S. LABITORIA, PRESIDING JUDGE, BRANCH 161, REGIONAL TRIAL COURT OF PASIG, METRO MANILA; SEA
MAR TRADING CO. INC.; EASTERN LAGOON FISHING CORP.; MINAMAR FISHING CORP.; MUNICIPALITY OF BINANGONAN and/or MAYOR ISIDRO B.
PACIS, respondents.

HERMOSISIMA, JR., J.:

It is difficult for a man, scavenging on the garbage dump created by affluence and profligate consumption and extravagance of the rich or fishing in the
murky waters of the Pasig River and the Laguna Lake or making a clearing in the forest so that he can produce food for his family, to understand why
protecting birds, fish, and trees is more important than protecting him and keeping his family alive.

How do we strike a balance between environmental protection, on the one hand, and the individual personal interests of people, on the other?

Towards environmental protection and ecology, navigational safety, and sustainable development, Republic Act No. 4850 created the "Laguna Lake
Development Authority." This Government Agency is supposed to carry out and effectuate the aforesaid declared policy, so as to accelerate the
development and balanced growth of the Laguna Lake area and the surrounding provinces, cities and towns, in the act clearly named, within the context of
the national and regional plans and policies for social and economic development.

Presidential Decree No. 813 of former President Ferdinand E. Marcos amended certain sections of Republic Act No. 4850 because of the concern for the
rapid expansion of Metropolitan Manila, the suburbs and the lakeshore towns of Laguna de Bay, combined with current and prospective uses of the lake for
municipal-industrial water supply, irrigation, fisheries, and the like. Concern on the part of the Government and the general public over: — the environment
impact of development on the water quality and ecology of the lake and its related river systems; the inflow of polluted water from the Pasig River,
industrial, domestic and agricultural wastes from developed areas around the lake; the increasing urbanization which induced the deterioration of the lake,
since water quality studies have shown that the lake will deteriorate further if steps are not taken to check the same; and the floods in Metropolitan Manila
area and the lakeshore towns which will influence the hydraulic system of Laguna de Bay, since any scheme of controlling the floods will necessarily involve
the lake and its river systems, — likewise gave impetus to the creation of the Authority.

Section 1 of Republic Act No. 4850 was amended to read as follows:

Sec. 1.Declaration of Policy. It is hereby declared to be the national policy to promote, and accelerate the development and balanced
growth of the Laguna Lake area and the surrounding provinces, cities and towns hereinafter referred to as the region, within the
context of the national and regional plans and policies for social and economic development and to carry out the development of the
Laguna Lake region with due regard and adequate provisions for environmental management and control, preservation of the quality
of human life and ecological systems, and the prevention of undue ecological disturbances, deterioration and pollution. 1

Special powers of the Authority, pertinent to the issues in this case, include:

Sec. 3. Section 4 of the same Act is hereby further amended by adding thereto seven new paragraphs to be known as paragraphs (j),
(k), (l), (m), (n), (o), and (p) which shall read as follows:

xxx xxx xxx

(j) The provisions of existing laws to the contrary notwithstanding, to engage in fish production and other aqua-
culture projects in Laguna de Bay and other bodies of water within its jurisdiction and in pursuance thereof to
conduct studies and make experiments, whenever necessary, with the collaboration and assistance of the Bureau
of Fisheries and Aquatic Resources, with the end in view of improving present techniques and practices. Provided,
that until modified, altered or amended by the procedure provided in the following sub-paragraph, the present
laws, rules and permits or authorizations remain in force;

(k) For the purpose of effectively regulating and monitoring activities in Laguna de Bay, the Authority shall have
exclusive jurisdiction to issue new permit for the use of the lake waters for any projects or activities in or affecting
the said lake including navigation, construction, and operation of fishpens, fish enclosures, fish corrals and the like,
and to impose necessary safeguards for lake quality control and management and to collect necessary fees for
said activities and projects: Provided, That the fees collected for fisheries may be shared between the Authority
and other government agencies and political sub-divisions in such proportion as may be determined by the
President of the Philippines upon recommendation of the Authority's Board: Provided, further, That the
Authority's Board may determine new areas of fishery development or activities which it may place under the
supervision of the Bureau of Fisheries and Aquatic Resources taking into account the overall development plans
and programs for Laguna de Bay and related bodies of water: Provided, finally, That the Authority shall subject to
the approval of the President of the Philippines promulgate such rules and regulations which shall govern fisheries
development activities in Laguna de Bay which shall take into consideration among others the following: socio-
economic amelioration of bonafide resident fishermen whether individually or collectively in the form of
cooperatives, lakeshore town development, a master plan for fishpen construction and operation, communal
fishing ground for lake shore town residents, and preference to lake shore town residents in hiring laborer for
fishery projects;

(l) To require the cities and municipalities embraced within the region to pass appropriate zoning ordinances and
other regulatory measures necessary to carry out the objectives of the Authority and enforce the same with the
assistance of the Authority;

(m) The provisions of existing laws to the contrary notwithstanding, to exercise water rights over public waters
within the Laguna de Bay region whenever necessary to carry out the Authority's projects;

(n) To act in coordination with existing governmental agencies in establishing water quality standards for
industrial, agricultural and municipal waste discharges into the lake and to cooperate with said existing agencies of
the government of the Philippines in enforcing such standards, or to separately pursue enforcement and penalty
actions as provided for in Section 4 (d) and Section 39-A of this Act: Provided, That in case of conflict on the
appropriate water quality standard to be enforced such conflict shall be resolved thru the NEDA Board. 2

To more effectively perform the role of the Authority under Republic Act No. 4850, as though Presidential Decree No. 813 were not thought to be
completely effective, the Chief Executive, feeling that the land and waters of the Laguna Lake Region are limited natural resources requiring judicious
management to their optimal utilization to insure renewability and to preserve the ecological balance, the competing options for the use of such resources
and conflicting jurisdictions over such uses having created undue constraints on the institutional capabilities of the Authority in the light of the limited
powers vested in it by its charter, Executive Order No. 927 further defined and enlarged the functions and powers of the Authority and named and
enumerated the towns, cities and provinces encompassed by the term "Laguna de Bay Region".

Also, pertinent to the issues in this case are the following provisions of Executive Order No. 927 which include in particular the sharing of fees:
 Sec 2. Water Rights Over Laguna de Bay and Other Bodies of Water within the Lake Region: To effectively regulate and monitor
activities in the Laguna de Bay region, the Authority shall have exclusive jurisdiction to issue permit for the use of all surface water for
any projects or activities in or affecting the said region including navigation, construction, and operation of fishpens, fish enclosures,
fish corrals and the like.

For the purpose of this Executive Order, the term "Laguna de Bay Region" shall refer to the Provinces of Rizal and Laguna; the Cities of
San Pablo, Pasay, Caloocan, Quezon, Manila and Tagaytay; the towns of Tanauan, Sto. Tomas and Malvar in Batangas Province; the
towns of Silang and Carmona in Cavite Province; the town of Lucban in Quezon Province; and the towns of Marikina, Pasig, Taguig,
Muntinlupa, and Pateros in Metro Manila.

Sec 3.Collection of Fees. The Authority is hereby empowered to collect fees for the use of the lake water and its tributaries for all
beneficial purposes including but not limited to fisheries, recreation, municipal, industrial, agricultural, navigation, irrigation, and waste
disposal purpose; Provided, that the rates of the fees to be collected, and the sharing with other government agencies and political
subdivisions, if necessary, shall be subject to the approval of the President of the Philippines upon recommendation of the Authority's
Board, except fishpen fee, which will be shared in the following manner; 20 percent of the fee shall go to the lakeshore local
governments, 5 percent shall go to the Project Development Fund which shall be administered by a Council and the remaining 75
percent shall constitute the share of LLDA. However, after the implementation within the three-year period of the Laguna Lake Fishery
Zoning and Management Plan, the sharing will be modified as follows: 35 percent of the fishpen fee goes to the lakeshore local
governments, 5 percent goes to the Project Development Fund and the remaining 60 percent shall be retained by LLDA; Provided,
however, that the share of LLDA shall form part of its corporate funds and shall not be remitted to the National Treasury as an
exception to the provisions of Presidential Decree No. 1234. (Emphasis supplied)

It is important to note that Section 29 of Presidential Decree No. 813 defined the term "Laguna Lake" in this manner:

Sec 41.Definition of Terms.

(11) Laguna Lake or Lake. Whenever Laguna Lake or lake is used in this Act, the same shall refer to Laguna de Bay which is that area
covered by the lake water when it is at the average annual maximum lake level of elevation 12.50 meters, as referred to a datum 10.00
meters below mean lower low water (M.L.L.W). Lands located at and below such elevation are public lands which form part of the bed
of said lake.

Then came Republic Act No. 7160, the Local Government Code of 1991. The municipalities in the Laguna Lake Region interpreted the provisions of this law
to mean that the newly passed law gave municipal governments the exclusive jurisdiction to issue fishing privileges within their municipal waters because
R.A. 7160 provides:

Sec. 149.Fishery Rentals, Fees and Charges.

(a) Municipalities shall have the exclusive authority to grant fishery privileges in the municipal waters and impose rental fees or charges
therefor in accordance with the provisions of this Section.

(b) The Sangguniang Bayan may:

(1) Grant fishing privileges to erect fish corrals, oyster, mussel or other aquatic beds or bangus fry areas, within a
definite zone of the municipal waters, as determined by it; . . . .

(2) Grant privilege to gather, take or catch bangus fry, prawn fry or kawag-kawag or fry of other species and fish
from the municipal waters by nets, traps or other fishing gears to marginal fishermen free from any rental fee,
charges or any other imposition whatsoever.

xxx xxx xxx

Sec. 447.Power, Duties, Functions and Compensation. . . . .

xxx xxx xxx

(XI) Subject to the provisions of Book II of this Code, grant exclusive privileges of constructing fish corrals or
fishpens, or the taking or catching of bangus fry, prawn fry or kawag-kawag or fry of any species or fish within the
municipal waters.

xxx xxx xxx

Municipal governments thereupon assumed the authority to issue fishing privileges and fishpen permits. Big fishpen operators took advantage of the
occasion to establish fishpens and fishcages to the consternation of the Authority. Unregulated fishpens and fishcages, as of July, 1995, occupied almost
one-third of the entire lake water surface area, increasing the occupation drastically from 7,000 hectares in 1990 to almost 21,000 hectares in 1995. The
Mayor's permit to construct fishpens and fishcages were all undertaken in violation of the policies adopted by the Authority on fishpen zoning and the
Laguna Lake carrying capacity.

To be sure, the implementation by the lakeshore municipalities of separate independent policies in the operation of fishpens and fishcages within their
claimed territorial municipal waters in the lake and their indiscriminate grant of fishpen permits have already saturated the lake area with fishpens, thereby
aggravating the current environmental problems and ecological stress of Laguna Lake.

In view of the foregoing circumstances, the Authority served notice to the general public that:

In compliance with the instructions of His Excellency PRESIDENT FIDEL V. RAMOS given on June 23, 1993 at Pila, Laguna pursuant to
Republic Act 4850 as amended by Presidential Decree 813 and Executive Order 927 series of 1983 and in line with the policies and
programs of the Presidential Task Force on Illegal Fishpens and Illegal Fishing, the general public is hereby notified that:

1. All fishpens, fishcages and other aqua-culture structures in the Laguna de Bay Region, which were not registered or to which no
application for registration and/or permit has been filed with Laguna Lake Development Authority as of March 31, 1993 are hereby
declared outrightly as illegal.

2. All fishpens, fishcages and other aqua-culture structures so declared as illegal shall be subject to demolition which shall be
undertaken by the Presidential Task Force for Illegal Fishpen and Illegal Fishing.

3. Owners of fishpens, fishcages and other aqua-culture structures declared as illegal shall, without prejudice to demolition of their
structures be criminally charged in accordance with Section 39-A of Republic Act 4850 as amended by P.D. 813 for violation of the
same laws. Violations of these laws carries a penalty of imprisonment of not exceeding 3 years or a fine not exceeding Five Thousand
Pesos or both at the discretion of the court.

All operators of fishpens, fishcages and other aqua-culture structures declared as illegal in accordance with the foregoing Notice shall
have one (1) month on or before 27 October 1993 to show cause before the LLDA why their said fishpens, fishcages and other aqua-
culture structures should not be demolished/dismantled.

One month, thereafter, the Authority sent notices to the concerned owners of the illegally constructed fishpens, fishcages and other aqua-culture structures
advising them to dismantle their respective structures within 10 days from receipt thereof, otherwise, demolition shall be effected.

Reacting thereto, the affected fishpen owners filed injunction cases against the Authority before various regional trial courts, to wit: (a) Civil Case No. 759-B,
for Prohibition, Injunction and Damages, Regional Trial Court, Branch 70, Binangonan, Rizal, filed by Fleet Development, Inc. and Carlito Arroyo; (b) Civil
Case No. 64049, for Injunction, Regional Trial Court, Branch 162, Pasig, filed by IRMA Fishing and Trading Corp., ARTM Fishing Corp., BDR Corp., MIRT Corp.
and TRIM Corp.; (c) Civil Case No. 566, for Declaratory Relief and Injunction, Regional Trial Court, Branch 163, Pasig, filed by Manila Marine Life Business
Resources, Inc. and Tobias Reynaldo M. Tianco; (d) Civil Case No. 556-M, for Prohibition, Injunction and Damages, Regional Trial Court, Branch 78, Morong,
Rizal, filed by AGP Fishing Ventures, Inc.; (e) Civil Case No. 522-M, for Prohibition, Injunction and Damages, Regional Trial Court, Branch 78, Morong, Rizal,
filed by Blue Lagoon and Alcris Chicken Growers, Inc.; (f) Civil Case No. 554-, for Certiorari and Prohibition, Regional Trial Court, Branch 79, Morong, Rizal,
filed by Greenfields Ventures Industrial Corp. and R.J. Orion Development Corp.; and (g) Civil Case No. 64124, for Injunction, Regional Trial Court, Branch 15,
Pasig, filed by SEA-MAR Trading Co., Inc. and Eastern Lagoon Fishing Corp. and Minamar Fishing Corporation.

The Authority filed motions to dismiss the cases against it on jurisdictional grounds. The motions to dismiss were invariably denied. Meanwhile, temporary
restraining order/writs of preliminary mandatory injunction were issued in Civil Cases Nos. 64124, 759 and 566 enjoining the Authority from demolishing
the fishpens and similar structures in question.

Hence, the herein petition for certiorari, prohibition and injunction, G.R. Nos. 120865-71, were filed by the Authority with this court. Impleaded as parties-
respondents are concerned regional trial courts and respective private parties, and the municipalities and/or respective Mayors of Binangonan, Taguig and
Jala-jala, who issued permits for the construction and operation of fishpens in Laguna de Bay. The Authority sought the following reliefs, viz.:

(A) Nullification of the temporary restraining order/writs of preliminary injunction issued in Civil Cases Nos. 64125, 759 and 566;

(B) Permanent prohibition against the regional trial courts from exercising jurisdiction over cases involving the Authority which is a co-
equal body;

(C) Judicial pronouncement that R.A. 7610 (Local Government Code of 1991) did not repeal, alter or modify the provisions of R.A. 4850,
as amended, empowering the Authority to issue permits for fishpens, fishcages and other aqua-culture structures in Laguna de Bay and
that, the Authority the government agency vested with exclusive authority to issue said permits.

By this Court's resolution of May 2, 1994, the Authority's consolidated petitions were referred to the Court of Appeals.
In a Decision, dated June 29, 1995, the Court of Appeals dismissed the Authority's consolidated petitions, the Court of Appeals holding that: (A) LLDA is not
among those quasi-judicial agencies of government whose decision or order are appealable only to the Court of Appeals; (B) the LLDA charter does vest
LLDA with quasi-judicial functions insofar as fishpens are concerned; (C) the provisions of the LLDA charter insofar as fishing privileges in Laguna de Bay are
concerned had been repealed by the Local Government Code of 1991; (D) in view of the aforesaid repeal, the power to grant permits devolved to and is
now vested with their respective local government units concerned.

Not satisfied with the Court of Appeals decision, the Authority has returned to this Court charging the following errors:

1. THE HONORABLE COURT OF APPEALS PROBABLY COMMITTED AN ERROR WHEN IT RULED THAT THE LAGUNA LAKE DEVELOPMENT
AUTHORITY IS NOT A QUASI-JUDICIAL AGENCY.

2. THE HONORABLE COURT OF APPEALS COMMITTED SERIOUS ERROR WHEN IT RULED THAT R.A. 4850 AS AMENDED BY P.D. 813 AND
E.O. 927 SERIES OF 1983 HAS BEEN REPEALED BY REPUBLIC ACT 7160. THE SAID RULING IS CONTRARY TO ESTABLISHED PRINCIPLES
AND JURISPRUDENCE OF STATUTORY CONSTRUCTION.

3. THE HONORABLE COURT OF APPEALS COMMITTED SERIOUS ERROR WHEN IT RULED THAT THE POWER TO ISSUE FISHPEN PERMITS
IN LAGUNA DE BAY HAS BEEN DEVOLVED TO CONCERNED (LAKESHORE) LOCAL GOVERNMENT UNITS.

We take a simplistic view of the controversy. Actually, the main and only issue posed is: Which agency of the Government — the Laguna Lake Development
Authority or the towns and municipalities comprising the region — should exercise jurisdiction over the Laguna Lake and its environs insofar as the issuance
of permits for fishery privileges is concerned?

Section 4 (k) of the charter of the Laguna Lake Development Authority, Republic Act No. 4850, the provisions of Presidential Decree No. 813, and Section 2
of Executive Order No. 927, cited above, specifically provide that the Laguna Lake Development Authority shall have exclusive jurisdiction to issue permits
for the use of all surface water for any projects or activities in or affecting the said region, including navigation, construction, and operation of fishpens, fish
enclosures, fish corrals and the like. On the other hand, Republic Act No. 7160, the Local Government Code of 1991, has granted to the municipalities the
exclusive authority to grant fishery privileges in municipal waters. The Sangguniang Bayan may grant fishery privileges to erect fish corrals, oyster, mussels
or other aquatic beds or bangus fry area within a definite zone of the municipal waters.

We hold that the provisions of Republic Act No. 7160 do not necessarily repeal the aforementioned laws creating the Laguna Lake Development Authority
and granting the latter water rights authority over Laguna de Bay and the lake region.

The Local Government Code of 1991 does not contain any express provision which categorically expressly repeal the charter of the Authority. It has to be
conceded that there was no intent on the part of the legislature to repeal Republic Act No. 4850 and its amendments. The repeal of laws should be made
clear and expressed.

It has to be conceded that the charter of the Laguna Lake Development Authority constitutes a special law. Republic Act No. 7160, the Local Government
Code of 1991, is a general law. It is basic in statutory construction that the enactment of a later legislation which is a general law cannot be construed to
have repealed a special law. It is a well-settled rule in this jurisdiction that "a special statute, provided for a particular case or class of cases, is not repealed
by a subsequent statute, general in its terms, provisions and application, unless the intent to repeal or alter is manifest, although the terms of the general
law are broad enough to include the cases embraced in the special law."3

Where there is a conflict between a general law and a special statute, the special statute should prevail since it evinces the legislative intent more clearly
than the general statute. The special law is to be taken as an exception to the general law in the absence of special circumstances forcing a contrary
conclusion. This is because implied repeals are not favored and as much as possible, effect must be given to all enactments of the legislature. A special law
cannot be repealed, amended or altered by a subsequent general law by mere implication.4

Thus, it has to be concluded that the charter of the Authority should prevail over the Local Government Code of 1991.

Considering the reasons behind the establishment of the Authority, which are environmental protection, navigational safety, and sustainable development,
there is every indication that the legislative intent is for the Authority to proceed with its mission.

We are on all fours with the manifestation of petitioner Laguna Lake Development Authority that "Laguna de Bay, like any other single body of water has its
own unique natural ecosystem. The 900 km² lake surface water, the eight (8) major river tributaries and several other smaller rivers that drain into the lake,
the 2,920 km² basin or watershed transcending the boundaries of Laguna and Rizal provinces, greater portion of Metro Manila, parts of Cavite, Batangas,
and Quezon provinces, constitute one integrated delicate natural ecosystem that needs to be protected with uniform set of policies; if we are to be serious
in our aims of attaining sustainable development. This is an exhaustible natural resource — a very limited one — which requires judicious management and
optimal utilization to ensure renewability and preserve its ecological integrity and balance."

"Managing the lake resources would mean the implementation of a national policy geared towards the protection, conservation, balanced growth and
sustainable development of the region with due regard to the inter-generational use of its resources by the inhabitants in this part of the earth. The authors
of Republic Act 4850 have foreseen this need when they passed this LLDA law — the special law designed to govern the management of our Laguna de Bay
lake resources."
"Laguna de Bay therefore cannot be subjected to fragmented concepts of management policies where lakeshore local government units exercise exclusive
dominion over specific portions of the lake water. The garbage thrown or sewage discharged into the lake, abstraction of water therefrom or construction
of fishpens by enclosing its certain area, affect not only that specific portion but the entire 900 km² of lake water. The implementation of a cohesive and
integrated lake water resource management policy, therefore, is necessary to conserve, protect and sustainably develop Laguna de Bay."5

The power of the local government units to issue fishing privileges was clearly granted for revenue purposes. This is evident from the fact that Section 149
of the New Local Government Code empowering local governments to issue fishing permits is embodied in Chapter 2, Book II, of Republic Act No. 7160
under the heading, "Specific Provisions On The Taxing And Other Revenue Raising Power Of Local Government Units."

On the other hand, the power of the Authority to grant permits for fishpens, fishcages and other aqua-culture structures is for the purpose of effectively
regulating and monitoring activities in the Laguna de Bay region (Section 2, Executive Order No. 927) and for lake quality control and management.6 It does
partake of the nature of police power which is the most pervasive, the least limitable and the most demanding of all State powers including the power of
taxation. Accordingly, the charter of the Authority which embodies a valid exercise of police power should prevail over the Local Government Code of 1991
on matters affecting Laguna de Bay.

There should be no quarrel over permit fees for fishpens, fishcages and other aqua-culture structures in the Laguna de Bay area. Section 3 of Executive
Order No. 927 provides for the proper sharing of fees collected.

In respect to the question as to whether the Authority is a quasi-judicial agency or not, it is our holding that, considering the provisions of Section 4 of
Republic Act No. 4850 and Section 4 of Executive Order No. 927, series of 1983, and the ruling of this Court in Laguna Lake Development Authority vs. Court
of Appeals, 231 SCRA 304, 306, which we quote:

xxx xxx xxx

As a general rule, the adjudication of pollution cases generally pertains to the Pollution Adjudication Board (PAB), except in cases
where the special law provides for another forum. It must be recognized in this regard that the LLDA, as a specialized administrative
agency, is specifically mandated under Republic Act No. 4850 and its amendatory laws to carry out and make effective the declared
national policy of promoting and accelerating the development and balanced growth of the Laguna Lake area and the surrounding
provinces of Rizal and Laguna and the cities of San Pablo, Manila, Pasay, Quezon and Caloocan with due regard and adequate
provisions for environmental management and control, preservation of the quality of human life and ecological systems, and the
prevention of undue ecological disturbances, deterioration and pollution. Under such a broad grant of power and authority, the LLDA,
by virtue of its special charter, obviously has the responsibility to protect the inhabitants of the Laguna Lake region from the
deleterious effects of pollutants emanating from the discharge of wastes from the surrounding areas. In carrying out the
aforementioned declared policy, the LLDA is mandated, among others, to pass upon and approve or disapprove all plans, programs,
and projects proposed by local government offices/agencies within the region, public corporations, and private persons or enterprises
where such plans, programs and/or projects are related to those of the LLDA for the development of the region.

xxx xxx xxx

. . . . While it is a fundamental rule that an administrative agency has only such powers as are expressly granted to it by law, it is
likewise a settled rule that an administrative agency has also such powers as are necessarily implied in the exercise of its express
powers. In the exercise, therefore, of its express powers under its charter, as a regulatory and quasi-judicial body with respect to
pollution cases in the Laguna Lake region, the authority of the LLDA to issue a "cease and desist order" is, perforce, implied. Otherwise,
it may well be reduced to a "toothless" paper agency.

there is no question that the Authority has express powers as a regulatory and quasi-judicial body in respect to pollution cases with authority to
issue a "cease and desist order" and on matters affecting the construction of illegal fishpens, fishcages and other aqua-culture structures in
Laguna de Bay. The Authority's pretense, however, that it is co-equal to the Regional Trial Courts such that all actions against it may only be
instituted before the Court of Appeals cannot be sustained. On actions necessitating the resolution of legal questions affecting the powers of the
Authority as provided for in its charter, the Regional Trial Courts have jurisdiction.

In view of the foregoing, this Court holds that Section 149 of Republic Act No. 7160, otherwise known as the Local Government Code of 1991, has not
repealed the provisions of the charter of the Laguna Lake Development Authority, Republic Act No. 4850, as amended. Thus, the Authority has the exclusive
jurisdiction to issue permits for the enjoyment of fishery privileges in Laguna de Bay to the exclusion of municipalities situated therein and the authority to
exercise such powers as are by its charter vested on it.

Removal from the Authority of the aforesaid licensing authority will render nugatory its avowed purpose of protecting and developing the Laguna Lake
Region. Otherwise stated, the abrogation of this power would render useless its reason for being and will in effect denigrate, if not abolish, the Laguna Lake
Development Authority. This, the Local Government Code of 1991 had never intended to do.

WHEREFORE, the petitions for prohibition, certiorari and injunction are hereby granted, insofar as they relate to the authority of the Laguna Lake
Development Authority to grant fishing privileges within the Laguna Lake Region.
The restraining orders and/or writs of injunction issued by Judge Arturo Marave, RTC, Branch 78, Morong, Rizal; Judge Herculano Tech, RTC, Branch 70,
Binangonan, Rizal; and Judge Aurelio Trampe, RTC, Branch 163, Pasig, Metro Manila, are hereby declared null and void and ordered set aside for having
been issued with grave abuse of discretion.

The Municipal Mayors of the Laguna Lake Region are hereby prohibited from issuing permits to construct and operate fishpens, fishcages and other aqua-
culture structures within the Laguna Lake Region, their previous issuances being declared null and void. Thus, the fishing permits issued by Mayors Isidro B.
Pacis, Municipality of Binangonan; Ricardo D. Papa, Municipality of Taguig; and Walfredo M. de la Vega, Municipality of Jala-jala, specifically, are likewise
declared null and void and ordered cancelled.

The fishpens, fishcages and other aqua-culture structures put up by operators by virtue of permits issued by Municipal Mayors within the Laguna Lake
Region, specifically, permits issued to Fleet Development, Inc. and Carlito Arroyo; Manila Marine Life Business Resources, Inc., represented by, Mr. Tobias
Reynald M. Tiangco; Greenfield Ventures Industrial Development Corporation and R.J. Orion Development Corporation; IRMA Fishing And Trading
Corporation, ARTM Fishing Corporation, BDR Corporation, Mirt Corporation and Trim Corporation; Blue Lagoon Fishing Corporation and ALCRIS Chicken
Growers, Inc.; AGP Fish Ventures, Inc., represented by its President Alfonso Puyat; SEA MAR Trading Co., Inc., Eastern Lagoon Fishing Corporation, and
MINAMAR Fishing Corporation, are hereby declared illegal structures subject to demolition by the Laguna Lake Development Authority.

SO ORDERED.

Davide, Jr., Bellosillo and Kapunan, JJ., concur.

Separate Opinions

PADILLA, J., concurring:

I fully concur with the decision written by Mr. Justice R. Hermosisima, Jr.. I would only like to stress what the decision already states, i.e., that the local
government units in the Laguna Lake area are not precluded from imposing permits on fishery operations for revenue raising purposes of such local
government units. In other words, while the exclusive jurisdiction to determine whether or not projects or activities in the lake area should be allowed, as
well as their regulation, is with the Laguna Lake Development Authority, once the Authority grants a permit, the permittee may still be subjected to an
additional local permit or license for revenue purposes of the local government units concerned. This approach would clearly harmonize the special law,
Rep. Act No. 4850, as amended, with Rep. Act No. 7160, the Local Government Code. It will also enable small towns and municipalities in the lake area, like
Jala-Jala, to rise to some level of economic viability.

Footnotes

1 Section 1, PD No. 813.

2 At pages 64-65.

3 Manila Railroad Company vs. Rafferty, 40 Phils. 225; National Power Corporation vs. Arca, 25 SCRA 935; Province of
Misamis Oriental vs. Cagayan Electric Power and Light Company, Inc., 181 SCRA 43.

4 Fajardo vs. Villafuerte, G.R. No. 89135, December 21, 1989.

5 Petition, under caption, "Nature of Petition".

6 Section 3 (k), Presidential Decree No. 813.

 Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. 88404 October 18, 1990

PHILIPPINE LONG DISTANCE TELEPHONE CO. [PLDT], petitioner,

vs.
THE NATIONAL TELECOMMUNICATIONS COMMISSION AND CELLCOM, INC., (EXPRESS TELECOMMUNICATIONS CO., INC. [ETCI]), respondents.

Alampan & Manhit Law Offices for petitioner.

Gozon, Fernandez, Defensor & Parel for private respondent.

MELENCIO-HERRERA, J.:

Petitioner Philippine Long Distance Telephone Company (PLDT) assails, by way of certiorari and Prohibition under Rule 65, two (2) Orders of public
respondent National Telecommunications Commission (NTC), namely, the Order of 12 December 1988 granting private respondent Express
Telecommunications Co., Inc. (ETCI) provisional authority to install, operate and maintain a Cellular Mobile Telephone System in Metro-Manila (Phase A) in
accordance with specified conditions, and the Order, dated 8 May 1988, denying reconsideration.

On 22 June 1958, Rep. Act No. 2090, was enacted, otherwise known as "An Act Granting Felix Alberto and Company, Incorporated, a Franchise to Establish
Radio Stations for Domestic and Transoceanic Telecommunications." Felix Alberto & Co., Inc. (FACI) was the original corporate name, which was changed to
ETCI with the amendment of the Articles of Incorporation in 1964. Much later, "CELLCOM, Inc." was the name sought to be adopted before the Securities
and Exchange Commission, but this was withdrawn and abandoned.

On 13 May 1987, alleging urgent public need, ETCI filed an application with public respondent NTC (docketed as NTC Case No. 87-89) for the issuance of a
Certificate of Public Convenience and Necessity (CPCN) to construct, install, establish, operate and maintain a Cellular Mobile Telephone System and an
Alpha Numeric Paging System in Metro Manila and in the Southern Luzon regions, with a prayer for provisional authority to operate Phase A of its proposal
within Metro Manila.

PLDT filed an Opposition with a Motion to Dismiss, based primarily on the following grounds: (1) ETCI is not capacitated or qualified under its legislative
franchise to operate a systemwide telephone or network of telephone service such as the one proposed in its application; (2) ETCI lacks the facilities needed
and indispensable to the successful operation of the proposed cellular mobile telephone system; (3) PLDT has itself a pending application with NTC, Case
No. 86-86, to install and operate a Cellular Mobile Telephone System for domestic and international service not only in Manila but also in the provinces and
that under the "prior operator" or "protection of investment" doctrine, PLDT has the priority or preference in the operation of such service; and (4) the
provisional authority, if granted, will result in needless, uneconomical and harmful duplication, among others.

In an Order, dated 12 November 1987, NTC overruled PLDT's Opposition and declared that Rep. Act No. 2090 (1958) should be liberally construed as to
include among the services under said franchise the operation of a cellular mobile telephone service.

In the same Order, ETCI was required to submit the certificate of registration of its Articles of Incorporation with the Securities and Exchange Commission,
the present capital and ownership structure of the company and such other evidence, oral or documentary, as may be necessary to prove its legal, financial
and technical capabilities as well as the economic justifications to warrant the setting up of cellular mobile telephone and paging systems. The continuance
of the hearings was also directed.

After evaluating the reconsideration sought by PLDT, the NTC, in October 1988, maintained its ruling that liberally construed, applicant's franchise carries
with it the privilege to operate and maintain a cellular mobile telephone service.

On 12 December 1988, NTC issued the first challenged Order. Opining that "public interest, convenience and necessity further demand a second cellular
mobile telephone service provider and finds PRIMA FACIE evidence showing applicant's legal, financial and technical capabilities to provide a cellular mobile
service using the AMPS system," NTC granted ETCI provisional authority to install, operate and maintain a cellular mobile telephone system initially in Metro
Manila, Phase A only, subject to the terms and conditions set forth in the same Order. One of the conditions prescribed (Condition No. 5) was that, within
ninety (90) days from date of the acceptance by ETCI of the terms and conditions of the provisional authority, ETCI and PLDT "shall enter into an
interconnection agreement for the provision of adequate interconnection facilities between applicant's cellular mobile telephone switch and the public
switched telephone network and shall jointly submit such interconnection agreement to the Commission for approval."

In a "Motion to Set Aside the Order" granting provisional authority, PLDT alleged essentially that the interconnection ordered was in violation of due
process and that the grant of provisional authority was jurisdictionally and procedurally infirm. On 8 May 1989, NTC denied reconsideration and set the date
for continuation of the hearings on the main proceedings. This is the second questioned Order.
PLDT urges us now to annul the NTC Orders of 12 December 1988 and 8 May 1989 and to order ETCI to desist from, suspend, and/or discontinue any and all
acts intended for its implementation.

On 15 June 1989, we resolved to dismiss the petition for its failure to comply fully with the requirements of Circular No. 1-88. Upon satisfactory showing,
however, that there was, in fact, such compliance, we reconsidered the order, reinstated the Petition, and required the respondents NTC and ETCI to submit
their respective Comments.

On 27 February 1990, we issued a Temporary Restraining Order enjoining NTC to "Cease and Desist from all or any of its on-going proceedings and ETCI
from continuing any and all acts intended or related to or which will amount to the implementation/execution of its provisional authority." This was upon
PLDT's urgent manifestation that it had been served an NTC Order, dated 14 February 1990, directing immediate compliance with its Order of 12 December
1988, "otherwise the Commission shall be constrained to take the necessary measures and bring to bear upon PLDT the full sanctions provided by law."

We required PLDT to post a bond of P 5M. It has complied, with the statement that it was "post(ing) the same on its agreement and/or consent to have the
same forfeited in favor of Private Respondent ETCI/CELLCOM should the instant Petition be dismissed for lack of merit." ETCI took exception to the
sufficiency of the bond considering its initial investment of approximately P 225M, but accepted the forfeiture proferred.

ETCI moved to have the TRO lifted, which we denied on 6 March 1990. We stated, however, that the inaugural ceremony ETCI had scheduled for that day
could proceed, as the same was not covered by the TRO.

PLDT relies on the following grounds for the issuance of the Writs prayed for:

1. Respondent NTC's subject order effectively licensed and/or authorized a corporate entity without any franchise to operate a public
utility, legislative or otherwise, to establish and operate a telecommunications system.

2. The same order validated stock transactions of a public service enterprise contrary to and/or in direct violation of Section 20(h) of
the Public Service Act.

3. Respondent NTC adjudicated in the same order a controverted matter that was not heard at all in the proceedings under which it
was promulgated.

As correctly pointed out by respondents, this being a special civil action for certiorari and Prohibition, we only need determine if NTC acted without
jurisdiction or with grave abuse of discretion amounting to lack or excess of jurisdiction in granting provisional authority to ETCI under the NTC questioned
Orders of 12 December 1988 and 8 May 1989.

The case was set for oral argument on 21 August 1990 with the parties directed to address, but not limited to, the following issues: (1) the status and
coverage of Rep. Act No. 2090 as a franchise; (2) the transfer of shares of stock of a corporation holding a CPCN; and (3) the principle and procedure of
interconnection. The parties were thereafter required to submit their respective Memoranda, with which they have complied.

We find no grave abuse of discretion on the part of NTC, upon the following considerations:

1. NTC Jurisdiction

There can be no question that the NTC is the regulatory agency of the national government with jurisdiction over all telecommunications entities. It is
legally clothed with authority and given ample discretion to grant a provisional permit or authority. In fact, NTC may, on its own initiative, grant such relief
even in the absence of a motion from an applicant.

Sec. 3. Provisional Relief. — Upon the filing of an application, complaint or petition or at any stage thereafter, the Board may grant on
motion of the pleaders or on its own initiative, the relief prayed for, based on the pleading, together with the affidavits and supporting
documents attached thereto, without prejudice to a final decision after completion of the hearing which shall be called within thirty
(30) days from grant of authority asked for. (Rule 15, Rules of Practice and Procedure Before the Board of Communications (now NTC).

What the NTC granted was such a provisional authority, with a definite expiry period of eighteen (18) months unless sooner renewed, and which may be
revoked, amended or revised by the NTC. It is also limited to Metro Manila only. What is more, the main proceedings are clearly to continue as stated in the
NTC Order of 8 May 1989.

The provisional authority was issued after due hearing, reception of evidence and evaluation thereof, with the hearings attended by various oppositors,
including PLDT. It was granted only after a prima facie showing that ETCI has the necessary legal, financial and technical capabilities and that public interest,
convenience and necessity so demanded.

PLDT argues, however, that a provisional authority is nothing short of a Certificate of Public Convenience and Necessity (CPCN) and that it is merely a
"distinction without a difference." That is not so. Basic differences do exist, which need not be elaborated on. What should be borne in mind is that
provisional authority would be meaningless if the grantee were not allowed to operate. Moreover, it is clear from the very Order of 12 December 1988 itself
that its scope is limited only to the first phase, out of four, of the proposed nationwide telephone system. The installation and operation of an alpha
numeric paging system was not authorized. The provisional authority is not exclusive. Its lifetime is limited and may be revoked by the NTC at any time in
accordance with law. The initial expenditure of P130M more or less, is rendered necessary even under a provisional authority to enable ETCI to prove its
capability. And as pointed out by the Solicitor General, on behalf of the NTC, if what had been granted were a CPCN, it would constitute a final order or
award reviewable only by ordinary appeal to the Court of Appeals pursuant to Section 9(3) of BP Blg. 129, and not by certiorari before this Court.

The final outcome of the application rests within the exclusive prerogative of the NTC. Whether or not a CPCN would eventually issue would depend on the
evidence to be presented during the hearings still to be conducted, and only after a full evaluation of the proof thus presented.

2. The Coverage of ETCI's Franchise

Rep. Act No. 2090 grants ETCI (formerly FACI) "the right and privilege of constructing, installing, establishing and operating in the entire Philippines radio
stations for reception and transmission of messages on radio stations in the foreign and domestic public fixed point-to-point and public base, aeronautical
and land mobile stations, ... with the corresponding relay stations for the reception and transmission of wireless messages on radiotelegraphy and/or
radiotelephony ...." PLDT maintains that the scope of the franchise is limited to "radio stations" and excludes telephone services such as the establishment
of the proposed Cellular Mobile Telephone System (CMTS). However, in its Order of 12 November 1987, the NTC construed the technical term
"radiotelephony" liberally as to include the operation of a cellular mobile telephone system. It said:

In resolving the said issue, the Commission takes into consideration the different definitions of the term "radiotelephony." As defined
by the New International Webster Dictionary the term "radiotelephony" is defined as a telephone carried on by aid of radiowaves
without connecting wires. The International Telecommunications Union (ITU) defines a "radiotelephone call" as a "telephone call,
originating in or intended on all or part of its route over the radio communications channels of the mobile service or of the mobile
satellite service." From the above definitions, while under Republic Act 2090 a system-wide telephone or network of telephone service
by means of connecting wires may not have been contemplated, it can be construed liberally that the operation of a cellular mobile
telephone service which carries messages, either voice or record, with the aid of radiowaves or a part of its route carried over radio
communication channels, is one included among the services under said franchise for which a certificate of public convenience and
necessity may be applied for.

The foregoing is the construction given by an administrative agency possessed of the necessary special knowledge, expertise and experience and deserves
great weight and respect (Asturias Sugar Central, Inc. v. Commissioner of Customs, et al., L-19337, September 30, 1969, 29 SCRA 617). It can only be set
aside on proof of gross abuse of discretion, fraud, or error of law (Tupas Local Chapter No. 979 v. NLRC, et al., L-60532-33, November 5, 1985, 139 SCRA
478). We discern none of those considerations sufficient to warrant judicial intervention.

3. The Status of ETCI Franchise

PLDT alleges that the ETCI franchise had lapsed into nonexistence for failure of the franchise holder to begin and complete construction of the radio system
authorized under the franchise as explicitly required in Section 4 of its franchise, Rep. Act No. 2090. 1 PLDT also invokes Pres. Decree No. 36, enacted on 2
November 1972, which legislates the mandatory cancellation or invalidation of all franchises for the operation of communications services, which have not
been availed of or used by the party or parties in whose name they were issued.

However, whether or not ETCI, and before it FACI, in contravention of its franchise, started the first of its radio telecommunication stations within (2) years
from the grant of its franchise and completed the construction within ten (10) years from said date; and whether or not its franchise had remained unused
from the time of its issuance, are questions of fact beyond the province of this Court, besides the well-settled procedural consideration that factual issues
are not subjects of a special civil action for certiorari (Central Bank of the Philippines vs. Court of Appeals, G.R. No. 41859, 8 March 1989, 171 SCRA 49; Ygay
vs. Escareal, G.R. No. 44189, 8 February 1985, 135 SCRA 78; Filipino Merchant's Insurance Co., Inc. vs. Intermediate Appellate Court, G.R. No. 71640, 27 June
1988, 162 SCRA 669). Moreover, neither Section 4, Rep. Act No. 2090 nor Pres. Decree No. 36 should be construed as self-executing in working a forfeiture.
Franchise holders should be given an opportunity to be heard, particularly so, where, as in this case, ETCI does not admit any breach, in consonance with
the rudiments of fair play. Thus, the factual situation of this case differs from that in Angeles Ry Co. vs. City of Los Angeles (92 Pacific Reporter 490) cited by
PLDT, where the grantee therein admitted its failure to complete the conditions of its franchise and yet insisted on a decree of forfeiture.

More importantly, PLDT's allegation partakes of a Collateral attack on a franchise Rep. Act No. 2090), which is not allowed. A franchise is a property right
and cannot be revoked or forfeited without due process of law. The determination of the right to the exercise of a franchise, or whether the right to enjoy
such privilege has been forfeited by non-user, is more properly the subject of the prerogative writ of quo warranto, the right to assert which, as a rule,
belongs to the State "upon complaint or otherwise" (Sections 1, 2 and 3, Rule 66, Rules of Court), 2 the reason being that the abuse of a franchise is a public
wrong and not a private injury. A forfeiture of a franchise will have to be declared in a direct proceeding for the purpose brought by the State because a
franchise is granted by law and its unlawful exercise is primarily a concern of Government.

A ... franchise is ... granted by law, and its ... unlawful exercise is the concern primarily of the Government. Hence, the latter as a rule is
the party called upon to bring the action for such ... unlawful exercise of franchise. (IV-B V. FRANCISCO, 298 [1963 ed.], citing Cruz vs.
Ramos, 84 Phil. 226).

4. ETCI's Stock Transactions

ETCI admits that in 1964, the Albertos, as original owners of more than 40% of the outstanding capital stock sold their holdings to the Orbes. In 1968, the
Albertos re-acquired the shares they had sold to the Orbes. In 1987, the Albertos sold more than 40% of their shares to Horacio Yalung. Thereafter, the
present stockholders acquired their ETCI shares. Moreover, in 1964, ETCI had increased its capital stock from P40,000.00 to P360,000.00; and in 1987, from
P360,000.00 to P40M.

PLDT contends that the transfers in 1987 of the shares of stock to the new stockholders amount to a transfer of ETCI's franchise, which
needs Congressional approval pursuant to Rep. Act No. 2090, and since such approval had not been obtained, ETCI's franchise had
been invalidated. The provision relied on reads, in part, as follows:

SECTION 10. The grantee shall not lease, transfer, grant the usufruct of, sell or assign this franchise nor the rights and privileges
acquired thereunder to any person, firm, company, corporation or other commercial or legal entity nor merge with any other person,
company or corporation organized for the same purpose, without the approval of the Congress of the Philippines first had. ...

It should be noted, however, that the foregoing provision is, directed to the "grantee" of the franchise, which is the corporation itself and refers to a sale,
lease, or assignment of that franchise. It does not include the transfer or sale of shares of stock of a corporation by the latter's stockholders.

The sale of shares of stock of a public utility is governed by another law, i.e., Section 20(h) of the Public Service Act (Commonwealth Act No. 146). Pursuant
thereto, the Public Service Commission (now the NTC) is the government agency vested with the authority to approve the transfer of more than 40% of the
subscribed capital stock of a telecommunications company to a single transferee, thus:

SEC. 20.Acts requiring the approval of the Commission. Subject to established stations and exceptions and saving provisions to the
contrary, it shall be unlawful for any public service or for the owner, lessee or operator thereof, without the approval and authorization
of the Commission previously had

xxx xxx xxx

(h) To sell or register in its books the transfer or sale of shares of its capital stock, if the result of that sale in itself or in connection with
another previous sale, shall be to vest in the transferee more than forty per centum of the subscribed capital of said public service. Any
transfer made in violation of this provision shall be void and of no effect and shall not be registered in the books of the public service
corporation. Nothing herein contained shall be construed to prevent the holding of shares lawfully acquired. (As amended by Com. Act
No. 454).

In other words, transfers of shares of a public utility corporation need only NTC approval, not Congressional authorization. What transpired in ETCI were a
series of transfers of shares starting in 1964 until 1987. The approval of the NTC may be deemed to have been met when it authorized the issuance of the
provisional authority to ETCI. There was full disclosure before the NTC of the transfers. In fact, the NTC Order of 12 November 1987 required ETCI to submit
its "present capital and ownership structure." Further, ETCI even filed a Motion before the NTC, dated 8 December 1987, or more than a year prior to the
grant of provisional authority, seeking approval of the increase in its capital stock from P360,000.00 to P40M, and the stock transfers made by its
stockholders.

A distinction should be made between shares of stock, which are owned by stockholders, the sale of which requires only NTC approval, and the franchise
itself which is owned by the corporation as the grantee thereof, the sale or transfer of which requires Congressional sanction. Since stockholders own the
shares of stock, they may dispose of the same as they see fit. They may not, however, transfer or assign the property of a corporation, like its franchise. In
other words, even if the original stockholders had transferred their shares to another group of shareholders, the franchise granted to the corporation
subsists as long as the corporation, as an entity, continues to exist The franchise is not thereby invalidated by the transfer of the shares. A corporation has a
personality separate and distinct from that of each stockholder. It has the right of continuity or perpetual succession (Corporation Code, Sec. 2).

To all appearances, the stock transfers were not just for the purpose of acquiring the ETCI franchise, considering that, as heretofore stated, a series of
transfers was involved from 1964 to 1987. And, contrary to PLDT's assertion, the franchise was not the only property of ETCI of meaningful value. The "zero"
book value of ETCI assets, as reflected in its balance sheet, was plausibly explained as due to the accumulated depreciation over the years entered for
accounting purposes and was not reflective of the actual value that those assets would command in the market.

But again, whether ETCI has offended against a provision of its franchise, or has subjected it to misuse or abuse, may more properly be inquired into in quo
warranto proceedings instituted by the State. It is the condition of every franchise that it is subject to amendment, alteration, or repeal when the common
good so requires (1987 Constitution, Article XII, Section 11).

5. The NTC Interconnection Order

In the provisional authority granted by NTC to ETCI, one of the conditions imposed was that the latter and PLDT were to enter into an interconnection
agreement to be jointly submitted to NTC for approval.

PLDT vehemently opposes interconnection with its own public switched telephone network. It contends: that while PLDT welcomes interconnections in the
furtherance of public interest, only parties who can establish that they have valid and subsisting legislative franchises are entitled to apply for a CPCN or
provisional authority, absent which, NTC has no jurisdiction to grant them the CPCN or interconnection with PLDT; that the 73 telephone systems operating
all over the Philippines have a viability and feasibility independent of any interconnection with PLDT; that "the NTC is not empowered to compel such a
private raid on PLDT's legitimate income arising out of its gigantic investment;" that "it is not public interest, but purely a private and selfish interest which
will be served by an interconnection under ETCI's terms;" and that "to compel PLDT to interconnect merely to give viability to a prospective competitor,
which cannot stand on its own feet, cannot be justified in the name of a non-existent public need" (PLDT Memorandum, pp. 48 and 50).

PLDT cannot justifiably refuse to interconnect.

Rep. Act No. 6849, or the Municipal Telephone Act of 1989, approved on 8 February 1990, mandates interconnection providing as it does that "all domestic
telecommunications carriers or utilities ... shall be interconnected to the public switch telephone network." Such regulation of the use and ownership of
telecommunications systems is in the exercise of the plenary police power of the State for the promotion of the general welfare. The 1987 Constitution
recognizes the existence of that power when it provides.

SEC. 6. The use of property bears a social function, and all economic agents shall contribute to the common good. Individuals and
private groups, including corporations, cooperatives, and similar collective organizations, shall have the right to own, establish, and
operate economic enterprises, subject to the duty of the State to promote distributive justice and to intervene when the common
good so demands (Article XII).

The interconnection which has been required of PLDT is a form of "intervention" with property rights dictated by "the objective of government to promote
the rapid expansion of telecommunications services in all areas of the Philippines, ... to maximize the use of telecommunications facilities available, ... in
recognition of the vital role of communications in nation building ... and to ensure that all users of the public telecommunications service have access to all
other users of the service wherever they may be within the Philippines at an acceptable standard of service and at reasonable cost" (DOTC Circular No. 90-
248). Undoubtedly, the encompassing objective is the common good. The NTC, as the regulatory agency of the State, merely exercised its delegated
authority to regulate the use of telecommunications networks when it decreed interconnection.

The importance and emphasis given to interconnection dates back to Ministry Circular No. 82-81, dated 6 December 1982, providing:

Sec. 1. That the government encourages the provision and operation of public mobile telephone service within local sub-base stations,
particularly, in the highly commercialized areas;

Sec. 5. That, in the event the authority to operate said service be granted to other applicants, other than the franchise holder, the
franchise operator shall be under obligation to enter into an agreement with the domestic telephone network, under an
interconnection agreement;

Department of Transportation and Communication (DOTC) Circular No. 87-188, issued in 1987, also decrees:

12. All public communications carriers shall interconnect their facilities pursuant to comparatively efficient interconnection (CEI) as
defined by the NTC in the interest of economic efficiency.

The sharing of revenue was an additional feature considered in DOTC Circular No. 90-248, dated 14 June 1990, laying down the "Policy on Interconnection
and Revenue Sharing by Public Communications Carriers," thus:

WHEREAS, it is the objective of government to promote the rapid expansion of telecommunications services in all areas of the
Philippines;

WHEREAS, there is a need to maximize the use of telecommunications facilities available and encourage investment in
telecommunications infrastructure by suitably qualified service providers;

WHEREAS, in recognition of the vital role of communications in nation building, there is a need to ensure that all users of the public
telecommunications service have access to all other users of the service wherever they may be within the Philippines at an acceptable
standard of service and at reasonable cost.

WHEREFORE, ... the following Department policies on interconnection and revenue sharing are hereby promulgated:

1. All facilities offering public telecommunication services shall be interconnected into the nationwide
telecommunications network/s.

xxx xxx xxx

4. The interconnection of networks shall be effected in a fair and non-discriminatory manner and within the
shortest time-frame practicable.

5. The precise points of interface between service operators shall be as defined by the NTC; and the
apportionment of costs and division of revenues resulting from interconnection of telecommunications networks
shall be as approved and/or prescribed by the NTC.
 xxx xxx xxx

Since then, the NTC, on 12 July 1990, issued Memorandum Circular No. 7-13-90 prescribing the "Rules and Regulations Governing the Interconnection of
Local Telephone Exchanges and Public Calling Offices with the Nationwide Telecommunications Network/s, the Sharing of Revenue Derived Therefrom, and
for Other Purposes."

The NTC order to interconnect allows the parties themselves to discuss and agree upon the specific terms and conditions of the interconnection agreement
instead of the NTC itself laying down the standards of interconnection which it can very well impose. Thus it is that PLDT cannot justifiably claim denial of
clue process. It has been heard. It will continue to be heard in the main proceedings. It will surely heard in the negotiations concerning the interconnection
agreement.

As disclosed during the hearing, the interconnection sought by ETCI is by no means a "parasitic dependence" on PLDT. The ETCI system can operate on its
own even without interconnection, but it will be limited to its own subscribers. What interconnection seeks to accomplish is to enable the system to reach
out to the greatest number of people possible in line with governmental policies laid down. Cellular phones can access PLDT units and vice versa in as wide
an area as attainable. With the broader reach, public interest and convenience will be better served. To be sure, ETCI could provide no mean competition
(although PLDT maintains that it has nothing to fear from the "innocuous interconnection"), and eat into PLDT's own toll revenue cream PLDT revenue," in
its own words), but all for the eventual benefit of all that the system can reach.

6. Ultimate Considerations

The decisive consideration are public need, public interest, and the common good. Those were the overriding factors which motivated NTC in granting
provisional authority to ETCI. Article II, Section 24 of the 1987 Constitution, recognizes the vital role of communication and information in nation building. It
is likewise a State policy to provide the environment for the emergence of communications structures suitable to the balanced flow of information into, out
of, and across the country (Article XVI, Section 10, Ibid.). A modern and dependable communications network rendering efficient and reasonably priced
services is also indispensable for accelerated economic recovery and development. To these public and national interests, public utility companies must
bow and yield.

Despite the fact that there is a virtual monopoly of the telephone system in the country at present.service is sadly inadequate. Customer demands are
hardly met, whether fixed or mobile. There is a unanimous cry to hasten the development of a modern, efficient, satisfactory and continuous
telecommunications service not only in Metro Manila but throughout the archipelago. The need therefor was dramatically emphasized by the destructive
earthquake of 16 July 1990. It may be that users of the cellular mobile telephone would initially be limited to a few and to highly commercialized areas.
However, it is a step in the right direction towards the enhancement of the telecommunications infrastructure, the expansion of telecommunications
services in, hopefully, all areas of the country, with chances of complete disruption of communications minimized. It will thus impact on, the total
development of the country's telecommunications systems and redound to the benefit of even those who may not be able to subscribe to ETCI.

Free competition in the industry may also provide the answer to a much-desired improvement in the quality and delivery of this type of public utility, to
improved technology, fast and handy mobile service, and reduced user dissatisfaction. After all, neither PLDT nor any other public utility has a constitutional
right to a monopoly position in view of the Constitutional proscription that no franchise certificate or authorization shall be exclusive in character or shall
last longer than fifty (50) years (ibid., Section 11; Article XIV Section 5, 1973 Constitution; Article XIV, Section 8, 1935 Constitution). Additionally, the State is
empowered to decide whether public interest demands that monopolies be regulated or prohibited (1987 Constitution. Article XII, Section 19).

WHEREFORE, finding no grave abuse of discretion, tantamount to lack of or excess of jurisdiction, on the part of the National Telecommunications
Commission in issuing its challenged Orders of 12 December 1988 and 8 May 1989 in NTC Case No. 87-39, this Petition is DISMISSED for lack of merit. The
Temporary Restraining Order heretofore issued is LIFTED. The bond issued as a condition for the issuance of said restraining Order is declared forfeited in
favor of private respondent Express Telecommunications Co., Inc. Costs against petitioner.

SO ORDERED.

Paras, Feliciano, Padilla, Sarmiento, Cortes, Griño-Aquino and Regalado, JJ., concur.

Separate Opinions

GUTIERREZ, JR., J., dissenting:

I share with the rest of the Court the desire to have a "modern, efficient, satisfactory, and continuous telecommunications service" in the Philippines. I
register this dissent, however, because I believe that any frustrations over the present state of telephone services do not justify our affirming an illegal and
inequitable order of the National Telecommunications Commission (NTC). More so when it appears that the questioned order is not really a solution to the
problems bugging our telephone industry.

My dissent is based on three primary considerations, namely:

(1) The Court has sustained nothing less than the desire of respondent ETCI to set-up a profitable business catering to an affluent clientele through the use
of billions of pesos worth of another company's properties. No issues of public welfare, breaking up of monopolies, or other high sounding principles are
involved. The core question is purely and simply whether or not to grant ETCI's desire for economic gains through riding on another firm's investments.
(2) The Court has permitted respondent ETCI to operate a telephone system without a valid legislative franchise. It strains the imagination too much to
interpret a legislative franchise authorizing "radio stations" as including the provisional permit for a sophisticated telephone system which has absolutely
nothing to do with radio broadcasts and transmissions. The Court subverts the legislative will when it validates a provisional permit on the basis of authority
which never envisioned much less intended its use for a regular telephone system catering to thousands of individual receiver units. There is nothing in Rep.
Act No. 2090 which remotely suggests a cellular mobile telephone system.

(3) The authority given by Rep. Act No. 2090 has expired. ETCI is not only riding on another company's investments and using legislative authority for a
purpose never dreamed of by the legislators but is also trying to extract life from and resurrect an unused and dead franchise.

My principal objection to the disputed NTC order arises from the fact that respondent Express Telecommunications Co. Inc. (ETCI) cannot exist without
using the facilities of Philippine Long Distance Telephone Co. (PLDT). Practically all of its business will be conducted through another company's property.

While pretending to set up a separate phone company, ETCI's cellular phones would be useless most of the time, if not all the time, unless they use PLDT
lines. It would be different if ETCI phone owners would primarily communicate with one another and tap into PLDT lines only rarely or occasionally.

To compare ETCI with the Government Telephone System (GTS) or with an independent phone company serving a province or city is misleading. The
defunct GTS was set up to connect government offices and personnel with one another. It could exist independently and was not primarily or wholly
dependent on PLDT connections. A provincial or city system serves the residents of a province or city. It primarily relies on its own investments and
infrastructure. It asks for PLDT services only when long distance calls to another country, city, or province have to be made.

I can, therefore, understand PLDT's reluctance Since it has its own franchise to operate exactly the same services which ETCI is endeavoring to establish.
PLDT would be using its own existing lines. Under the Court's decision, it would be compelled to allow another company to use those same lines in direct
competition with the lines owner. The cellular system is actually only an adjunct to a regular telephone system, not a separate and independent system. As
an adjunct and component unit or as a parasite (if a foreign body) it must be fed by the mother organism or unit if it is to survive.

Under the disputed order, ETCI will be completely dependent upon its use of the P16 billions worth of infrastructure which PLDT has built over several
decades. The vaunted payment of compensation everytime an ETCI phone taps into a PLDT line is illusory. There can be no adequate payment for the use of
billions of pesos of investments built up over 60 years. Moreover, it is actually the phone owner or consumer who pays the fee. The rate will be fixed by
Government and will be based on the consumer's best interests and capacity, ignoring or subordinating the petitioner's investments. Payment will depend
on how much the phone user should be charged for making a single phone call and will disregard the millions of pesos that ETCI will earn through its use of
billions of pesos worth of another company's investments and properties.

The "hated monopoly" and "improved services" arguments are not only misleading but also illusory.

To sustain the questioned NTC order will not in any way improve telephone services nor would any monopoly be dismantled. The answer to inadequate
telephone facilities is better administrative supervision. The NTC should pay attention to its work and compel PLDT to improve its services instead of
saddling with the burden of carrying another company's system.

For better services, what the country needs is to improve the existing system and provide enough telephone lines for all who really need them. The
proposed ETCI cellular phones will serve mostly those who can afford to tide in expensive cars and who already have two or three telephones in their offices
and residences. Cellular phones should legally and fairly be provided by PLDT as just another facet of its expansion program.

The mass of applicants for new telephones will not benefit from cellular phones. In fact, if PLDT is required by NTC to open up new exchanges or
interconnections for the rich ETCI consumers, this will mean an equivalent number of low income or middle income applicants who will have to wait longer
for their own PLDT lines. The Court's resolution favors the conveniences of the rich at the expense of the necessities of the poor. *

I agree with the petitioner that what NTC granted is not merely provisional authority but what is in effect a regular certificate of public convenience and
necessity or "CPCN".

Starting with seven cell sites for 3,000 subscribers in Metro Manila, the cellular mobile system will establish 67 cell sites beginning October 1991. The initial
expenses alone will amount to P130 million. At page 8 of its Comment, ETCI admits that that "the provisional authority to operate will be useless to ETCI if it
does not put up the system and interconnnect said system with the existing PLDT network."(Emphasis supplied) The completion of interconnection
arrangements, the setting up of expensive installations, the requirements as to maintenance and operation, and other conditions found in the NTC order
are anything but provisional.

The authority given to ETCI is entirely different from the provisional authority given to MERALCO or oil companies to increase the price of oil or electricity or
to bus and jeepney operators to raise fares a few centavos. In these cases the need for increases is not only urgent but is usually a foregone conclusion
dictated by pressing circumstances. Further hearings are needed only to fix the amount which will be finally authorized. The NTC orders can also be easily
revoked. Increased prices of oil or rates of transportation services can be lowered or struck down if the preliminary determinations are wrong. In the instant
case, NTC has authorized a new company to start operations even if the issues have not been thoroughly threshed out. There is no urgent need which
warrants operations before a final permit is granted. Once in operation, there can be no cancelling or revocation of the authority to operate, no dismantling
of thousands of cellular phones and throwing to waste of over P100 million worth of investments in fixed facilities. Theoretically, it can be done but it is
clear from the records that what was granted is really a CPCN.
There is no dispute that a legislative franchise is necessary for the operation of a telephone system. The NTC has no jurisdiction to grant the authority. The
fact that ETCI has to rely on a 1958 legislative franchise shows that only Congress can give the franchise which will empower NTC to issue the certificate or
CPCN.

Rep. Act No. 2090 is a franchise for the construction and operation of radio stations. Felix Alberto and Co. Inc. (FACI) was authorized in the operation of
those radio stations to acquire and handle transmitters, receivers, electrical machinery and other related devises. The use of radio telephone was never
intended or envisioned for a regular telephone company. "Radio telephony" is governed and circumscribed by the basic purpose of operating radio stations.
Telephony may be used only to enable communications between the stations, to transmit a radio message to a station where it would be transcribed into a
form suitable for delivery to the intended recipient. FACI was authorized to communicate to, between, and among its radio stations. There is no authority
for thousands of customers to be talking to PLDT subscribers directly. FACI was never given authority by Rep. Act 2090 to operate switching facilities, wire-
line transmissions, and telecommunication stations of a telephone company. The entire records can be scrutinized and they will show that ETCI has all but
ignored and kept silent about the purpose of its alleged franchise-which is for the real operation of radio stations. There can be no equating of "radio
stations" with a complete cellular mobile telephone system. The two are poles apart.

The most liberal interpretation can not possibly read in a 1958 franchise for radio stations, the authority for a mobile cellular system vintage 1990. No
amount of liberal interpretation can supply the missing requirement. And besides, we are not interpreting a Constitution which is intended to cover
changing situations and must be read liberally. Legislative franchises are always construed strictly against the franchise.

The remedy is for ETCI to go to Congress. I regret that in dismissing this petition, we may be withholding from Congress the courtesy we owe to it as a co-
equal body and denigrating its power to examine whether or not ETCI really deserves a legislative franchise.

My third point has to do with the sudden resurrection of a dead franchise and its coming to life in an entirely different form-no longer a radio station but a
modern telephone company.

I have searched the records in vain for any plan of ETCI to operate radio stations. It has not operated and does not plan to operate radio stations. Its sole
objective is to set up a telephone company. For that purpose, it should go to Congress and get a franchise for a telephone company. NTC cannot give it such
a franchise.

Section 10 of Rep. Act No. 2090 prohibits the transfer of the franchise and the rights and privileges under that franchise without the express approval of
Congress. No amount of legal niceties can cloak the fact that ETCI is not FACI, that the franchise was sold by FACI to ETCI, and that the permit given by NTC
to ETCI is based on a purchased franchise.

When the owners of FACI sold out their stocks, the 3,900 shares were on paper worth only 35 centavos each. The company had no assets and physical
properties. All it had was the franchise, for whatever it was worth. The buyers paid P4,618,185.00 for the company's stocks, almost all of the amount
intended for the franchise. It was, therefore, a sale or transfer of the franchise in violation of the express terms of Rep. Act No. 2090 which call for approval
by Congress.

ETCI tried to show a series of transactions involving the sales of almost all of its stocks. Not only are the circumstances surrounding the transfers quite
suspicious, but they were effected without the approval and authorization of the Commission as required by law.

Sec. 4 of Rep. Act No. 2090 also provides that the franchise shall be void unless the construction of radio stations is begun within two years or June 22, 1960
and completed within ten years or June 22, 1968.

As of April 14, 1987, ETCI formally admitted that it was still in the pre-operating stage. Almost 30 years later, it had not even started the business authorized
by the franchise. It is only now that it proposes to construct, not radio stations, but a telephone system.

During the oral arguments and in its memorandum, ETCI presented proof of several radio station construction permits. A construction permit authorizes a
construction but does not prove it. There is no proof that the entire construction of all stations was completed within ten years. In fact, there is not the
slightest intimation that ETCI, today, is operating radio stations. What it wants is to set up a telephone system.

In addition to the franchise being void under its own charter, P.D. 36 on November 2, 1972, cancelled all unused or dormant legislative franchises. Rep. Act
No. 2090, having been voided by its own Section 4, suffered a second death if that is at all possible.

The violations of law-(1) the giving of life to an already dead franchise, (2) the transfer of ownership against an express statutory provision, and (3) the use
of a franchise for radio stations to justify the setting up of a cellular mobile telephone system are too glaring for us to ignore on the basis of "respect" for a
questionable NTC order and other purely technical considerations. We should not force PLDT to open its lines to enable a competitor to operate a system
which cannot survive unless it uses PLDT properties.

The NTC bases its order on alleged grounds of public need, public interest, and the common good. There is no showing that these considerations will be
satisfied, at least sufficient to warrant a strained interpretation of legal provisions. Any slight improvement which the expensive ETCI project will accomplish
cannot offset its violation of law and fair dealing.

I, THEREFORE, VOTE to GRANT the petition.

Fernan, C.J., Narvasa, Gancayco, Bidin and Medialdea, JJ., concur.

CRUZ, J., concurring and dissenting:

As one of the many dissatisfied customers of PLDT, I should have no objection to the grant of the provisional authority to ETCI. I have none. Its admission
will improve communication facilities in the country conformably to the constitutional objective. It will also keep PLDT on its toes and encourage it to
correct its deficient service in view of the competition.

I fully agree with all the rulings in the ponencia except the approval of the requirement for PLDT to interconnect with ETCI. I think it violates due process. It
reminds me of the story of the little red hen who found some rice and asked who would help her plant it. None of the animals in the farm was willing and
neither did they help in watering, harvesting and finally cooking it. But when she asked, "Who will help me eat the rice?" everyone wanted to join in. The
little red hen is like PLDT.

If ETCI wants to operate its own telephone system, it should rely on its own resources instead of riding piggy-back on PLDT. It seems to me rather unfair for
the Government to require PLDT to share with a newcomer and potential rival what it took PLDT tremendous effort and long years and billions of pesos to
build .

The case of Republic of the Philippines v. PLDT, 26 SCRA 620, is not applicable because it was the Government itself that was there seeking interconnection
of its own telephone system, with PLDT. The Court recognized the obvious public purpose that justified the special exercise (by the Government of the
power of eminent domain. But in the case before us, the intended beneficiary is a private enterprise primarily organized for profit and, indeed, to compete
with PLDT. In effect, the Government is forcing PLDT to surrender its competitive advantage and share its resources with ETCI, which may not only
supplement but, possibly, even ultimately supplant PLDT. I do not think government authority extends that far.

The majority disposes of the question of due process by simply saying that PLDT will have frill opportunity to be heard in the ascertainment of the just
compensation ETCI will have to pay for the interconnection. That is not the issue. What PLDT is objecting to is not the amount of the just compensation but
the interconnection itself that is being forced upon it.

I feel there is no due process where private property is taken by the Government from one private person and given to another private person for the
latter's direct benefit. The fact that compensation is paid is immaterial; the flaw lies in the taking itself (Davidson v. New Orleans, 90 U.S. 97). The
circumstance that PLDT is a public utility is no warrant for taking undue liberties with its property, which is protected by the Bill of Rights. "Public need"
cannot be a blanket justification for favoring one investor against another in contravention of the system of free enterprise. If PLDT has misused its
franchise, I should think the solution is to revoke its authority, not to force it to share its resources with its private competitors.

The rule is that where it is the legislature itself that directly calls for the expropriation of private property, its determination of the thing to be condemned
and the purpose of the taking is conclusive on the courts (City of Manila v. Chinese Community, 40 Phil. 349). But where the power of eminent domain is
exercised only by a delegate of the legislature, like ETCI, the courts may inquire into the necessity or propriety of the expropriation and, when warranted,
pronounce its invalidity (Republic of the Philippines v. La Orden de PO Benedictinos de Filipinas, 1 SCRA 649). I think this is what the Court should do in the
case at bar.

A final point. It is argued that requiring ETCI to start from scratch (as PLDT did) and import its own equipment would entail a tremendous outflow of foreign
currency we can ill afford at this time. Perhaps so. But we must remember that the Bill of Rights is not a marketable commodity, like a piece of machinery.
Due process is an indispensable requirement that cannot be assessed in dollar and cents.

Fernan, C.J., and Narvasa, J., concur.

Footnotes

1 SEC. 4. This franchise shall continue for a period of fifty years from the date the first of said stations shall be placed in operation, and
is granted upon the express condition that same shall be void unless the construction of said station be begun within two years from
the date of the approval of this Act and be completed within ten years from said date.

2 SECTION 1. Action by Government against individuals. An action for the usurpation of office or franchise may be brought in the name
of the Republic of the Philippines against:

(a) A person who usurps, intrudes into, or unlawfully holds or exercises a public office, or a franchise, or an office in a corporation
created by authority of law;
xxx xxx xxx

SECTION 2. Like actions against corporations. — A like action may be brought against a corporation:

(a) When it has offended against a provision of an Act for its creation or renewal;

(b) When it has forfeited its privileges and franchises by non-user;

(c) When it has committed or omitted an act which amounts to a surrender of its corporate rights, privileges, or franchises;

(d) When it has misused a right, privilege, or franchise conferred upon it by law, or when it has exercised a right, privilege, or franchise
in contravention of law.

SECTION 3. When Solicitor General or fiscal must commence action.-The Solicitor General or a fiscal, when directed by the President of
the Philippines, or when upon complaint or otherwise he has good reason to believe that any case specified in the last two preceding
sections can be established by proof, must commence such action.

GUTIERREZ, JR., J.: Dissenting Opinion

* The subscriber pays P38,000.00 for a vehicle borne telephone for a portable phone. and P57,000.00 for a Pocketphone, although NTC
allow 15% discounts on these amounts. There is a basic charge which includes P750.00 a month for free answering services. If the
subscriber uses his phone from 7:00 AM to 7:00 PM, he pays P7.00 for the first minute and P5.50 for each additional minute. For a long
distance calls, the PLDT toll is added. Even for unsuccessful and unconnected operator assisted calls there is a P4.00 charge per call.
 Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. 111097 July 20, 1994

MAYOR PABLO P. MAGTAJAS & THE CITY OF CAGAYAN DE ORO, petitioners,

vs.
PRYCE PROPERTIES CORPORATION, INC. & PHILIPPINE AMUSEMENT AND GAMING CORPORATION, respondents.

Aquilino G. Pimentel, Jr. and Associates for petitioners.

R.R. Torralba & Associates for private respondent.

CRUZ, J.:

There was instant opposition when PAGCOR announced the opening of a casino in Cagayan de Oro City. Civic organizations angrily denounced the project.
The religious elements echoed the objection and so did the women's groups and the youth. Demonstrations were led by the mayor and the city legislators.
The media trumpeted the protest, describing the casino as an affront to the welfare of the city.

The trouble arose when in 1992, flush with its tremendous success in several cities, PAGCOR decided to expand its operations to Cagayan de Oro City. To
this end, it leased a portion of a building belonging to Pryce Properties Corporation, Inc., one of the herein private respondents, renovated and equipped
the same, and prepared to inaugurate its casino there during the Christmas season.

The reaction of the Sangguniang Panlungsod of Cagayan de Oro City was swift and hostile. On December 7, 1992, it enacted Ordinance No. 3353 reading as
follows:

ORDINANCE NO. 3353

AN ORDINANCE PROHIBITING THE ISSUANCE OF BUSINESS PERMIT AND CANCELLING EXISTING BUSINESS PERMIT TO ANY
ESTABLISHMENT FOR THE USING AND ALLOWING TO BE USED ITS PREMISES OR PORTION THEREOF FOR THE OPERATION OF CASINO.

BE IT ORDAINED by the Sangguniang Panlungsod of the City of Cagayan de Oro, in session assembled that:

Sec. 1. — That pursuant to the policy of the city banning the operation of casino within its territorial jurisdiction, no business permit
shall be issued to any person, partnership or corporation for the operation of casino within the city limits.

Sec. 2. — That it shall be a violation of existing business permit by any persons, partnership or corporation to use its business
establishment or portion thereof, or allow the use thereof by others for casino operation and other gambling activities.

Sec. 3. — PENALTIES. — Any violation of such existing business permit as defined in the preceding section shall suffer the following
penalties, to wit:

a) Suspension of the business permit for sixty (60) days for the first offense and a fine of
P1,000.00/day

b) Suspension of the business permit for Six (6) months for the second offense, and a fine of
P3,000.00/day

c) Permanent revocation of the business permit and imprisonment of One (1) year, for the
third and subsequent offenses.

Sec. 4. — This Ordinance shall take effect ten (10) days from publication thereof.

Nor was this all. On January 4, 1993, it adopted a sterner Ordinance No. 3375-93 reading as follows:

ORDINANCE NO. 3375-93

AN ORDINANCE PROHIBITING THE OPERATION OF CASINO AND PROVIDING PENALTY FOR VIOLATION THEREFOR.
 WHEREAS, the City Council established a policy as early as 1990 against CASINO under its Resolution No. 2295;

WHEREAS, on October 14, 1992, the City Council passed another Resolution No. 2673, reiterating its policy against the establishment of
CASINO;

WHEREAS, subsequently, thereafter, it likewise passed Ordinance No. 3353, prohibiting the issuance of Business Permit and to cancel
existing Business Permit to any establishment for the using and allowing to be used its premises or portion thereof for the operation of
CASINO;

WHEREAS, under Art. 3, section 458, No. (4), sub paragraph VI of the Local Government Code of 1991 (Rep. Act 7160) and under Art.
99, No. (4), Paragraph VI of the implementing rules of the Local Government Code, the City Council as the Legislative Body shall enact
measure to suppress any activity inimical to public morals and general welfare of the people and/or regulate or prohibit such activity
pertaining to amusement or entertainment in order to protect social and moral welfare of the community;

NOW THEREFORE,

BE IT ORDAINED by the City Council in session duly assembled that:

Sec. 1. — The operation of gambling CASINO in the City of Cagayan de Oro is hereby prohibited.

Sec. 2. — Any violation of this Ordinance shall be subject to the following penalties:

a) Administrative fine of P5,000.00 shall be imposed against the proprietor, partnership or corporation undertaking the operation,
conduct, maintenance of gambling CASINO in the City and closure thereof;

b) Imprisonment of not less than six (6) months nor more than one (1) year or a fine in the amount of P5,000.00 or both at the
discretion of the court against the manager, supervisor, and/or any person responsible in the establishment, conduct and maintenance
of gambling CASINO.

Sec. 3. — This Ordinance shall take effect ten (10) days after its publication in a local newspaper of general circulation.

Pryce assailed the ordinances before the Court of Appeals, where it was joined by PAGCOR as intervenor and supplemental petitioner. Their challenge
succeeded. On March 31, 1993, the Court of Appeals declared the ordinances invalid and issued the writ prayed for to prohibit their
enforcement. 1 Reconsideration of this decision was denied on July 13, 1993. 2

Cagayan de Oro City and its mayor are now before us in this petition for review under Rule 45 of the Rules of Court. 3 They aver that the respondent Court
of Appeals erred in holding that:

1. Under existing laws, the Sangguniang Panlungsod of the City of Cagayan de Oro does not have the power and authority to prohibit
the establishment and operation of a PAGCOR gambling casino within the City's territorial limits.

2. The phrase "gambling and other prohibited games of chance" found in Sec. 458, par. (a), sub-par. (1) — (v) of R.A. 7160 could only
mean "illegal gambling."

3. The questioned Ordinances in effect annul P.D. 1869 and are therefore invalid on that point.

4. The questioned Ordinances are discriminatory to casino and partial to cockfighting and are therefore invalid on that point.

5. The questioned Ordinances are not reasonable, not consonant with the general powers and purposes of the instrumentality
concerned and inconsistent with the laws or policy of the State.

6. It had no option but to follow the ruling in the case of Basco, et al. v. PAGCOR, G.R. No. 91649, May 14, 1991, 197 SCRA 53 in
disposing of the issues presented in this present case.

PAGCOR is a corporation created directly by P.D. 1869 to help centralize and regulate all games of chance, including casinos on land and sea within the
territorial jurisdiction of the Philippines. In Basco v. Philippine Amusements and Gaming Corporation, 4 this Court sustained the constitutionality of the
decree and even cited the benefits of the entity to the national economy as the third highest revenue-earner in the government, next only to the BIR and
the Bureau of Customs.

Cagayan de Oro City, like other local political subdivisions, is empowered to enact ordinances for the purposes indicated in the Local Government Code. It is
expressly vested with the police power under what is known as the General Welfare Clause now embodied in Section 16 as follows:
 Sec. 16. — General Welfare. — Every local government unit shall exercise the powers expressly granted, those necessarily implied
therefrom, as well as powers necessary, appropriate, or incidental for its efficient and effective governance, and those which are
essential to the promotion of the general welfare. Within their respective territorial jurisdictions, local government units shall ensure
and support, among other things, the preservation and enrichment of culture, promote health and safety, enhance the right of the
people to a balanced ecology, encourage and support the development of appropriate and self-reliant scientific and technological
capabilities, improve public morals, enhance economic prosperity and social justice, promote full employment among their residents,
maintain peace and order, and preserve the comfort and convenience of their inhabitants.

In addition, Section 458 of the said Code specifically declares that:

Sec. 458. — Powers, Duties, Functions and Compensation. — (a) The Sangguniang Panlungsod, as the legislative body of the city, shall
enact ordinances, approve resolutions and appropriate funds for the general welfare of the city and its inhabitants pursuant to Section
16 of this Code and in the proper exercise of the corporate powers of the city as provided for under Section 22 of this Code, and shall:

(1) Approve ordinances and pass resolutions necessary for an efficient and effective city government, and in this connection, shall:

xxx xxx xxx

(v) Enact ordinances intended to prevent, suppress and impose appropriate penalties for
habitual drunkenness in public places, vagrancy, mendicancy, prostitution, establishment and
maintenance of houses of ill repute, gamblingand other prohibited games of chance,
fraudulent devices and ways to obtain money or property, drug addiction, maintenance of
drug dens, drug pushing, juvenile delinquency, the printing, distribution or exhibition of
obscene or pornographic materials or publications, and such other activities inimical to the
welfare and morals of the inhabitants of the city;

This section also authorizes the local government units to regulate properties and businesses within their territorial limits in the interest of the general
welfare. 5

The petitioners argue that by virtue of these provisions, the Sangguniang Panlungsod may prohibit the operation of casinos because they involve games of
chance, which are detrimental to the people. Gambling is not allowed by general law and even by the Constitution itself. The legislative power conferred
upon local government units may be exercised over all kinds of gambling and not only over "illegal gambling" as the respondents erroneously argue. Even if
the operation of casinos may have been permitted under P.D. 1869, the government of Cagayan de Oro City has the authority to prohibit them within its
territory pursuant to the authority entrusted to it by the Local Government Code.

It is submitted that this interpretation is consonant with the policy of local autonomy as mandated in Article II, Section 25, and Article X of the Constitution,
as well as various other provisions therein seeking to strengthen the character of the nation. In giving the local government units the power to prevent or
suppress gambling and other social problems, the Local Government Code has recognized the competence of such communities to determine and adopt the
measures best expected to promote the general welfare of their inhabitants in line with the policies of the State.

The petitioners also stress that when the Code expressly authorized the local government units to prevent and suppress gambling and other prohibited
games of chance, like craps, baccarat, blackjack and roulette, it meant allforms of gambling without distinction. Ubi lex non distinguit, nec nos distinguere
debemos. 6 Otherwise, it would have expressly excluded from the scope of their power casinos and other forms of gambling authorized by special law, as it
could have easily done. The fact that it did not do so simply means that the local government units are permitted to prohibit all kinds of gambling within
their territories, including the operation of casinos.

The adoption of the Local Government Code, it is pointed out, had the effect of modifying the charter of the PAGCOR. The Code is not only a later
enactment than P.D. 1869 and so is deemed to prevail in case of inconsistencies between them. More than this, the powers of the PAGCOR under the
decree are expressly discontinued by the Code insofar as they do not conform to its philosophy and provisions, pursuant to Par. (f) of its repealing clause
reading as follows:

(f) All general and special laws, acts, city charters, decrees, executive orders, proclamations and administrative regulations, or part or
parts thereof which are inconsistent with any of the provisions of this Code are hereby repealed or modified accordingly.

It is also maintained that assuming there is doubt regarding the effect of the Local Government Code on P.D. 1869, the doubt must be resolved in favor of
the petitioners, in accordance with the direction in the Code calling for its liberal interpretation in favor of the local government units. Section 5 of the Code
specifically provides:

Sec. 5.Rules of Interpretation. — In the interpretation of the provisions of this Code, the following rules shall apply:

(a) Any 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 be resolved in favor of devolution of powers and of the lower local government unit. Any fair and reasonable doubt as to
the existence of the power shall be interpreted in favor of the local government unit concerned;
 xxx xxx xxx

(c) 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 people in the community; . . . (Emphasis supplied.)

Finally, the petitioners also attack gambling as intrinsically harmful and cite various provisions of the Constitution and several decisions of this Court
expressive of the general and official disapprobation of the vice. They invoke the State policies on the family and the proper upbringing of the youth and, as
might be expected, call attention to the old case of U.S. v. Salaveria,7 which sustained a municipal ordinance prohibiting the playing of panguingue. The
petitioners decry the immorality of gambling. They also impugn the wisdom of P.D. 1869 (which they describe as "a martial law instrument") in creating
PAGCOR and authorizing it to operate casinos "on land and sea within the territorial jurisdiction of the Philippines."

This is the opportune time to stress an important point.

The morality of gambling is not a justiciable issue. Gambling is not illegal per se. While it is generally considered inimical to the interests of the people, there
is nothing in the Constitution categorically proscribing or penalizing gambling or, for that matter, even mentioning it at all. It is left to Congress to deal with
the activity as it sees fit. In the exercise of its own discretion, the legislature may prohibit gambling altogether or allow it without limitation or it may
prohibit some forms of gambling and allow others for whatever reasons it may consider sufficient. Thus, it has prohibited jueteng and monte but permits
lotteries, cockfighting and horse-racing. In making such choices, Congress has consulted its own wisdom, which this Court has no authority to review, much
less reverse. Well has it been said that courts do not sit to resolve the merits of conflicting theories. 8 That is the prerogative of the political departments. It
is settled that questions regarding the wisdom, morality, or practicibility of statutes are not addressed to the judiciary but may be resolved only by the
legislative and executive departments, to which the function belongs in our scheme of government. That function is exclusive. Whichever way these
branches decide, they are answerable only to their own conscience and the constituents who will ultimately judge their acts, and not to the courts of
justice.

The only question we can and shall resolve in this petition is the validity of Ordinance No. 3355 and Ordinance No. 3375-93 as enacted by the Sangguniang
Panlungsod of Cagayan de Oro City. And we shall do so only by the criteria laid down by law and not by our own convictions on the propriety of gambling.

The tests of a valid ordinance are well established. A long line of decisions 9 has held that to be valid, an ordinance must conform to the following
substantive requirements:

1) It must not contravene the constitution or any statute.

2) It must not be unfair or oppressive.

3) It must not be partial or discriminatory.

4) It must not prohibit but may regulate trade.

5) It must be general and consistent with public policy.

6) It must not be unreasonable.

We begin by observing that under Sec. 458 of the Local Government Code, local government units are authorized to prevent or suppress, among others,
"gambling and other prohibited games of chance." Obviously, this provision excludes games of chance which are not prohibited but are in fact permitted by
law. The petitioners are less than accurate in claiming that the Code could have excluded such games of chance but did not. In fact it does. The language of
the section is clear and unmistakable. Under the rule of noscitur a sociis, a word or phrase should be interpreted in relation to, or given the same meaning
of, words with which it is associated. Accordingly, we conclude that since the word "gambling" is associated with "and other prohibited games of chance,"
the word should be read as referring to only illegal gambling which, like the other prohibited games of chance, must be prevented or suppressed.

We could stop here as this interpretation should settle the problem quite conclusively. But we will not. The vigorous efforts of the petitioners on behalf of
the inhabitants of Cagayan de Oro City, and the earnestness of their advocacy, deserve more than short shrift from this Court.

The apparent flaw in the ordinances in question is that they contravene P.D. 1869 and the public policy embodied therein insofar as they prevent PAGCOR
from exercising the power conferred on it to operate a casino in Cagayan de Oro City. The petitioners have an ingenious answer to this misgiving. They deny
that it is the ordinances that have changed P.D. 1869 for an ordinance admittedly cannot prevail against a statute. Their theory is that the change has been
made by the Local Government Code itself, which was also enacted by the national lawmaking authority. In their view, the decree has been, not really
repealed by the Code, but merely "modified pro tanto" in the sense that PAGCOR cannot now operate a casino over the objection of the local government
unit concerned. This modification of P.D. 1869 by the Local Government Code is permissible because one law can change or repeal another law.

It seems to us that the petitioners are playing with words. While insisting that the decree has only been "modifiedpro tanto," they are actually arguing that
it is already dead, repealed and useless for all intents and purposes because the Code has shorn PAGCOR of all power to centralize and regulate casinos.
Strictly speaking, its operations may now be not only prohibited by the local government unit; in fact, the prohibition is not only discretionary
but mandated by Section 458 of the Code if the word "shall" as used therein is to be given its accepted meaning. Local government units have now no
choice but to prevent and suppress gambling, which in the petitioners' view includes both legal and illegal gambling. Under this construction, PAGCOR will
have no more games of chance to regulate or centralize as they must all be prohibited by the local government units pursuant to the mandatory duty
imposed upon them by the Code. In this situation, PAGCOR cannot continue to exist except only as a toothless tiger or a white elephant and will no longer
be able to exercise its powers as a prime source of government revenue through the operation of casinos.

It is noteworthy that the petitioners have cited only Par. (f) of the repealing clause, conveniently discarding the rest of the provision which painstakingly
mentions the specific laws or the parts thereof which are repealed (or modified) by the Code. Significantly, P.D. 1869 is not one of them. A reading of the
entire repealing clause, which is reproduced below, will disclose the omission:

Sec. 534.Repealing Clause. — (a) Batas Pambansa Blg. 337, otherwise known as the "Local Government Code," Executive Order No. 112
(1987), and Executive Order No. 319 (1988) are hereby repealed.

(b) Presidential Decree Nos. 684, 1191, 1508 and such other decrees, orders, instructions, memoranda and issuances related to or
concerning the barangay are hereby repealed.

(c) The provisions of Sections 2, 3, and 4 of Republic Act No. 1939 regarding hospital fund; Section 3, a (3) and b (2) of Republic Act. No.
5447 regarding the Special Education Fund; Presidential Decree No. 144 as amended by Presidential Decree Nos. 559 and 1741;
Presidential Decree No. 231 as amended; Presidential Decree No. 436 as amended by Presidential Decree No. 558; and Presidential
Decree Nos. 381, 436, 464, 477, 526, 632, 752, and 1136 are hereby repealed and rendered of no force and effect.

(d) Presidential Decree No. 1594 is hereby repealed insofar as it governs locally-funded projects.

(e) The following provisions are hereby repealed or amended insofar as they are inconsistent with the provisions of this Code: Sections
2, 16, and 29 of Presidential Decree No. 704; Sections 12 of Presidential Decree No. 87, as amended; Sections 52, 53, 66, 67, 68, 69, 70,
71, 72, 73, and 74 of Presidential Decree No. 463, as amended; and Section 16 of Presidential Decree No. 972, as amended, and

(f) All general and special laws, acts, city charters, decrees, executive orders, proclamations and administrative regulations, or part or
parts thereof which are inconsistent with any of the provisions of this Code are hereby repealed or modified accordingly.

Furthermore, it is a familiar rule that implied repeals are not lightly presumed in the absence of a clear and unmistakable showing of such intention.
In Lichauco & Co. v. Apostol, 10 this Court explained:

The cases relating to the subject of repeal by implication all proceed on the assumption that if the act of later date clearly reveals an
intention on the part of the lawmaking power to abrogate the prior law, this intention must be given effect; but there must always be a
sufficient revelation of this intention, and it has become an unbending rule of statutory construction that the intention to repeal a
former law will not be imputed to the Legislature when it appears that the two statutes, or provisions, with reference to which the
question arises bear to each other the relation of general to special.

There is no sufficient indication of an implied repeal of P.D. 1869. On the contrary, as the private respondent points out, PAGCOR is mentioned as the
source of funding in two later enactments of Congress, to wit, R.A. 7309, creating a Board of Claims under the Department of Justice for the benefit of
victims of unjust punishment or detention or of violent crimes, and R.A. 7648, providing for measures for the solution of the power crisis. PAGCOR revenues
are tapped by these two statutes. This would show that the PAGCOR charter has not been repealed by the Local Government Code but has in fact been
improved as it were to make the entity more responsive to the fiscal problems of the government.

It is a canon of legal hermeneutics that instead of pitting one statute against another in an inevitably destructive confrontation, courts must exert every
effort to reconcile them, remembering that both laws deserve a becoming respect as the handiwork of a coordinate branch of the government. On the
assumption of a conflict between P.D. 1869 and the Code, the proper action is not to uphold one and annul the other but to give effect to both by
harmonizing them if possible. This is possible in the case before us. The proper resolution of the problem at hand is to hold that under the Local
Government Code, local government units may (and indeed must) prevent and suppress all kinds of gambling within their territories except only those
allowed by statutes like P.D. 1869. The exception reserved in such laws must be read into the Code, to make both the Code and such laws equally effective
and mutually complementary.

This approach would also affirm that there are indeed two kinds of gambling, to wit, the illegal and those authorized by law. Legalized gambling is not a
modern concept; it is probably as old as illegal gambling, if not indeed more so. The petitioners' suggestion that the Code authorizes them to prohibit all
kinds of gambling would erase the distinction between these two forms of gambling without a clear indication that this is the will of the legislature.
Plausibly, following this theory, the City of Manila could, by mere ordinance, prohibit the Philippine Charity Sweepstakes Office from conducting a lottery as
authorized by R.A. 1169 and B.P. 42 or stop the races at the San Lazaro Hippodrome as authorized by R.A. 309 and R.A. 983.

In light of all the above considerations, we see no way of arriving at the conclusion urged on us by the petitioners that the ordinances in question are valid.
On the contrary, we find that the ordinances violate P.D. 1869, which has the character and force of a statute, as well as the public policy expressed in the
decree allowing the playing of certain games of chance despite the prohibition of gambling in general.

The rationale of the requirement that the ordinances should not contravene a statute is obvious. Municipal governments are only agents of the national
government. Local councils exercise only delegated legislative powers conferred on them by Congress as the national lawmaking body. The delegate cannot
be superior to the principal or exercise powers higher than those of the latter. It is a heresy to suggest that the local government units can undo the acts of
Congress, from which they have derived their power in the first place, and negate by mere ordinance the mandate of the statute.

Municipal corporations owe their origin to, and derive their powers and rights wholly from the legislature. It breathes into them the
breath of life, without which they cannot exist. As it creates, so it may destroy. As it may destroy, it may abridge and control. Unless
there is some constitutional limitation on the right, the legislature might, by a single act, and if we can suppose it capable of so great a
folly and so great a wrong, sweep from existence all of the municipal corporations in the State, and the corporation could not prevent
it. We know of no limitation on the right so far as to the corporation themselves are concerned. They are, so to phrase it, the mere
tenants at will of the legislature. 11

This basic relationship between the national legislature and the local government units has not been enfeebled by the new provisions in the Constitution
strengthening the policy of local autonomy. Without meaning to detract from that policy, we here confirm that Congress retains control of the local
government units although in significantly reduced degree now than under our previous Constitutions. The power to create still includes the power to
destroy. The power to grant still includes the power to withhold or recall. True, there are certain notable innovations in the Constitution, like the direct
conferment on the local government units of the power to tax, 12 which cannot now be withdrawn by mere statute. By and large, however, the national
legislature is still the principal of the local government units, which cannot defy its will or modify or violate it.

The Court understands and admires the concern of the petitioners for the welfare of their constituents and their apprehensions that the welfare of Cagayan
de Oro City will be endangered by the opening of the casino. We share the view that "the hope of large or easy gain, obtained without special effort, turns
the head of the workman" 13 and that "habitual gambling is a cause of laziness and ruin." 14 In People v. Gorostiza, 15 we declared: "The social scourge of
gambling must be stamped out. The laws against gambling must be enforced to the limit." George Washington called gambling "the child of avarice, the
brother of iniquity and the father of mischief." Nevertheless, we must recognize the power of the legislature to decide, in its own wisdom, to legalize certain
forms of gambling, as was done in P.D. 1869 and impliedly affirmed in the Local Government Code. That decision can be revoked by this Court only if it
contravenes the Constitution as the touchstone of all official acts. We do not find such contravention here.

We hold that the power of PAGCOR to centralize and regulate all games of chance, including casinos on land and sea within the territorial jurisdiction of the
Philippines, remains unimpaired. P.D. 1869 has not been modified by the Local Government Code, which empowers the local government units to prevent
or suppress only those forms of gambling prohibited by law.

Casino gambling is authorized by P.D. 1869. This decree has the status of a statute that cannot be amended or nullified by a mere ordinance. Hence, it was
not competent for the Sangguniang Panlungsod of Cagayan de Oro City to enact Ordinance No. 3353 prohibiting the use of buildings for the operation of a
casino and Ordinance No. 3375-93 prohibiting the operation of casinos. For all their praiseworthy motives, these ordinances are contrary to P.D. 1869 and
the public policy announced therein and are therefore ultra vires and void.

WHEREFORE, the petition is DENIED and the challenged decision of the respondent Court of Appeals is AFFIRMED, with costs against the petitioners. It is so
ordered.

Narvasa, C.J., Feliciano, Bidin, Regalado, Romero, Bellosillo, Melo, Quiason, Puno, Vitug, Kapunan and Mendoza, JJ., concur.

Separate Opinions

PADILLA, J., concurring:

I concur with the majority holding that the city ordinances in question cannot modify much less repeal PAGCOR's general authority to establish and
maintain gambling casinos anywhere in the Philippines under Presidential Decree No. 1869.

In Basco v. Philippine Amusement and Gaming Corporation (PAGCOR), 197 SCRA 52, I stated in a separate opinion that:

. . . I agree with the decision insofar as it holds that the prohibition, control, and regulation of the entire activity known as gambling
properly pertain to "state policy". It is, therefore, the political departments of government, namely, the legislative and the executive
that should decide on what government should do in the entire area of gambling, and assume full responsibility to the people for such
policy." (Emphasis supplied)

However, despite the legality of the opening and operation of a casino in Cagayan de Oro City by respondent PAGCOR, I wish to reiterate my view that
gambling in any form runs counter to the government's own efforts to re-establish and resurrect the Filipino moral character which is generally perceived to
be in a state of continuing erosion.

It is in the light of this alarming perspective that I call upon government to carefully weigh the advantages and disadvantages of setting up more gambling
facilities in the country.

That the PAGCOR contributes greatly to the coffers of the government is not enough reason for setting up more gambling casinos because, undoubtedly,
this will not help improve, but will cause a further deterioration in the Filipino moral character.
It is worth remembering in this regard that, 1) what is legal is not always moral and 2) the ends do not always justify the means.

As in Basco, I can easily visualize prostitution at par with gambling. And yet, legalization of the former will not render it any less reprehensible even if
substantial revenue for the government can be realized from it. The same is true of gambling.

In the present case, it is my considered view that the national government (through PAGCOR) should re-examine and re-evaluate its decision
of imposing the gambling casino on the residents of Cagayan de Oro City; for it is abundantly clear that public opinion in the city is very much against it, and
again the question must be seriously deliberated: will the prospects of revenue to be realized from the casino outweigh the further destruction of the
Filipino sense of values?

DAVIDE, JR., J., concurring:

While I concur in part with the majority, I wish, however, to express my views on certain aspects of this case.

I.

It must at once be noted that private respondent Pryce Properties Corporation (PRYCE) directly filed with the Court of Appeals its so-called petition
for prohibition, thereby invoking the said court's original jurisdiction to issue writs of prohibition under Section 9(1) of B.P. Blg. 129. As I see it, however, the
principal cause of action therein is one for declaratory relief: to declare null and unconstitutional — for, inter alia, having been enacted without or in excess
of jurisdiction, for impairing the obligation of contracts, and for being inconsistent with public policy — the challenged ordinances enacted by
the Sangguniang Panglungsod of the City of Cagayan de Oro. The intervention therein of public respondent Philippine Amusement and Gaming Corporation
(PAGCOR) further underscores the "declaratory relief" nature of the action. PAGCOR assails the ordinances for being contrary to the non-impairment and
equal protection clauses of the Constitution, violative of the Local Government Code, and against the State's national policy declared in P.D. No. 1869.
Accordingly, the Court of Appeals does not have jurisdiction over the nature of the action. Even assuming arguendo that the case is one for prohibition,
then, under this Court's established policy relative to the hierarchy of courts, the petition should have been filed with the Regional Trial Court of Cagayan de
Oro City. I find no special or compelling reason why it was not filed with the said court. I do not wish to entertain the thought that PRYCE doubted a
favorable verdict therefrom, in which case the filing of the petition with the Court of Appeals may have been impelled by tactical considerations. A dismissal
of the petition by the Court of Appeals would have been in order pursuant to our decisions in People vs. Cuaresma (172 SCRA 415, [1989]) and Defensor-
Santiago vs. Vasquez (217 SCRA 633 [1993]). In Cuaresma, this Court stated:

A last word. This court's original jurisdiction to issue writs of certiorari (as well as prohibition, mandamus, quo warranto, habeas
corpus and injunction) is not exclusive. It is shared by this Court with Regional Trial Courts (formerly Courts of First Instance), which
may issue the writ, enforceable in any part of their respective regions. It is also shared by this court, and by the Regional Trial Court,
with the Court of Appeals (formerly, Intermediate Appellate Court), although prior to the effectivity of Batas Pambansa Bilang 129 on
August 14, 1981, the latter's competence to issue the extraordinary writs was restricted by those "in aid of its appellate jurisdiction."
This concurrence of jurisdiction is not, however, to be taken as according to parties seeking any of the writs an absolute, unrestrained
freedom of choice of the court to which application therefor will be directed. There is after all a hierarchy of courts. That hierarchy is
determinative of the revenue 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 direct invocation of the Supreme Court's 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 established policy. It is a policy
that is necessary to prevent inordinate demands upon the Court's time and attention which are better devoted to those matters within
its exclusive jurisdiction, and to prevent further over-crowding of the Court's docket. Indeed, the removal of the restriction of the
jurisdiction of the Court of Appeals in this regard, supra — resulting from the deletion of the qualifying phrase, "in aid of its appellate
jurisdiction" — was evidently intended precisely to relieve this Court pro tanto of the burden of dealing with applications for
extraordinary writs which, but for the expansion of the Appellate Court's corresponding jurisdiction, would have had to be filed with it.
(citations omitted)

And in Vasquez, this Court said:

One final observation. We discern in the proceedings in this case a propensity on the part of petitioner, and, for that matter, the same
may be said of a number of litigants who initiate recourses before us, to disregard the hierarchy of courts in our judicial system by
seeking relief directly from this Court despite the fact that the same is available in the lower courts in the exercise of their original or
concurrent jurisdiction, or is even mandated by law to be sought therein. This practice must be stopped, not only because of the
imposition upon the previous 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 as the proper forum under the rules of
procedure, or as better equipped to resolve the issues since this Court is not a trier of facts. We, therefore, reiterate the judicial policy
that this Court will not entertain direct resort to it unless the redress desired cannot be obtained in the appropriate courts or where
exceptional and compelling circumstances justify availment of a remedy within and calling for the exercise of our primary jurisdiction.

II.

The challenged ordinances are (a) Ordinance No. 3353 entitled, "An Ordinance Prohibiting the Issuance of Business Permit and Canceling Existing Business
Permit To Any Establishment for the Using and Allowing to be Used Its Premises or Portion Thereof for the Operation of Casino," and (b) Ordinance No. 3375-
93 entitled, "An Ordinance Prohibiting the Operation of Casino and Providing Penalty for Violation Therefor." They were enacted to implement Resolution
No. 2295 entitled, "Resolution Declaring As a Matter of Policy to Prohibit and/or Not to Allow the Establishment of the Gambling Casino in the City of
Cagayan de Oro," which was promulgated on 19 November 1990 — nearly two years before PRYCE and PAGCOR entered into a contract of lease under
which the latter leased a portion of the former's Pryce Plaza Hotel for the operation of a gambling casino — which resolution was vigorously reiterated in
Resolution No. 2673 of 19 October 1992.

The challenged ordinances were enacted pursuant to the Sangguniang Panglungsod's express powers conferred by Section 458, paragraph (a),
subparagraphs (1)-(v), (3)-(ii), and (4)-(i), (iv), and (vii), Local Government Code, and pursuant to its implied power under Section 16 thereof (the general
welfare clause) which reads:

Sec. 16.General Welfare. — Every local government unit shall exercise the powers expressly granted, those necessarily implied
therefrom, as well as powers necessary, appropriate, or incidental for its efficient and effective governance, and those which are
essential to the promotion of the general welfare. Within their respective territorial jurisdictions, local government units shall ensure
and support, among other things, the preservation and enrichment of culture, promote health and safety, enhance the right of the
people to a balanced ecology, encourage and support the development of appropriate and self-reliant scientific and technological
capabilities, improve public morals, enhance economic prosperity and social justice, promote full employment among their residents,
maintain peace and order, and preserve the comfort and convenience of their inhabitants.

The issue that necessarily arises is whether in granting local governments (such as the City of Cagayan de Oro) the above powers and functions, the Local
Government Code has, pro tanto, repealed P.D. No. 1869 insofar as PAGCOR's general authority to establish and maintain gambling casinos anywhere in the
Philippines is concerned.

I join the majority in holding that the ordinances cannot repeal P.D. No. 1869.

III.

The nullification by the Court of Appeals of the challenged ordinances as unconstitutional primarily because it is in contravention to P.D. No. 1869 is
unwarranted. A contravention of a law is not necessarily a contravention of the constitution. In any case, the ordinances can still stand even if they be
conceded as offending P.D. No. 1869. They can be reconciled, which is not impossible to do. So reconciled, the ordinances should be construed as not
applying to PAGCOR.

IV.

From the pleadings, it is obvious that the government and the people of Cagayan de Oro City are, for obvious reasons, strongly against the opening of the
gambling casino in their city. Gambling, even if legalized, would be inimical to the general welfare of the inhabitants of the City, or of any place for that
matter. The PAGCOR, as a government-owned corporation, must consider the valid concerns of the people of the City of Cagayan de Oro and should not
impose its will upon them in an arbitrary, if not despotic, manner.

#Footnotes

1 Rollo, pp. 64-94.

2 Ibid., pp. 53-62.

3 Pryce was dropped as private respondent in the resolution of the Court dated June 13, 1994.

4 197 SCRA 53.

5 Sec. 458, [2(vi-xv)]; [3(ii-vii)]; [4(i-ix)], Local Government Code, 1991.

6 Where the law does not distinguish, neither ought we to distinguish.

7 39 Phil. 102.

8 Garcia v. Executive Secretary, 204 SCRA 516, quoting Cooley, Constitutional Limitations, 8th ed., 379-380.

9 Tatel v. Municipality of Virac, 207 SCRA 157; Solicitor General v. Metropolitan Manila Authority, 204 SCRA 837; De la Cruz v. Paras,
123 SCRA 569; U.S. v. Abandan, 24 Phil. 165.

10 44 Phil. 138.
11 Clinton v. Ceder Rapids, etc. Railroad Co., 24 Iowa 455.

12 Art. X, Sec. 5, Constitution.

13 Planiol, Droit Civil, Vol. 2, No. 2210.

14 Ibid.

15 77 Phil. 88.