Ichong vs Hernandez

FACTS:
The Legislature passed R.A. 1180 (An Act to Regulate the Retail Business). Its purpose was to prevent persons who
are not citizens of the Phil. from having a stranglehold upon the people’s economic life.

 a prohibition against aliens and against associations, partnerships, or corporations the capital of which are
not wholly owned by Filipinos, from engaging directly or indirectly in the retail trade

 aliens actually engaged in the retail business on May 15, 1954 are allowed to continue their business,
unless their licenses are forfeited in accordance with law, until their death or voluntary retirement. In
case of juridical persons, ten years after the approval of the Act or until the expiration of term.

Citizens and juridical entities of the United States were exempted from this Act.

 provision for the forfeiture of licenses to engage in the retail business for violation of the laws on
nationalization, economic control weights and measures and labor and other laws relating to trade,
commerce and industry.

 provision against the establishment or opening by aliens actually engaged in the retail business of
additional stores or branches of retail business

Lao Ichong, in his own behalf and behalf of other alien residents, corporations and partnerships affected by the
Act, filed an action to declare it unconstitutional for the ff: reasons:

1. it denies to alien residents the equal protection of the laws and deprives them of their liberty and
property without due process

2. the subject of the Act is not expressed in the title

3. the Act violates international and treaty obligations

4. the provisions of the Act against the transmission by aliens of their retail business thru hereditary
succession

ISSUE: WON the Act deprives the aliens of the equal protection of the laws.

HELD: The law is a valid exercise of police power and it does not deny the aliens the equal protection of the laws.
There are real and actual, positive and fundamental differences between an alien and a citizen, which fully justify
the legislative classification adopted.

RATIO:
The equal protection clause does not demand absolute equality among residents. It merely requires that all
persons shall be treated alike, under like circumstances and conditions both as to privileges conferred and
liabilities enforced.

The classification is actual, real and reasonable, and all persons of one class are treated alike.

The difference in status between citizens and aliens constitutes a basis for reasonable classification in the exercise
of police power.

Official statistics point out to the ever-increasing dominance and control by alien of the retail trade. It is this
domination and control that is the legislature’s target in the enactment of the Act.

The mere fact of alienage is the root cause of the distinction between the alien and the national as a trader. The
alien is naturally lacking in that spirit of loyalty and enthusiasm for the Phil. where he temporarily stays and makes
his living. The alien owes no allegiance or loyalty to the State, and the State cannot rely on him/her in times of
crisis or emergency.

While the citizen holds his life, his person and his property subject to the needs of the country, the alien may
become the potential enemy of the State.

The alien retailer has shown such utter disregard for his customers and the people on whom he makes his profit.
Through the illegitimate use of pernicious designs and practices, the alien now enjoys a monopolistic control on
the nation’s economy endangering the national security in times of crisis and emergency.

Facts:
On 13 June 1963, Ordinance 4760 was issued by the municipal board of the City of Manila and approved by Vice Mayor
Herminio Astorga, who was at the time acting Mayor of the City of Manila. The ordinance (1) imposes a P6,000.00 fee
per annum for first class motels and P4,500.00 for second class motels; (2) requires the owner, manager, keeper or
duly authorized representative of a hotel, motel, or lodging house to refrain from entertaining or accepting any guest or
customer or letting any room or other quarter to any person or persons without his filling up the prescribed form in a
lobby open to public view at all times and in his presence, wherein the surname, given name and middle name, the
date of birth, the address, the occupation, the sex, the nationality, the length of stay and the number of companions in
the room, if any, with the name, relationship, age and sex would be specified, with data furnished as to his residence
certificate as well as his passport number, if any, coupled with a certification that a person signing such form has
personally filled it up and affixed his signature in the presence of such owner, manager, keeper or duly authorized
representative, with such registration forms and records kept and bound together; (3) provides that the premises and
facilities of such hotels, motels and lodging houses would be open for inspection either by the City Mayor, or the Chief
of Police, or their duly authorized representatives. The ordinance also classified motels into two classes and required
the maintenance of certain minimum facilities in first class motels such as a telephone in each room, a dining room or
restaurant and laundry; while second class motels are required to have a dining room. It prohibited a person less than
18 years old from being accepted in such hotels, motels, lodging houses, tavern or common inn unless accompanied
by parents or a lawful guardian and made it unlawful for the owner, manager, keeper or duly authorized representative
of such establishments to lease any room or portion thereof more than twice every 24 hours. It provided a penalty of
automatic cancellation of the license of the offended party in case of conviction. On 5 July 1963, the Ermita-Malate
Hotel and Motel Operators Association (EMHMOA), its member Hotel del Mar, and a certain Go Chiu filed a petition for
prohibition against the mayor of the City of Manila in his capacity as he is charged with the general power and duty to
enforce ordinances of the City of Manila and to give the necessary orders for the faithful execution and enforcement of
such ordinances. There was a plea for the issuance of preliminary injunction and for a final judgment declaring the
above ordinance null and void and unenforceable. The lower court on 6 July 1963 issued a writ of preliminary injunction
ordering the Mayor to refrain from enforcing said Ordinance 4760 from and after 8 July 1963. After the submission of
the memoranda, ruled that the City of Manila lack authority to regulate motels and rendering Ordinance 4760
unconstitutional and therefore null and void. It made permanent the preliminary injunction issued by the Mayor and his
agents to restrain him from enforcing the ordinance. The Mayor of Manila appealed to the Supreme Court.

Issue: Whether the regulations imposed on motels and hotels (increasing license fees, partially restricting the freedom
to contract, and restraining the liberty of individuals) is valid and/or constitutional.

Held: Yes. The ordinance was enacted to minimize certain practices hurtful to public morals. It was made as there is
observed an alarming increase in the rate of prostitution, adultery and fornication in Manila traceable in great part to
the existence of motels, which provide a necessary atmosphere for clandestine entry, presence and exit and thus
become the ideal haven for prostitutes and thrill seekers. The ordinance proposes to check the clandestine harboring
of transients and guests of these establishments by requiring these transients and guests to fill up a registration form,
prepared for the purpose, in a lobby open to public view at all times, and by introducing several other amendatory
provisions calculated to shatter the privacy that characterizes the registration of transients and guests. The increase in
the license fees was intended to discourage establishments of the kind from operating for purpose other than legal and
to increase the income of the city government. Further, the restriction on the freedom to contract, insofar as the
challenged ordinance makes it unlawful for the owner, manager, keeper or duly authorized representative of any hotel,
motel, lodging house, tavern, common inn or the like, to lease or rent any room or portion thereof more than twice every
24 hours, with a proviso that in all cases full payment shall be charged, cannot be viewed as a transgression against
the command of due process. It is neither unreasonable nor arbitrary. Precisely it was intended to curb the opportunity
for the immoral or illegitimate use to which such premises could be, and, are being devoted. Furthermore, the right of
the individual is necessarily subject to reasonable restraint by general law for the common good. The liberty of the
citizen may be restrained in the interest of the public health, or of the public order and safety, or otherwise within the
proper scope of the police power. State in order to promote the general welfare may interfere with personal liberty, with
property, and with business and occupations. Persons and property may be subjected to all kinds of restraints and
burdens, in order to secure the general comfort, health, and prosperity of the state.

2. Ermita-Malate Hotel Operations vs. City of Manila

Facts:
On July 5, 1963 the petition for prohibition against Ordinance No. 4760 was filed by Ermita-Malate Hotel
and Motel Operators Association, one of its members, Hotel del Mar Inc., and Go Chiu, who is "the latter’s president
and general manager" against the respondent Mayor of the City of Manila who was sued in his capacity as such
"charged with the general power and duty to enforce ordinances of the City of Manila and to give the necessary
orders for the faithful execution and enforcement of such ordinances." It was alleged that the petitioner non-stock
corporation is dedicated to the promotion and protection of the interest of its eighteen (18) members "operating
hotels and motels, characterized as legitimate businesses duly licensed by both national and city authorities,
regularly paying taxes, employing and giving livelihood to not less than 2,500 person and representing an investment
of more than P3 million."
It was then alleged that on June 13, 1963, the Municipal Board of the City of Manila enacted Ordinance No.
4760, approved on June 14, 1963 by the then Vice-Mayor Herminio Astorga, who was at the time acting as Mayor
of the City of Manila. There was the assertion of its being beyond the powers of the Municipal Board of the City of
Manila to enact insofar as it would regulate motels, on the ground that in the revised charter of the City of Manila
or in any other law. Sec. 1: It was a violation of privacy and it was against self-incrimination and that is why it is
unconstitutional and void. Sec. 2: classifying rooms and prohibiting persons under 18 to be given any room without
the company of parents. On August 3, 1963 an answer was filed regarding the respondent mayor that the petitioners
are licensed to engage in the hotel or motel business in the City of Manila, of the provisions of the cited Ordinance
but a denial of its alleged nullity, whether on statutory or constitutional grounds the petition did fail to state a cause
of action and that the challenged ordinance bears a reasonable relation, to a proper purpose, which is to curb
immorality, a valid and proper exercise of the police power and that only the guests or customers not before the
court could complain of the alleged invasion of the right to privacy and the guaranty against self incrimination, with
the assertion that the issuance of the preliminary injunction ex parte was contrary to law, respondent Mayor prayed
for, its dissolution and the dismissal of the petition.

Issue: WON Ordinance No. 4760 of the City of Manila is violative of the due process clause

Ruling:
The lower court held that it is and adjudged it "unconstitutional, and, therefore, null and void." Nor does the
restriction on the freedom to contract, insofar as the challenged ordinance makes it unlawful for the owner,
manager, keeper or duly authorized representative of any hotel, motel, lodging house, tavern, common inn or the
like, to lease or rent room or portion thereof more than twice every 24 hours, with a proviso that in all cases full
payment shall be charged, call for a different conclusion. Again, such a limitation cannot be viewed as a transgression
against the command of due process. It is neither unreasonable nor arbitrary. The right of the individual is necessarily
subject to reasonable restraint by general law for the common good x x x The liberty of the citizen may be restrained
in the interest of the public health, or of the public order and safety, or otherwise within the proper scope of the
police power."28The policy of laissez faire has to some extent given way to the assumption by the government of the
right of intervention even in contractual relations affected with public interest. 31 What may be stressed sufficiently
is that if the liberty involved were freedom of the mind or the person, the standard for the validity of governmental
acts is much more rigorous and exacting, but where the liberty curtailed affects at the most rights of property, the
permissible scope of regulatory measure is wider. The attack against the validity of the challenged ordinance cannot
be considered a success.
BASECO VS. PCGG ET AL DIGEST

Challenged in this special civil action of certiorari and prohibition by a private corporation known as the Bataan
Shipyard and Engineering Co., Inc. are: (1) Executive Orders Numbered 1 and 2, promulgated by President Corazon
C. Aquino on February 28, 1986 and March 12, 1986, respectively, and (2) the sequestration, takeover, and other
orders issued, and acts done, in accordance with said executive orders by the Presidential Commission on Good
Government and/or its Commissioners and agents, affecting said corporation.

The sequestration order which, in the view of the petitioner corporation, initiated all its misery was issued on April
14, 1986 by Commissioner Mary Concepcion Bautista.

On the strength of the above sequestration order, Mr. Jose M. Balde, acting for the PCGG, addressed a letter dated
April 18, 1986 to the President and other officers of petitioner firm, reiterating an earlier request for the
production of certain documents such as Stock Transfer Book and other Legal documents (Articles of
Incorporation, By-Laws, etc.)

Orders were also issued in connection with the sequestration and takeover, such as termination of Contract for
Security Services and abortion of contract for Improvement of Wharf at Engineer Island; Change of Mode of
Payment of Entry Charges; Operation of Sesiman Rock Quarry, Mariveles, Bataa; disposal of scrap, etc.; and the
provisional takeover by the PCGG of BASECO, “the Philippine Dockyard Corporation and all their affiliated
companies.”

While BASECO concedes that “sequestration without resorting to judicial action, might be made within the context
of Executive Orders Nos. 1 and 2 before March 25, 1986 when the Freedom Constitution was promulgated, under
the principle that the law promulgated by the ruler under a revolutionary regime is the law of the land, it ceased to
be acceptable when the same ruler opted to promulgate the Freedom Constitution on March 25, 1986 wherein
under Section I of the same,y Article IV (Bill of Rights) of the 1973 Constitution was adopted providing, among
others, that “No person shall be deprived of life, liberty and property without due process of law.” (Const., Art. I V,
Sec. 1).”

It declares that its objection to the constitutionality of the Executive Orders “as well as the Sequestration Order * *
and Takeover Order * * issued purportedly under the authority of said Executive Orders, rests on four fundamental
considerations: First, no notice and hearing was accorded * * (it) before its properties and business were taken
over; Second, the PCGG is not a court, but a purely investigative agency and therefore not competent to act as
prosecutor and judge in the same cause; Third, there is nothing in the issuances which envisions any proceeding,
process or remedy by which petitioner may expeditiously challenge the validity of the takeover after the same has
been effected; and Fourthly, being directed against specified persons, and in disregard of the constitutional
presumption of innocence and general rules and procedures, they constitute a Bill of Attainder.”

It argues that the order to produce corporate records from 1973 to 1986, which it has apparently already complied
with, was issued without court authority and infringed its constitutional right against self-incrimination, and
unreasonable search and seizure. 14

BASECO further contends that the PCGG had unduly interfered with its right of dominion and management of its
business affairs.

ISSUE

Whether or not the sequestration order dated April 14, 1986, and all other orders subsequently issued and acts
done on the basis thereof, inclusive of the takeover order of July 14, 1986 and the termination of the services of
the BASECO executives are valid;

DECISION
Yes. The petition cannot succeed. The writs of certiorari and prohibition prayed for will not be issued. Other
evidence submitted to the Court by the Solicitor General proves that President Marcos not only exercised control
over BASECO, but also that he actually owns well nigh one hundred percent of its outstanding stock.

Executive Orders Not a Bill of Attainder – In the first place, nothing in the executive orders can be reasonably
construed as a determination or declaration of guilt. On the contrary, the executive orders, inclusive of Executive
Order No. 14, make it perfectly clear that any judgment of guilt in the amassing or acquisition of “ill-gotten wealth”
is to be handed down by a judicial tribunal, in this case, the Sandiganbayan, upon complaint filed and prosecuted
by the PCGG. In the second place, no punishment is inflicted by the executive orders, as the merest glance at their
provisions will immediately make apparent. In no sense, therefore, may the executive orders be regarded as a bill
of attainder.

No Violation of Right against Self-Incrimination and Unreasonable Searches and Seizures – It is elementary that the
right against self-incrimination has no application to juridical persons. While an individual may lawfully refuse to
answer incriminating questions unless protected by an immunity statute, it does not follow that a corporation,
vested with special privileges and franchises, may refuse to show its hand when charged with an abuse
ofsuchprivileges * *

Scope and Extent of Powers of the PCGG – PCGG cannot exercise acts of dominion over property sequestered,
frozen or provisionally taken over. AS already earlier stressed with no little insistence, the act of sequestration;
freezing or provisional takeover of property does not import or bring about a divestment of title over said
property; does not make the PCGG the owner thereof.

The PCGG may thus exercise only powers of administration over the property or business sequestered or
provisionally taken over, much like a court-appointed receiver, such as to bring and defend actions in its own
name; receive rents; collect debts due; pay outstanding debts; and generally do such other acts and things as may
be necessary to fulfill its mission as conservator and administrator.

Powers over Business Enterprises Taken Over by Marcos or Entities or Persons Close to him; Limitations Thereon –
Now, in the special instance of a business enterprise shown by evidence to have been “taken over by the
government of the Marcos Administration or by entities or persons close to former President Marcos,” the PCGG is
given power and authority, as already adverted to, to “provisionally take (it) over in the public interest or to
prevent * * (its) disposal or dissipation;” and since the term is obviously employed in reference to going concerns,
or business enterprises in operation, something more than mere physical custody is connoted; the PCGG may in
this case exercise some measure of control in the operation, running, or management of the business itself. But
even in this special situation, the intrusion into management should be restricted to the minimum degree
necessary to accomplish the legislative will, which is “to prevent the disposal or dissipation” of the business
enterprise.

Voting of Sequestered Stock; Conditions Therefor – So, too, it is within the parameters of these conditions and
circumstances that the PCGG may properly exercise the prerogative to vote sequestered stock of corporations,
granted to it by the President of the Philippines through a Memorandum dated June 26, 1986. In the case at bar,
there was adequate justification to vote the incumbent directors out of office and elect others in their stead
because the evidence showed prima facie that the former were just tools of President Marcos and were no longer
owners of any stock in the firm, if they ever were at all.

No Sufficient Showing of Other Irregularities -As to the other irregularities complained of by BASECO, i.e., the
cancellation or revision, and the execution of certain contracts, inclusive of the termination of the employment of
some of its executives, this Court cannot, in the present state of the evidence on record, pass upon them. It is not
necessary to do so. The issues arising therefrom may and will be left for initial determination in the appropriate
action.
WHEREFORE, the petition is dismissed. The temporary restraining order issued on October 14, 1986 is lifted.