NEWSOUNDS BROADCASTING & NETWORK INC.
and CONSOLIDATED  Newsounds and CBS sought to obtain from DAR Region II a formal
BROADCASTING SYSTEM, INC. v. HON. CESAR G. DY, FELICISIMO G. MEER,
BAGNOS MAXIMO, RACMA FERNANDEZ-GARCIA & CITY OF CAUAYAN
G.R. Nos. 170270 & 179411 | April 2, 2009 | J. Tinga
FACTS:
 Newsounds Broadcasting Network, Inc. (Newsounds) and Consolidated
Broadcasting System, Inc. (CBS) are corporations organized by Bombo
Radyo. The said corporations operate several radio stations throughout the
Philippines.
o Among the stations run by Newsounds is Bombo Radyo DZNC
Cauayan (DZNC), an AM radio broadcast station operating out of
Cauayan City, Isabela.
o CBS, in turn, runs Star FM DWIT Cauayan (Star FM), also
operating out of Cauayan City, airing on the FM band.
 1996: Newsounds relocated its broadcasting stations, management office
and transmitters in Minante 2, Cauayan City Isabela, on a property owned by
its affiliate corporation, CBS Development Corporation.
o The municipal government of Cauayan issued a building permit.
o The HLURB also issued a Zoning Decision certifying the property
as commercial.
o The Office of the Municipal Planning and Development Coordinator
(OMPDC) of Cauayan affirmed that the commercial structure to be
constructed by CDC conformed to local zoning regulations, noting
as well that the location is classified as a Commercial area. The
OMPDC would later issue similar certifications from 1997 to 2001.
o Hence, a building was consequently erected on the property, where
DZNC and Star FM operated as radio stations.
 Both stations were able to secure the operating
documents, including mayor’s permits from 1997 to 2001.
 Real property taxes were also paid based on the
classification of the land as commercial.
 2002: Newsounds and CBS applied for the renewal of the mayor’s permit.
o The City Assessors Office confirmed that the property was
classified as commercial.
o However, City Zoning Administrator-Designate Bagnos Maximo
refused to issue a zoning clearance for the property, requiring
Newsounds and CBS to submit:
 An approved land conversion papers from DAR, showing
that the property was converted from prime agricultural
land to commercial land, OR
 A resolution from the Sangguniang Bayan or Sangguniang
Panglungsod authorizing the re-classification of the
property from agricultural to commercial land
o Consequently, Newsounds and CBS were unable to secure a
mayor’s permit.
 Newsounds and CBS filed a petition for mandamus with RTC of Cauayan
City to compel the issuance of the 2002 mayor’s permit  RTC DENIED the
injunctive relief sought by the petitioners.
 Newsounds and CBS then filed a Rule 65 petition with the CA  CA
DISMISSED (due to availability of other speedy remedies)
 RTC: Dismissed the petition for mandamus for being moot and academic.
recognition of the conversion of the property from agricultural to commercial
 GRANTED (i.e. declared that the land was commercial)
 2003: Newsounds and CBS filed their applications for the renewal of the
mayor’s permit, attaching the DAR Order.
o Acting City Administrator Felicisimo Meer wrote to petitioners,
claiming that the DAR Order was void as the Regional Center for
Land Use Policy Planning and Implementation (RCLUPPI) reported
that it did not have a record of the DAR Order.
 2004: Newsounds and CBS again applied for renewal of the mayor’s permit,
attaching the DAR Order.
o A zonal clearance was issued in their favor. However, Meer claimed
that no record of the DAR case existed with the Office of the
Regional Director of DAR or with RCLUPPI. Hence, their
application was again denied.
 February 15, 2004: The deadline for application for the mayors permit
lapsed despite petitioners plea for another extension.
 February 17, 2004: Meer and Racma Fernandez-Garcia, City Legal Officer
of Cauayan City, arrived at the property and closed the radio stations.
 Newsounds and CBS filed a petition with COMELEC, seeking enforcement
of the Omnibus Election Code, particularly the prohibition of closure of radio
stations during the pendency of the election period.
 March 23, 2004: COMELEC issued an Order, directing the parties to
maintain the status quo prevailing before February 17, 2004 (i.e. allow
Newsounds and CBS to continue their operations)
o Within hours, Mayor Cesar Dy issued a Closure Order, stating that
since Newsounds and CBS did not have the requisite permits
before February 17, the status quo meant that the stations were not
allowed to operate.
o Through the intervention of COMELEC, petitioners were able to
resume operations.
 May 9, 2004: COMELEC denied the petition and set aside the status quo
order. Upon reconsideration, COMELEC directed the maintenance of the
status quo until the end of the election period. Thus, petitioners were able to
continue operations until June 10. Thereafter, the respondents closed the
radio stations.
 Newsounds and CBS filed a petition for mandamus (with prayer for issuance
of TRO and writ of preliminary prohibitory injunction) with RTC Cauayan.
 RTC: Denied the petition, upheld the right of respondents to deny the
mayor’s permit unless they were duly satisfied that the property has been
classified as commercial.
 Newsounds and CBS filed to actions with the CA: (1) a Ruled 65 petiion,
imputing GAOD on the part of the RTC, and (2) a Notice of Appeal in
connection with the denial of their mandamus action.
 CA: Denied both petitions.
 Hence, the present petition
ISSUES/HELD:
W/N THE ACTIONS OF THE RESPONDENTS CONSTITUTE PRIOR RESTRAINT-
YES
 Free speech and free press may be identified with the liberty to discuss
publicly and truthfully any matter of public interest without censorship and
punishment.
o There is to be no previous restraint on the communication of views
or subsequent liability whether in libel suits, prosecution for
sedition, or action for damages, or contempt proceedings unless
there be a clear and present danger of substantive evil that
Congress has a right to prevent.
 THE COURT CONSIDERED THE FOLLOWING CIRCUMSTANCES IN
RULING THAT THERE WAS PRIOR RESTRAINT IN THIS CASE:
o In 2001, Bombo Radyo has been aggressively exposing the
widespread election irregularities in Isabela which favored Mayor
Cesar Dy and his political dynasty.
o His brother (Faustino Dy) was the governor of Isabela until he was
defeated by Grace Padaca, a former assistant station manager at
DZNC Bombo Radyo.
o Further, the rival AM radio station of DZNC (which was DWDY) was
owned and operated by the Dy family.
o A Philippine Daily Inquirer article also quoted Mayor Dy saying that
he will disenfranchise the radio station.
 The Court ruled that the Constitution has a systemic bias towards free
speech, as seen in the absolutist tenor of Section 4, Article III.
o Here, petitioners are authorized by law to operate radio stations in
Cauayan City, and had been doing so for some years undisturbed
by local authorities.
o But beginning in 2002, respondents in their official capacities have
taken actions, whatever may be the motive, that have impeded the
ability of petitioners to freely broadcast, if not broadcast at all.
These actions have ranged from withholding permits to operate to
the physical closure of those stations under color of legal authority.
 The acts of closing the radio stations or preventing their operations
constitute prior restraint against speech, expression or of the press.
o Prior restraint refers to official governmental restrictions on the
press or other forms of expression in advance of actual publication
or dissemination.
o While any system of prior restraint comes to court bearing a heavy
burden against its constitutionality, not all prior restraints on speech
are invalid
o Here, the actions taken by respondents are colored with legal
authority, under the powers of local governments vested in the
Local Government Code (LGC), or more generally, the police
powers of the State.
 Local Government Units (LGU) are capacitated to enact ordinances requiring
the obtention of licenses or permits by businesses, a term defined elsewhere
in the LGC as trade or commercial activity regularly engaged in as a means
of livelihood or with a view to profit.
 But there is a long line of jurisprudence holding that governmental action
directed at expression must satisfy a greater burden of justification than
governmental action directed at most other forms of behavior.
o Any system of prior restraints of expression comes to this Court
bearing a heavy presumption against its constitutional validity. The
Government 'thus carries a heavy burden of showing justification
for the enforcement of such restraint. There is thus a reversal of the
normal presumption of validity that inheres in every legislation.
(SWS v. COMELEC)
o There has also been a distinction between a content-neutral
regulation (merely concerned with the incidents of the speech, or
one that merely controls the time, place or manner, and under well
defined standards) and a content-based restraint or censorship
(the restriction is based on the subject matter of the utterance or
speech)
 Content-based laws are generally treated as more suspect
than content-neutral laws because of judicial concern with
discrimination in the regulation of expression. Content-
neutral regulations of speech or of conduct that may
amount to speech, are subject to lesser but still
heightened scrutiny
o IN THE CASE: The action of the respondents was a content-based
restraint.
 The act of an LGU requiring a business of proof that the
property from which it operates has been zoned for
commercial use can be argued, when applied to a radio
station, as content-neutral.
 But the circumstances of this case dictate that the actions
of the respondents must be viewed as content-based
restraint, since these are steps to ultimately shut down the
radio station.
 Hence, the Court held that the actions of the respondents
warrant heightened or strict scrutiny, i.e. the burden falls
upon respondents to prove that their actions do not
infringe upon petitioners’ constitutional rights.
W/N THE RESPONDENTS MAY VALIDLY REQUIRE THE PETITIONERS TO
SUBMIT THE CONVERSION PAPERS OR THE RESOLUTIONS FROM THE
SANGGUNIANS CONCERNED FOR THE ISSUANCE OF THE MAYOR’S PERMIT -
NO
 The LGC authorizes local legislative bodies to enact ordinances
authorizing the issuance of permits or licenses upon such conditions
and for such purposes intended to promote the general welfare of the
inhabitants of the LGU
o A municipal or city mayor is likewise authorized under the LGC to
issue licenses and permits and suspend or revoke the same for any
violation of the conditions upon which said licenses or permits had
been issued, pursuant to law or ordinance.
 Generally, LGUs have exercised its authority to require permits or licenses
from business enterprises operating within its territorial jurisdiction.
o A municipal license is essentially a governmental restriction upon
private rights and is valid only if based upon an exercise by the
municipality of its police or taxing powers.
 o The LGC subjects the power of sanggunians to enact ordinances
requiring licenses or permits within the parameters of Book II of the
Code, concerning Local Taxation and Fiscal Matters.
o It also necessarily follows that the exercise of this power should
also be consistent with the Constitution as well as the other laws of
the land.
 Nothing in national law exempts media entities that also operate as
businesses such as newspapers and broadcast stations such as petitioners
from being required to obtain permits or licenses from local governments in
the same manner as other businesses are expected to do so.
o While this may lead to some concern that requiring media entities to
secure licenses or permits from local government units infringes on
the constitutional right to a free press, there is no concern so long
as such requirement has been duly ordained through local
legislation and content-neutral in character, i.e., applicable to
all other similarly situated businesses.
 There are safeguards within the LGC against the arbitrary or
unwarranted exercise of the authority to issue licenses and permits.
o As earlier noted, the power of sanggunians to enact ordinances
authorizing the issuance of permits or licenses is subject to the
provisions of Book Two of the LGC.
o The power of the mayor to issue license and permits and suspend
or revoke the same must be exercised pursuant to law or
ordinance.
 IN THE CASE: The authority to require a mayors permit was enacted
through Ordinance No. 92-004, enacted in 1993 when Cauayan was still a
municipality.
o On its face, it operates as a content-neutral regulation that does not
impose any special impediment to the exercise of the constitutional
right to free expression.
o But under the veil of Ordinance No. 92-004 or any other similarly
oriented ordinance, a local government unit such as Cauayan City
may attempt to infringe on such constitutional rights.
 While the ill-motives of a local government do not exempt
the injured regulatory subject from complying with the
municipal laws, such laws themselves do not insulate
those ill-motives if they are attended with infringements of
constitutional rights.
o Nothing in Ordinance No. 92-004 requires that an applicant for a
mayors permit submit either an approved land conversion papers
from the DAR showing that its property was converted from prime
agricultural land to commercial land, or an approved resolution from
the Sangguniang Bayan or Sangguniang Panglungsod authorizing
the re-classification of the property from agricultural to commercial
land.
o Moreover, Ordinance No. 92-004 does not impose on the applicant
any burden to establish that the property from where the business
was to operate had been duly classified as commercial in nature.
 RESPONDENTS: It was only in 2002 that Maximo discovered the mistake
committed by his predecessor in the issuance of the Zoning Certifications
from 1996 to 2001.
o Assuming that were true, it would have given cause for the local
government in requiring the business so affected to submit
additional requirements not required of other applicants related to
the classification of its property.
 But the Court held that there are circumstances that belie the claim that the
previous certifications issued by the OMPDC as to the commercial character
of CDCs property was incorrect, and confirm that the subject property has
long been classified as commercial:
o The HLURB issued a zoning decision which classified the subject
property as commercial. There is no reason to doubt that when the
HLURB acknowledged in 1996 that the property in question was
commercial, it had consulted the development plans and zoning
ordinances of Cauayan.
o There has also been six certifications by the OMPDC (from 1996-
2001) certifying that the land in question is classified as
commercial, based on the municipality’s Land Use Plan.
o Petitioners also paid real property tax based on the classification of
the property as commercial.
 ON THE NON-APPLICABILITY OF STATE IMMUNITY FROM ESTOPPEL:
o When there is no convincing evidence to prove irregularity or
negligence on the part of the government official whose acts are
being disowned other than the bare assertion on the part of the
State, the Court has declined to apply State immunity from
estoppel.
o Here, the absence of any evidence other than bare assertions that
the 1996 to 2001 certifications were incorrect lead to the ineluctable
conclusion that respondents are estopped from asserting that the
previous recognition of the property as commercial was wrong.
 Contrary to the RTC ruling that the previous certifications issued by Deputy
Zoning Administrator Romeo Perez were incorrect because he had no
authority to reclassify lands is flawed as the certifications, the certifications
merely confirm that based on the Land Use Plan and the existing zoning
ordinances of Cauayan, the property in question is commercial.
 Lkewise, the RTC’s reliance on the Comprehensive Agrarian Reform Law
(that only the DAR can authorize reclassification) is misplaced as the
property had already been classified as commercial prior to the enactment of
the CARL.
 Because the acts complained of the respondents led to the closure of
petitioners radio stations, at the height of election season no less,
respondents actions warrant strict scrutiny from the courts, and there can be
no presumption that their acts are constitutional or valid.
 The classification of the property as commercial is further corroborated by
the DAR Order.
o The validity of this DAR order has been assailed on the ground of
forgery. But the Court held that the challenges to the validity of the
order are irrelevant because notwithstanding, the evidence is
compelling enough to show that the property had already been
classified for commercial used prior to the said DAR Order. The
respondents had the burden of proving the contrary.
 Consequently, there was no valid cause to require the petitioners to
secure approved land conversion papers from DAR.
 o That requirement, assuming that it can be demanded by a local
government in the context of approving mayors permits, should only
obtain upon clear proof that the property from where the business
would operate was classified as agricultural under the LGUs land PROVISIONS OF ORDINANCE NO. 92-004:
use plan or zoning ordinances and other relevant laws.
o No evidence to that effect was presented by the respondents either Sec. 3A.01. Imposition of Fee. There shall be imposed and collected an annual fee at the rates provided
hereunder for the issuance of Mayors Permit to every person that shall conduct business, trade or activity
to the petitioners, or to the courts. within the Municipality of Cauayan.
 Having established that the constitutional rights of the petitioners have been
violated, the Court held that the petitioners were entitled to preliminary The permit fee is payable for every separate or distinct establishment or place where the business trade or
mandatory injunction, and that the writ of mandamus lies. Further, given that activity is conducted. One line of business or activity does not become exempt by being conducted with some
other business or activity for which the permit fee has been paid.
there was a clear violation of the right to free expression, damages were
awarded on the basis of Article 32 (2), NCC. xxxx

OTHER ISSUES: W/N THE TRIAL COURT CORRECTLY DENIED THE PROVISIONAL REMEDIES
SOUGHT – NO
 Section 5 of Rule 58 prescribes a mandatory hearing and prior notice to the party or person sought
to be enjoined if preliminary injunction should be granted. It imposes no similar requirement if such
provisional relief were to be denied.
 However, this case that petitioners deserved not only a hearing on their motion, but the very writ
itself.
o The burden of presuming valid the actions of respondents sought, fraught as they were
with alleged violations on petitioners constitutional right to expression, fell on
respondents themselves
o As evidenced by the Closure Order, the petitioners also faced the live threat of their
closure.
o From that mindset, the trial court could not have properly denied provisional relief
without any hearing since absent any extenuating defense offered by the respondents,
their actions remained presumptively invalid.
RULING:
Sec. 3A.03. Application for Mayors Permit False Statements.― A written application for a permit to operate a
business shall be filed with the Office of the Mayor in three copies. The application form shall set forth the
name and address of the applicant, the description or style of business, the place where the business shall be
conducted and such other pertinent information or data as may be required.
Upon submission of the application, it shall be the duty of the proper authorities to verify if the other Municipal
requirements regarding the operation of the business or activity are complied with. The permit to operate shall
be issued only upon such compliance and after the payment of the corresponding taxes and fees as required
by this revenue code and other municipal tax ordinances.
Any false statement deliberately made by the applicant shall constitute sufficient ground for denying or
revoking the permit issued by the Mayor, and the applicant or licensee may further be prosecuted in
accordance with the penalties provided in this article.
A Mayors Permit shall be refused to any person:
(1) Whose business establishment or undertaking does not conform with zoning regulations and safety, health
and other requirements of the Municipality; (2) that has an unsettled tax obligations, debt or other liability to the
Municipal Government; and (3) that is disqualified under any provision of law or ordinance to establish, or
operate the business for which a permit is being applied.

WHEREFORE, the petitions are GRANTED. The assailed decisions of the Court of
Appeals and the Regional Trial Court of Cauayan City, Branch 24, are hereby
REVERSED and SET ASIDE. The instant petition for mandamus is hereby
GRANTED and respondents are directed to immediately issue petitioners zoning
clearances and mayors permits for 2004 to petitioners

Respondents Caesar G. Dy, Felicisimo G. Meer, Bagnos Maximo, and Racma

Fernandez-Garcia are hereby ORDERED to pay petitioners JOINTLY AND
SEVERALLY the following amounts in damages:

(1) FOUR MILLION PESOS (P4,000,000.00) as TEMPERATE DAMAGES

(2) ONE MILLION PESOS (P1,000,000.00) as EXEMPLARY DAMAGES;
(3) FIVE HUNDRED THOUSAND PESOS (P 500,000.00) as ATTORNEYS FEES.

Costs against respondents.

SO ORDERED.