CITY OF MANILA VS.

 LAGUIO
G.R. No. 118127, April 12, 2005

FACTS: Private respondent Malate Tourist Development Corporation (MTDC) is a

corporation engaged in the business of operating hotels, motels, hostels and lodging
houses. It built and opened Victoria Court in Malate which was licensed as a motel
although duly accredited with the DOT as a hotel. On 28 June 1993, MTDC filed a
Petition for Declaratory Relief with Prayer for a Writ of Preliminary Injunction and/or
Temporary Restraining Order7 with the lower court impleading as defendants, herein
petitioners City of Manila, Hon. Alfredo S. Lim (Lim), Hon. Joselito L. Atienza, and
the members of the City Council of Manila (City Council). MTDC prayed that the
Ordinance, insofar as it includes motels and inns as among its prohibited
establishments, be declared invalid and unconstitutional.
Enacted by the City Council and approved by petitioner City Mayor, the said
Ordinance is entitled–

AN ORDINANCE PROHIBITING THE ESTABLISHMENT OR OPERATION OF

BUSINESSES PROVIDING CERTAIN FORMS OF AMUSEMENT,
ENTERTAINMENT, SERVICES AND FACILITIES IN THE ERMITA-MALATE
AREA, PRESCRIBING PENALTIES FOR VIOLATION THEREOF, AND FOR
OTHER PURPOSES.
Judge Laguio rendered the assailed Decision (in favour of respondent).

On 11 January 1995, petitioners filed the present Petition, alleging that the following
errors were committed by the lower court in its ruling:

(1) It erred in concluding that the subject ordinance is ultra vires, or otherwise, unfair,
unreasonable and oppressive exercise of police power;
(2) It erred in holding that the questioned Ordinance contravenes P.D. 499 which
allows operators of all kinds of commercial establishments, except those specified
therein; and
(3) It erred in declaring the Ordinance void and unconstitutional.

ISSUE: WON the ordinance is unconstitutional and a valid use of police power

HELD: The Court is of the opinion, and so holds, that the lower court did not err in
declaring the Ordinance, as it did, ultra vires and therefore null and void.
The tests of a valid ordinance are well established. A long line of decisions has held
that for an ordinance to be valid, it must not only be within the corporate powers of
the local government unit to enact and must be passed according to the procedure
prescribed by law, it must also conform to the following substantive requirements:
(1) must not contravene the Constitution or any statute;
(2) must not be unfair or oppressive;
(3) must not be partial or discriminatory;
(4) must not prohibit but may regulate trade;
(5) must be general and consistent with public policy; and
(6) must not be unreasonable.
The Ordinance was passed by the City Council in the exercise of its police power, an
enactment of the City Council acting as agent of Congress. This delegated police
power is found in Section 16 of the LGC, known as the general welfare clause.
The inquiry in this Petition is concerned with the validity of the exercise of such
delegated power.