.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.   Reconsideration of this decision was denied on July 13, 1993. 
1 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.   They aver that the respondent Court of Appeals erred in holding that:
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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,   this Court sustained the
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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:

x x x           x x x          x x x

(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, gambling and 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 all forms of gambling without distinction. Ubi lex non distinguit, nec
nos distinguere debemos.   Otherwise, it would have expressly excluded from the scope of their
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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,  which sustained a municipal
7

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.   That is the prerogative of the
8

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   has held that to be valid,
9

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 "modified pro 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,   this Court
10

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,   which
12

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"   and that "habitual gambling is a cause of laziness
13

and ruin."   In People v. Gorostiza,   we declared: "The social scourge of gambling must be stamped
14 15

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

G.R. No. 132834             November 24, 2006

RUPERTO LUCERO, JR., PABLO LUCERO and ANTONIO TENORIO, Petitioners,

vs.
CITY GOVERNMENT OF PASIG, as represented by the Market Administrator, Respondent.

DECISION

CORONA, J.:

In this petition for review on certiorari, petitioners seek the review and reversal of the Court of
Appeals (CA) decision1 and resolution2 in CA-G.R. SP. No. 42131.

Petitioners were granted lease contracts to occupy and operate stalls 3 in the public market of Pasig
by virtue of Municipal Ordinance No. 25, series of 1983.

Sometime in 1993, the municipal government of Pasig renovated the market facilities and
constructed annex buildings to the old public market. The Sangguniang Bayan of Pasig then enacted
Municipal Ordinance No. 56, series of 1993, entitled "An Ordinance Prescribing the Rules and
Regulations in Occupying and Using Market Stalls and Providing Penalties for Violations Thereof."
The ordinance took effect 30 days after its enactment on October 20, 1993.

Pursuant to the new ordinance, municipal officials urged all stall occupants to fill up and submit the
necessary application forms. The application form contained the terms and conditions for the
occupation and operation of the stalls. If approved, the application would serve as the lease contract.

Petitioners, however, refused to apply for a new lease on their market stalls. They were given a
deadline to comply with the new ordinance but petitioners were adamant.

On November 14, 1995, the city government of Pasig4 filed a complaint for ejectment against
petitioners in the Metropolitan Trial Court (MTC), Branch 68, Pasig City. The case was docketed as
Civil Case No. 5043.

In its complaint, the city government alleged that petitioners failed to pay the required ₱10,000
performance bond and their rental fees since January 1994 as required by the municipal ordinance.

In their answer, petitioners claimed that they had faithfully complied with their obligations as set forth
in their 1983 lease contracts. They alleged that it was the city government which refused to accept
their rental payments from January 1994 onwards because of petitioners’ failure to submit new
applications to lease their market stalls. They did not pay the performance bond because, as
previous stall occupants, they were not required to do so. With due notice to the city treasurer,
petitioners deposited their payments in a bank when their offer to pay was not acted upon.

Finding the ejectment suit to be without merit, the MTC ruled in favor of petitioners and dismissed
the complaint.5
Dissatisfied with the lower court’s decision, the city government appealed to the Regional Trial Court
(RTC), Branch 162, Pasig City.6 The RTC reversed the MTC decision and decided in favor of the city
government.

WHEREFORE, PREMISES CONSIDERED, this Court hereby renders judgment in this case in favor
of [the City Government of Pasig] and against [petitioners] by:

(1) Reversing, amending and/or modifying the decision of the trial court dated March 29,
1996 subject of this appeal, and entering a new judgment directing the herein [petitioners]
and all persons claiming right under them to vacate the Market Stalls Nos. 28 and 29,
Commercial Section, and Stall [Nos.] 456 and 457, Grocery Section, and to restore
possession thereof to [the city government];

(2) Ordering the [petitioners] to pay the rent for the use and occupancy of the subject stalls,
as follows:

(a) Ruperto Lucero – the amount of ₱49,980.00 representing arrearages for the
whole year of [January 1994 up to September 1995]; and the further sum in the same
amount representing rents for the inclusive period of [October 1995 up to and until
September 1996];

(b) Pablo Lucero – the amount of ₱20,050.00 representing arrearages from

[February 1995 up to September 1995]; and the further sum in the same amount
representing rents for the duration of October 1995 to September 1996;

(c) Antonio Tenorio – the amount of ₱38,587.50 representing arrearages from

January 1994 to September 1995; and the further sum in the same amount
representing rents for the inclusive period [of] October 1995 to September 1996.

(3) Ordering [petitioners] to pay jointly and severally the amount of ₱15,000.00 for and as
attorney’s fees.

With costs against [petitioners].

SO ORDERED.7

Petitioners appealed the RTC decision to the CA. The appeal was, however, dismissed for lack of
merit.8 Their motion for reconsideration was similarly denied; 9 hence, this petition.

Petitioners mainly assail the non-renewal of their lease contracts on stalls in the public market when
they did not comply with the requirements of Municipal Ordinance No. 56, series of 1993. 10 They
claim to have a vested right to the possession, use and enjoyment of the market stalls based on their
1983 lease contracts. This, they assert, could not be impaired by the enactment of Municipal
Ordinance No. 56 in 1993.

The only issue for our resolution is: can petitioners claim a vested right to the market stalls they were
occupying by virtue of their lease contracts under Municipal Ordinance No. 25, series of 1983? They
cannot.

"A right is vested when the right to enjoyment has become the property of some particular person or
persons as a present interest."11 It is unalterable, absolute, complete and unconditional. 12 This right is
perfect in itself; it is not dependent upon a contingency.13 The concept of "vested right" expresses a
"present fixed interest which in right reason and natural justice is protected against arbitrary state
action."14 It includes not only legal and equitable title to the enforcement of a demand but also
exemptions from new obligations created after the right has become vested. 15

Contrary to petitioners’ contention that they were no longer covered by the 1993 ordinance requiring
payment of a performance bond and submission of new application forms, their 1983 lease contracts
did not grant them irrefutable rights to the market stalls. They were mere grantees of a privilege to
occupy and operate such booths.

What petitioners had was a license to occupy and operate particular stalls over a period of time.
Their possession and use of these facilities could not be characterized as fixed and absolute.
Indeed, petitioners did not have any vested right to the stalls.

It was within the ambit of the Sanggunian’s authority in the exercise of police power to regulate the
enjoyment of the privilege to lease the market stalls. The enactment of the Municipal Ordinance No.
56, series of 1993 repealing Municipal Ordinance No. 25, series of 1983 (the basis of petitioners’
lease) was a valid exercise of such governmental authority to

regulate the possession and use of the public market and its facilities. 16

The lease (and occupation) of a stall in a public market is not a right but a purely statutory privilege
governed by laws and ordinances.17 The operation of a market stall by virtue of a license is always
subject to the police power of the city government. 18 An application for this privilege may be granted
or refused for reasons of public policy and sound public administration. 19 The city government,
through its market administrator, is not duty-bound to grant lease privileges to any applicant, least of
all those who refuse to obey the new ordinance prescribing the rules and regulations for the market
stalls.

Moreover, a public market is one dedicated to the service of the general public and operated under
government control and supervision as a public utility. 20 Hence, the operation of a public market and
its facilities is imbued with public interest. Petitioners’ 1983 lease contracts contained an implied
reservation of the police power as a postulate of the existing legal order. 21 This power could be
exercised any time to change the provisions of the contracts or even abrogate them entirely, for the
protection of the general welfare. 22 Such an act did not violate the non-impairment clause which is
anyway subject to and limited by the paramount police power.

WHEREFORE, the petition is hereby DENIED.

Costs against petitioners.

SO ORDERED

EN BANC

G.R. No. 187298               July 03, 2012

JAMAR M. KULAYAN, TEMOGEN S. TULAWIE, HJI. MOH. YUSOP ISMI, JULHAJAN AWADI,
and SPO1 SATTAL H. JADJULI, Petitioners,
vs.
GOV. ABDUSAKUR M. TAN, in his capacity as Governor of Sulu; GEN. JUANCHO SABAN,
COL. EUGENIO CLEMEN PN, P/SUPT. JULASIRIM KASIM and P/SUPT. BIENVENIDO G.
LATAG, in their capacity as officers of the Phil. Marines and Phil. National Police,
respectively, Respondents.

DECISION

SERENO, J.:

On 15 January 2009, three members from the International Committee of the Red Cross (ICRC)
were kidnapped in the vicinity of the Provincial Capitol in Patikul, Sulu. Andres Notter, a Swiss
1 

national and head of the ICRC in Zamboanga City, Eugenio Vagni, an Italian national and ICRC
delegate, and Marie Jean Lacaba, a Filipino engineer, were purportedly inspecting a water and
sanitation project for the Sulu Provincial Jail when inspecting a water and sanitation project for the
Sulu Provincial Jail when they were seized by three armed men who were later confirmed to be
members of the Abu Sayyaf Group (ASG). The leader of the alleged kidnappers was identified as
2 

Raden Abu, a former guard at the Sulu Provincial Jail. News reports linked Abu to Albader Parad,
one of the known leaders of the Abu Sayyaf.

On 21 January 2009, a task force was created by the ICRC and the Philippine National Police
(PNP), which then organized a parallel local group known as the Local Crisis Committee. The local
3 

group, later renamed Sulu Crisis Management Committee, convened under the leadership of
respondent Abdusakur Mahail Tan, the Provincial Governor of Sulu. Its armed forces component
was headed by respondents General Juancho Saban, and his deputy, Colonel Eugenio Clemen. The
PNP component was headed by respondent Police Superintendent Bienvenido G. Latag, the Police
Deputy Director for Operations of the Autonomous Region of Muslim Mindanao (ARMM). 4

Governor Tan organized the Civilian Emergency Force (CEF), a group of armed male civilians
coming from different municipalities, who were redeployed to surrounding areas of Patikul. The 5 

organization of the CEF was embodied in a "Memorandum of Understanding" entered into

6 

between three parties: the provincial government of Sulu, represented by Governor Tan; the Armed
Forces of the Philippines, represented by Gen. Saban; and the Philippine National Police,
represented by P/SUPT. Latag. The Whereas clauses of the Memorandum alluded to the
extraordinary situation in Sulu, and the willingness of civilian supporters of the municipal mayors to
offer their services in order that "the early and safe rescue of the hostages may be achieved." 7

This Memorandum, which was labeled ‘secret’ on its all pages, also outlined the responsibilities of
each of the party signatories, as follows:

Responsibilities of the Provincial Government:

1) The Provincial Government shall source the funds and logistics needed for the activation
of the CEF;

2) The Provincial Government shall identify the Local Government Units which shall
participate in the operations and to propose them for the approval of the parties to this
agreement;

3) The Provincial Government shall ensure that there will be no unilateral action(s) by the
CEF without the knowledge and approval by both parties.
Responsibilities of AFP/PNP/ TF ICRC (Task Force ICRC):

1) The AFP/PNP shall remain the authority as prescribed by law in military operations and
law enforcement;

2) The AFP/PNP shall ensure the orderly deployment of the CEF in the performance of their
assigned task(s);

3) The AFP/PNP shall ensure the safe movements of the CEF in identified areas of
operation(s);

4) The AFP/PNP shall provide the necessary support and/or assistance as called for in the
course of operation(s)/movements of the CEF. 8

Meanwhile, Ronaldo Puno, then Secretary of the Department of Interior and Local Government,
announced to the media that government troops had cornered some one hundred and twenty (120)
Abu Sayyaf members along with the three (3) hostages. However, the ASG made
9 

contact with the authorities and demanded that the military pull its troops back from the jungle
area. The government troops yielded and went back to their barracks; the Philippine Marines
10 

withdrew to their camp, while police and civilian forces pulled back from the terrorists’ stronghold by
ten (10) to fifteen (15) kilometers. Threatening that one of the hostages will be beheaded, the ASG
further demanded the evacuation of the military camps and bases in the different barangays in
Jolo. The authorities were given no later than 2:00 o’clock in the afternoon of 31 March 2009 to
11 

comply. 12

On 31 March 2009, Governor Tan issued Proclamation No. 1, Series of 2009 (Proclamation 1-09),
declaring a state of emergency in the province of Sulu. It cited the kidnapping incident as a ground
13 

for the said declaration, describing it as a terrorist act pursuant to the Human Security

Act (R.A. 9372). It also invoked Section 465 of the Local Government Code of 1991 (R.A. 7160),
which bestows on the Provincial Governor the power to carry out emergency measures during man-
made and natural disasters and calamities, and to call upon the appropriate national law
enforcement agencies to suppress disorder and lawless violence.

In the same Proclamation, respondent Tan called upon the PNP and the CEF to set up checkpoints
and chokepoints, conduct general search and seizures including arrests, and other actions
necessary to ensure public safety. The pertinent portion of the proclamation states:

NOW, THEREFORE, BY VIRTUE OF THE POWERS VESTED IN ME BY LAW, I, ABDUSAKUR

MAHAIL TAN, GOVERNOR OF THE PROVINCE OF SULU, DO HEREBY DECLARE A STATE OF
EMERGENCY IN THE PROVINCE OF SULU, AND CALL ON THE PHILIPPINE NATIONAL
POLICE WITH THE ASSISTANCE OF THE ARMED FORCES OF THE PHILIPPINES AND THE
CIVILIAN EMERGENCY FORCE TO IMPLEMENT THE FOLLOWING:

1. The setting-up of checkpoints and chokepoints in the province;

2. The imposition of curfew for the entire province subject to such Guidelines as may be
issued by proper authorities;
 3. The conduct of General Search and Seizure including arrests in the pursuit of the
kidnappers and their supporters; and

4. To conduct such other actions or police operations as may be necessary to ensure public
safety.

DONE AT THE PROVINCIAL CAPITOL, PROVINCE OF SULU THIS

31STDAY OF MARCH 2009. Sgd. Abdusakur M. Tan Governor. 14

On 1 April 2009, SPO1 Sattal Jadjuli was instructed by his superior to report to respondent P/SUPT.
Julasirim Kasim. Upon arriving at the police station, he was booked, and interviewed about his
15 

relationship to Musin, Jaiton, and Julamin, who were all his deceased relatives. Upon admitting that
he was indeed related to the three, he was detained. After a few hours, former Punong Barangay
Juljahan Awadi, Hadji Hadjirul Bambra, Abdugajir Hadjirul, as well as PO2 Marcial Hajan, SPO3
Muhilmi Ismula, Punong Barangay Alano Mohammad and jeepney driver Abduhadi Sabdani, were
also arrested. The affidavit of the apprehending officer alleged that they were suspected ASG
16  17 

supporters and were being arrested under Proclamation 1-09. The following day, 2 April 2009, the
hostage Mary Jane Lacaba was released by the ASG.

On 4 April 2009, the office of Governor Tan distributed to civic organizations, copies of the
"Guidelines for the Implementation of Proclamation No. 1, Series of 2009 Declaring a State of
Emergency in the Province of Sulu." These Guidelines suspended all Permits to Carry
18 

Firearms Outside of Residence (PTCFORs) issued by the Chief of the PNP, and allowed civilians to
seek exemption from the gun ban only by applying to the Office of the Governor and obtaining the
appropriate identification cards. The said guidelines also allowed general searches and seizures in
designated checkpoints and chokepoints.

On 16 April 2009, Jamar M. Kulayan, Temogen S. Tulawie, Hadji Mohammad Yusop Ismi, Ahajan
Awadi, and SPO1 Sattal H. Jadjuli, residents of Patikul, Sulu, filed the present Petition for Certiorari
and Prohibition, claiming that Proclamation 1-09 was issued with grave abuse of discretion
19 

amounting to lack or excess of jurisdiction, as it threatened fundamental freedoms guaranteed under

Article III of the 1987 Constitution.

Petitioners contend that Proclamation No. 1 and its Implementing Guidelines were issued ultra vires,
and thus null and void, for violating Sections 1 and 18, Article VII of the Constitution, which grants
the President sole authority to exercise emergency powers and calling-out powers as the chief
executive of the Republic and commander-in-chief of the armed forces. Additionally, petitioners
20 

claim that the Provincial Governor is not authorized by any law to create civilian armed forces under
his command, nor regulate and limit the issuances of PTCFORs to his own private army.

In his Comment, Governor Tan contended that petitioners violated the doctrine on hierarchy of
courts when they filed the instant petition directly in the court of last resort, even if both the Court of
Appeals (CA) and the Regional Trial Courts (RTC) possessed concurrent jurisdiction with the

Supreme Court under Rule 65. This is the only procedural defense raised by respondent Tan.
21 

Respondents Gen. Juancho Saban, Col. Eugenio Clemen, P/SUPT. Julasirim Kasim, and P/SUPT.
Bienvenido Latag did not file their respective Comments. 1âwphi1
On the substantive issues, respondents deny that Proclamation 1-09 was issued ultra vires, as
Governor Tan allegedly acted pursuant to Sections 16 and 465 of the Local Government Code,
which empowers the Provincial Governor to carry out emergency measures during calamities and
disasters, and to call upon the appropriate national law enforcement agencies to suppress disorder,
riot, lawless violence, rebellion or sedition. Furthermore, the Sangguniang Panlalawigan of Sulu
22 

authorized the declaration of a state of emergency as evidenced by Resolution No. 4, Series of 2009
issued on 31 March 2009 during its regular session. 23

The threshold issue in the present case is whether or not Section 465, in relation to Section 16, of
the Local Government Code authorizes the respondent governor to declare a state of emergency,
and exercise the powers enumerated under Proclamation 1-09, specifically the conduct of general
searches and seizures. Subsumed herein is the secondary question of whether or not the provincial
governor is similarly clothed with authority to convene the CEF under the said provisions.

We grant the petition.

I. Transcendental public Importance warrants a relaxation of the Doctrine of Hierarchy of Courts

We first dispose of respondents’ invocation of the doctrine of hierarchy of courts which allegedly
prevents judicial review by this Court in the present case, citing for this specific purpose, Montes v.
Court of Appeals and Purok Bagong Silang Association, Inc. v. Yuipco. Simply put, the
24 

doctrine provides that where the issuance of an extraordinary writ is also within the competence of
the CA or the RTC, it is in either of these courts and not in the Supreme Court, that the specific
action for the issuance of such writ must be sought unless special and important laws are clearly and
specifically set forth in the petition. The reason for this is that this Court is a court of last resort and
must so remain if it is to perform the functions assigned to it by the Constitution and immemorial
tradition. It cannot be burdened with deciding cases in the first instance. 25

The said rule, however, is not without exception. In Chavez v. PEA-Amari, the Court stated:
26 

PEA and AMARI claim petitioner ignored the judicial hierarchy by seeking relief directly from the
Court. The principle of hierarchy of courts applies generally to cases involving factual questions. As
it is not a trier of facts, the Court cannot entertain cases involving factual issues. The instant case,
however, raises constitutional questions of transcendental importance to the public. The Court can
resolve this case without determining any factual issue related to the case. Also, the instant case is a
petition for mandamus which falls under the original jurisdiction of the Court under Section 5, Article
VIII of the Constitution. We resolve to exercise primary jurisdiction over the instant case. 27

The instant case stems from a petition for certiorari and prohibition, over which the Supreme Court
possesses original jurisdiction. More crucially, this case involves acts of a public official which
28 

pertain to restrictive custody, and is thus impressed with transcendental public importance that
would warrant the relaxation of the general rule. The Court would be remiss in its constitutional
duties were it to dismiss the present petition solely due to claims of judicial hierarchy.

In David v. Macapagal-Arroyo, the Court highlighted the transcendental public importance involved
29 

in cases that concern restrictive custody, because judicial review in these cases serves as "a
manifestation of the crucial defense of civilians ‘in police power’ cases due to the diminution of their
basic liberties under the guise of a state of emergency." Otherwise, the importance of the high
30 

tribunal as the court of last resort would be put to naught, considering the nature of "emergency"
cases, wherein the proclamations and issuances are inherently short-lived. In finally disposing of the
claim that the issue had become moot and academic, the Court also cited transcendental public
importance as an exception, stating:

Sa kabila ng pagiging akademiko na lamang ng mga isyu tungkol sa mahigpit na pangangalaga

(restrictive custody) at pagmonitor ng galaw (monitoring of movements) ng nagpepetisyon,
dedesisyunan namin ito (a) dahil sa nangingibabaw na interes ng madla na nakapaloob dito,

(b) dahil sa posibilidad na maaaring maulit ang pangyayari at (c) dahil kailangang maturuan ang
kapulisan tungkol dito.

The moot and academic principle is not a magical formula that can automatically dissuade the courts
in resolving a case. Courts will decide cases, otherwise moot and academic, if: first, there is a grave
violation of the Constitution; second, the exceptional character of the situation and the paramount
public interest is involved; third, when [the] constitutional issue raised requires formulation of
controlling principles to guide the bench, the bar, and the public; and fourth, the case is capable of
repetition yet evading review.

…There is no question that the issues being raised affect the public interest, involving as they do the
people’s basic rights to freedom of expression, of assembly and of the press. Moreover, the

Court has the duty to formulate guiding and controlling constitutional precepts, doctrines or rules. It
has the symbolic function of educating the bench and the bar, and in the present petitions, the
military and the police, on the extent of the protection given by constitutional guarantees. And lastly,
respondents contested actions are capable of repetition. Certainly, the petitions are subject to
judicial review.

Evidently, the triple reasons We advanced at the start of Our ruling are justified under the foregoing
exceptions. Every bad, unusual incident where police officers figure in generates public interest and
people watch what will be done or not done to them. Lack of disciplinary steps taken against them
erode public confidence in the police institution. As petitioners themselves assert, the restrictive
custody of policemen under investigation is an existing practice, hence, the issue is bound to crop up
every now and then. The matter is capable of repetition or susceptible of recurrence. It better be
resolved now for the education and guidance of all concerned. (Emphasis supplied)
31 

Hence, the instant petition is given due course, impressed as it is with transcendental public
importance.

II. Only the President is vested with calling-out powers, as the commander-in-chief of the Republic

i. One executive, one commander-in-chief

As early as Villena v. Secretary of Interior, it has already been established that there is one
32 

repository of executive powers, and that is the President of the Republic. This means that when
Section 1, Article VII of the Constitution speaks of executive power, it is granted to the President and
no one else. As emphasized by Justice Jose P. Laurel, in his ponencia in Villena:
33 

With reference to the Executive Department of the government, there is one purpose which is
crystal-clear and is readily visible without the projection of judicial searchlight, and that is the
establishment of a single, not plural, Executive. The first section of Article VII of the Constitution,
dealing with the Executive Department, begins with the enunciation of the principle that "The
executive power shall be vested in a President of the Philippines." This means that the President of
the Philippines is the Executive of the Government of the Philippines, and no other. 34

Corollarily, it is only the President, as Executive, who is authorized to exercise emergency powers as
provided under Section 23, Article VI, of the Constitution, as well as what became known as the
calling-out powers under Section 7, Article VII thereof.

ii. The exceptional character of Commander-in-Chief powers dictate that they are exercised by one
president

Springing from the well-entrenched constitutional precept of One President is the notion that there
are certain acts which, by their very nature, may only be performed by the president as the Head of
the State. One of these acts or prerogatives is the bundle of Commander-in-Chief powers to which
the "calling-out" powers constitutes a portion. The President’s Emergency Powers, on the other
hand, is balanced only by the legislative act of Congress, as embodied in the second paragraph of
Section 23, Article 6 of the Constitution:

Article 6, Sec 23(2). In times of war or other national emergency, the Congress may, by law,
authorize the President, for a limited period and subject to such restrictions as it may prescribe, to
exercise powers necessary and proper to carry out a declared national policy. Unless sooner
withdrawn by resolution of the Congress, such powers shall cease upon the next adjournment
thereof.35

Article 7, Sec 18. The President shall be the Commander-in-Chief of all armed forces of the
Philippines and whenever it becomes necessary, he may call out such armed forces to prevent or
suppress lawless violence, invasion or rebellion. In case of invasion or rebellion, when the public
safety requires it, he may, for a period not exceeding sixty days, suspend the privilege of the writ of
habeas corpus or place the Philippines or any part thereof under martial law. Within forty-eight hours
from the proclamation of martial law or the suspension of the privilege of the writ of habeas corpus,
the President shall submit a report in person or in writing to the Congress. The Congress, voting
jointly, by a vote of at least a majority of all its Members in regular or special session, may revoke
such proclamation or suspension, which revocation shall not be set aside by the President. Upon the
initiative of the President, the Congress may, in the same manner, extend such proclamation or
suspension for a period to be determined by the Congress, if the invasion or rebellion shall persist
and public safety requires it.

The Congress, if not in session, shall, within twenty-four hours following such proclamation or
suspension, convene in accordance with its rules without need of a call. 36

The power to declare a state of martial law is subject to the Supreme Court’s authority to review the
factual basis thereof.  By constitutional fiat, the calling-out powers, which is of lesser gravity than the
37 

power to declare martial law, is bestowed upon the President alone. As noted in Villena, "(t)here are
certain constitutional powers and prerogatives of the Chief Executive of the Nation which must be
exercised by him in person and no amount of approval or ratification will validate the exercise of any
of those powers by any other person. Such, for instance, is his power to suspend the writ of habeas
corpus and proclaim martial law x x x. 38

Indeed, while the President is still a civilian, Article II, Section 3 of the Constitution mandates that
39 

civilian authority is, at all times, supreme over the military, making the civilian president the nation’s
supreme military leader. The net effect of Article II, Section 3, when read with Article VII,
Section 18, is that a civilian President is the ceremonial, legal and administrative head of the armed
forces. The Constitution does not require that the President must be possessed of military training
and talents, but as Commander-in-Chief, he has the power to direct military operations and to
determine military strategy. Normally, he would be expected to delegate the actual command of the
armed forces to military experts; but the ultimate power is his. As Commander-in-Chief, he is
40 

authorized to direct the movements of the naval and military forces placed by law at his command,
and to employ them in the manner he may deem most effectual. 41

In the case of Integrated Bar of the Philippines v. Zamora, the Court had occasion to rule that the
42 

calling-out powers belong solely to the President as commander-in-chief:

When the President calls the armed forces to prevent or suppress lawless violence, invasion or
rebellion, he necessarily exercises a discretionary power solely vested in his wisdom. This is clear
from the intent of the framers and from the text of the Constitution itself. The Court, thus, cannot be
called upon to overrule the President’s wisdom or substitute its own. However, this does not prevent
an examination of whether such power was exercised within permissible constitutional limits or
whether it was exercised in a manner constituting grave abuse of discretion. In view of the
constitutional intent to give the President full discretionary power to determine the necessity of
calling out the armed forces, it is incumbent upon the petitioner to show that the President’s decision
is totally bereft of factual basis.

There is a clear textual commitment under the Constitution to bestow on the President full
discretionary power to call out the armed forces and to determine the necessity for the exercise of
such power. (Emphasis supplied)
43 

Under the foregoing provisions, Congress may revoke such proclamation or suspension and the
Court may review the sufficiency of the factual basis thereof. However, there is no such equivalent
provision dealing with the revocation or review of the President’s action to call out the armed forces.
The distinction places the calling out power in a different category from the power to declare martial
law and the power to suspend the privilege of the writ of habeas corpus, otherwise, the framers of
the Constitution would have simply lumped together the three powers and provided for their
revocation and review without any qualification. 44

That the power to call upon the armed forces is discretionary on the president is clear from the
deliberation of the Constitutional Commission:

FR. BERNAS. It will not make any difference. I may add that there is a graduated power of the
President as Commander-in-Chief. First, he can call out such Armed Forces as may be necessary to
suppress lawless violence; then he can suspend the privilege of the writ of habeas corpus, then he
can impose martial law. This is a graduated sequence.

When he judges that it is necessary to impose martial law or suspend the privilege of the writ of
habeas corpus, his judgment is subject to review. We are making it subject to review by the
Supreme Court and subject to concurrence by the National Assembly. But when he exercises this
lesser power of calling on the Armed Forces, when he says it is necessary, it is my opinion that his
judgment cannot be reviewed by anybody.

x x x           x x x          x x x

MR. REGALADO. That does not require any concurrence by the legislature nor is it subject to
judicial review.
The reason for the difference in the treatment of the aforementioned powers highlights the intent to
grant the President the widest leeway and broadest discretion in using the power to call out because
it is considered as the lesser and more benign power compared to the power to suspend the
privilege of the writ of habeas corpus and the power to impose martial law, both of which involve the
curtailment and suppression of certain basic civil rights and individual freedoms, and thus
necessitating safeguards by Congress and review by this Court.

x x x Thus, it is the unclouded intent of the Constitution to vest upon the President, as Commander-
in-Chief of the Armed Forces, full discretion to call forth the military when in his judgment it is
necessary to do so in order to prevent or suppress lawless violence, invasion or
rebellion. (Emphasis Supplied)
45 

In the more recent case of Constantino, Jr. v. Cuisia, the Court characterized these powers as
46 

exclusive to the President, precisely because they are of exceptional import:

These distinctions hold true to this day as they remain embodied in our fundamental law. There are
certain presidential powers which arise out of exceptional circumstances, and if exercised, would
involve the suspension of fundamental freedoms, or at least call for the supersedence of executive
prerogatives over those exercised by co-equal branches of government. The declaration of martial
law, the suspension of the writ of habeas corpus, and the exercise of the pardoning power,
notwithstanding the judicial determination of guilt of the accused, all fall within this special class that
demands the exclusive exercise by the President of the constitutionally vested power. The list is by
no means exclusive, but there must be a showing that the executive power in question is of
similar gravitas and exceptional import. 47

In addition to being the commander-in-chief of the armed forces, the President also acts as the
leader of the country’s police forces, under the mandate of Section 17, Article VII of the Constitution,
which provides that, "The President shall have control of all the executive departments, bureaus, and
offices. He shall ensure that the laws be faithfully executed." During the deliberations of the
Constitutional Commission on the framing of this provision, Fr. Bernas defended the retention of the
word "control," employing the same rationale of singularity of the office of the president, as the only
Executive under the presidential form of government. 48

Regarding the country’s police force, Section 6, Article XVI of the Constitution states that: "The State
shall establish and maintain one police force, which shall be national in scope and civilian in
character, to be administered and controlled by a national police commission. The authority of local
executives over the police units in their jurisdiction shall be provided by law." 49

A local chief executive, such as the provincial governor, exercises operational supervision over the
police, and may exercise control only in day-to-day operations, viz:
50 

Mr. Natividad: By experience, it is not advisable to provide either in our Constitution or by law full
control of the police by the local chief executive and local executives, the mayors. By our
experience, this has spawned warlordism, bossism and sanctuaries for vices and abuses. If the
national government does not have a mechanism to supervise these 1,500 legally, technically
separate police forces, plus 61 city police forces, fragmented police system, we will have a lot of
difficulty in presenting a modern professional police force. So that a certain amount of supervision
and control will have to be exercised by the national government.

For example, if a local government, a town cannot handle its peace and order problems or police
problems, such as riots, conflagrations or organized crime, the national government may come in,
especially if requested by the local executives. Under that situation, if they come in under such an
extraordinary situation, they will be in control. But if the day-to-day business of police investigation of
crime, crime prevention, activities, traffic control, is all lodged in the mayors, and if they are in
complete operational control of the day-to-day business of police service, what the national
government would control would be the administrative aspect.

x x x           x x x          x x x

Mr. de los Reyes: so the operational control on a day-to-day basis, meaning, the usual duties being
performed by the ordinary policemen, will be under the supervision of the local executives?

Mr. Natividad: Yes, Madam President.

x x x           x x x          x x x

Mr. de los Reyes: But in exceptional cases, even the operational control can be taken over by the
National Police Commission?

Mr. Natividad: If the situation is beyond the capacity of the local governments. (Emphases supplied)
51 

Furthermore according to the framers, it is still the President who is authorized to exercise
supervision and control over the police, through the National Police Commission:

Mr. Rodrigo: Just a few questions. The President of the Philippines is the Commander-in-Chief of all
the armed forces.

Mr. Natividad: Yes, Madam President.

Mr. Rodrigo: Since the national police is not integrated with the armed forces, I do not suppose they
come under the Commander-in-Chief powers of the President of the Philippines.

Mr. Natividad: They do, Madam President. By law, they are under the supervision and control of the
President of the Philippines.

Mr. Rodrigo: Yes, but the President is not the Commander-in-Chief of the national police.

Mr. Natividad: He is the President.

Mr. Rodrigo: Yes, the Executive. But they do not come under that specific provision that the
President is the Commander-in-Chief of all the armed forces.

Mr. Natividad: No, not under the Commander-in-Chief provision.

Mr. Rodrigo: There are two other powers of the President. The

President has control over ministries, bureaus and offices, and supervision over local governments.
Under which does the police fall, under control or under supervision?

Mr. Natividad: Both, Madam President.

Mr. Rodrigo: Control and supervision.

Mr. Natividad: Yes, in fact, the National Police Commission is under the Office of the President. 52

In the discussions of the Constitutional Commission regarding the above provision it is clear that the
framers never intended for local chief executives to exercise unbridled control over the police in
emergency situations. This is without prejudice to their authority over police units in their jurisdiction
as provided by law, and their prerogative to seek assistance from the police in day to day situations,
as contemplated by the Constitutional Commission. But as a civilian agency of the government, the
police, through the NAPOLCOM, properly comes within, and is subject to, the exercise by the
President of the power of executive control. 53

iii. The provincial governor does not possess the same calling-out powers as the President

Given the foregoing, respondent provincial governor is not endowed with the power to call upon the
armed forces at his own bidding. In issuing the assailed proclamation, Governor Tan exceeded his
authority when he declared a state of emergency and called upon the Armed Forces, the police, and
his own Civilian Emergency Force. The calling-out powers contemplated under the Constitution is
exclusive to the President. An exercise by another official, even if he is the local chief executive, is
ultra vires, and may not be justified by the invocation of Section 465 of the Local Government Code,
as will be discussed subsequently.

Respondents, however, justify this stance by stating that nowhere in the seminal case of David v.
Arroyo, which dealt squarely with the issue of the declaration of a state of emergency, does it limit
the said authority to the President alone. Respondents contend that the ruling in David expressly
limits the authority to declare a national emergency, a condition which covers the entire country, and
does not include emergency situations in local government units. This claim is belied by the clear
54 

intent of the framers that in all situations involving threats to security, such as lawless violence,
invasion or rebellion, even in localized areas, it is still the President who possesses the sole
authority to exercise calling-out powers. As reflected in the Journal of the Constitutional
Commission:

Thereafter, Mr. Padilla proposed on line 29 to insert the phrase OR PUBLIC DISORDER in lieu of
"invasion or rebellion." Mr. Sumulong stated that the committee could not accept the amendment
because under the first section of Section 15, the President may call out and make use of the armed
forces to prevent or suppress not only lawless violence but even invasion or rebellion without
declaring martial law. He observed that by deleting "invasion or rebellion" and substituting PUBLIC
DISORDER, the President would have to declare martial law before he can make use of the armed
forces to prevent or suppress lawless invasion or rebellion.

Mr. Padilla, in reply thereto, stated that the first sentence contemplates a lighter situation where
there is some lawless violence in a small portion of the country or public disorder in another at which
times, the armed forces can be called to prevent or suppress these incidents. He noted that the
Commander-in-Chief can do so in a minor degree but he can also exercise such powers should the
situation worsen. The words "invasion or rebellion" to be eliminated on line 14 are covered by the
following sentence which provides for "invasion or rebellion." He maintained that the proposed
amendment does not mean that under such circumstances, the President cannot call on the armed
forces to prevent or suppress the same. (Emphasis supplied)
55 

III. Section 465 of the Local

Government Code cannot be invoked to justify the powers enumerated under Proclamation 1-09
Respondent governor characterized the kidnapping of the three ICRC workers as a terroristic act,
and used this incident to justify the exercise of the powers enumerated under Proclamation 1-09. He 56 

invokes Section 465, in relation to Section 16, of the Local Government Code, which purportedly
allows the governor to carry out emergency measures and call upon the appropriate national law
enforcement agencies for assistance. But a closer look at the said proclamation shows that there is
no provision in the Local Government Code nor in any law on which the broad and unwarranted
powers granted to the Governor may be based.

Petitioners cite the implementation of "General Search and Seizure including arrests in the pursuit of
the kidnappers and their supporters," as being violative of the constitutional proscription on general
57 

search warrants and general seizures. Petitioners rightly assert that this alone would be sufficient to
render the proclamation void, as general searches and seizures are proscribed, for being violative of
the rights enshrined in the Bill of Rights, particularly:

The right of the people to be secure in their persons, houses, papers, and effects against
unreasonable searches and seizures of whatever nature and for any purpose shall be inviolable, and
no search warrant or warrant of arrest shall issue except upon probable cause to be determined
personally by the judge after examination under oath or affirmation of the complainant and the
witnesses he may produce, and particularly describing the place to be searched and the persons or
things to be seized.58

In fact, respondent governor has arrogated unto himself powers exceeding even the martial law
powers of the President, because as the Constitution itself declares, "A state of martial law does not
suspend the operation of the Constitution, nor supplant the functioning of the civil courts or
legislative assemblies, nor authorize the conferment of the jurisdiction on military courts and
agencies over civilians where civil courts are able to function, nor automatically suspend the
privilege of the writ."
59

We find, and so hold, that there is nothing in the Local Government Code which justifies the acts
sanctioned under the said Proclamation. Not even Section 465 of the said Code, in relation to
Section 16, which states:

Section 465. The Chief Executive: Powers, Duties, Functions, and Compensation.

x x x           x x x          x x x

(b) For efficient, effective and economical governance the purpose of which is the general welfare of
the province and its inhabitants pursuant to Section 16 of this Code, the provincial governor shall:

(1) Exercise general supervision and control over all programs, projects, services, and activities of
the provincial government, and in this connection, shall:

x x x           x x x          x x x

(vii) Carry out such emergency measures as may be necessary during and in the aftermath of man-
made and natural disasters and calamities;

(2) Enforce all laws and ordinances relative to the governance of the province and the exercise of
the appropriate corporate powers provided for under Section 22 of this Code, implement all
approved policies, programs, projects, services and activities of the province and, in addition to the
foregoing, shall:
 x x x           x x x          x x x

(vi) Call upon the appropriate national law enforcement agencies to suppress disorder, riot, lawless
violence, rebellion or sedition or to apprehend violators of the law when public interest so requires
and the police forces of the component city or municipality where the disorder or violation is
happening are inadequate to cope with the situation or the violators.

Section 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.
(Emphases supplied)

Respondents cannot rely on paragraph 1, subparagraph (vii) of Article 465 above, as the said
provision expressly refers to calamities and disasters, whether man-made or natural. The governor,
as local chief executive of the province, is certainly empowered to enact and implement emergency
measures during these occurrences. But the kidnapping incident in the case at bar cannot be
considered as a calamity or a disaster. Respondents cannot find any legal mooring under this
provision to justify their actions.

Paragraph 2, subparagraph (vi) of the same provision is equally inapplicable for two reasons. First,
the Armed Forces of the Philippines does not fall under the category of a "national law enforcement
agency," to which the National Police Commission (NAPOLCOM) and its departments belong.

Its mandate is to uphold the sovereignty of the Philippines, support the Constitution, and defend the
Republic against all enemies, foreign and domestic. Its aim is also to secure the integrity of the
national territory.
60

Second, there was no evidence or even an allegation on record that the local police forces were
inadequate to cope with the situation or apprehend the violators. If they were inadequate, the
recourse of the provincial governor was to ask the assistance of the Secretary of Interior and Local
Government, or such other authorized officials, for the assistance of national law enforcement
agencies.

The Local Government Code does not involve the diminution of central powers inherently vested in
the National Government, especially not the prerogatives solely granted by the Constitution to the
President in matters of security and defense.

The intent behind the powers granted to local government units is fiscal, economic, and
administrative in nature.  The Code is concerned only with powers that would make the delivery of
1âwphi1

basic services more effective to the constituents, and should not be unduly stretched to confer
61 

calling-out powers on local executives.

In the sponsorship remarks for Republic Act 7160, it was stated that the devolution of powers is a
step towards the autonomy of local government units (LGUs), and is actually an experiment whose
success heavily relies on the power of taxation of the LGUs. The underpinnings of the Code can be
found in Section 5, Article II of the 1973 Constitution, which allowed LGUs to create their own
sources of revenue. During the interpellation made by Mr. Tirol addressed to Mr. de Pedro, the latter
62 

emphasized that "Decentralization is an administrative concept and the process of shifting and
delegating power from a central point to subordinate levels to promote independence, responsibility,
and quicker decision-making. … (I)t does not involve any transfer of final authority from the national
to field levels, nor diminution of central office powers and responsibilities. Certain government
agencies, including the police force, are exempted from the decentralization process because their
functions are not inherent in local government units."63

IV. Provincial governor is not authorized to convene CEF

Pursuant to the national policy to establish one police force, the organization of private citizen armies
is proscribed. Section 24 of Article XVIII of the Constitution mandates that:

Private armies and other armed groups not recognized by duly constituted authority shall be
dismantled. All paramilitary forces including Civilian Home Defense Forces (CHDF) not consistent
with the citizen armed force established in this Constitution, shall be dissolved or, where appropriate,
converted into the regular force.

Additionally, Section 21of Article XI states that, "The preservation of peace and order within the
regions shall be the responsibility of the local police agencies which shall be organized, maintained,
supervised, and utilized in accordance with applicable laws. The defense and security of the regions
shall be the responsibility of the National Government."

Taken in conjunction with each other, it becomes clear that the Constitution does not authorize the
organization of private armed groups similar to the CEF convened by the respondent Governor. The
framers of the Constitution were themselves wary of armed citizens’ groups, as shown in the
following proceedings:

MR. GARCIA: I think it is very clear that the problem we have here is a paramilitary force operating
under the cloak, under the mantle of legality is creating a lot of problems precisely by being able to
operate as an independent private army for many regional warlords. And at the same time, this I
think has been the thrust, the intent of many of the discussions and objections to the paramilitary
units and the armed groups.

MR. PADILLA: My proposal covers two parts: the private armies of political warlords and other
armed torces not recognized by constituted authority which shall be dismantled and dissolved. In my
trips to the provinces, I heard of many abuses committed by the CHDF (Civilian Home Defense
Forces), specially in Escalante, Negros Occidental. But I do not know whether a particular CHDF is
approved or authorized by competent authority. If it is not authorized, then the CHDF will have to be
dismantled. If some CHDFs, say in other provinces, are authorized by constituted authority, by the
Armed Forces of the Philippines, through the Chief of Staff or the Minister of National Defense, if
they are recognized and authorized, then they will not be dismantled. But I cannot give a categorical
answer to any specific CHDF unit, only the principle that if they are armed forces which are not
authorized, then they should be dismantled.  (Emphasis supplied)
64 

Thus, with the discussions in the Constitutional Commission as guide, the creation of the Civilian
Emergency Force (CEF) in the present case, is also invalid.

WHEREFORE, the instant petition is GRANTED. Judgment is rendered commanding respondents to

desist from further proceedings m implementing Proclamation No. 1, Series of 2009, and its
Implementing Guidelines. The said proclamation and guidelines are hereby declared NULL and
VOID for having been issued in grave abuse of discretion, amounting to lack or excess of
jurisdiction.

SO ORDERED

EN BANC

G.R. No. L-24670 December 14, 1979

ORTIGAS & CO., LIMITED PARTNERSHIP, plaintiff-appellant,

vs.
FEATI BANK AND TRUST CO., defendant-appellee.

Ramirez & Ortigas for appellant.

Tañada, Teehankee & Carreon for appellee.

SANTOS, J.:

An appeal interposed on June 23, 1965 by plaintiff-appellant, Ortigas & Co., Limited Partnership,
from the decision of the Court of First Instance of Rizal, Branch VI, at Pasig, Hon. Andres Reyes
presiding, which dismissed its complaint in Civil Case No. 7706, entitled, "Ortigas & Company,
Limited Partnership, plaintiff, v. Feati Bank and Trust Company, defendant," for lack of merit.

The following facts — a reproduction of the lower court's findings, which, in turn, are based on a
stipulation of facts entered into by the parties are not disputed. Plaintiff (formerly known as "Ortigas,
Madrigal y Cia") is a limited partnership and defendant Feati Bank and Trust Co., is a corporation
duly organized and existing in accordance with the laws of the Philippines. Plaintiff is engaged in real
estate business, developing and selling lots to the public, particularly the Highway Hills Subdivision
along Epifanio de los Santos Avenue, Mandaluyong, Rizal.  1

On March 4, 1952, plaintiff, as vendor, and Augusto Padilla y Angeles and Natividad Angeles, as
vendees, entered into separate agreements of sale on installments over two parcels of land, known
as Lots Nos. 5 and 6, Block 31, of the Highway Hills Subdivision, situated at Mandaluyong, Rizal. On
July 19, 1962, the said vendees transferred their rights and interests over the aforesaid lots in favor
of one Emma Chavez. Upon completion of payment of the purchase price, the plaintiff executed the
corresponding deeds of sale in favor of Emma Chavez. Both the agreements (of sale on installment)
and the deeds of sale contained the stipulations or restrictions that:

1. The parcel of land subject of this deed of sale shall be used the Buyer exclusively
for residential purposes, and she shall not be entitled to take or remove soil, stones
or gravel from it or any other lots belonging to the Seller.

2. All buildings and other improvements (except the fence) which may be constructed
at any time in said lot must be, (a) of strong materials and properly painted, (b)
provided with modern sanitary installations connected either to the public sewer or to
an approved septic tank, and (c) shall not be at a distance of less than two (2) meters
from its boundary lines. 2
The above restrictions were later annotated in TCT Nos. 101509 and 101511 of the Register of
Deeds of Rizal, covering the said lots and issued in the name of Emma Chavez. 3

Eventually, defendant-appellee acquired Lots Nos. 5 and 6, with TCT Nos. 101613 and 106092
issued in its name, respectively and the building restrictions were also annotated
therein.   Defendant-appellee bought Lot No. 5 directly from Emma Chavez, "free from all liens and
4

encumbrances as stated in Annex 'D',   while Lot No. 6 was acquired from Republic Flour Mills
5

through a "Deed of Exchange," Annex "E".   TCT No. 101719 in the name of Republic Flour Mills
6

likewise contained the same restrictions, although defendant-appellee claims that Republic Flour
Mills purchased the said Lot No. 6 "in good faith. free from all liens and encumbrances," as stated in
the Deed of Sale, Annex "F"   between it and Emma Chavez.
7

Plaintiff-appellant claims that the restrictions annotated on TCT Nos. 101509, 101511, 101719,
101613, and 106092 were imposed as part of its general building scheme designed for the
beautification and development of the Highway Hills Subdivision which forms part of the big landed
estate of plaintiff-appellant where commercial and industrial sites are also designated or
established. 8

Defendant-appellee, upon the other hand, maintains that the area along the western part of Epifanio
de los Santos Avenue (EDSA) from Shaw Boulevard to Pasig River, has been declared a
commercial and industrial zone, per Resolution No. 27, dated February 4, 1960 of the Municipal
Council of Mandaluyong, Rizal.   It alleges that plaintiff-appellant 'completely sold and transferred to
9

third persons all lots in said subdivision facing Epifanio de los Santos Avenue"   and the subject lots
10

thereunder were acquired by it "only on July 23, 1962 or more than two (2) years after the area ...
had been declared a commercial and industrial zone ...  11

On or about May 5, 1963, defendant-appellee began laying the foundation and commenced the
construction of a building on Lots Nos. 5 and 6, to be devoted to banking purposes, but which
defendant-appellee claims could also be devoted to, and used exclusively for, residential purposes.
The following day, plaintiff-appellant demanded in writing that defendant-appellee stop the
construction of the commerical building on the said lots. The latter refused to comply with the
demand, contending that the building was being constructed in accordance with the zoning
regulations, defendant-appellee having filed building and planning permit applications with the
Municipality of Mandaluyong, and it had accordingly obtained building and planning permits to
proceed with the construction. 12

On the basis of the foregoing facts, Civil Case No. 7706, supra, was submitted in the lower court for
decision. The complaint sought, among other things, the issuance of "a writ of preliminary
injunction ... restraining and enjoining defendant, its agents, assigns, and those acting on its or their
behalf from continuing or completing the construction of a commercial bank building in the
premises ... involved, with the view to commanding the defendant to observe and comply with the
building restrictions annotated in the defendant's transfer certificate of title."

In deciding the said case, the trial court considered, as the fundamental issue, whether or not the
resolution of the Municipal Council of Mandaluyong declaring Lots Nos. 5 and 6, among others, as
part of the commercial and industrial zone of the municipality, prevailed over the building restrictions
imposed by plaintiff-appellant on the lots in question.   The records do not show that a writ of
13

preliminary injunction was issued.

The trial court upheld the defendant-appellee and dismissed the complaint, holding that the subject
restrictions were subordinate to Municipal Resolution No. 27, supra. It predicated its conclusion on
the exercise of police power of the said municipality, and stressed that private interest should "bow
down to general interest and welfare. " In short, it upheld the classification by the Municipal Council
of the area along Epifanio de los Santos Avenue as a commercial and industrial zone, and held that
the same rendered "ineffective and unenforceable" the restrictions in question as against defendant-
appellee.  The trial court decision further emphasized that it "assumes said resolution to be valid,
14

considering that there is no issue raised by either of the parties as to whether the same is null and
void. 
15

On March 2, 1965, plaintiff-appellant filed a motion for reconsideration of the above decision,   which
16

motion was opposed by defendant-appellee on March 17, 1965.  It averred, among others, in the
17

motion for reconsideration that defendant- appellee "was duty bound to comply with the conditions of
the contract of sale in its favor, which conditions were duly annotated in the Transfer Certificates of
Title issued in her (Emma Chavez) favor." It also invited the trial court's attention to its claim that the
Municipal Council had (no) power to nullify the contractual obligations assumed by the defendant
corporation."  18

The trial court denied the motion for reconsideration in its order of March 26, 1965.  19

On April 2, 1965 plaintiff-appellant filed its notice of appeal from the decision dismissing the
complaint and from the order of March 26, 1965 denying the motion for reconsideration, its record on
appeal, and a cash appeal bond."   On April 14, the appeal was given due course   and the records
20 21

of the case were elevated directly to this Court, since only questions of law are raised.  22

Plaintiff-appellant alleges in its brief that the trial court erred —

I. When it sustained the view that Resolution No. 27, series of 1960 of the Municipal
Council of Mandaluyong, Rizal declaring Lots Nos. 5 and 6, among others, as part of
the commercial and industrial zone, is valid because it did so in the exercise of its
police power; and

II. When it failed to consider whether or not the Municipal Council had the power to
nullify the contractual obligations assumed by defendant-appellee and when it did not
make a finding that the building was erected along the property line, when it should
have been erected two meters away from said property line.  23

The defendant-appellee submitted its counter-assignment of errors. In this connection, We already

had occasion to hold in Relativo v. Castro   that "(I)t is not incumbent on the appellee, who occupies
24

a purely defensive position, and is seeking no affirmative relief, to make assignments of error, "

The only issues to be resolved, therefore, are: (1) whether Resolution No. 27 s-1960 is a valid
exercise of police power; and (2) whether the said Resolution can nullify or supersede the
contractual obligations assumed by defendant-appellee.

1. The contention that the trial court erred in sustaining the validity of Resolution No. 27 as an
exercise of police power is without merit. In the first place, the validity of the said resolution was
never questioned before it. The rule is that the question of law or of fact which may be included in
the appellant's assignment of errors must be those which have been raised in the court below, and
are within the issues framed by the parties.   The object of requiring the parties to present all
25

questions and issues to the lower court before they can be presented to the appellate court is to
enable the lower court to pass thereon, so that the appellate court upon appeal may determine
whether or not such ruling was erroneous. The requirement is in furtherance of justice in that the
other party may not be taken by surprise.   The rule against the practice of blowing "hot and cold" by
26

assuming one position in the trial court and another on appeal will, in the words of Elliot, prevent
deception.   For it is well-settled that issues or defenses not raised   or properly litigated   or
27 28 29

pleaded   in the Court below cannot be raised or entertained on appeal.

30

In this particular case, the validity of the resolution was admitted at least impliedly, in the stipulation
of facts below. when plaintiff-appellant did not dispute the same. The only controversy then as stated
by the trial court was whether or not the resolution of the Municipal Council of Mandaluyong ... which
declared lots Nos. 4 and 5 among others, as a part of the commercial and industrial zone of the
municipality, prevails over the restrictions constituting as encumbrances on the lots in
question.   Having admitted the validity of the subject resolution below, even if impliedly, plaintiff-
31

appellant cannot now change its position on appeal.

But, assuming arguendo that it is not yet too late in the day for plaintiff-appellant to raise the issue of
the invalidity of the municipal resolution in question, We are of the opinion that its posture is
unsustainable. Section 3 of R.A. No. 2264, otherwise known as the Local Autonomy
Act,"   empowers a Municipal Council "to adopt zoning and subdivision ordinances
32

or regulations";   for the municipality. Clearly, the law does not restrict the exercise of the power
33

through an ordinance. Therefore, granting that Resolution No. 27 is not an ordinance, it certainly is a
regulatory measure within the intendment or ambit of the word "regulation" under the provision. As a
matter of fact the same section declares that the power exists "(A)ny provision of law to the contrary
notwithstanding ... "

An examination of Section 12 of the same law   which prescribes the rules for its interpretation
34

likewise reveals that the implied power of a municipality should be "liberally construed in its favor"
and that "(A)ny fair and reasonable doubt as to the existence of the power should be interpreted in
favor of the local government and it shall be presumed to exist." The same section further mandates
that the general welfare clause be liberally interpreted in case of doubt, so as to give more power to
local governments in promoting the economic conditions, social welfare and material progress of the
people in the community. The only exceptions under Section 12 are existing vested rights arising out
of a contract between "a province, city or municipality on one hand and a third party on the other," in
which case the original terms and provisions of the contract should govern. The exceptions, clearly,
do not apply in the case at bar.

2. With regard to the contention that said resolution cannot nullify the contractual obligations
assumed by the defendant-appellee – referring to the restrictions incorporated in the deeds of sale
and later in the corresponding Transfer Certificates of Title issued to defendant-appellee – it should
be stressed, that while non-impairment of contracts is constitutionally guaranteed, the rule is not
absolute, since it has to be reconciled with the legitimate exercise of police power, i.e., "the power to
prescribe regulations to promote the health, morals, peace, education, good order or safety and
general welfare of the people.   Invariably described as "the most essential, insistent, and illimitable
35

of powers"   and "in a sense, the greatest and most powerful attribute of government,   the exercise
36 37

of the power may be judicially inquired into and corrected only if it is capricious, 'whimsical, unjust or
unreasonable, there having been a denial of due process or a violation of any other applicable
constitutional guarantee.   As this Court held through Justice Jose P. Bengzon in Philippine Long
38

Distance Company vs. City of Davao, et al.   police power "is elastic and must be responsive to
39

various social conditions; it is not, confined within narrow circumscriptions of precedents resting on
past conditions; it must follow the legal progress of a democratic way of life." We were even more
emphatic in Vda. de Genuino vs. The Court of Agrarian Relations, et al.,   when We declared: "We
40

do not see why public welfare when clashing with the individual right to property should not be made
to prevail through the state's exercise of its police power.

Resolution No. 27, s-1960 declaring the western part of highway 54, now E. de los Santos Avenue
(EDSA, for short) from Shaw Boulevard to the Pasig River as an industrial and commercial zone,
was obviously passed by the Municipal Council of Mandaluyong, Rizal in the exercise of police
power to safeguard or promote the health, safety, peace, good order and general welfare of the
people in the locality, Judicial notice may be taken of the conditions prevailing in the area, especially
where lots Nos. 5 and 6 are located. The lots themselves not only front the highway; industrial and
commercial complexes have flourished about the place. EDSA, a main traffic artery which runs
through several cities and municipalities in the Metro Manila area, supports an endless stream of
traffic and the resulting activity, noise and pollution are hardly conducive to the health, safety or
welfare of the residents in its route. Having been expressly granted the power to adopt zoning and
subdivision ordinances or regulations, the municipality of Mandaluyong, through its Municipal
'council, was reasonably, if not perfectly, justified under the circumstances, in passing the subject
resolution.

The scope of police power keeps expanding as civilization advances, stressed this Court, speaking
thru Justice Laurel in the leading case of Calalang v. Williams et al.,   Thus-
41

As was said in the case of Dobbins v. Los Angeles (195 US 223, 238 49 L. ed.
169), 'the right to exercise the police power is a continuing one, and a business
lawful today may in the future, because of changed situation, the growth of
population or other causes, become a menace to the public health and welfare, and
be required to yield to the public good.' And in People v. Pomar (46 Phil. 440), it was
observed that 'advancing civilization is bringing within the scope of police power of
the state today things which were not thought of as being with in such power
yesterday. The development of civilization), the rapidly increasing population, the
growth of public opinion, with an increasing 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 many questions for regulation which formerly
were not so considered.   (Emphasis, supplied.)
42

Thus, the state, in order to promote the general welfare, may interfere with personal liberty, with
property, and with business and occupations. Persons may be subjected to all kinds of restraints and
burdens, in order to secure the general comfort health and prosperity of the state   and to this
43

fundamental aim of our Government, the rights of the individual are subordinated.  44

The need for reconciling the non-impairment clause of the Constitution and the valid exercise of
police power may also be gleaned from Helvering v. Davis   wherein Mr. Justice Cardozo, speaking
45

for the Court, resolved the conflict "between one welfare and another, between particular and
general, thus —

Nor is the concept of the general welfare static. Needs that were narrow or parochial
a century ago may be interwoven in our day with the well-being of the nation What is
critical or urgent changes with the times. 46

The motives behind the passage of the questioned resolution being reasonable, and it being a "
legitimate response to a felt public need,"   not whimsical or oppressive, the non-impairment of
47

contracts clause of the Constitution will not bar the municipality's proper exercise of the power. Now
Chief Justice Fernando puts it aptly when he declared: "Police power legislation then is not likely to
succumb to the challenge that thereby contractual rights are rendered nugatory."  48

Furthermore, We restated in Philippine American Life Ins. Co. v. Auditor General  that laws and
49

reservation of essential attributes of sovereign power are read into contracts agreed upon by the
parties. Thus —
 Not only are existing laws read into contracts in order to fix obligations as between
the parties, but the reservation of essential attributes of sovereign power is also read
into contracts as a postulate of the legal order. The policy of protecting contracts
against impairments presupposes the maintenance of a government by virtue of
which contractual relations are worthwhile – a government which retains adequate
authority to secure the peace and good order of society.

Again, We held in Liberation Steamship Co., Inc. v. Court of Industrial Relations,   through Justice
50

J.B.L. Reyes, that ... the law forms part of, and is read into, every contract, unless clearly excluded
therefrom in those cases where such exclusion is allowed." The decision in Maritime Company of
the Philippines v. Reparations Commission,   written for the Court by Justice Fernando, now Chief
51

Justice, restates the rule.

One last observation. Appellant has placed unqualified reliance on American jurisprudence and
authorities   to bolster its theory that the municipal resolution in question cannot nullify or supersede
52

the agreement of the parties embodied in the sales contract, as that, it claims, would impair the
obligation of contracts in violation of the Constitution. Such reliance is misplaced.

In the first place, the views set forth in American decisions and authorities are not per se controlling
in the Philippines, the laws of which must necessarily be construed in accordance with the intention
of its own lawmakers and such intent may be deduced from the language of each law and the
context of other local legislation related thereto.   and Burgess, et al v. Magarian, et al.,   two Of the
53 55

cases cited by plaintiff-appellant, lend support to the conclusion reached by the trial court, i.e. that
the municipal resolution supersedes/supervenes over the contractual undertaking between the
parties. Dolan v. Brown, states that "Equity will not, as a rule, enforce a restriction upon the use of
property by injunction where the property has so changed in character and environment as to make
it unfit or unprofitable for use should the restriction be enforced, but will, in such a case, leave the
complainant to whatever remedy he may have at law.   (Emphasis supplied.) Hence, the remedy of
56

injunction in Dolan vs. Brown was denied on the specific holding that "A grantor may lawfully insert
in his deed conditions or restrictions which are not against public policy and do not materially impair
the beneficial enjoyment of the estate.   Applying the principle just stated to the present controversy,
57

We can say that since it is now unprofitable, nay a hazard to the health and comfort, to use Lots
Nos. 5 and 6 for strictly residential purposes, defendants- appellees should be permitted, on the
strength of the resolution promulgated under the police power of the municipality, to use the same
for commercial purposes. In Burgess v. Magarian et al. it was, held that "restrictive covenants
running with the land are binding on all subsequent purchasers ... " However, Section 23 of the
zoning ordinance involved therein contained a proviso expressly declaring that the ordinance was
not intended "to interfere with or abrogate or annul any easements, covenants or other agreement
between parties."   In the case at bar, no such proviso is found in the subject resolution.
58

It is, therefore, clear that even if the subject building restrictions were assumed by the defendant-
appellee as vendee of Lots Nos. 5 and 6, in the corresponding deeds of sale, and later, in Transfer
Certificates of Title Nos. 101613 and 106092, the contractual obligations so assumed cannot prevail
over Resolution No. 27, of the Municipality of Mandaluyong, which has validly exercised its police
power through the said resolution. Accordingly, the building restrictions, which declare Lots Nos. 5
and 6 as residential, cannot be enforced.

IN VIEW OF THE FOREGOING, the decision appealed from, dismissing the complaint, is hereby
AFFIRMED. "without pronouncement as to costs.

SO ORDERED
 SECOND DIVISION

G.R. No. 198860               July 23, 2012

ABRAHAM RIMANDO, Petitioner,
vs.
NAGUILIAN EMISSION TESTING CENTER, INC., represented by its President, ROSEMARIE
LLARENAS and HON. COURT OF APPEALS, Respondents.

RESOLUTION

REYES, J.:

Before us is a petition for review on certiorari under Rule 45 of the Rules of Court seeking to annul
1 

and set aside Decision dated March 30, 2011 of the Court of Appeals (CA) in CA-G.R. SP NO.
2 

112152.

The Facts

The present controversy stemmed from a petition for mandamus and damages filed before Branch
67 of the Regional Trial Court (RTC) of Bauang, La Union, by Naguilian Emission Testing Center,
Inc., represented by its President, Rosemarie Llarenas (respondent) against Abraham P. Rimando
(petitioner), who, at the time material to the case, was the sitting mayor of the Municipality of
Naguilian, La Union.

The petition prayed for the issuance of a writ of mandamus to compel the petitioner to issue a
business permit in favor of the respondent.

In support of its plea, the respondent claimed that its business is being conducted on a parcel of land
which formerly belonged to the national government but later on certified by the Department of
Environment and Natural Resources (DENR) as an alienable and disposable land of the public
domain. The respondent had operated its business of emission testing on the land from 2005 to
2007. On January 18, 2008, the respondent filed an application for the renewal of its business permit
and paid the corresponding fees therefor.

The petitioner, however, refused to issue a business permit unless and until the respondent
executes a contract of lease with the Municipality of Naguilian. The respondent was amenable to
signing such contract subject to some proposed revisions, which, however, were not acceptable to
the petitioner. The parties did not reach a common ground hence, the petition for mandamus.

The Ruling of the RTC

On May 26, 2009, the RTC denied the petition for lack of merit based on the ratiocinations that: (a)
3 

the Municipality of Naguilian is the declared owner of the subject parcel of land by virtue of Tax
Declaration No. 002-01197; (b) under Section 6A.01 of the Revenue Code of the Municipality of
Naguilian, the municipality has the right to require the petitioner to sign a contract of lease because
its business operation is being conducted on a real property owned by the municipality; and (c) a
mayor’s duty to issue business permits is discretionary in nature which may not be enforced by a
mandamus writ. The decretal portion of the decision reads:

WHEREFORE, premises considered, the petition is DENIED for lack of merit.

SO ORDERED. 4

The Ruling of the CA

Unwaivering, the respondent appealed to the CA. In its Decision dated March 30, 2011, the CA held
5 

that the appeal was dismissible on the ground of mootness considering that the period for which the
business period was being sought had already lapsed. As such, any ruling on the matter would bring
no practical relief. Nonetheless, the CA proceeded to resolve the issues involved in the appeal for
academic purposes.

The CA disagreed with the RTC and found that the factual milieu of the case justifies the issuance of
a writ of mandamus. The CA reasoned that the tax declaration in the name of the municipality was
insufficient basis to require the execution of a contract of lease as a condition sine qua non for the
renewal of a business permit. The CA further observed that Sangguniang Bayan Resolution No.
2007-81, upon which the municipality anchored its imposition of rental fees, was void because it
failed to comply with the requirements of the Local Government Code and its Implementing Rules
and Regulations.

The CA held that the petitioner may not be held liable for damages since his action or inaction, for
that matter, was done in the performance of official duties that are legally protected by the
presumption of good faith. The CA likewise stressed that the civil action filed against the petitioner
had already become moot and academic upon the expiration of his term as the mayor of Naguilian,
La Union.

Despite its incessant declarations on the mootness of the case, the CA disposed of the appeal in this
wise:

WHEREFORE, the Decision dated 26 May 2009 of the Regional Trial Court, First Judicial Region,
Bauang, La Union, Branch 67, in Special Civil Action Case No. 72-BG, is hereby REVERSED and
SET ASIDE.

SO ORDERED. 6

The petitioner moved for reconsideration questioning the pronouncement of the CA that
7 

Sangguniang Bayan Resolution No. 2007-81 was void and arguing that a petition for mandamus is
not the proper vehicle to determine the issue on the ownership of the subject land. The motion was
denied in the CA Resolution dated September 30, 2011.
8 

The petitioner is now before this Court reiterating the arguments raised in his motion for
reconsideration.

Our Ruling

We agree with the CA that the petition for mandamus has already become moot and academic
owing to the expiration of the period intended to be covered by the business permit.

An issue or a case becomes moot and academic when it ceases to present a justiciable controversy
so that a determination thereof would be without practical use and value or in the nature of things,
9 

cannot be enforced. In such cases, there is no actual substantial relief to which the applicant would
10 

be entitled to and which would be negated by the dismissal of the petition. As a rule, courts decline
11 

jurisdiction over such case, or dismiss it on ground of mootness. 12

The objective of the petition for mandamus to compel the petitioner to grant a business permit in
favor of respondent corporation for the period 2008 to 2009 has already been superseded by the
passage of time and the expiration of the petitioner’s term as mayor. Verily then, the issue as to
whether or not the petitioner, in his capacity as mayor, may be compelled by a writ of mandamus to
release the respondent’s business permit ceased to present a justiciable controversy such that any
ruling thereon would serve no practical value. Should the writ be issued, the petitioner can no longer
abide thereby; also, the effectivity date of the business permit no longer subsists.

While the CA is not precluded from proceeding to resolve the otherwise moot appeal of the
respondent, we find that the decretal portion of its decision was erroneously couched.

The CA’s conclusions on the issue of ownership over the subject land and the invalidity of
Sangguniang Bayan Resolution No. 2007-81, aside from being unsubstantiated by convincing
evidence, can no longer be practically utilized in favor of the petitioner. Thus, the overriding and
decisive factor in the final disposition of the appeal was its mootness and the CA should have
dismissed the same along with the petition for mandamus that spawned it.

More importantly, a mayor cannot be compelled by mandamus to issue a business permit since the
exercise of the same is a delegated police power hence, discretionary in nature. This was the
pronouncement of this Court in Roble Arrastre, Inc. v. Hon. Villaflor where a determination was
13 

made on the nature of the power of a mayor to grant business permits under the Local Government
Code, viz:
14 

Central to the resolution of the case at bar is a reading of Section 444(b)(3)(iv) of the Local
Government Code of 1991, which provides, thus:

SEC. 444. The Chief Executive: Powers, Duties, Functions and Compensation.

(b) For efficient, effective and economical governance the purpose of which is the general
welfare of the municipality and its inhabitants pursuant to Section 16 of this Code, the
municipal mayor shall:

xxxx

3) Initiate and maximize the generation of resources and revenues, and apply the same to
the implementation of development plans, program objectives and priorities as provided for
under Section 18 of this Code, particularly those resources and revenues programmed for
agro-industrial development and country-wide growth and progress, and relative thereto,
shall:

xxxx

(iv) 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.

As Section 444(b)(3)(iv) so states, the power of the municipal mayor to issue licenses is pursuant to
Section 16 of the Local Government Code of 1991, which declares:

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.

Section 16, known as the general welfare clause, encapsulates the delegated police power to local
governments.  Local government units exercise police power through their respective legislative
1âwphi1

bodies. Evidently, the Local Government Code of 1991 is unequivocal that the municipal mayor has
the power 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. x x x

xxxx

Section 444(b)(3)(iv) of the Local Government Code of 1991, whereby the power of the respondent
mayor to issue license and permits is circumscribed, is a manifestation of the delegated police power
of a municipal corporation. Necessarily, the exercise thereof cannot be deemed ministerial. As to the
question of whether the power is validly exercised, the matter is within the province of a writ of
certiorari, but certainly, not of mandamus. (Citations omitted)
15 

Indeed, as correctly ruled by the RTC, the petition for mandamus filed by the respondent is
incompetent to compel the exercise of a mayor’s discretionary duty to issue business permits.

WHEREFORE, premises considered, the Decision dated March 30, 2011 of the Court of Appeals in
CA-G.R. SP No. 112152 is hereby SET ASIDE. The Decision dated May 26, 2009 of the Regional
Trial Court of Bauang, La Union is REINSTATED.

SO ORDERED

G.R. No. 141010             February 7, 2007

UNITED BF HOMEOWNERS’ ASSOCIATIONS, INC., ROMEO T. VILLAMEJOR, RAUL S.

LANUEVO, ROBERTO ARNALDO, FLORENTINO CONCEPCION, BF NORTHWEST
HOMEOWNERS’ ASSOCIATION, INC., KK HOMEOWNERS’ ASSOCIATION, INC., and BF
(CRAB) HOMEOWNERS’ ASSOCIATION, INC., Petitioners,
vs.
THE (MUNICIPAL) CITY MAYOR, THE (MUNICIPAL) CITY PLANNING AND DEVELOPMENT
COORDINATING OFFICER OR ZONING ADMINISTRATOR, THE (MUNICIPAL) CITY ENGINEER
AND/OR BUILDING OFFICIAL, THE CHIEF OF THE PERMITS AND LICENSES DIVISION, THE
SANGGUNIANG (BAYAN) PANGLUNGSOD, and BARANGAY BF HOMES, ALL OF
PARAÑAQUE CITY, METRO MANILA, Respondents,
EL GRANDE AGUIRRE COMMERCE AND TRADE ASSOCIATION (EL ACTO), Respondent-
Intervenor.

DECISION

CARPIO, J.:

The Case
This is a petition for review1 of the 28 June 1999 Decision2 and the 16 November 1999 Resolution 3 of
the Court of Appeals in CA-G.R. SP No. 46624. The Court of Appeals held that Municipal Ordinance
No. 97-08 is a valid exercise of police power by the Municipality of Parañaque. 4

The Facts

BF Homes Parañaque Subdivision (BF Homes Parañaque), with a land area straddling the cities of
Parañaque, Las Piñas, and Muntinlupa, is the largest subdivision in the country.

On 11 November 1997, the Municipal Council of Parañaque enacted Municipal Ordinance No. 97-
085 entitled, "An Ordinance Prescribing the Comprehensive Land Use Plan & Zoning of the
Municipality of Parañaque Pursuant to the Local Government Code of 1991 and Other Pertinent
Laws." Sections 11.5 and 11.6 of Municipal Ordinance No. 97-08, reclassifying El Grande and
Aguirre Avenues in BF Homes Parañaque from residential to commercial areas, read:

11.5 C-1 LOW INTENSITY COMMERCIAL ZONES

xxxx

BARANGAY BF HOMES

Lot deep both side[s] along Aguirre Avenue from Governor A. Santos Street eastward to
Gng. Elsie Gatches Street

Lot deep both side[s] along El Grande Avenue from Lopez Avenue gate southward to corner
Aguirre Avenue

xxxx

11.6 C-2 MAJOR COMMERCIAL ZONES

xxxx

BARANGAY BF HOMES

Lot deep both side[s] along Aguirre Avenue from Dallas to El Grande Avenue

Lot deep both side[s] along Aguirre Avenue from El Grande Avenue to Gov. A. Santos Street

BF Parañaque Commercial Plaza

Area bounded on the

North - Pres. Quezon Street

South - A. Aguirre Avenue

East - President’s Avenue

West - MMP, Creek along BF Homeowner’s Association clubhouse

 Lot deep east side along President’s Avenue from Mac Donald southward to M. Rufino
Street

Area bounded on the

North - A. Aguirre Avenue

South - A. Soriano Sr. & M. Rufino Street

East - President’s Avenue

West - Gng. Elsie Ga[t]ches Street

x x x x6

On 27 January 1998, the United BF Homeowners’ Associations, Inc. (UBFHAI), 7 several

homeowners’ associations, and residents of BF Homes Parañaque (collectively petitioners) filed with
the Court of Appeals a petition for prohibition with an application for temporary restraining order and
preliminary injunction. Petitioners questioned the constitutionality of Sections 11.5, 11.6,
15,8 17,9 and 19.610 of Municipal Ordinance No. 97-08.

Petitioners alleged that the reclassification of certain portions of BF Homes Parañaque from
residential to commercial zone is unconstitutional because it amounts to impairment of the contracts
between the developer of BF Homes Parañaque and the lot buyers. Petitioners cited the annotation
on the lot buyers’ titles which provides that "the property shall be used for residential purposes only
and for no other purpose."

On the other hand, public respondents alleged that the passage of Municipal Ordinance No. 97-08 is
a valid exercise of police power by the Municipal Council of Parañaque and that such ordinance can
nullify or supersede the contractual obligations entered into by the petitioners and the developer.

Meanwhile, El Grande Aguirre Commerce and Trade Organization (EL ACTO), a non-stock, non-
profit corporation, intervened as respondent. EL ACTO claimed that its members are lot owners,
residents, and operators of commercial establishments along El Grande and Aguirre Avenues in BF
Homes Parañaque, who will be affected if Municipal Ordinance No. 97-08 is declared
unconstitutional. EL ACTO asserted that Municipal Ordinance No. 97-08 is a valid exercise of police
power and that petitioners are guilty of estoppel since petitioners endorsed the opening of many of
these commercial establishments in BF Homes Parañaque. EL ACTO further alleged that the instant
petition should have been initially filed with the Regional Trial Court in accordance with the principle
of hierarchy of courts. 1awphi1.net

On 28 June 1999, the Court of Appeals dismissed the petition. Petitioners moved for
reconsideration, which the Court of Appeals denied.

Hence, this petition.

The Ruling of the Court of Appeals

Citing the General Welfare Clause11 of Republic Act No. 7160 (RA 7160), the Court of Appeals held
that the enactment of Municipal Ordinance No. 97-08 which, among others, reclassified El Grande
and Aguirre Avenues in BF Homes Parañaque as commercial zones, was a valid exercise of police
power by the Municipality of Parañaque.

The Court of Appeals took judicial notice of the fact that El Grande and Aguirre Avenues are main
streets of BF Homes Parañaque which have long been commercialized, thus:

The declaration of El Grande and Aguirre Avenues as commercial zones through Municipal
Ordinance No. 97-08 is an exercise of police power.

Obviously, because of the rapid and tremendous increase in population, the needs of the
homeowners in the BF Parañaque Subdivision grew. The commercial zones in the area proved
inadequate to service the needs of its residents. There was therefore a need to open more
commercial districts. In fact, records show that several homeowners along El Grande and Aguirre
Avenues converted their residences into business establishments. El Acto’s members are among
them.

Aside from the increasing number of commercial establishments therein, judicial notice may be
taken of the fact that El Grande and Aguirre Avenues are main thoroughfares of BF Homes
Parañaque which have long been commercialized. The local government therefore responded to
these changes in the community by enacting Ordinance No. 97-08 x x x. 12

The Issues

Petitioners raise the following issues:

1. Whether R.A. 7160, the Local Government Code of 1991 has repealed PD 957, the
Subdivision and Condominium Buyer’s Protective Decree;

2. Whether the power of local government units to enact comprehensive zoning ordinances
has legal limitations;

3. Whether Municipal Ordinance No. 97-08 is a legitimate exercise of police power;

4. Whether Municipal Ordinance No. 97-08 is constitutional considering that it impairs a

contractual obligation annotated in homeowners’ titles and violates the doctrine of separation
of powers;

5. Whether Municipal Ordinance No. 97-08 is enforceable pending review by the MMDA, the
Metro Manila Mayor’s Council and the HLURB.13

The resolution of these issues turns on the validity of Municipal Ordinance No. 97-08.

The Ruling of the Court

The petition is without merit.

Power to Enact Zoning Ordinances

The Municipal Council of Parañaque enacted Municipal Ordinance No. 97-08 pursuant to the
provisions of RA 7160 and Executive Order No. 72. 14
Under Section 447 of RA 7160, the Sangguniang Bayan or the Municipal Council, as the legislative
body of the municipality, has the power to enact ordinances for the general welfare of the
municipality and its inhabitants.

Among the functions of the Sangguniang Bayan enumerated under Section 447 of RA 7160 are:

(2) Generate and maximize the use of resources and revenues for the development plans, program
objectives and priorities of the municipality as provided for under Section 18 of this Code with
particular attention to agro-industrial development and countryside growth and progress, and relative
thereto, shall:

xxxx

(vii) Adopt a comprehensive land use plan for the municipality: Provided, That the
formulation, adoption, or modification of said plan shall be in coordination with the approved
provincial comprehensive land use plan;

(viii) Reclassify land within the jurisdiction of the municipality subject to the pertinent
provision of this Code;

(ix) Enact integrated zoning ordinances in consonance with the approved

comprehensive land use plan, subject to existing laws, rules and regulations; establish
fire limits or zones, particularly in populous centers; and regulate the construction, repair or
modification of buildings within said fire limits or zones in accordance with the provisions of
the Fire Code; (Emphasis supplied)

On the other hand, Executive Order No. 72 provides:

SECTION 1. Plan formulation or updating. – (a) Cities and municipalities shall continue to
formulate or update their respective comprehensive land use plans, in conformity with the
land use planning and zoning standards and guidelines prescribed by the HLURB pursuant
to national policies.

As a policy recommending body of the LGU, the city or municipal development council (CDC/MDC)
shall initiate the formulation or updating of its land use plan, in consultation with the concerned
sectors in the community. For this purpose, the CDC/MDC may seek the assistance of any local
official or field officer of NGA’s operation in the LGU.

The city or municipal planning and development coordinator (CPDC/MPDC) and/or the city or
municipal agriculturist, if there is any, shall provide the technical support services and such other
assistance as may be required by the CDC/MDC to effectively carry out this function.

The comprehensive land use plan prepared by the CDC/MDC shall be submitted to the
sangguniang panglungsod or sangguniang bayan, as the case may be, for enactment into a
zoning ordinance. Such ordinance shall be enacted and approved in accordance with Articles 107
and 108 of the Implementing Rules and Regulations (IRR) of the LGC.

(b) The comprehensive land use plans of component cities and municipalities shall be formulated,
adopted, or modified in accordance with the approved provincial comprehensive land use plans.
(c) Cities and municipalities of metropolitan Manila shall continue to formulate or update their
respective comprehensive land use plans, in accordance with the land use planning and zoning
standards and guidelines prescribed by the HLURB pursuant to EO 392, S. of 1990, and other
pertinent national policies.

x x x x (Emphasis supplied)

Under Section 3(m), Rule 131 of the Rules of Court, there is a presumption that official duty has
been regularly performed. Thus, in the absence of evidence to the contrary, there is a presumption
that public officers performed their official duties regularly and legally and in compliance with
applicable laws, in good faith, and in the exercise of sound judgment. 15

We find no sufficient evidence disputing the regularity of the enactment of Municipal Ordinance No.
97-08. Before the Municipal Council of Parañaque passed Municipal Ordinance No. 97-08, 16 it has
been the subject of barangay consultations and committee hearings in accordance with Executive
Order No. 72.

Reclassification of El Grande and Aguirre Avenues

Contrary to petitioners’ allegations, we find Municipal Ordinance No. 97-08 reasonable and not
discriminating or oppressive with respect to BF Homes Parañaque. As held by the Court of Appeals,
the increasing number of homeowners in BF Homes Parañaque necessitated the addition of
commercial areas in the subdivision to service the needs of the homeowners. In fact, several
homeowners along El Grande and Aguirre Avenues already converted their residences into business
establishments. Furthermore, as found by the Court of Appeals, El Grande and Aguirre Avenues are
main thoroughfares in BF Homes Parañaque which have long been commercialized.

Even petitioner UBFHAI, the recognized umbrella organization of all homeowners’ associations in
BF Homes Parañaque, acknowledged the need for additional commercial area. Records reveal that
as early as 30 July 1989, UBFHAI recommended for approval an "Amended Integrated Zoning
Policies and Guidelines for BF Homes Parañaque."17 UBFHAI proposed another commercial zone in
BF Homes Parañaque to accommodate the growing needs of the residents, thus:

Subject to the approval of BF Homes, Inc., the Local Zoning Official/Planning Officer of Parañaque
and the Metro Manila Commission and in recognition of the fact that the subdivision has
tremendously grown in size and population since 1983 when the above-mentioned guidelines
of the MMC [Ordinance 81-01] were promulgated, such that one commercial zone for the
entire subdivision is now inadequate vis-a-vis the needs of the residents, the UBFHAI is
proposing another commercial zone in Phase III of the Subdivision, in the vicinity of the
Parish of the Presentation of the Child Jesus as follows:

One lot deep along Aguirre Avenue from Gov. Santos St., to the end of Aguirre Avenue and
two lots deep along El Grande from where it intersects Aguirre Avenue.

Pending approval of the aforesaid proposal, commercial buildings constructed and existing
in the aforesaid area will be given temporary-use permits good for five (5) years from
December 31, 1986 or until December 31, 1991, after which, the same must revert to residential
status, unless, in the meantime the proposal is approved, provided all such buildings must comply
with the set-back and parking provision of the Metro Manila Commission Ordinance 81-01; I.M. 09-
83.
 xxxx

The term for temporary use permits of the designated commercial area shall be considered
extended for 8 years from December 31, 1991 to December 31, 1998; without prejudice to the
official conversion of the area under existing MMA/LGC guidelines to commercial.18 (Emphasis
supplied)

Thus, UBFHAI’s proposed new commercial area, encompassing El Grande and Aguirre Avenues, is
substantially the same area, which Municipal Ordinance No. 97-08 later reclassified as a commercial
zone.

Furthermore, in the subsequent years, UBFHAI and its member homeowners’ associations endorsed
the issuance of municipal and barangay permits for commercial establishments along El Grande and
Aguirre Avenues. Contrary to petitioners’ allegations, the commercial establishments endorsed by
UBFHAI were not mere convenience stores, which Metro Manila Commission Ordinance No. 81-
0119 and Municipal Ordinance No. 97-08 allow in residential areas. Among the commercial
establishments which UBFHAI endorsed were a trading business,20 electronics repair shop,21 mini-
grocery store,22 beauty salon,23 school,24 dress shop,25 and consultancy or management services
business.26

Clearly, the reclassification of El Grande and Aguirre Avenues in BF Homes Parañaque as

commercial area was reasonable and justified under the circumstances.

Non-Impairment of Contract

Petitioners invoke Presidential Decree No. 957 (PD 957), 27 otherwise known as the Subdivision and
Condominium Buyers’ Protective Decree. Petitioners maintain that PD 957 is intended primarily to
protect the buyers and to ensure that subdivision developers keep their promises and
representations. Petitioners allege that one of the promises of the developer of BF Homes
Parañaque is that the property shall be used for residential purposes only. Petitioners assert that the
reclassification of certain portions of BF Homes Parañaque from residential to commercial zone is
unconstitutional because it impairs the contracts between the developer of BF Homes Parañaque
and the lot buyers.

The Court has upheld in several cases the superiority of police power over the non-impairment
clause.28 The constitutional guaranty of non-impairment of contracts is limited by the exercise of the
police power of the State, in the interest of public health, safety, morals and general welfare. 29

In Ortigas & Co., Limited Partnership v. Feati Bank and Trust Co.,30 the Court held that contractual
restrictions on the use of property could not prevail over the reasonable exercise of police power
through zoning regulations. The Court held:

With regard to the contention that said resolution cannot nullify the contractual obligations assumed
by the defendant-appellee–referring to the restrictions incorporated in the deeds of sale and later in
the corresponding Transfer Certificates of Title issued to defendant-appellee–it should be stressed,
that while non-impairment of contracts is constitutionally guaranteed, the rule is not absolute,
since it has to be reconciled with the legitimate exercise of police power, i.e., "the power to
prescribe regulations to promote the health, morals, peace, education, good order or safety
and general welfare of the people." Invariably described as "the most essential, insistent, and
illimitable of powers" and "in a sense, the greatest and most powerful attribute of
government," the exercise of the power may be judicially inquired into and corrected only if it
is capricious, whimsical, unjust or unreasonable, there having been a denial of due process
or a violation of any other applicable constitutional guarantee. As this Court held through
Justice Jose P. Bengzon in Philippine Long Distance Company v. City of Davao, et al., police power
"is elastic and must be responsive to various social conditions; it is not confined within narrow
circumscriptions of precedents resting on past conditions; it must follow the legal progress of a
democratic way of life." We were even more emphatic in Vda. De Genuino v. The Court of Agrarian
Relations, et al., when We declared: "We do not see why the public welfare when clashing with
the individual right to property should not be made to prevail through the state’s exercise of
its police power."

Resolution No. 27. s-1960 declaring the western part of Highway 54, now E. de los Santos Avenue
(EDSA, for short) from Shaw Boulevard to the Pasig River as an industrial and commercial zone,
was obviously passed by the Municipal Council of Mandaluyong, Rizal in the exercise of police
power to safeguard or promote the health, safety, peace, good order and general welfare of the
people in the locality. Judicial notice may be taken of the conditions prevailing in the area, especially
where Lots Nos. 5 and 6 are located. The lots themselves not only front the highway; industrial and
commercial complexes have flourished about the place. EDSA, a main traffic artery which runs
through several cities and municipalities in the Metro Manila area, supports an endless stream of
traffic and the resulting activity, noise and pollution are hardly conducive to the health, safety or
welfare of the residents in its route. Having been expressly granted the power to adopt zoning and
subdivision ordinances or regulations, the municipality of Mandaluyong, through its Municipal
Council, was reasonably, if not perfectly, justified under the circumstances, in passing the subject
resolution.31 (Emphasis supplied)

Likewise, in Sangalang v. Intermediate Appellate Court,32 the Court upheld Metro Manila

Commission Ordinance No. 81-01, which reclassified Jupiter Street in Makati into a high-density
commercial zone, as a legitimate exercise of police power. The Court held that the power of the
Metro Manila Commission and the Makati Municipal Council to enact zoning ordinances for the
general welfare prevails over the deed restrictions on the lot owners in Bel-Air Village which
restricted the use of the lots for residential purposes only. The Court held:

It is not that we are saying that restrictive easements, especially the easements herein in question,
are invalid or ineffective. As far as the Bel-Air subdivision itself is concerned, certainly, they are valid
and enforceable. But they are, like all contracts, subject to the overriding demands, needs, and
interests of the greater number as the State may determine in the legitimate exercise of police
power. Our jurisdiction guarantees sanctity of contract and is said to be the "law between the
contracting parties," but while it is so, it cannot contravene "law, morals, good customs,
public order, or public policy." Above all, it cannot be raised as a deterrent to police power,
designed precisely to promote health, safety, peace, and enhance the common good, at the
expense of contractual rights, whenever necessary. x x x33 (Emphasis supplied)

Similarly, in this case, Municipal Ordinance No. 97-08 is a legitimate exercise of police power and
the reclassification of El Grande and Aguirre Avenues in BF Homes Parañaque is not arbitrary or
unreasonable.

WHEREFORE, we AFFIRM the Decision dated 28 June 1999 and the Resolution dated 16

November 1999 of the Court of Appeals in CA-G.R. SP No. 46624.

SO ORDERED

Social Justice Society (SJS) Officers, Namely, Samson S. Alcantara, and Vladimir Alarique T. Cabigao V. Alfredo S. Lim, in his
capacity as mayor of the City of Manila, G.R. No. 187836, November 25, 2014
♦ Decision, Perez [J]
♦ Concurring and Dissenting Opinion, Leonen [J]

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. 187836               November 25, 2014

SOCIAL JUSTICE SOCIETY (SJS) OFFICERS, NAMELY, SAMSON S. ALCANTARA, and

VLADIMIR ALARIQUE T. CABIGAO, Petitioners,
vs.
ALFREDO S. LIM, in his capacity as mayor of the City of Manila, Respondent.

x-----------------------x

G.R. No. 187916

JOSE L. ATIENZA, JR., BIENVINIDO M. ABANTE, MA. LOURDES M. ISIP-GARCIA, RAFAEL P.

BORROMEO JOCELYN DAWIS-ASUNCION, minors MARIAN REGINA B. TARAN, MACAILA
RICCI B. TARAN, RICHARD KENNETH B. TARAN, represented and joined by their parents
RICHARD AND MARITES TARAN, minors CZARINA ALYSANDRA C. RAMOS, CEZARAH
ADRIANNA C. RAMOS, and CRISTEN AIDAN C. RAMOS represented and joined by their
mother DONNA C. RAMOS, minors JAZMIN SYLLITA T. VILA AND ANTONIO T. CRUZ IV,
represented and joined by their mother MAUREEN C. TOLENTINO, Petitioners,
vs.
MAYOR ALFREDO S. LIM, VICE MAYOR FRANCISCO DOMAGOSO, COUNCILORS ARLENE
W. KOA, MOISES T. LIM, JESUS FAJARDO LOUISITO N. CHUA, VICTORIANO A. MELENDEZ,
JOHN MARVIN C. NIETO, ROLANDO M. VALERIANO, RAYMUNDO R. YUPANGCO, EDWARD
VP MACEDA, RODERICK D. V ALBUENA, JOSEFINA M. SISCAR, SALVADOR PHILLIP H.
LACUNA, LUCIANO M. VELOSO, CARLO V. LOPEZ, ERNESTO F. RIVERA,  DANILO VICTOR 1

H. LACUNA, JR., ERNESTO G. ISIP, HONEY H. LACUNA-PANGAN, ERNESTO M. DIONISO, JR.

and ERICK IAN O. NIEVA, Respondents.

x-----------------------x

CHEVRON PHILIPPINES INC., PETRON CORPORATION AND PILIPINAS SHELL

PETROLEUM CORPORATION, Intervenors.

DECISION

PEREZ, J.:

Challenged in these consolidated petitions  is the validity of Ordinance No. 8187  entitled "AN
2 3

ORDINANCE AMENDING ORDINANCE NO. 8119, OTHERWISE KNOWN AS ‘THE MANILA

COMPREHENSIVE LAND USE PLAN AND ZONING ORDINANCE OF 2006,’ BY CREATING A
MEDIUM INDUSTRIAL ZONE (1-2) AND HEAVY INDUSTRIAL ZONE (1-3), AND PROVIDING FOR
ITS ENFORCEMENT" enacted by the Sangguniang Panlungsod of Manila (Sangguniang
Panlungsod) on 14 May 2009.

The creation of a medium industrial zone (1-2) and heavy industrial zone (1-3) effectively lifted the
prohibition against owners and operators of businesses, including herein intervenors Chevron
Philippines, Inc. (Chevron), Pilipinas Shell Petroleum Corporation (Shell), and Petron Corporation
(Petron), collectively referred to as the oil companies, from operating in the designated commercial
zone – an industrial zone prior to the enactment of Ordinance No. 8027  entitled "AN ORDINANCE
4

RECLASSIFYING THE LAND USE OF THAT PORTION OF LAND BOUNDED BY THE

PASIGRIVER IN THE NORTH, PNR RAILROAD TRACK IN THE EAST, BEATA ST. IN THE
SOUTH, PALUMPONG ST. IN THE SOUTHWEST AND ESTERO DE PANDACAN IN THE WEST,
PNR RAILROAD IN THE NORTHWEST AREA, ESTERO DE PANDACAN IN THE NORTHEAST,
PASIG RIVER IN THE SOUTHEAST AND DR. M. L. CARREON IN THE SOUTHWEST, THE AREA
OF PUNTA, STA.ANA BOUNDED BY THE PASIG RIVER, MARCELINO OBRERO ST., MAYO 28
ST. AND THE F. MANALO STREET FROM INDUSTRIAL II TO COMMERCIAL I," and Ordinance
No. 8119  entitled "AN ORDINANCE ADOPTING THE MANILA COMPREHENSIVE LAND USE
5

PLAN AND ZONING REGULATIONS OF 2006 AND PROVIDING FOR THE ADMINISTRATION,
ENFORCEMENT AND AMENDMENT THERETO."

The Parties

Petitioners allege the parties’ respective capacity to sue and be sued, viz:

Petitioners Residence Suing capacity aside from being

in Manila residents of Manila other personal
circumstances

G.R. No. 187836

SJS Officer Samson S. Alcantara Not mentioned in Manila taxpayer;

(Alcantara) the petition; One of the petitioners in SJS v.
holding office in Atienza (G.R. No. 156052);*
Ermita, Manila Pesident of ABAKADA GURO
PARTY LIST with members who
are residents of the City of Manila

SJS Officer Vladimir Alarique T. Pandacan One of the petitioners in SJS v.

Cabigao (Cabigao) Atienza (G.R. No. 156052)

* The allegation is inaccurate. SJS Officer Alcantara is actually one of the counsels for petitioner SJS
in G.R. No. 156052. The petitioners in that case are the SJS itself, Cabigao and Bonifacio S.
Tumbokon (Tumbokon).

G.R. No. 187916

Former Mayor Jose L. Atienza, Jr. San Andres Former Mayor of Manila;
(Mayor Atienza) Secretary of Department of
Environment and Natural
Resources (DENR)
 Bienvinido M. Abante Sta. Ana Citizen and taxpayer;
member of the House of
Representatives

Ma. Lourdes M. Isip-Garcia San Miguel Incumbent City Councilor of the

City of Manila

Rafael P. Borromeo Paco Incumbent City Councilor of the

City of Manila

Jocelyn Dawis-Asuncion Sta. Mesa Incumbent City Councilor of the

City of Manila

Minors Marian Regina B. Taran, Paco Citizens, real estate owners and
Macalia Ricci B. Taran, Richard taxpayers
Kenneth B. Taran, represented and
joined by their parents Richard and
Marites Taran

Minors Czarina Alysandra C. Ramos, Tondo Citizens, real estate owners and
Cezarah Adrianna C. Ramos, and taxpayers
Cristen Aidan C. Ramos represented
and joined by
their mother Donna c. Ramos

Minors Jasmin Syllita T. Vila and Sta. Ana Citizens, real estate owners and
Antonio T. Cruz IV, represented and taxpayers
joined by their mother Maureen C.
Tolentino

Respondents Sued in their capacity as

G.R. Nos. 187836 and 187916

Former Mayor Alfredo S. Lim (Mayor Lim) Incumbent Mayor of Manila at

the time of the filing of the
present petitions

Respondents Sued in their capacity as

G.R. No. 187916

Vice-Mayor Francisco Domagoso (Vice-Mayor Vice-Mayor and Presiding Officer

Domagoso) of the City Council of Manila
 Arlene Woo Koa Principal author of City
Ordinance No. 8187

Moises T. Lim, Jesus Fajardo, Louisito N. Chua, Personal and official capacities as
Victoriano A. Melendez, John Marvin Nieto, Rolando M. councilors who voted and approved
Valeriano, Raymondo R. Yupangco, Edward VP Maceda, City Ordinance No. 8187
Roderick D. Valbuena, Josefina M. Siscar, Phillip H.
Lacuna, Luciano M. Veloso, Carlo V. Lopez, Ernesto F.
Rivera,  Danilo Victor H. Lacuna, Jr., Ernesto G. Isip,
6

Honey H. Lacuna-Pangan, Ernesto M. Dionisio, Jr., Erick

Ian O. Nieva

The following intervenors, all of which are corporations organized under Philippine laws, intervened: 7

Intervenors Nature of Business

Chevron Philippines, importing, distributing and marketing of petroleum

Inc. (CHEVRON) products in the Philippines since 1922

Pilipinas Shell Petroleum Corporation manufacturing, refining, importing, distributing and

(SHELL) marketing of petroleum products in the Philippines

Petron Corporation (PETRON) manufacturing, refining, importing, distributing and

marketing of petroleum products in the Philippines

They claim that their rights with respect to the oil depots in Pandacan would be directly affected by
the outcome of these cases.

The Antecedents

These petitions are a sequel to the case of Social Justice Society v. Mayor Atienza, Jr.  (hereinafter
8

referred to asG.R. No. 156052), where the Court found: (1) that the ordinance subject thereof –
Ordinance No. 8027 – was enacted "to safeguard the rights to life, security and safety of the
inhabitants of Manila;"  (2) that it had passed the tests of a valid ordinance; and (3) that it is not
9

superseded by Ordinance No. 8119.  Declaring that it is constitutional and valid,  the Court
10 11

accordingly ordered its immediate enforcement with a specific directive on the relocation and
transfer of the Pandacan oil terminals. 12

Highlighting that the Court has soruled that the Pandacan oil depots should leave, herein petitioners
now seek the nullification of Ordinance No. 8187, which contains provisions contrary to those
embodied in Ordinance No. 8027. Allegations of violation of the right to health and the right to a
healthful and balanced environment are also included.

For a better perspective of the facts of these cases, we again trace the history of the Pandacan oil
terminals, aswell as the intervening events prior to the reclassification of the land use from Industrial
II to Commercial I under Ordinance No. 8027 until the creation of Medium Industrial Zone and Heavy
Industrial Zone pursuant to Ordinance No. 8187.
History of the Pandacan
Oil Terminals

We quote the following from the Resolution of the Court in G.R. No. 156052:

Pandacan (one of the districts of the City of Manila) is situated along the banks of the Pasig [R]iver.
Atthe turn of the twentieth century, Pandacan was unofficially designated as the industrial center of
Manila. The area, then largely uninhabited, was ideal for various emerging industries as the nearby
river facilitated the transportation of goods and products. In the 1920s, it was classifiedas an
industrial zone. Among its early industrial settlers werethe oil companies. x x x On December 8,
1941, the Second World War reached the shores of the Philippine Islands. x x x [I]n their zealous
attempt to fend off the Japanese Imperial Army, the United States Army took control of the
Pandacan Terminals and hastily made plans to destroy the storage facilities to deprive the
advancing Japanese Army of a valuable logistics weapon. The U.S. Army burned unused petroleum,
causing a frightening conflagration. Historian Nick Joaquin recounted the events as follows:

After the USAFFE evacuated the City late in December 1941, all army fuel storage dumps were set
on fire. The flames spread, enveloping the City in smoke, setting even the rivers ablaze,
endangering bridges and all riverside buildings. … For one week longer, the "open city" blazed—a
cloud of smoke by day, a pillar of fire by night.

The fire consequently destroyed the Pandacan Terminals and rendered its network of depots and
service stations inoperative.

After the war, the oil depots were reconstructed. Pandacan changed as Manila rebuilt itself. The
three major oil companies resumed the operation of their depots. But the district was no longer a
sparsely populated industrial zone; it had evolved into a bustling, hodgepodge community. Today,
Pandacan has become a densely populated area inhabited by about 84,000 people, majority of
whom are urban poor who call it home. Aside from numerous industrial installations, there are also
small businesses, churches, restaurants, schools, daycare centers and residences situated there.
Malacañang Palace, the official residence of the President of the Philippines and the seat of
governmental power, is just two kilometers away. There is a private school near the Petron depot.
Along the walls of the Shell facility are shanties of informal settlers. More than 15,000 students are
enrolled in elementary and high schools situated near these facilities. A university with a student
population of about 25,000 is located directly across the depot on the banks of the Pasig [R]iver.

The 36-hectare Pandacan Terminals house the oil companies’ distribution terminals and depot
facilities.  The refineries of Chevron and Shell in Tabangao and Bauan, both in Batangas,
1âwphi1

respectively, are connected to the Pandacan Terminals through a 114-kilometer underground

pipeline system. Petron’s refinery in Limay, Bataan, on the other hand, also services the depot. The
terminals store fuel and other petroleum products and supply 95% of the fuel requirements of Metro
Manila, 50% of Luzon’s consumption and 35% nationwide. Fuel can also be transported through
barges along the Pasig [R]iver ortank trucks via the South Luzon Expressway.  (Citations omitted)
13

Memorandum of Agreement (MOA)

dated 12 October 2001 between the oil companies
and the Department of Energy (DOE)

On 12 October 2001, the oil companies and the DOE entered into a MOA  "in light of recent
14

international developments involving acts of terrorism on civilian and government

landmarks,"  "potential new security risks relating to the Pandacan oil terminals and the impact on
15

the surrounding community which may be affected,"  and "to address the perceived risks posed by
16
the proximity of communities, businesses and offices to the Pandacan oil terminals, consistent with
the principle of sustainable development."  The stakeholders acknowledged that "there is a need for
17

a comprehensive study to address the economic, social, environmental and security concerns with
the end in view of formulating a Master Plan to address and minimize the potential risks and hazards
posed by the proximity of communities, businesses and offices to the Pandacan oil terminals without
adversely affecting the security and reliability of supply and distribution of petroleum products to
Metro Manila and the rest of Luzon, and the interests of consumers and users of such petroleum
products in those areas."18

The enactment of Ordinance No. 8027

against the continued stay of the oil depots

The MOA, however, was short-lived.

On 20 November 2001, during the incumbency of former Mayor Jose L. Atienza, Jr. (Mayor Atienza)
– nowone of the petitioners in G.R. No. 187916 – the Sangguniang Panlungsod enacted Ordinance
No. 8027  reclassifying the use of the land in Pandacan, Sta. Ana, and its adjoining areas from
19

Industrial II to Commercial I.

The owners and operators of the businesses thus affected by the reclassification were given six
months from the date of effectivity of the Ordinance within which to stop the operation of their
businesses.

Nevertheless, the oil companies weregranted an extension of until 30 April 2003 within which to
comply with the Ordinance pursuant to the following:

(1) Memorandum of Understanding (MOU)  dated 26 June 2002 between the City of Manila
20

and the Department of Energy (DOE), on the one hand, and the oil companies, on the other,
where the parties agreed that "the scaling down of the Pandacan Terminals [was] the most
viable and practicable option"  and committed to adopt specific measures  consistent with
21 22

the said objective;

(2) Resolution No. 97 dated 25 July 2002  of the Sangguniang Panlungsod, which ratified
23

the 26 June 2002 MOU but limited the extension of the period within which to comply to six
months from 25 July 2002; and

(3) Resolution No. 13 dated 30 January 2003  of the Sanguniang Panlungsod, which
24

extended the validity of Resolution No. 97 to 30 April 2003, authorized then Mayor Atienza to
issue special business permits to the oil companies, and called for a reassessment of the
ordinance.

Social Justice Society v. Atienza (G.R. No. 156052):

The filing of an action for mandamus
before the Supreme Court
to enforce Ordinance No. 8027

In the interim, an original action for mandamus entitled Social Justice Society v. Atienza, Jr.
docketed as G.R. No. 156052  was filed on 4 December 2002 by Tumbokon and herein petitioners
25

SJS and Cabigao against then Mayor Atienza. The petitioners sought to compel former Mayor
Atienza to enforce Ordinance No. 8027 and cause the immediate removal of the terminals of the oil
companies. 26
Issuance by the Regional Trial Court (RTC)
of writs of preliminary prohibitory injunction
and preliminary mandatory injunction,
and status quo order in favor of the oil companies

Unknown to the Court, during the pendency of G.R. No. 156052, and before the expiration of the
validity ofResolution No. 13, the oil companies filed the following actions before the Regional Trial
Court of Manila: (1) an action for the annulment of Ordinance No. 8027 with application for writs of
preliminary prohibitory injunction and preliminary mandatory injunction – by Chevron; (2) a petition
for prohibition and mandamus also for the annulment of the Ordinance with application for writs of
preliminary prohibitory injunction and preliminary mandatory injunction – by Shell; and (3) a petition
assailing the validity of the Ordinance with prayer for the issuance of a writ of preliminary injunction
and/or temporary restraining order (TRO) – by Petron. 27

Writs of preliminary prohibitory injunction and preliminary mandatory injunction were issued in favor
of Chevron and Shell on 19 May 2003. Petron, on the other hand, obtained a status quo order on 4
August 2004. 28

The Enactment of Ordinance No. 8119 defining the Manila land use plan and zoning regulations

On 16 June 2006, then Mayor Atienza approved Ordinance No. 8119 entitled "An Ordinance
Adopting the Manila Comprehensive Land Use Plan and Zoning Regulations of 2006 and Providing
for the Administration, Enforcement and Amendment thereto." 29

Pertinent provisions relative to these cases are the following:

(a) Article IV, Sec. 7  enumerating the existing zones or districts in the City of Manila;
30

(b) Article V, Sec. 23  designating the Pandacan oil depot area as a "Planned Unit
31

Development/Overlay Zone" (O-PUD); and

(c) the repealing clause, which reads:

SEC. 84. Repealing Clause. – All ordinances, rules, regulations in conflict with the provisions of this
Ordinance are hereby repealed; PROVIDED, That the rights that are vested upon the effectivity of
this Ordinance shall not be impaired. 32

7 March 2007 Decision in G.R. No. 156052;

The mayor has the mandatory legal duty to enforce
Ordinance No. 8027 and order the removal of the Pandacan terminals

On 7 March 2007, the Court granted the petition for mandamus, and directed then respondent Mayor
Atienza to immediately enforce Ordinance No. 8027. 33

Confined to the resolution of the following issues raised by the petitioners, to wit:

1. whether respondent [Mayor Atienza]has the mandatory legal duty to enforce Ordinance
No. 8027 and order the removal of the Pandacan Terminals, and

2. whether the June 26, 2002 MOU and the resolutions ratifying it can amend or repeal
Ordinance No. 8027. 34
the Court declared:

x x x [T]he Local Government Code imposes upon respondent the duty, as city mayor, to "enforce all
laws and ordinances relative to the governance of the city." One of these is Ordinance No. 8027. As
the chief executive of the city, he has the duty to enforce Ordinance No. 8027 as long as it has not
been repealed by the Sanggunian or annulled by the courts. He has no other choice. It is his
ministerial duty to do so. x x x

xxxx

The question now is whether the MOU entered into by respondent with the oil companies and the
subsequent resolutions passed by the Sanggunianhave made the respondent’s duty to enforce
Ordinance No. 8027 doubtful, unclear or uncertain. x x x

We need not resolve this issue. Assuming that the terms of the MOU were inconsistent with
Ordinance No. 8027, the resolutions which ratified it and made it binding on the Cityof Manila
expressly gave it full force and effect only until April 30, 2003. Thus, at present, there is nothing that
legally hinders respondent from enforcing Ordinance No. 8027.

Ordinance No. 8027 was enacted right after the Philippines, along with the rest of the world,
witnessed the horror of the September 11, 2001 attack on the Twin Towers of the World Trade
Center in New York City. The objective of the ordinance is toprotect the residents of Manila from the
catastrophic devastation that will surely occur in case of a terrorist attack on the Pandacan
Terminals. No reason exists why such a protective measure should be delayed.  (Emphasis
35

supplied; citations omitted)

13 February 2008 Resolution in G.R. No. 156052;

Ordinance No. 8027 is constitutional

The oil companies and the Republic of the Philippines, represented by the DOE, filed their motions
for leave to intervene and for reconsideration of the 7 March 2007 Decision. During the oral
arguments, the parties submitted to the power of the Court torule on the constitutionality and validity
of the assailed Ordinance despite the pendency of the cases in the RTC. 36

On 13 February 2008, the Court granted the motions for leave to intervene of the oil companies and
the Republic of the Philippines but denied their respective motions for reconsideration. The
dispositive portion of the Resolution reads:

WHEREFORE, x x x

We reiterate our order to respondent Mayor of the City of Manila to enforce Ordinance No. 8027. In
coordination with the appropriate agencies and other parties involved, respondent Mayor is hereby
ordered to oversee the relocation and transfer of the Pandacan Terminals out of its present site. 37

13 February 2008 Resolution in G.R. No. 156052;

Ordinance No. 8027 was not impliedly repealed
by Ordinance No. 8119

The Court also ruled that Ordinance No. 8027 was not impliedly repealed by Ordinance No. 8119.
On this score, the Court ratiocinated:
For the first kind of implied repeal, there must be an irreconcilable conflict between the two
ordinances. There is no conflict between the two ordinances. Ordinance No. 8027 reclassified the
Pandacan area from Industrial II to Commercial I. Ordinance No. 8119, Section 23, designated it as
a "Planned Unit Development/Overlay Zone (O-PUD)." In its Annex "C" which defined the zone
boundaries, the Pandacan area was shown to be within the "High Density Residential/Mixed Use
Zone (R-3/MXD)." x x x [B]oth ordinances actually have a common objective, i.e., to shift the zoning
classification from industrial to commercial (Ordinance No. 8027) or mixed residential commercial
(Ordinance No. 8119)

xxxx

Ordinance No. 8027 is a special law since it deals specifically with a certain area described therein
(the Pandacan oil depot area) whereas Ordinance No. 8119 can be considered a general law as it
covers the entire city of Manila.

xxxx

x x x The repealing clause of Ordinance No. 8119 cannot be taken to indicate the legislative intent to
repeal all prior inconsistent laws on the subject matter, including Ordinance No. 8027, a special
enactment, since the aforequoted minutes (an official record of the discussions in the Sanggunian)
actually indicated the clear intent to preserve the provisions of Ordinance No. 8027.38

Filing of a draft Resolution amending Ordinance No. 8027 effectively allowing

the oil depots to stay in the Pandacan area; Manifestation and
Motion to forestall the passing of the new Ordinance filed in G.R. No. 156052

On 5 March 2009, respondent then Councilor Arlene W. Koa, filed with the Sangguniang
Panlungsod a draft resolution entitled "An Ordinance Amending Ordinance No. 8119 Otherwise
Known as ‘The Manila Comprehensive Land Use Plan and Zoning Ordinance of 2006’ by Creating a
Medium Industrial Zone (1-2) and Heavy Industrial Zone (1-3) and Providing for its
Enforcement."  Initially numbered as Draft Ordinance No. 7177, this was later renumbered as
39

Ordinance No. 8187, the assailed Ordinance in these instant petitions.

Considering that the provisions thereof run contrary to Ordinance No. 8027, the petitioners in G.R.
No. 156052 filed a "Manifestation and Motion to: a) Stop the City Council of Manila from further
hearing the amending ordinance to Ordinance No. 8027; [and] b) Transfer the monitoring of the
enforcement of the Resolution of the Honorable Court on this case dated 13 February 2008 from
Branch 39, Manila Regional Trial Court to the Supreme Court." 40

28 April 2009 Resolution in G.R. No. 156052;

Second Motion for Reconsideration denied with finality;
succeeding motions likewise denied or otherwise noted without action

On 28 April 2009, pending the resolution of the Manifestation and Motion, the Court denied with
finalitythe second motion for reconsideration dated 27 February 2008 of the oil companies. 41

It further ruled that no further pleadings shall be entertained in the case. 42

Succeeding motions were thus deniedand/or noted without action. And, after the "Very Urgent
Motion to Stop the Mayor of the City of Manila from Signing Draft Ordinance No. 7177 and to Cite
Him for Contempt if He Would Do So" filed on 19 May 2009 was denied on 2 June 2009 for being
moot,  all pleadings pertaining to the earlier motion against the drafting of an ordinance to amend
43

Ordinance No. 8027 were noted without action. 44

The Enactment of Ordinance No. 8187

allowing the continued stay of the oil depots

On 14 May 2009, during the incumbency of former Mayor Alfredo S. Lim (Mayor Lim), who
succeeded Mayor Atienza, the Sangguniang Panlungsod enacted Ordinance No. 8187. 45

The new Ordinance repealed, amended, rescinded or otherwise modified Ordinance No. 8027,
Section 23 of Ordinance No. 8119, and all other Ordinances or provisions inconsistent
therewith  thereby allowing, once again, the operation of "Pollutive/Non-Hazardous and
46

Pollutive/Hazardous manufacturing and processing establishments" and "Highly Pollutive/Non-

Hazardous[,] Pollutive/Hazardous[,] Highly Pollutive/Extremely Hazardous[,] Non-Pollutive/Extremely
Hazardous; and Pollutive/Extremely Hazardous; and Pollutive/Extremely Hazardous manufacturing
and processing establishments" within the newly created Medium Industrial Zone (1-2) and Heavy
Industrial Zone (1-3) in the Pandacan area.

Thus, where the Industrial Zoneunder Ordinance No. 8119 was limited to Light Industrial Zone (I-1),
Ordinance No. 8187 appended to the list a Medium Industrial Zone (I-2) and a Heavy Industrial Zone
(I-3), where petroleum refineries and oil depots are now among those expressly allowed.

Hence these petitions.

The Petitions

G.R. No. 187836

To support their petition for prohibition against the enforcement of Ordinance No. 8187, the petitioner
Social Justice Society (SJS) officers allege that:

1. The enactment of the assailed Ordinance is not a valid exercise of police power because
the measures provided therein do not promote the general welfare of the people within the
contemplation of the following provisions of law:

a) Article III, Section 18 (kk)  of Republic Act No. 409 otherwise known as the
47

"Revised Charter of the City of Manila," which provides that the Municipal Board shall
have the legislative power to enact all ordinances it may deem necessary and
proper;

b) Section 16  of Republic Act No. 7160 known as the Local Government Code,
48

which defines the scope of the general welfare clause;

2. The conditions at the time the Court declared Ordinance No. 8027 constitutional in G.R.
No. 156052 exist to this date;

3. Despite the finality of the Decision in G.R. No. 156052, and notwithstanding that the
conditions and circumstances warranting the validity of the Ordinance remain the same, the
Manila City Council passed a contrary Ordinance, thereby refusing to recognize that "judicial
decisions applying or interpreting the laws or the Constitution form part of the legal system of
the Philippines;"  and
49
 4. Ordinance No. 8187 is violative of Sections 15 and 16, Article II of the Constitution of the
Philippines on the duty of the State "to protect and promote the right to health of the
people"  and "protect and advance the right of the people to a balanced and healthful
50

ecology."  Petitioners pray that Ordinance No. 8187 of the City of Manila be declared null
51

and void, and that respondent, and all persons acting under him, be prohibited from
enforcing the same.

G.R. No. 187916

The petition for Prohibition, Mandamus and Certiorari with Prayer for Temporary Restraining Order
and/or Injunction against the enforcement of Ordinance No. 8187 of former Secretary of Department
of Environment and Natural Resources and then Mayor Atienza, together with other residents and
taxpayers of the City of Manila, also alleges violation of the right to health of the people and the right
to a healthful and balanced environment under Sections 15 and 16 of the Constitution.

Petitioners likewise claim that the Ordinance is in violation of the following health and environment-
related municipal laws, and international conventions and treaties to which the Philippines is a state
party:

1. Municipal Laws –

(a) Sections 4,  12,  19  and 30  of Republic Act No. 8749 otherwise known as the
52 53 54 55

Philippine Clean Air Act;

(b) Environment Code (Presidential Decree No. 1152);

(c) Toxic and Hazardous Wastes Law (Republic Act No. 6969); and

(d) Civil Code provisions on nuisance and human relations;

2. International Conventions and Treaties to which the Philippines is a state party –

a. Section 1 of the Universal Declaration of Human Rights, which states that

"[e]veryone has the right to life, liberty and security of person;"

b. Articles 6,  24  and 27  of the Convention on the Rights of the Child, summarized
56 57 58

by the petitioners in the following manner:

1. the human right to safe and healthy environment[;]

2. human right to the highest attainable standard of health[;]

3. the human right to ecologically sustainable development[;]

4. the human right to an adequate standard of living, including access to safe food and
water[;]

5. the human right of the child to live in an environment appropriate for physical and mental
development[; and]
 6. the human right to full and equal participation for all persons in environmental decision-
making and development planning, and in shaping decisions and policies affecting one’s
community, at the local, national and international levels. 59

Petitioners likewise posit that the title of Ordinance No. 8187 purports to amend or repeal Ordinance
No. 8119 when it actually intends to repeal Ordinance No. 8027. According to them, Ordinance No.
8027 was never mentioned in the title and the body of the new ordinance in violation of Section 26,
Article VI of the 1987 Constitution, which provides that every bill passed by Congress shall embrace
only one subject which shall be expressed in the title thereof.

Also pointed out by the petitioners is a specific procedure outlined in Ordinance No. 8119 that should
be observed when amending the zoning ordinance. This is provided for under Section 81 thereof,
which reads:

SEC. 81. Amendments to the Zoning Ordinance. The proposed amendments to the Zoning
Ordinance asreviewed and evaluated by the City Planning and Development Office (CPDO)shall be
submitted to the City Council for approval of the majority of the Sangguniang Panlungsod members.
The amendments shall be acceptable and eventually approved: PROVIDED, That there is sufficient
evidence and justification for such proposal; PROVIDED FURTHER,That such proposal is consistent
with the development goals, planning objectives, and strategies of the Manila Comprehensive Land
Use Plan. Said amendments shall take effect immediately upon approval or after thirty (30) days
from application.

Petitioners thus pray that:

1. upon filing of [the] petition, [the] case be referred to the Court [E]n Banc, and setting (sic)
the case for oral argument;

2. upon the filing of [the] petition, a temporary restraining order be issued enjoining the
respondents from publishing and posting Manila City Ordinance No. 8187 and/or posting of
Manila City Ordinance No. 8187; and/or taking any steps to implementing (sic) and/or
enforce the same and after due hearing, the temporary restraining order be converted to a
permanent injunction;

3. x x x Manila City Ordinance 8187 [be declared] as null and void for being repugnant to the
Constitution and existing municipal laws and international covenants;

4. x x x the respondents [be ordered] to refrain from enforcing and/or implementing Manila
City Ordinance No. 8187;

5. x x x respondent City Mayor Alfredo S. Lim [be enjoined] from issuing any permits
(business or otherwise) to all industries whose allowable uses are anchored under the
provisions of Manila Ordinance No. 8187; and

6. x x x respondent Mayor of Manila Alfredo S. Lim [be ordered] to comply with the Order of
the Honorable Court in G.R. 156052 dated February 13, 2008. 60

The Respondents’ Position on the Consolidated Petitions

Respondent former Mayor Lim

In his Memorandum,  former Mayor Lim, through the City Legal Officer, attacks the petitioners’ lack
61

of legal standing to sue. He likewise points out that the petitioners failed to observe the principle of
hierarchy of courts.

Maintaining that Ordinance No. 8187 is valid and constitutional, he expounds on the following
arguments:

On the procedural issues, he contends that: (1) it is the function of the Sangguniang Panlungsod to
enact zoning ordinances, for which reason, it may proceed to amend or repeal Ordinance No. 8119
without prior referral to the Manila Zoning Board of Adjustment and Appeals (MZBAA) as prescribed
under Section 80 (Procedure for Re-Zoning) and the City Planning and Development Office (CPDO)
pursuant to Section 81 (Amendments to the Zoning Ordinance) of Ordinance No. 8119, especially
when the action actually originated from the Sangguniang Panlungsod itself; (2) the Sangguniang
Panlungsod may, in the later ordinance, expressly repeal all or part of the zoning ordinance sought
to be modified; and (3) the provision repealing Section 23 of Ordinance No. 8119 is not violative of
Section 26, Article VI of the 1987 Constitution, which requires that every bill must embrace only one
subject and that such shall be expressed in the title.

On the substantive issues, he posits that the petitions are based on unfounded fears; that the
assailed ordinance is a valid exercise of police power; that it is consistent with the general welfare
clause and public policy, and is not unreasonable; that it does not run contrary to the Constitution,
municipal laws, and international conventions; and that the petitioners failed to overcome the
presumption of validity of the assailed ordinance.

Respondents Vice-Mayor Domagoso and the City Councilors who voted in favor of the assailed
ordinance

On 14 September 2012, after the Court gave the respondents several chances to submit their
Memorandum,  they, through the Secretary of the Sangguniang Panlungsod, prayed that the Court
62

dispense with the filing thereof.

In their Comment,  however, respondents offered a position essentially similar to those proffered by
63

former Mayor Lim.

The Intervenors’ Position on the Consolidated Petitions

On the other hand, the oil companies sought the outright dismissal of the petitions based on alleged
procedural infirmities, among others, incomplete requisites of judicial review, violation of the principle
of hierarchy of courts, improper remedy, submission of a defective verification and certification
against forum shopping, and forum shopping.

As to the substantive issues, they maintain, among others, that the assailed ordinance is
constitutional and valid; that the Sangguniang Panlalawigan is in the best position to determine the
needs of its constituents; that it is a valid exercise of legislative power; that it does not violate health
and environment-related provisions of the Constitution, laws, and international conventions and
treaties to which the Philippines is a party; that the oil depots are not likely targets of terrorists; that
the scaling down of the operations in Pandacan pursuant to the MOU has been followed; and that
the people are safe in view of the safety measures installed in the Pandacan terminals.
Incidentally, in its Manifestation dated 30 November 2010,  Petron informed the Court that it will
64

"cease [the] operation of its petroleum product storage facilities"  in the Pandacan oil terminal not
65

later than January 2016 on account of the following:

2.01 Environmental issues, many of which are unfounded, continually crop up and tarnish the
Company’s image.

2.02. The location of its Pandacanterminal is continually threatened, and made uncertain preventing
long-term planning, by the changing local government composition. Indeed, the relevant zoning
ordinances have been amended three (3) times, and their validity subjected to litigation. 66

Intervening Events

On 28 August 2012, while the Court was awaiting the submission of the Memorandum of
respondents Vice-Mayor Domagoso and the councilors who voted in favor of the assailed
Ordinance, the Sangguniang Panlungsod, which composition had already substantially changed,
enacted Ordinance No. 8283  entitled "AN ORDINANCE AMENDING SECTION 2 OF ORDINANCE
67

NO. 8187 BY RECLASSIFYING THE AREA WHERE PETROLEUM REFINERIES AND OIL
DEPOTS ARE LOCATED FROM HEAVY INDUSTRIAL (1-3) TO HIGH INTENSITY
COMMERCIAL/MIXED USE ZONE (C3/MXD).

The new ordinance essentially amended the assailed ordinance to exclude the area where
petroleum refineries and oil depots are located from the Industrial Zone.

Ordinance No. 8283 thus permits the operation of the industries operating within the Industrial Zone.
However, the oil companies, whose oil depots are located in the High Intensity Commercial/Mixed
Use Zone (C3/MXD), are given until the end of January 2016 within which to relocate their terminals.

Former Mayor Lim, who was then the incumbent mayor, did not support the amendment. Maintaining
that the removal of the oil depots was prejudicial to public welfare, and, on account of the pending
cases in the Supreme Court, he vetoed Ordinance No. 8283 on 11 September 2012. 68

On 28 November 2012, former Mayor Lim filed a Manifestation informing this Court that the
Sangguniang Panlungsod voted to override the veto, and that he, in turn, returned it again with his
veto. He likewise directed the Sangguniang Panlungsod to append his written reasons for his veto of
the Ordinance, so that the same will be forwarded to the President for his consideration in the event
that his veto is overridden again. 69

On 11 December 2012, Shell also filed a similar Manifestation. 70

Meanwhile, three days after former Mayor Lim vetoed the new ordinance, Atty. Luch R. Gempis, Jr.
(Atty. Gempis), Secretary of the Sangguniang Panlungsod, writing on behalf of respondents Vice-
Mayor Domagoso and the City Councilors of Manila who voted in favor of the assailed Ordinance,
finally complied with this Court’s Resolution dated 17 July 2012 reiterating its earlier directives  to
71

submit the said respondents’ Memorandum.

In his Compliance/Explanation with Urgent Manifestation  dated 13 September 2012, Atty. Gempis
72

explained that it was not his intention to show disrespect to this Court or to delay or prejudice the
disposition of the cases.
According to him, he signed the Comment prepared by respondents Vice-Mayor and the City
Councilors only to attest that the pleading was personally signed by the respondents. He clarified
that he was not designated as the legal counsel of the respondents as, in fact, he was of the
impression that, pursuant to Section 481(b)(3) of the Local Government Code,  it is the City Legal
73

Officer who isauthorized to represent the local government unit or any official thereof in a litigation. It
was for the same reason that he thought that the filing of a Memorandum may already be dispensed
with when the City Legal Officer filed its own on 8 February 2010. He further explained that the
Ordinance subject of these cases was passed during the 7th Council (2007-2010); that the
composition of the 8th Council (2010-2013) had already changed after the 2010 elections; and that
steps were already taken to amend the ordinance again. Hence, he was in a dilemma as to the
position of the Sangguniang Panlungsod at the time he received the Court’s Resolution of 31 May
2011.

Atty. Gempis, thus, prayed that the Court dispense with the filing of the required memorandum in
view of the passing of Ordinance No. 8283.

Issue

The petitioners’ arguments are primarily anchored on the ruling of the Court in G. R. No. 156052
declaring Ordinance No. 8027 constitutional and valid after finding that the presence of the oil
terminals in Pandacan is a threat to the life and security of the people of Manila. From thence, the
petitioners enumerated constitutional provisions, municipal laws and international treaties and
conventions on health and environment protection allegedly violated by the enactment of the
assailed Ordinance to support their position.

The resolution of the present controversy is, thus, confined to the determination of whether or not the
enactment of the assailed Ordinance allowing the continued stay of the oil companies in the depots
is, indeed, invalid and unconstitutional.

Our Ruling

We see no reason why Ordinance No. 8187 should not be stricken down insofar as the presence of
the oil depots in Pandacan is concerned.

We first rule on the procedural issues raised by the respondents and the oil companies.

At the outset, let it be emphasized that the Court, in G.R. No. 156052, has already pronounced that
the matter of whether or not the oil depots should remain in the Pandacan area is of transcendental
importance to the residents of Manila. 74

We may, thus, brush aside procedural infirmities, if any, as we had in the past, and take cognizance
of the cases  if only to determine if the acts complained of are no longer within the bounds of the
75

Constitution and the laws in place. 76

Put otherwise, there can be no valid objection to this Court’s discretion to waive one or some
procedural requirements if only to remove any impediment to address and resolve the serious
constitutional question  raised in these petitions of transcendental importance, the same having
77

farreaching implications insofar as the safety and general welfare of the residents of Manila, and
even its neighboring communities, are concerned.
Proper Remedy

Respondents and intervenors argue that the petitions should be outrightly dismissed for failure on
the part of the petitioners to properly apply related provisions of the Constitution, the Rules of Court,
and/or the Rules of Procedure for Environmental Cases relative to the appropriate remedy available
to them.

To begin with, questioned is the applicability of Rule 65  of the Rules of Court to assail the validity
78

and constitutionality of the Ordinance.

… there is no appeal, or any plain,

speedy, and adequate remedy

in the ordinary course of law…

Rule 65 specifically requires that the remedy may be availed of only when "there is no appeal, or any
plain, speedy, and adequate remedy in the ordinary course of law." 79

Shell argues that the petitioners should have sought recourse before the first and second level
courts under the Rules of Procedure for Environmental Cases,  which govern "the enforcement or
80

violations of environmental and other related laws, rules and regulations."  Petron additionally
81

submits that the most adequate remedy available to petitioners is to have the assailed ordinance
repealed by the Sangguniang Panlungsod. In the alternative, a local referendum may be had. And,
assuming that there were laws violated, the petitioners may file an action for each alleged violation
of law against the particular individuals that transgressed the law.

It would appear, however, that the remedies identified by the intervenors prove to be inadequate
toresolve the present controversies in their entirety owing to the intricacies of the circumstances
herein prevailing.

The scope of the Rules of Procedure for Environmental Cases is embodied in Sec. 2, Part I, Rule I
thereof. It states that the Rules shall govern the procedure in civil, criminal and special civil actions
before the Metropolitan Trial Courts, Municipal Trial Courts in Cities, Municipal Trial Courts and
Municipal Circuit Trial Courts, and the Regional Trial Courts involving enforcement or violations of
environmental and other related laws, rules and regulations such as but not limited to the following:

(k) R.A. No. 6969, Toxic Substances and Hazardous Waste Act;

xxxx

(r) R.A. No. 8749, Clean Air Act;

xxxx

(y) Provisions in C.A. No. 141, x x x; and other existing laws that relate to the conservation,
development, preservation, protection and utilization of the environment and natural
resources.  (Emphasis supplied)
82

Notably, the aforesaid Rules are limited in scope. While, indeed, there are allegations of violations of
environmental laws in the petitions, these only serve as collateral attacks that would support the
other position of the petitioners – the protection of the rightto life, security and safety. Moreover, it
bears emphasis that the promulgation of the said Rules was specifically intended to meet the
following objectives:

SEC. 3. Objectives.—The objectives of these Rules are:

(a) To protect and advance the constitutional right of the people to a balanced and healthful
ecology;

(b) To provide a simplified, speedy and inexpensive procedure for the enforcement of
environmental rights and duties recognized under the Constitution, existing laws, rules and
regulations, and international agreements;

(c) To introduce and adopt innovations and best practices ensuring the effective enforcement
of remedies and redress for violation of environmental laws; and

(d) To enable the courts to monitor and exact compliance with orders and judgments in
environmental cases. 83

Surely, the instant petitions are not within the contemplation of these Rules.

Relative to the position of Petron, it failed to consider that these petitions are already a sequel to
G.R. No. 156052, and that there are some issues herein raised that the remedies available at the
level of the Sangguniang Panlungsod could not address. Neither could the filing of an individual
action for each law violated be harmonized with the essence of a "plain, speedy, and adequate"
remedy.

From another perspective, Shell finds fault with the petitioners’ direct recourse to this Court when,
pursuant to Section 5, Article VIII of the Constitution, the Supreme Court exercises only appellate
jurisdiction over cases involving the constitutionality or validity of an ordinance.  Thus:
84

Section 5.The Supreme Court shall have the following powers:

xxxx

2. Review, revise, reverse, modify, or affirm on appeal or certiorari, as the law or the Rules of Court
may provide, final judgments and orders of lower courtsin:

a. All cases in which the constitutionality or validity of any treaty, international or executive
agreement, law, presidential decree, proclamation, order, instruction, ordinance, or regulation is in
question. (Emphasis supplied)

To further support its position, it cites the case of Liga ng mga Barangay National v. City Mayor of
Manila,  where the petitioners sought the nullification of the mayor’s executive order and the
85

council’s ordinance concerning certain functions of the petitioners that are vested in them by law.
There, the Court held:

Second, although the instant petition is styled as a petition for certiorari, in essence, it seeks the
declaration by this Court of the unconstitutionality or illegality of the questioned ordinance and
executive order. It, thus, partakes of the nature of a petition for declaratory relief over which this
Court has only appellate, not original, jurisdiction.  Section 5, Article VIII of the Constitution provides:
86

xxx

As such, this petition must necessary fail, as this Court does not have original jurisdiction over a
petition for declaratory relief even if only questions of law are involved.87

Assuming that a petition for declaratory relief is the proper remedy, and that the petitions should
have been filed with the Regional Trial Court, we have, time and again, resolved to treat such a
petition as one for prohibition, provided that the case has far-reaching implications and
transcendental issues that need to be resolved,  as in these present petitions.
88

On a related issue, we initially found convincing the argument that the petitions should have been
filed with the Regional Trial Court, it having concurrent jurisdiction with this Court over a special civil
action for prohibition, and original jurisdiction over petitions for declaratory relief. However, as we
have repeatedly said, the petitions at bar are of transcendental importance warranting a relaxation of
the doctrine of hierarchy of courts.  In the case of Jaworski v. PAGCOR,  the Court ratiocinated:
89 90

Granting arguendothat the present action cannot be properly treated as a petition for prohibition, the
transcendental importance of the issues involved in this case warrants that weset aside the technical
defects and take primary jurisdiction over the petition at bar. x x x This is in accordance with the well-
entrenched principle that rules of procedure are not inflexible tools designed to hinder or delay, but
to facilitate and promote the administration of justice.Their strict and rigid application, which would
result in technicalities that tend to frustrate, rather than promote substantial justice, must always be
eschewed. (Emphasis supplied)

…persons aggrieved thereby…

As to who may file a petition for certiorari, prohibition or mandamus, Petron posits that petitioners
are not among the "persons aggrieved" contemplated under Sections 1 to 3 of Rule 65 of the Rules
of Court.

Chevron argues that petitioners, whether as "citizens," taxpayers," or legislators," lack the legal
standing toassail the validity and constitutionality of Ordinance No. 8187. It further claims that
petitioners failed to show that they have suffered any injury and/or threatened injury as a result of the
act complained of. 91

Shell also points out that the petitions cannot be considered taxpayers’ suit, for then, there should be
a claim that public funds were illegally disbursed and that petitioners have sufficient interest
concerning the prevention of illegal expenditure of public money.  In G.R. No. 187916, Shell
92

maintains that the petitioners failed to show their personal interest in the case and/or to establish
that they may represent the general sentiments of the constituents of the City of Manila so as to be
treated as a class suit. Even the minors, it argues, are not numerous and representative enough for
the petition to be treated as a class suit. Asto the city councilors who joined the petitioners in
assailing the validity of Ordinance No. 8187, Shell posits that they cannot invoke the ruling in Prof.
David v. Pres. Macapagal-Arroyo,  where the Court held that legislators may question the
93

constitutionality of a statute, if and when it infringes upon their prerogatives as legislators, because
of the absence of the allegation that the assailed ordinance indeed infringes upon their prerogatives.

Former Mayor Lim submitted a similar position supported by a number of cases on the concept of
locus standi,  the direct injury test,  an outline of the stringent requirements of legal standing when
94 95

suing as a citizen,  as a taxpayer,  as a legislator and in cases where class suits are filed in behalf
96 97

of all citizens. 98
Their arguments are misplaced.

In G.R. No. 156052, we ruled that the petitioners in that case have a legal right to seek the
enforcement of Ordinance No. 8027 because the subject of the petition concerns a public right, and
they, as residents of Manila, have a direct interest in the implementation of the ordinances of the
city. Thus:

To support the assertion that petitioners have a clear legal right to the enforcement of the ordinance,
petitioner SJS states that it is a political party registered with the Commission on Elections and has
its offices in Manila. It claims to have many members who are residents of Manila. The other
petitioners, Cabigao and Tumbokon, are allegedly residents of Manila.

We need not belabor this point. We have ruled in previous cases that when a mandamus proceeding
concerns a public right and its object is to compel a public duty, the people who are interested in the
execution of the laws are regarded as the real parties in interest and they need not show any
specific interest. Besides, as residents of Manila, petitioners have a direct interest in the
enforcement of the city’s ordinances.  x x x (Citations omitted)
99

No different are herein petitioners who seek to prohibit the enforcement of the assailed ordinance,
and who deal with the same subject matter that concerns a public right. Necessarily, the people who
are interested in the nullification of such an ordinance are themselves the real parties in interest, for
which reason, they are no longer required to show any specific interest therein. Moreover, it is worth
mentioning that SJS, now represented by SJS Officer Alcantara, has been recognized by the Court
in G.R. No. 156052 to have legal standing to sue in connection with the same subject matter herein
considered. The rest of the petitioners are residents of Manila. Hence, all of them have a direct
interest in the prohibition proceedings against the enforcement of the assailed ordinance.

In the case of Initiatives for Dialogue and Empowerment through Alternative Legal Services, Inc.
(IDEALS, INC.) v. Power Sector Assets and Liabilities Management Corporation
(PSALM),  involving a petition for certiorari and prohibition to permanently enjoin PSALM from
100

selling the Angat Hydro-Electric Power Plant (AHEPP) to Korea Water Resources Corporation (K-
Water), the Court ruled:

"Legal standing" or locus standihas been defined as a personal and substantial interest in the case
such that the party has sustained or will sustain direct injury as a result of the governmental act that
is being challenged, alleging more than a generalized grievance. x x x This Court, however, has
adopted a liberal attitude on the locus standi of a petitioner where the petitioner is able to craft
anissue of transcendental significance to the people, as when the issues raised are of paramount
importance to the public. Thus, when the proceeding involves the assertion of a public right, the
mere fact that the petitioner is a citizen satisfies the requirement of personal interest.

There can be no doubt that the matter of ensuring adequate water supply for domestic use is one of
paramount importance to the public. That the continued availability of potable water in Metro Manila
might be compromised if PSALM proceeds with the privatization of the hydroelectric power plant in
the Angat Dam Complex confers upon petitioners such personal stake in the resolution of legal
issues in a petition to stop its implementation.  (Emphasis supplied; citations omitted)
101

In like manner, the preservation of the life, security and safety of the people is indisputably a right of
utmost importance to the public. Certainly, the petitioners, as residents of Manila, have the required
personal interest to seek relief from this Court to protect such right.
… in excess of its or his jurisdiction,
or with grave abuse of discretion
amounting to lack or excess of jurisdiction…

Petron takes issue with the alleged failure of the petitioners to establish the facts with certainty that
would show that the acts of the respondents fall within the parameters of the grave abuse of
discretion clause settled by jurisprudence, to wit:

x x x "[G]rave abuse of discretion" means such capricious and whimsical exercise of judgment as is
equivalent to lack of jurisdiction. The abuse of discretion must be grave as where the power is
exercised in an arbitrary or despotic manner by reason of passion or personal hostility and must be
so patent and gross asto amount to an evasion of positive duty or to a virtual refusal to perform the
duty enjoined by or to act all in contemplation of law. 102

It is pointless to discuss the matter at length in these instant cases of transcendental importance in
view of the Court’s pronouncement, in Magallona v. Ermita.  There it held that the writs of
103

certiorariand prohibition are proper remedies to test the constitutionality of statutes, notwithstanding
the following defects:

In praying for the dismissal of the petition on preliminary grounds, respondents seek a strict
observance of the offices of the writs of certiorari and prohibition, noting that the writs cannot
issue absent any showing of grave abuse of discretion in the exercise of judicial, quasi-
judicial or ministerial powers on the part of respondents and resulting prejudice on the part of
petitioners.

Respondents’ submission holds true in ordinary civil proceedings. When this Court exercises its
constitutional power of judicial review, however, we have, by tradition, viewed the writs of
certiorariand prohibition as proper remedial vehicles to test the constitutionality of statutes, and
indeed, of acts of other branches of government. Issues of constitutional importx x x carry
such relevance in the life of this nation that the Court inevitably finds itself constrained to
take cognizance of the case and pass upon the issues raised, noncompliance with the letter
of procedural rules notwithstanding. The statute sought to be reviewed here is one such
law.  (Emphasis supplied; citations omitted)
104

Requisites of judicial review

For a valid exercise of the power of judicial review, the following requisites shall concur: (1) the
existence of a legal controversy; (2) legal standing to sue of the party raising the constitutional
question; (3) a plea that judicial review be exercised at the earliest opportunity; and (4) the
constitutional question is the lis mota of the case.105

Only the first two requisites are put in issue in these cases.

On the matter of the existence of a legal controversy, we reject the contention that the petitions
consist of bare allegations based on speculations, surmises, conjectures and hypothetical grounds.

The Court declared Ordinance No. 8027 valid and constitutional and ordered its implementation.
Withthe passing of the new ordinance containing the contrary provisions, it cannot be any clearer
that here lies an actual case or controversy for judicial review. The allegation on this, alone, is
sufficient for the purpose.
The second requisite has already been exhaustively discussed.

Proof of identification required in the notarization

of the verification and certification against forum
shopping in G.R. No. 187916

At the bottom of the Verification and Certification against Forum Shopping of the petition in G.R. No.
187916 is the statement of the notary public to the effect that the affiant, in his presence and after
presenting "an integrally competent proof of identification with signature and photograph,"  signed
106

the document under oath.

Citing Sec. 163 of the Local Government Code,  which provides that an individual acknowledging
107

any document before a notary public shall present his Community Tax Certificate (CTC), Chevron
posits that the petitioner’s failure to present his CTC rendered the petition fatally defective warranting
the outright dismissal of the petition.

We disagree.

The verification and certification against forum shopping are governed specifically by Sections 4 and
5,Rule 7 of the Rules of Court.

Section 4 provides that a pleading, when required to be verified, shall be treated as an unsigned
pleading if it lacks a proper verification while Section 5 requires that the certification to be executed
by the plaintiff or principal party be under oath.

These sections, in turn, should be read together with Sections 6 and 12, Rule 2 of the 2004 Rules on
Notarial Practice.

Section 6  of the latter Rules, specifically, likewise provides that any competent evidence of identity
108

specified under Section 12 thereof may now be presented before the notary public, to wit:

SEC. 12. Competent Evidence of Identity. - The phrase "competent evidence of identity" refers to the
identification of an individual based on:

(a) at least one current identification document issued by an official agency bearing the
photograph and signature of the individual, such as but not limited to passport, driver’s
license, Professional Regulations Commission ID, National Bureau of Investigation
clearance, police clearance, postal ID, voter’s ID, Barangay certification, Government
Service and Insurance System (GSIS) e-card, Social Security System (SSS) card, Philhealth
card, senior citizen card, Overseas Workers Welfare Administration (OWWA) ID, OFW ID,
seaman’s book, alien certificate of registration/immigrant certificate of registration,
government office ID, certification from the National Council for the Welfare of Disable
Persons (NCWDP), Department of Social Welfare and Development (DSWD) certification; or

(b) x x x. 109

Forum shopping

Shell contends that the petitioners in G.R. No. 187836 violated the rule against forum shopping
allegedly because all the elements thereof are present in relation to G.R. No. 156052, to wit:
 1. "identity of parties, or at least such parties who represent the same interests in both
actions" – According to Shell, the interest of petitioner SJS in G.R. No. 156052 and the
officers of SJS in G.R. No. 187836 are clearly the same. Moreover, both actions implead the
incumbent mayor of the City of Manila as respondent. Both then respondent Mayor Atienza
in G.R. No. 156052 and respondent former Mayor Lim in G.R. No. 187836 are sued in their
capacity as Manila mayor.

2. "identity of rights asserted and relief prayed for, the relief being founded on the same
fact(s)" – Shell contends that, in both actions, petitioners assert the same rights to health and
to a balanced and healthful ecology relative to the fate of the Pandacan terminal, and seek
essentially the same reliefs, that is, the removal of the oil depots from the present site.

3. "the identity of the two preceding particulars is such that any judgment rendered in the
pending case, regardless of which party is successful, would amount to res judicata in the
other" – Relative to the filing of the Manifestation and Motion to: a) Stop the City Council of
Manila from further hearing the amending ordinance to Ordinance No. 8027 x x x
(Manifestation and Motion) and Very Urgent Motion to Stop the Mayor of the City of Manila
from Signing Draft Ordinance No. 7177 [now Ordinance No. 8187] and to Cite Him for
Contempt if He Would Do So (Urgent Motion) both in G.R. No. 156052, Shell points out the
possibility that the Court would have rendered conflicting rulings "on cases involving the
same facts, parties, issues and reliefs prayed for."110

We are not persuaded.

In Spouses Cruz v. Spouses Caraos,  the Court expounded on the nature of forum shopping. Thus:
111

Forum shopping is an act of a party, against whom an adverse judgment or order has been rendered
in one forum, of seeking and possibly getting a favorable opinion in another forum, other than by
appeal or special civil action for certiorari. It may also be the institution of two or more actions or
proceedings grounded on the same cause on the supposition that one or the other court would make
a favorable disposition. The established rule is that for forum shopping to exist, both actions must
involve the same transactions, same essential facts and circumstances and must raise identical
causes of actions, subject matter, and issues. x x x  (Citations omitted) It bears to stress that the
112

present petitions were initially filed, not to secure a judgment adverse to the first decision, but,
precisely, to enforce the earlier ruling to relocate the oil depots from the Pandacan area.

As to the matter of the denial of the petitioners’ Manifestation and Urgent Motion in G.R. No. 156052,
which wereboth incidental to the enforcement of the decision favorable to them brought about by the
intervening events after the judgment had become final and executory, and which involve the same
Ordinance assailed in these petitions, we so hold that the filing of the instant petitions is not barred
by res judicata.

In the same case of Spouses Cruz v. Spouses Caraos involving the refiling of a complaint, which
had been earlier dismissed without qualification that the dismissal was with prejudice, and which had
not been decided on the merits, the Court declared that such re-filing did not amount to forum
shopping. It ratiocinated:

It is not controverted that the allegations of the respective complaints in both Civil Case No. 95-1387
and Civil Case No. 96-0225 are similarly worded, and are identical in all relevant details, including
typographical errors, except for the additional allegations in support of respondents’ prayer for the
issuance of preliminary injunction in Civil Case No. 95-1387. It is similarly not disputed that both
actions involve the same transactions; same essential facts and circumstances; and raise identical
causes of actions, subject matter, and issues.

xxxx

x x x The dismissal of Civil Case No. 95-1387 was without prejudice. Indeed, the Order dated 20
November 1995, dismissing Civil Case No. 95-1387 was an unqualified dismissal. More significantly,
its dismissal was not based on grounds under paragraphs (f), (h), and (i) of Section 1 of Rule 16 of
the Rules of Court, which dismissal shall bar the refiling of the same action or claim as crystallized in
Section 5 of Rule 16 thereof, thus:

SEC. 5. Effect of dismissal. – Subject to the right of appeal, an order granting a motion to dismiss
based on paragraphs (f), (h), and (i) of section 1 hereof shall bar the refiling of the same action or
claim.

From the foregoing, it is clear that dismissals under paragraphs (f), (h), and (i) of Section 1 of Rule
16 of the Rules of Court constitute res judicata, to wit:

(f) That the cause of action isbarred by a prior judgment or by the statute of limitations;

xxxx

(h) That the claim or demand set forth in the plaintiff’s pleading has been paid, waived, abandoned,
or otherwise extinguished;

(i) That the claim on which the action is founded is unenforceable under the provisions of the statute
of frauds.

Res judicata or bar by prior judgmentis a doctrine which holds that a matter that has been
adjudicated by a court of competent jurisdiction must be deemed to have been finally and
conclusively settled if it arises in any subsequent litigation between the same parties and for the
same cause. Res judicata exists when the following elements are present: (a) the former judgment
must be final; (b) the court which rendered judgment had jurisdiction over the parties and the subject
matter; (3)it must be a judgment on the merits; and (d) and there must be, between the first and
second actions, identity ofparties, subject matter, and cause of action.  (Emphasis supplied;
113

citations omitted)

Here, it should be noted that this Court denied the said Manifestation and Urgent Motion, and
refused to act on the succeeding pleadings, for being moot.  Clearly, the merits of the motion were
114

not considered by the Court. The following disquisition of the Court in Spouses Cruz v. Spouses
Caraosis further enlightening:

The judgment of dismissal in Civil Case No. 95-1387 does not constitute res judicata to sufficiently
bar the refiling thereof in Civil Case No. 96-0225. As earlier underscored, the dismissal was one
without prejudice. Verily, it was not a judgment on the merits. It bears reiterating that a judgment on
the merits is one rendered after a determination of which party is right, as distinguished from a
judgment rendered upon some preliminary or formal or merely technical point. The dismissal of the
case without prejudice indicates the absence of a decision on the merits and leaves the parties free
to litigate the matter in a subsequent action asthough the dismissed action had not been
commenced.  (Emphasis supplied; citations omitted)
115
Considering that there is definitely no forum shopping in the instant cases, we need not discuss in
detail the elements of forum shopping.

II

The Local Government Code of 1991 expressly provides that the Sangguniang Panlungsod is
vested with the power to "reclassify land within the jurisdiction of the city"  subject to the pertinent
116

provisions of the Code. It is also settled that an ordinance may be modified or repealed by another
ordinance.  These have been properly applied in G.R. No. 156052, where the Court upheld the
117

position of the Sangguniang Panlungsod to reclassify the land subject of the Ordinance,  and118

declared that the mayor has the duty to enforce Ordinance No. 8027, provided that it has not been
repealed by the Sangguniang Panlungsod or otherwise annulled by the courts.  In the same case,
119

the Court also used the principle that the Sanguniang Panlungsod is in the best position to
determine the needs of its Constituents  – that the removal of the oil depots from the Pandacan
120

area is necessary "to protect the residents of Manila from catastrophic devastation in case of a
terrorist attack on the Pandacan Terminals." 121

Do all these principles equally apply to the cases at bar involving the same subject matter to justify
the contrary provisions of the assailed Ordinance?

We answer in the negative.

We summarize the position of the Sangguniang Panlungsodon the matter subject of these petitions.
In 2001, the Sanggunian found the relocation of the Pandacan oil depots necessary. Hence, the
enactment of Ordinance No. 8027.

In 2009, when the composition of the Sanggunian had already changed, Ordinance No. 8187 was
passed in favor of the retention of the oil depots. In 2012, again when some of the previous
members were no longer re-elected, but with the Vice-Mayor still holding the same seat, and
pending the resolution of these petitions, Ordinance No. 8283 was enacted to give the oil depots
until the end of January 2016 within which to transfer to another site. Former Mayor Lim stood his
groundand vetoed the last ordinance.

In its Comment, the 7th Council (2007-2010) alleged that the assailed Ordinance was enacted to
alleviate the economic condition of its constituents. 122

Expressing the same position, former Mayor Lim even went to the extent of detailing the steps  he 123

took prior to the signing of the Ordinance, if only to show his honest intention to make the right
decision.

The fact remains, however, that notwithstanding that the conditions with respect to the operations of
the oil depots existing prior to the enactment of Ordinance No. 8027 do not substantially differ to this
day, as would later be discussed, the position of the Sangguniang Panlungsod on the matter has
thrice changed, largely depending on the new composition of the council and/or political affiliations.
The foregoing, thus, shows that its determination of the "general welfare" of the city does not after all
gear towards the protection of the people in its true sense and meaning, but is, one way or another,
dependent on the personal preference of the members who sit in the council as to which particular
sector among its constituents it wishes to favor.

Now that the City of Manila, through the mayor and the city councilors, has changed its view on the
matter, favoring the city’s economic related benefits, through the continued stay of the oil terminals,
over the protection of the very lives and safety of its constituents, it is imperative for this Court to
make a final determination on the basis of the facts on the table as to which specific right of the
inhabitants of Manila should prevail. For, in this present controversy, history reveals that there is
truly no such thing as "the will of Manila" insofar as the general welfare of the people is concerned.

If in sacrilege, in free translation of Angara  by Justice Laurel, we say when the judiciary mediates
124

we do notin reality nullify or invalidate an act of the Manila Sangguniang Panlungsod, but only
asserts the solemn and sacred obligation assigned to the Court by the Constitution to determine
conflicting claims of authority under the Constitution and to establish for the parties in an actual
controversy the rights which that instrument secures and guarantees to them.

III

The measures taken by the intervenors to lend support to their position that Manila is now safe
despite the presence of the oil terminals remain ineffective. These have not completely removed the
threat to the lives of the in habitants of Manila.

In G.R. No. 156052, the validity and constitutionality of Ordinance No. 8027 was declared as a
guarantee for the protection of the constitutional right to life of the residents of Manila. There, the
Court said that the enactment of the said ordinance was a valid exercise of police power with the
concurrence of the two requisites: a lawful subject – "to safeguard the rights to life, security and
safety of all the inhabitants of Manila;"  and a lawful method – the enactment of Ordinance No. 8027
125

reclassifying the land use from industrial to commercial, which effectively ends the continued stay of
the oil depots in Pandacan. 126

In the present petitions, the respondents and the oil companies plead that the Pandacan Terminal
has never been one of the targets of terrorist attacks;  that the petitions were based on unfounded
127

fears and mere conjectures;  and that the possibility that it would be picked by the terrorists is nil
128

given the security measures installed thereat. 129

The intervenors went on to identify the measures taken to ensure the safety of the people even with
the presence of the Pandacan Terminals. Thus:

1. Chevron claims that it, together with Shell and Petron, continues to enhance the safety
and security features of the terminals. They likewise adopt fire and product spill prevention
measures in accordance with the local standards set by the Bureau of Fire Protection,
among others, and with the international standards of the American Petroleum Industry
("API") and the National Fire Prevention and Safety Association ("NFPSA"); that since 1914,
the oil depots had not experienced "any incident beyond the ordinary risks and
expectations"  of the residents of Manila; and that it received a passing grade on the safety
130

measures they installed in the facilities from the representatives of the City of Manila who
conducted an ocular inspection on 22 May 2009; and

2. Referring to the old MOU entered into between the City of Manila and the DOE, on the
one hand, and the oil companies, on the other, where the parties thereto conceded and
acknowledged that the scale-down option for the Pandacan Terminal operations is the best
alternative to the relocation of the terminals, Shell enumeratesthe steps taken to scale down
its operations.

As to the number of main fuel tanks, the entire Pandacan Terminal has already decommissioned
twenty-eight out of sixty-four tanks. Speaking for Shell alone, its LPG Spheres, which it claims is the
only product that may cause explosion, was part of those decommissioned, thereby allegedly
removing the danger of explosion. Safety buffer zones and linear/green parks were likewise created
to separate the terminal from the nearest residential area. Shell’s portion of the oil depot is likewise
allegedly equipped with the latest technology to ensure air-quality control and waterquality control,
and to prevent and cope with possible oil spills with a crisis management plan in place in the event
that an oil spill occurs. Finally, Shell claims that the recommendations of EQE International in its
Quantitative Risk Assessment (QRA) study, which it says is one of the leading independent risk
assessment providers in the world and largest risk management consultancy, were sufficiently
complied with; and that, on its own initiative, it adopted additional measures for the purpose, for
which reason, "the individual risk level resulting from any incident occurring from the Pandacan
Terminal, per the QRA study, is twenty (20) times lower compared to the individual risk level of an
average working or domestic environment." 131

We are not persuaded.

The issue of whether or not the Pandacan Terminal is not a likely target of terrorist attacks has
already been passed upon in G. R. No. 156052. Based on the assessment of the Committee on
Housing, Resettlement and Urban Development of the City of Manila and the then position of the
Sangguniang Panlungsod,  the Court was convinced that the threat of terrorism is imminent. It
132

remains so convinced.

Even assuming that the respondents and intervenors were correct, the very nature of the depots
where millions of liters of highly flammable and highly volatile products, regardless of whether ornot
the composition may cause explosions, has no place in a densely populated area. Surely, any
untoward incident in the oil depots, beit related to terrorism of whatever origin or otherwise, would
definitely cause not only destruction to properties within and among the neighboring communities but
certainly mass deaths and injuries.

With regard to the scaling down of the operations in the Pandacan Terminals, which the oil
companies continue to insist to have been validated and recognized by the MOU, the Court,in G.R.
No. 156052, has already put this issue to rest. It specifically declared that even assuming that the
terms of the MOU and Ordinance No. 8027 were inconsistent, the resolutions ratifying the MOU
gave it full force and effect only until 30 April 2003.
133

The steps taken by the oil companies, therefore, remain insufficient to convince the Court that the
dangers posed by the presence of the terminals in a thickly populated area have already been
completely removed.

For, given that the threat sought to be prevented may strike at one point or another, no matter how
remote it is as perceived by one or some, we cannot allow the right to life to bedependent on the
unlikelihood of an event. Statistics and theories of probability have no place in situations where the
very life of not just an individual but of residents of big neighborhoods is at stake.

IV

It is the removal of the danger to life not the mere subdual of risk of catastrophe, that we saw in and
made us favor Ordinance No. 8027. That reason, unaffected by Ordinance No. 8187, compels the
affirmance of our Decision in G.R. No. 156052.

In striking down the contrary provisions of the assailed Ordinance relative to the continued stay of
the oil depots, we follow the same line of reasoning used in G.R. No. 156052, to wit: Ordinance No.
8027 was enacted "for the purpose of promoting sound urban planning, ensuring health, public
safety and general welfare" of the residents of Manila. The Sanggunian was impelled to take
measures to protect the residents of Manila from catastrophic devastation in case of a terrorist attack
on the Pandacan Terminals. Towards this objective, the Sanggunian reclassified the area defined in
the ordinance from industrial to commercial.

The following facts were found by the Committee on Housing, Resettlement and Urban Development
of the City of Manila which recommended the approval of the ordinance:

(1) the depot facilities contained 313.5 million liters of highly flammable and highly volatile
products which include petroleum gas, liquefied petroleum gas, aviation fuel, diesel,
gasoline, kerosene and fuel oil among others;

(2) the depot is open to attack through land, water or air;

(3) it is situated in a densely populated place and near Malacañang Palace; and

(4) in case of an explosion or conflagration in the depot, the fire could spread to the
neighboring communities.

The ordinance was intended to safeguard the rights to life, security and safety of all the inhabitants
of Manila and not just of a particular class. The depot is perceived, rightly or wrongly, as a
representation of western interests which means that it is a terrorist target. As long as it (sic) there is
such a target in their midst, the residents of Manila are not safe. It therefore became necessary to
remove these terminals to dissipate the threat. According to respondent:

Such a public need became apparent after the 9/11 incident which showed that what was perceived
to be impossible to happen, to the most powerful country in the world at that, is actually possible.
The destruction of property and the loss of thousands of lives on that fateful day became the impetus
for a public need. Inthe aftermath of the 9/11 tragedy, the threats of terrorism continued [such] that it
became imperative for governments to take measures to combat their effects.

xxxx

Both law and jurisprudence support the constitutionality and validity of Ordinance No. 8027. Without
a doubt, there are no impediments to its enforcement and implementation. Any delay is unfair to the
inhabitants of the City of Manila and its leaders who have categorically expressed their desire for the
relocation of the terminals. Their power to chart and control their own destiny and preserve their lives
and safety should not be curtailed by the intervenors’ warnings of doomsday scenarios and threats
of economic disorder if the ordinance is enforced. 134

The same best interest of the public guides the present decision. The Pandacan oil depot remains a
terrorist target even if the contents have been lessened. In the absence of any convincing reason to
persuade this Court that the life, security and safety of the inhabitants of Manila are no longer put at
risk by the presence of the oil depots, we hold that Ordinance No. 8187 in relation to the Pandacan
Terminals is invalid and unconstitutional.

There is, therefore, no need to resolve the rest of the issues.

Neither is it necessary to discuss at length the test of police power against the assailed ordinance.
Suffice it to state that the objective adopted by the Sangguniang Panlungsod to promote the
constituents’ general welfare in terms of economic benefits cannot override the very basic rights to
life, security and safety of the people.
In. G.R. No. 156052, the Court explained:

Essentially, the oil companies are fighting for their right to property. They allege that they stand
tolose billions of pesos if forced to relocate. However, based on the hierarchy of constitutionally
protected rights, the right to life enjoys precedence over the right to property. The reason is obvious:
life is irreplaceable, property is not. When the state or LGU’s exercise of police power clashes with a
few individuals’ right to property, the former should prevail.
135

We thus conclude with the very final words in G.R. No. 156052:

On Wednesday, January 23, 2008, a defective tanker containing 2,000 liters of gasoline and 14,000
liters of diesel exploded in the middle of the street a short distance from the exit gate of the
Pandacan Terminals, causing death, extensive damage and a frightening conflagration in the vicinity
of the incident. Need we say anthing about what will happen if it is the estimated 162 to 211 million
liters [or whatever is left of the 26 tanks] of petroleum products in the terminal complex will blow up?
136

As in the prequel case, we note that as early as October 2001, the oil companies signed a MOA with
the DOE obliging themselves to:

... undertake a comprehensive and comparative study ... [which] shall include the preparation ofa
Master Plan, whose aim is to determine the scope and timing of the feasible location of the
Pandacan oil terminals and all associated facilities and infrastructure including government support
essential for the relocation such as the necessary transportation infrastructure, land and right of way
acquisition, resettlement of displaced residents and environmental and social acceptability which
shall be based on mutual benefit of the Parties and the public.

such that:

Now that they are being compelled to discontinue their operations in the Pandacan Terminals, they
cannot feign unreadiness considering that they had years to prepare for this eventuality. 137

On the matter of the details of the relocation, the Court gave the oil companies the following time
frames for compliance:

To ensure the orderly transfer, movement and relocation of assets and personnel, the intervenors
Chevron Philippines Inc., Petron Corporation and Pilipinas Shell Petroleum Corporation shall, within
a nonextendible period of ninety (90) days, submit to the Regional Trial Court of Manila, Branch 39,
the comprehensive plan and relocation schedule which have allegedly been prepared. The presiding
judge of Manila RTC, Branch 39 will monitor the strict enforcement of this resolution. 138

The periods were given in the Decision in G.R. No. 156052 which became final on 23 April 2009.
Five years have passed, since then. The years of non-compliance may be excused by the swing of
local legislative leads. We now stay the sway and begin a final count.

A comprehensive and well-coordinated plan within a specific timeframe shall, therefore, be observed
in the relocation of the Pandacan Terminals. The oil companies shall begiven a fresh non-extendible
period of forty-five (45) days from notice within which to submit to the Regional Trial Court, Branch
39, Manila an updated comprehensive plan and relocation schedule. The relocation, inturn, shall be
completed not later than six months from the date of their submission. Finally, let it be underscored
that after the last Manifestation filed by Shell informing this Court that respondent former Mayor Lim
vetoed Ordinance No. 8283 for the second time, and was anticipating its referral to the President for
the latter’s consideration, nothing was heard from any of the parties until the present petitions as to
the status of the approval or disapproval of the said ordinance. As it is, the fate of the Pandacan
Terminals remains dependent on this final disposition of these cases.

VI

On the matter of the failure of Atty. Gempis to immediately comply with the directives of this Court to
file the Memorandum for the Vice-Mayor and the city councilors who voted in favor of the assailed
Ordinance, the records do not bear proof that he received a copy of any of the resolutions pertaining
to the filing of the Memorandum.

A narration of the events from his end would show, however, that he was aware of the directive
issued in 2009 when he stated that "when the City Legal Officer filed its Memorandum dated 8
February 2010, [he] thought the filing of a Memorandum for the other respondent city officials could
be dispensed with."  There was also a categorical admission that he received the later Resolution of
139

31 May 2011 but that he could not prepare a Memorandum defending the position of respondents
vice-mayor and the city councilors who voted in favor of Ordinance No. 8187 in view of the ongoing
drafting of Ordinance No. 8283, which would change the position of the Sanggunian, if subsequently
approved.

The reasons he submitted are notimpressed with merit.

That he was not officially designated as the counsel for the vicemayor and the city councilors is
beside the point. As an officer of the court, he cannot feign ignorance of the fact that"a resolution of
this Court is not a mere request but an order which should be complied with promptly and
completely."  As early as 2009, he should have immediately responded and filed a Manifestation
140

and therein set forth his reasons why he cannot represent the vice-mayor and the city councilors.
And, even assuming that the 31 May 2011 Resolution was the first directive he personally received,
he had no valid excuse for disregarding the same. Worse, the Court had to issue a show cause
order before he finally heeded.

Atty. Gempis should "strive harderto live up to his duties of observing and maintaining the respect
dueto the courts, respect for law and for legal processes and of upholding the integrity and dignity of
the legal profession in order to perform his responsibilities asa lawyer effectively."
141

In Sibulo v. Ilagan,  which involves a lawyer’s repeated failure to comply with the directives of the
142

Court, the penalty recommended by the Integrated Bar of the Philippines was reduced from
suspension to reprimand and a warning. The Court ratiocinated:

Considering, however, that respondent was absolved of the administrative charge against him and is
being taken to task for his intransigence and lack of respect, the Court finds that the penalty of
suspension would not be warranted under the circumstances.

xxxx

To the Court’s mind, a reprimand and a warning are sufficient sanctions for respondent’s
disrespectful actuations directed against the Court and the IBP. The imposition of these sanctions in
the present case would be more consistent with the avowed purpose of disciplinary case, which is
"not so much to punish the individual attorney as to protect the dispensation of justice by sheltering
the judiciary and the public from the misconduct or inefficiency of officers of the court."
143

We consider the participation of Atty. Gempis in this case and opt to be lenient even as we reiterate
the objective of protecting the dispensation of justice. We deem it sufficient to remind Atty. Gempis
to be more mindful of his duty as a lawyer towards the Court.

WHEREFORE, in light of all the foregoing, Ordinance No. 8187 is hereby declared
UNCONSTITUTIONAL and INVALID with respect to the continued stay of the Pandacan Oil
Terminals.

The incumbent mayor of the City of Manila is hereby ordered to CEASE and DESIST from enforcing
Ordinance No. 8187.  In coordination with the appropriate government agencies and the parties
1âwphi1

herein involved, he is further ordered to oversee the relocation and transfer of the oil terminals out of
the Pandacan area.

As likewise required in G.R. No. 156052, the intervenors Chevron Philippines, Inc., Pilipinas Shell
Petroleum Corporation, and Petron Corporation shall, within a non-extendible period of forty-five (45)
days, submit to the Regional Trial Court, Branch 39, Manila an updated comprehensive plan and
relocation schedule, which relocation shall be completed not later than six (6) months from the date
the required documents are submitted. The presiding judge of Branch 39 shall monitor the strict
enforcement of this Decision.

For failure to observe the respect due to the Court, Atty. Luch R. Gempis, Jr., Secretary of the
Sangguniang Panlungsod, is REMINDED of his duties towards the Court and WARNED that a
repetition of an act similar to that here committed shall be dealt with more severely.

SO ORDERED

EN BANC

G.R. No. 210551               June 30, 2015

JOSE J. FERRER, JR., Petitioner,

vs.
CITY MAYOR HERBERT BAUTISTA, CITY COUNCIL OF QUEZON CITY, CITY TREASURER OF
QUEZON CITY, and CITY ASSESSOR OF QUEZON CITY, Respondents.

DECISION

PERALTA, J.:

Before this Court is a petition for certiorari under Rule 65 of the Rules of Court with prayer for the
issuance of a temporary restraining order (TRO) seeking to declare unconstitutional and illegal
Ordinance Nos. SP-2095, S-2011 and SP-2235, S-2013 on the Socialized Housing Tax and
Garbage Fee, respectively, which are being imposed by the respondents.

The Case

On October 17, 2011,  respondent Quezon City Council enacted Ordinance No. SP-2095, S-
1

2011,  or the Socialized Housing Tax of Quezon City, Section 3 of which provides:
2
SECTION 3. IMPOSITION. A special assessment equivalent to one-half percent (0.5%) on the
assessed value of land in excess of One Hundred Thousand Pesos (Php100,000.00) shall be
collected by the City Treasurer which shall accrue to the Socialized Housing Programs of the
Quezon City Government. The special assessment shall accrue to the General Fund under a special
account to be established for the purpose.

Effective for five (5) years, the Socialized Housing Tax ( SHT ) shall be utilized by the Quezon City
Government for the following projects: (a) land purchase/land banking; (b) improvement of
current/existing socialized housing facilities; (c) land development; (d) construction of core houses,
sanitary cores, medium-rise buildings and other similar structures; and (e) financing of public-private
partners hip agreement of the Quezon City Government and National Housing Authority ( NHA ) with
the private sector.
3

Under certain conditions, a tax credit shall be enjoyed by taxpayers regularly paying the special
assessment:

SECTION 7. TAX CREDIT. Taxpayers dutifully paying the special assessment tax as imposed by
this ordinance shall enjoy a tax credit. The tax credit may be availed of only after five (5) years of
continue[d] payment. Further, the taxpayer availing this tax credit must be a taxpayer in good
standing as certified by the City Treasurer and City Assessor.

The tax credit to be granted shall be equivalent to the total amount of the special assessment paid
by the property owner, which shall be given as follows:

1. 6th year - 20%

2. 7th year - 20%

3. 8th year - 20%

4. 9th year - 20%

5. 10th year - 20%

Furthermore, only the registered owners may avail of the tax credit and may not be continued by the
subsequent property owners even if they are buyers in good faith, heirs or possessor of a right in
whatever legal capacity over the subject property. 4

On the other hand, Ordinance No. SP-2235, S-2013  was enacted on December 16, 2013 and took
5

effect ten days after when it was approved by respondent City Mayor.  The proceeds collected from
6

the garbage fees on residential properties shall be deposited solely and exclusively in an earmarked
special account under the general fund to be utilized for garbage collections.  Section 1 of the
7

Ordinance se t forth the schedule and manner for the collection of garbage fees:

SECTION 1. The City Government of Quezon City in conformity with and in relation to Republic Act
No. 7160, otherwise known as the Local Government Code of 1991 HEREBY IMPOSES THE
FOLLOWING SCHEDULE AND MANNER FOR THE ANNUAL COLLECTION OF GARBAGE FEES,
AS FOLLOWS: On all domestic households in Quezon City;

LAND AREA IMPOSABLE FEE

 Less than 200 sq. m. PHP 100.00

201 sq. m. – 500 sq. m. PHP 200.00

501 sq. m. – 1,000 sq. m. PHP 300.00

1,001 sq. m. – 1,500 sq. m. PHP 400.00

1,501 sq. m. – 2,000 sq. m. or more PHP 500.00

On all condominium unit and socialized housing projects/units in Quezon City;

FLOOR AREA IMPOSABLE FEE

Less than 40 sq. m. PHP 25.00

41 sq. m. – 60 sq. m. PHP 50.00

61 sq. m. – 100 sq. m. PHP 75.00

101 sq. m. – 150 sq. m. PHP 100.00

151 sq. m. – 200 sq. [m.] or more PHP 200.00

On high-rise Condominium Units

a) High-rise Condominium – The Homeowners Association of high- rise condominiums shall

pay the annual garbage fee on the total size of the entire condominium and socialized
Housing Unit and an additional garbage fee shall be collected based on area occupied for
every unit already so ld or being amortized.

b) High-rise apartment units – Owners of high-rise apartment units shall pay the annual
garbage fee on the total lot size of the entire apartment and an additional garbage fee based
on the schedule prescribed herein for every unit occupied.

The collection of the garbage fee shall accrue on the first day of January and shall be paid
simultaneously with the payment of the real property tax, but not later than the first quarter
installment.  In case a household owner refuses to pay, a penalty of 25% of the garbage fee due,
8

plus an interest of 2% per month or a fraction thereof, shall be charged.9

Petitioner alleges that he is a registered co-owner of a 371-square-meter residential property in

Quezon City which is covered by Transfer Certificate of Title (TCT ) No. 216288, and that, on
January 7, 2014, he paid his realty tax which already included the garbage fee in the sum of

Php100.00. 10

The instant petition was filed on January 17, 2014. We issued a TRO on February 5, 2014, which
enjoined the enforcement of Ordinance Nos. SP-2095 and SP-2235 and required respondents to
comment on the petition without necessarily giving due course thereto. 11
Respondents filed their Comment  with urgent motion to dissolve the TRO on February 17, 2014.
12

Thereafter, petitioner filed a Reply and a Memorandum on March 3, 2014 and September 8, 2014,
respectively.

Procedural Matters

A. Propriety of a Petition for Certiorari

Respondents are of the view that this petition for certiorari is improper since they are not tribunals,
boards or officers exercising judicial or quasi-judicial functions. Petitioner, however, counters that in
enacting Ordinance Nos. SP-2095 and SP-2235, the Quezon City Council exercised quasi-judicial
function because the ordinances ruled against the property owners who must pay the SHT and the
garbage fee, exacting from them funds for basic essential public services that they should not be
held liable. Even if a Rule 65 petition is improper, petitioner still asserts that this Court, in a number
of cases like in Rosario v. Court of Appeals,  has taken cognizance of an improper remedy in the
13

interest of justice.

We agree that respondents neither acted in any judicial or quasi-judicial capacity nor arrogated unto
themselves any judicial or quasi-judicial prerogatives.

A respondent is said to be exercising judicial function where he has the power to determine what the
law is and what the legal rights of the parties are, and then undertakes to determine these questions
and adjudicate upon the rights of the parties.

Quasi-judicial function, on the other hand, is "a term which applies to the actions, discretion, etc., of
public administrative officers or bodies … required to investigate facts or ascertain the existence of
facts, hold hearings, and draw conclusions from them as a basis for their official action and to
exercise discretion of a judicial nature."

Before a tribunal, board, or officer may exercise judicial or quasi-judicial acts, it is necessary that
there be a law that gives rise to some specific rights of person s or property under which adverse
claims to such rights are made, and the controversy en suing therefrom is brought before a tribunal,
board, or officer clothed with power and authority to determine the law and adjudicate the respective
rights of the contending parties. 14

For a writ of certiorari to issue, the following requisites must concur: (1) it must be directed against a
tribunal, board, or officer exercising judicial or quasi-judicial functions; (2) the tribunal, board, or
officer must have acted without or in excess of jurisdiction or with grave abuse of discretion
amounting to lack or excess of jurisdiction; and (3) there is no appeal or any plain, speedy, and
adequate remedy in the ordinary course of law. The enactment by the Quezon City Council of the
assailed ordinances was done in the exercise of its legislative, not judicial or quasi-judicial, function.
Under Republic Act (R.A.) No.7160, or the Local Government Code of 1991 (LGC), local legislative
power shall be exercised by the Sangguniang Panlungsod for the city. Said law likewise is specific in
15

providing that the power to impose a tax, fee, or charge , or to generate revenue shall be exercised
by the sanggunian of the local government unit concerned through an appropriate ordinance. 16

Also, although the instant petition is styled as a petition for certiorari, it essentially seeks to declare
the unconstitutionality and illegality of the questioned ordinances. It, thus, partakes of the nature of a
petition for declaratory relief, over which this Court has only appellate, not original, jurisdiction. 17
Despite these, a petition for declaratory relief may be treated as one for prohibition or mandamus,
over which we exercise original jurisdiction, in cases with far-reaching implications or one which
raises transcendental issues or questions that need to be resolved for the public good. The judicial
18

policy is that this Court will entertain direct resort to it when the redress sought cannot be obtained in
the proper courts or when exceptional and compelling circumstances warrant availment of a remedy
within and calling for the exercise of Our primary jurisdiction. 19

Section 2, Rule 65 of the Rules of Court lay down under what circumstances a petition for prohibition
may be filed:

SEC. 2. Petition for prohibition. - When the proceedings of any tribunal, corporation, board, officer or
person, whether exercising judicial, quasi-judicial or ministerial functions, are without or in excess of
its or his jurisdiction, or with grave abuse of discretion amounting to lack or excess of jurisdiction,
and there is no appeal or any other plain, speedy, and adequate remedy in the ordinary course of
law, a person aggrieved thereby may file a verified petition in the proper court, alleging the facts with
certainty and praying that judgment be rendered commanding the respondent to desist from further
proceeding in the action or matter specified therein, or otherwise granting such incidental reliefs as
law and justice may require.

In a petition for prohibition against any tribunal, corporation, board, or person – whether exercising
judicial, quasi-judicial, or ministerial functions – who has acted without or in excess of jurisdiction or
with grave abuse of discretion, the petitioner prays that judgment be rendered, commanding the
respondents to desist from further proceeding in the action or matter specified in the petition. In this
case, petitioner's primary intention is to prevent respondents from implementing Ordinance Nos. SP-
2095 and SP-2235. Obviously, the writ being sought is in the nature of a prohibition, commanding
desistance.

We consider that respondents City Mayor, City Treasurer, and City Assessor are performing
ministerial functions. A ministerial function is one that an officer or tribunal performs in the context of
a given set of facts, in a prescribed manner and without regard for the exercise of his or its own
judgment, upon the propriety or impropriety of the act done.  Respondent Mayor, as chief executive
20

of the city government, exercises such powers and performs such duties and functions as provided
for by the LGC and other laws.  Particularly, he has the duty to ensure that all taxes and other
21

revenues of the city are collected, and that city funds are applied to the payment of expenses and
settlement of obligations of the city, in accordance with law or ordinance.  On the other hand, under
22

the LGC, all local taxes, fees, and charges shall be collected by the provincial, city, municipal, or
barangay treasurer, or their duly-authorized deputies, while the assessor shall take charge, among
others, of ensuring that all laws and policies governing the appraisal and assessment of real
properties for taxation purposes are properly executed.  Anent the SHT, the Department of Finance
23

(DOF) Local Finance Circular No. 1-97, dated April 16, 1997, is more specific:

6.3 The Assessor’s office of the Identified LGU shall:

a. immediately undertake an inventory of lands within its jurisdiction which shall be

subject to the levy of the Social Housing Tax (SHT) by the local sanggunian
concerned;

b. inform the affected registered owners of the effectivity of the SHT; a list of the
lands and registered owners shall also be posted in 3 conspicuous places in the
city/municipality;
 c. furnish the Treasurer’s office and the local sanggunian concerned of the list of
lands affected;

6.4 The Treasurer’s office shall:

a. collect the Social Housing Tax on top of the Real Property Tax, SEF Tax and other
special assessments;

b. report to the DOF, thru the Bureau of Local Government Finance, and the Mayor’s
office the monthly collections on Social Housing Tax (SHT). An annual report should
likewise be submitted to the HUDCC on the total revenues raised during the year
pursuant to Sec. 43, R.A. 7279 and the manner in which the same was disbursed.

Petitioner has adduced special and important reasons as to why direct recourse to us should be
allowed. Aside from presenting a novel question of law, this case calls for immediate resolution since
the challenged ordinances adversely affect the property interests of all paying constituents of
Quezon City. As well, this petition serves as a test case for the guidance of other local government
units (LGUs).Indeed, the petition at bar is of transcendental importance warranting a relaxation of
the doctrine of hierarchy of courts. In Social Justice Society (SJS) Officers, et al. v. Lim , the Court
24

cited the case of Senator Jaworski v. Phil. Amusement & Gaming Corp.,  where We ratiocinated:
25

Granting arguendo that the present action cannot be properly treated as a petition for prohibition, the
transcendental importance of the issues involved in this case warrants that we set aside the
technical defects and take primary jurisdiction over the petition at bar . x x x This is in accordance
with the well entrenched principle that rules of procedure are not inflexible tools designed to hinder
or delay, but to facilitate and promote the administration of justice. Their strict and rigid application,
which would result in technicalities that tend to frustrate, rather than promote substantial justice,
must always be eschewed. 26

B. Locus Standi of Petitioner

Respondents challenge petitioner’s legal standing to file this case on the ground that, in relation to
Section 3 of Ordinance No. SP-2095, petitioner failed to allege his ownership of a property that has
an assessed value of more than Php100,000.00 and, with respect to Ordinance No. SP-2335, by
what standing or personality he filed the case to nullify the same. According to respondents, the
petition is not a class suit, and that, for not having specifically alleged that petitioner filed the case as
a taxpayer, it could only be surmised whether he is a party-in-interest who stands to be directly
benefited or injured by the judgment in this case.

It is a general rule that every action must be prosecuted or defended in the name of the real party-in-
interest, who stands to be benefited or injured by the judgment in the suit, or the party entitled to the
avails of the suit.

Jurisprudence defines interest as "material interest, an interest in issue and to be affected by the
decree, as distinguished from mere interest in the question involved, or a mere incidental interest. By
real interest is meant a present substantial interest, as distinguished from a mere expectancy or a
future, contingent, subordinate, or consequential interest." "To qualify a person to be a real party-in-
interest in whose name an action must be prosecuted, he must appear to be the present real owner
of the right sought to be enforced." 27
"Legal standing" or locus standi calls for more than just a generalized grievance.  The concept has
28

been define d as a personal and substantial interest in the case such that the party has sustained or
will sustain direct injury as a result of the government al act that is being challenged.  The gist of the
29

question of standing is whether a party alleges such personal stake in the outcome of the
controversy as to assure that concrete adverseness which sharpens the presentation of issues upon
which the court depends for illumination of difficult constitutional questions. 30

A party challenging the constitutionality of a law, act, or statute must show "not only that the law is
invalid, but also that he has sustained or is in immediate, or imminent danger of sustaining some
direct injury as a result of its enforcement, and not merely that he suffers thereby in some indefinite
way." It must be shown that he has been, or is about to be, denied some right or privilege to which
he is lawfully entitled, or that he is about to be subjected to some burdens or penalties by reason of
the statute complained of. 31

Tested by the foregoing, petitioner in this case clearly has legal standing to file the petition. He is a
real party-in-interest to assail the constitutionality and legality of Ordinance Nos. SP-2095 and SP-
2235 because respondents did not dispute that he is a registered co-owner of a residential property
in Quezon City an d that he paid property tax which already included the SHT and the garbage fee.
He has substantial right to seek a refund of the payments he made and to stop future imposition.
While he is a lone petitioner, his cause of action to declare the validity of the subject ordinances is
substantial and of paramount interest to similarly situated property owners in Quezon City.

C. Litis Pendentia

Respondents move for the dismissal of this petition on the ground of litis pendentia. They claim that,
as early as February 22, 2012, a case entitled Alliance of Quezon City Homeowners, Inc., et al., v.
Hon. Herbert Bautista, et al. , docketed as Civil Case No. Q-12- 7-820, has been pending in the
Quezon City Regional Trial Court, Branch 104, which assails the legality of Ordinance No. SP-2095.
Relying on City of Makati, et al. v. Municipality (now City) of Taguig, et al.,  respondents assert that
32

there is substantial identity of parties between the two cases because petitioner herein and plaintiffs
in the civil case filed their respective cases as taxpayers of Quezon City.

For petitioner, however, respondents’ contention is untenable since he is not a party in Alliance and
does not even have the remotest identity or association with the plaintiffs in said civil case.
Moreover, respondents’ arguments would deprive this Court of its jurisdiction to determine the
constitutionality of laws under Section 5, Article VIII of the 1987 Constitution. 33

Litis pendentia is a Latin term which literally means "a pending suit" and is variously referred to in
some decisions as lis pendens and auter action pendant.  While it is normally connected with the
34

control which the court has on a property involved in a suit during the continuance proceedings, it is
more interposed as a ground for the dismissal of a civil action pending in court.  In Film 35

Development Council of the Philippines v. SM Prime Holdings, Inc.,36 We elucidated:

Litis pendentia, as a ground for the dismissal of a civil action, refers to a situation where two actions
are pending between the same parties for the same cause of action, so that one of them becomes
unnecessary and vexatious. It is based on the policy against multiplicity of suit and authorizes a
court to dismiss a case motu proprio.

xxxx

The requisites in order that an action may be dismissed on the ground of litis pendentia are: (a) the
identity of parties, or at least such as representing the same interest in both actions; (b) the identity
of rights asserted and relief prayed for, the relief being founded on the same facts, and (c) the
identity of the two cases such that judgment in one, regardless of which party is successful, would
amount to res judicata in the other.

The underlying principle of litis pendentia is the theory that a party is not allowed to vex another
more than once regarding the same subject matter and for the same cause of action. This theory is
founded on the public policy that the same subject matter should not be the subject of controversy in
courts more than once, in order that possible conflicting judgments may be avoided for the sake of
the stability of the rights and status of persons, and also to avoid the costs and expenses incident to
numerous suits.

Among the several tests resorted to in ascertaining whether two suits relate to a single or common
cause of action are: (1) whether the same evidence would support and sustain both the first and
second causes of action; and (2) whether the defenses in one case may be used to substantiate the
complaint in the other.

The determination of whether there is an identity of causes of action for purposes of litis pendentia is
inextricably linked with that of res judicata , each constituting an element of the other. In either case,
both relate to the sound practice of including, in a single litigation, the disposition of all issues
relating to a cause of action that is before a court.37

There is substantial identity of the parties when there is a community of interest between a party in
the first case and a party in the second case albeit the latter was not impleaded in the first
case.  Moreover, the fact that the positions of the parties are reversed, i.e., the plaintiffs in the first
38

case are the defendants in the second case or vice-versa, does not negate the identity of parties for
purposes of determining whether the case is dismissible on the ground of litis pendentia . 39

In this case, it is notable that respondents failed to attach any pleading connected with the alleged
civil case pending before the Quezon City trial court.  Granting that there is substantial identity of
1âwphi1

parties between said case and this petition, dismissal on the ground of litis pendentia still cannot be
had in view of the absence of the second and third requisites. There is no way for us to determine
whether both cases are based on the same set of facts that require the presentation of the same
evidence. Even if founded on the same set of facts, the rights asserted and reliefs prayed for could
be different. Moreover, there is no basis to rule that the two cases are intimately related and/or
intertwined with one another such that the judgment that may be rendered in one, regardless of
which party would be successful, would amount to res judicata in the other.

D. Failure to Exhaust Administrative Remedies

Respondents contend that petitioner failed to exhaust administrative remedies for his non-
compliance with Section 187 of the LGC, which mandates:

Section 187. Procedure for Approval and Effectivity of Tax Ordinances and Revenue Measures;
Mandatory Public Hearings. – The procedure for approval of local tax ordinances and revenue
measures shall be in accordance with the provisions of this Code: Provided, That public hearings
shall be conducted for the purpose prior to the enactment thereof: Provided, further, That any
question on the constitutionality or legality of tax ordinances or revenue measures may be raised on
appeal within thirty (30) days from the effectivity thereof to the Secretary of Justice who shall render
a decision within sixty (60) days from the date of receipt of the appeal: Provided, however, That such
appeal shall not have the effect of suspending the effectivity of the ordinance and the accrual and
payment of the tax, fee, or charge levied therein: Provided, finally, That within thirty (30) days after
receipt of the decision or the lapse of the sixty-day period without the Secretary of Justice acting
upon the appeal, the aggrieved party may file appropriate proceedings with a court of competent
jurisdiction.

The provision, the constitutionality of which was sustained in Drilon v. Lim ,  has been construed as
40

mandatory  considering that –

41

A municipal tax ordinance empowers a local government unit to impose taxes. The power to tax is
the most effective instrument to raise needed revenues to finance and support the myriad activities
of local government units for the delivery of basic services essential to the promotion of the general
welfare and enhancement of peace, progress, and prosperity of the people. Consequently, any delay
in implementing tax measures would be to the detriment of the public. It is for this reason that
protests over tax ordinances are required to be done within certain time frames. x x x. 42

The obligatory nature of Section 187 was underscored in Hagonoy Market Vendor Asso. v.
Municipality of Hagonoy: 43

x x x [T]he timeframe fixed by law fo r parties to avail of their legal remedies before competent courts
is not a "mere technicality" that can be easily brushed aside. The periods stated in Section 187 of
the Local Government Code are mandatory. x x x Being its lifeblood, collection of revenues by the
government is of paramount importance. The funds for the operation of its agencies and provision of
basic services to its inhabitants are largely derived from its revenues and collections. Thus, it is
essential that the validity of revenue measures is not left uncertain for a considerable length of time.
Hence, the law provided a time limit for an aggrieved party to assail the legality of revenue measures
and tax ordinances." 44

Despite these cases, the Court, in Ongsuco, et al. v. Hon. Malones, held that there was no need for
45

petitioners therein to exhaust administrative remedies before resorting to the courts, considering that
there was only a pure question of law, the parties did not dispute any factual matter on which they
had to present evidence. Likewise, in Cagayan Electric Power and Light Co., Inc. v. City of Cagayan
de Oro,  We relaxed the application of the rules in view of the more substantive matters. For the
46

same reasons, this petition is an exception to the general rule.

Substantive Issues

Petitioner asserts that the protection of real properties from informal settlers and the collection of
garbage are basic and essential duties and functions of the Quezon City Government. By imposing
the SHT and the garbage fee, the latter has shown a penchant and pattern to collect taxes to pay for
public services that could be covered by its revenues from taxes imposed on property, idle land,
business, transfer, amusement, etc., as well as the Internal Revenue Allotment (IRA ) from the
National Government. For petitioner, it is noteworthy that respondents did not raise the issue that the
Quezon City Government is in dire financial state and desperately needs money to fund housing for
informal settlers and to pay for garbage collection. In fact, it has not denied that its revenue
collection in 2012 is in the sum of ₱13.69 billion.

Moreover, the imposition of the SHT and the garbage fee cannot be justified by the Quezon City
Government as an exercise of its power to create sources of income under Section 5, Article X of the
1987 Constitution.  According to petitioner, the constitutional provision is not a carte blanche for the
47

LGU to tax everything under its territorial and political jurisdiction as the provision itself admits of
guidelines and limitations.

Petitioner further claims that the annual property tax is an ad valorem tax, a percentage of the
assessed value of the property, which is subject to revision every three (3) years in order to reflect
an increase in the market value of the property. The SHT and the garbage fee are actually increases
in the property tax which are not based on the assessed value of the property or its reassessment
every three years; hence, in violation of Sections 232 and 233 of the LGC. 48

For their part, respondents relied on the presumption in favor of the constitutionality of Ordinance
Nos. SP-2095 and SP-2235, invoking Victorias Milling Co., Inc. v. Municipality of Victorias,
etc.,  People v. Siton, et al.,  and Hon. Ermita v. Hon. Aldecoa-Delorino .  They argue that the
49 50 51

burden of establishing the invalidity of an ordinance rests heavily upon the party challenging its
constitutionality. They insist that the questioned ordinances are proper exercises of police power
similar to Telecom. & Broadcast Attys. of the Phils., Inc. v. COMELEC52 and Social Justice Society
(SJS), et al. v. Hon. Atienza, Jr.  and that their enactment finds basis in the social justice principle
53

enshrined in Section 9,  Article II of the 1987 Constitution.

54

As to the issue of publication, respondents argue that where the law provides for its own effectivity,
publication in the Official Gazette is not necessary so long as it is not punitive in character, citing
Balbuna, et al. v. Hon. Secretary of Education, et al.  and Askay v. Cosalan .[56]] Thus, Ordinance
55

No. SP-2095 took effect after its publication, while Ordinance No. SP-2235 became effective after its
approval on December 26, 2013.

Additionally, the parties articulate the following positions:

On the Socialized Housing Tax

Respondents emphasize that the SHT is pursuant to the social justice principle found in Sections 1
and 2, Article XIII  of the 1987 Constitution and Sections 2 (a)  and 43  of R.A. No. 7279, or the
57 58 59

"Urban Development and Housing Act of 1992 ( UDHA ).

Relying on Manila Race Horse Trainers Assn., Inc. v. De La Fuente, and Victorias Milling Co., Inc. v.
60

Municipality of Victorias, etc., respondents assert that Ordinance No. SP-2095 applies equally to all
61

real property owners without discrimination. There is no way that the ordinance could violate the
equal protection clause because real property owners and informal settlers do not belong to the
same class.

Ordinance No. SP-2095 is also not oppressive since the tax rate being imposed is consistent with
the UDHA. While the law authorizes LGUs to collect SHT on properties with an assessed value of
more than ₱50,000.00, the questioned ordinance only covers properties with an assessed value
exceeding ₱100,000.00. As well, the ordinance provides for a tax credit equivalent to the total
amount of the special assessment paid by the property owner beginning in the sixth (6th) year of the
effectivity of the ordinance.

On the contrary, petitioner claims that the collection of the SHT is tantamount to a penalty imposed
on real property owners due to the failure of respondent Quezon City Mayor and Council to perform
their duty to secure and protect real property owners from informal settlers, thereby burdening them
with the expenses to provide funds for housing. For petitioner, the SHT cannot be viewed as a
"charity" from real property owners since it is forced, not voluntary.

Also, petitioner argues that the collection of the SHT is a kind of class legislation that violates the
right of property owners to equal protection of the laws since it favors informal settlers who occupy
property not their own and pay no taxes over law-abiding real property owners w ho pay income and
realty taxes.
Petitioner further contends that respondents’ characterization of the SHT as "nothing more than an
advance payment on the real property tax" has no statutory basis. Allegedly, property tax cannot be
collected before it is due because, under the LGC, chartered cities are authorized to impose property
tax based on the assessed value and the general revision of assessment that is made every three
(3) years.

As to the rationale of SHT stated in Ordinance No. SP-2095, which, in turn, was based on Section
43 of the UDHA, petitioner asserts that there is no specific provision in the 1987 Constitution stating
that the ownership and enjoyment of property bear a social function. And even if there is, it is
seriously doubtful and far-fetched that the principle means that property owners should provide
funds for the housing of informal settlers and for home site development. Social justice and police
power, petitioner believes, does not mean imposing a tax on one, or that one has to give up
something, for the benefit of another. At best, the principle that property ownership and enjoyment
bear a social function is but a reiteration of the Civil Law principle that property should not be
enjoyed and abused to the injury of other properties and the community, and that the use of the
property may be restricted by police power, the exercise of which is not involved in this case.

Finally, petitioner alleges that 6 Bistekvilles will be constructed out of the SHT collected. Bistek is the
monicker of respondent City Mayor. The Bistekvilles makes it clear, therefore, that politicians will
take the credit for the tax imposed on real property owners.

On the Garbage Fee

Respondents claim that Ordinance No. S-2235, which is an exercise of police power, collects on the
average from every household a garbage fee in the meager amount of thirty-three (33) centavos per
day compared with the sum of ₱1,659.83 that the Quezon City Government annually spends for
every household for garbage collection and waste management. 62

In addition, there is no double taxation because the ordinance involves a fee. Even assuming that
the garbage fee is a tax, the same cannot be a direct duplicate tax as it is imposed on a different
subject matter and is of a different kind or character. Based on Villanueva, et al. v. City of Iloilo  and
63

Victorias Milling Co., Inc. v. Municipality of Victorias, etc.,  there is no "taxing twice" because the real
64

property tax is imposed on ownership based on its assessed value, while the garbage fee is required
on the domestic household. The only reference to the property is the determination of the applicable
rate and the facility of collection.

Petitioner argues, however, that Ordinance No. S-2235 cannot be justified as an exercise of police
power. The cases of Calalang v. Williams,  Patalinghug v. Court of Appeals,  and Social Justice
65 66

Society (SJS), et al. v. Hon. Atienza, Jr.,  which were cited by respondents, are inapplicable since
67

the assailed ordinance is a revenue measure and does not regulate the disposal or other aspect of
garbage.

The subject ordinance, for petitioner, is discriminatory as it collects garbage fee only from domestic
households and not from restaurants, food courts, fast food chains, and other commercial dining
places that spew garbage much more than residential property owners.

Petitioner likewise contends that the imposition of garbage fee is tantamount to double taxation
because garbage collection is a basic and essential public service that should be paid out from
property tax, business tax, transfer tax, amusement tax, community tax certificate, other taxes, and
the IRA of the Quezon City Government. To bolster the claim, he states that the revenue collection
of the Quezon City Government reached Php13.69 billion in 2012. A small portion of said amount
could be spent for garbage collection and other essential services.
It is further noted that the Quezon City Government already collects garbage fee under Section
47  of R.A. No. 9003, or the Ecological Solid Waste Management Act of 2000, which authorizes
68

LGUs to impose fees in amounts sufficient to pay the costs of preparing, adopting, and implementing
a solid waste management plan, and that LGUs have access to the Solid Waste Management
(SWM) Fund created under Section 46  of the same law. Also, according to petitioner, it is evident
69

that Ordinance No. S2235 is inconsistent with R.A. No. 9003 for whil e the law encourages
segregation, composting, and recycling of waste, the ordinance only emphasizes the collection and
payment of garbage fee; while the law calls for an active involvement of the barangay in the
collection, segregation, and recycling of garbage, the ordinance skips such mandate. Lastly, in
challenging the ordinance, petitioner avers that the garbage fee was collected even if the required
publication of its approval had not yet elapsed. He notes that on January 7, 2014, he paid his realty
tax which already included the garbage fee.

The Court's Ruling

Respondents correctly argued that an ordinance, as in every law, is presumed valid.

An ordinance carries with it the presumption of validity. The question of reasonableness though is
open to judicial inquiry. Much should be left thus to the discretion of municipal authorities. Courts will
go slow in writing off an ordinance as unreasonable unless the amount is so excessive as to be
prohibitive, arbitrary, unreasonable, oppressive, or confiscatory. A rule which has gained acceptance
is that factors relevant to such an inquiry are the municipal conditions as a whole and the nature of
the business made subject to imposition. 70

For an ordinance to be valid though, it must not only be within the corporate powers of the LGU to
enact and must be passed according to the procedure prescribed by law, it should also conform to
the following requirements: (1) not contrary to the Constitution or any statute; (2) not unfair or
oppressive; (3) not partial or discriminatory; (4) not prohibit but may regulate trade; (5) general and
consistent with public policy; and (6) not unreasonable.  As jurisprudence indicates, the tests are
71

divided into the formal (i.e., whether the ordinance was enacted within the corporate powers of the
LGU and whether it was passed in accordance with the procedure prescribed by law), and the
substantive ( i.e., involving inherent merit, like the conformity of the ordinance with the limitations
under the Constitution and the statutes, as well as with the requirements of fairness and reason, and
its consistency with public policy). 72

An ordinance must pass muster under the test of constitutionality and the test of consistency with the
prevailing laws.  If not, it is void.
73 74

Ordinance should uphold the principle of the supremacy of the Constitution.  As to conformity with
75

existing statutes,

Batangas CATV, Inc. v. Court of Appeals  has this to say:

76

It is a fundamental principle that municipal ordinances are inferior in status and subordinate to the
laws of the state. An ordinance in conflict with a state law of general character and statewide
application is universally held to be invalid. The principle is frequently expressed in the declaration
that municipal authorities, under a general grant of power, cannot adopt ordinances which infringe
the spirit of a state law or repugnant to the general policy of the state. In every power to pass
ordinances given to a municipality, there is an implied restriction that the ordinances shall be
consistent with the general law. In the language of Justice Isagani Cruz (ret.), this Court, in Magtajas
vs. Pryce Properties Corp., Inc., ruled that:
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.

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, 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.77

LGUs must be reminded that they merely form part of the whole; that the policy of ensuring the
autonomy of local governments was never intended by the drafters of the 1987 Constitution to create
an imperium in imperio and install an intra-sovereign political subdivision independent of a single
sovereign state. 78

"[M]unicipal corporations are bodies politic and corporate, created not only as local units of local self-
government, but as governmental agencies of the state. The legislature, by establishing a municipal
corporation, does not divest the State of any of its sovereignty; absolve itself from its right and duty
to administer the public affairs of the entire state; or divest itself of any power over the inhabitants of
the district which it possesses before the charter was granted." 79

LGUs are able to legislate only by virtue of a valid delegation of legislative power from the national
legislature; they are mere agents vested with what is called the power of subordinate
legislation.  "Congress enacted the LGC as the implementing law for the delegation to the various
80

LGUs of the State’s great powers, namely: the police power, the power of eminent domain, and the
power of taxation. The LGC was fashioned to delineate the specific parameters and limitations to be
complied with by each LGU in the exercise of these delegated powers with the view of making each
LGU a fully functioning subdivision of the State subject to the constitutional and statutory
limitations."
81

Specifically, with regard to the power of taxation, it is indubitably the most effective instrument to
raise needed revenues in financing and supporting myriad activities of the LGUs for the delivery of
basic services essential to the promotion of the general welfare and the enhancement of peace,
progress, and prosperity of the people.  As this Court opined in National Power Corp. v. City of
82

Cabanatuan: 83
In recent years, the increasing social challenges of the times expanded the scope of state activity,
and taxation has become a tool to realize social justice and the equitable distribution of wealth,
economic progress and the protection of local industries as well as public welfare and similar
objectives. Taxation assume s even greater significance with the ratification of the 1987 Constitution.
Thenceforth, the power to tax is no longer vested exclusively on Congress; local legislative bodies
are now given direct authority to levy taxes, fees and other charges pursuant to Article X, Section 5
of the 1987 Constitution, viz: "Section 5. Each Local Government unit shall have the power to create
its own sources of revenue, to levy taxes, fees and charges subject to such guidelines and
limitations as the Congress may provide, consistent with the basic policy of local autonomy. Such
taxes, fees and charges shall accrue exclusively to the local governments."

This paradigm shift results from the realization that genuine development can be achieved only by
strengthening local autonomy and promoting decentralization of governance. For a long time, the
country’s highly centralized government structure has bred a culture of dependence among local
government leaders upon the national leadership. It has also "dampened the spirit of initiative,
innovation and imaginative resilience in matters of local development on the part of local government
leaders." The only way to shatter this culture of dependence is to give the LGUs a wider role in the
delivery of basic services, and confer them sufficient powers to generate their own sources for the
purpose. To achieve this goal, Section 3 of Article X of the 1987 Constitution mandates Congress to
enact a local government code that will, consistent with the basic policy of local autonomy , set the
guidelines and limitations to this grant of taxing powers x x x 84

Fairly recently, We also stated in Pelizloy Realty Corporation v. Province of Benguet  that:
85

The rule governing the taxing power of provinces, cities, municipalities and barangays is
summarized in Icard v. City Council of Baguio :

It is settled that a municipal corporation unlike a sovereign state is clothed with no inherent power of
taxation. The charter or statute must plainly show an intent to confer that power or the municipality,
cannot assume it. And the power when granted is to be construed in strictissimi juris . Any doubt or
ambiguity arising out of the term used in granting that power must be resolved against the
municipality. Inferences, implications, deductions – all these – have no place in the interpretation of
the taxing power of a municipal corporation. [Underscoring supplied]

xxxx

Per Section 5, Article X of the 1987 Constitution, "the power to tax is no longer vested exclusively on
Congress; local legislative bodies are now given direct authority to levy taxes, fees and other
charges." Nevertheless, such authority is "subject to such guidelines and limitations as the Congress
may provide."

In conformity with Section 3, Article X of the 1987 Constitution, Congress enacted Republic Act No.
7160, otherwise known as the Local Government Code of 1991. Book II of the LGC governs local
taxation and fiscal matters.86

Indeed, LGUs have no inherent power to tax except to the extent that such power might be
delegated to them either by the basic law or by the statute.  "Under the now prevailing Constitution ,
87

where there is neither a grant nor a prohibition by statute , the tax power must be deemed to exist
although Congress may provide statutory limitations and guidelines. The basic rationale for the
current rule is to safeguard the viability and self-sufficiency of local government units by directly
granting them general and broad tax powers. Nevertheless, the fundamental law did not intend the
delegation to be absolute and unconditional; the constitutional objective obviously is to ensure that,
while the local government units are being strengthened and made more autonomous , the
legislature must still see to it that (a) the taxpayer will not be over-burdened or saddled with multiple
and unreasonable impositions; (b) each local government unit will have its fair share of available
resources; (c) the resources of the national government will not be unduly disturbed; and (d) local
taxation will be fair, uniform, and just."
88

Subject to the provisions of the LGC and consistent with the basic policy of local autonomy, every
LGU is now empowered and authorized to create its own sources of revenue and to levy taxes, fees,
and charges which shall accrue exclusively to the local government unit as well as to apply its
resources and assets for productive, developmental, or welfare purposes, in the exercise or
furtherance of their governmental or proprietary powers and functions.  The relevant provisions of
89

the LGC which establish the parameters of the taxing power of the LGUs are as follows:

SECTION 130. Fundamental Principles. – The following fundamental principles shall govern th e
exercise of the taxing and other revenue-raising powers of local government units:

(a) Taxation shall be uniform in each local government unit;

(b) Taxes, fees, charges and other impositions shall:

(1) be equitable and based as far as practicable on the taxpayer’s ability to pay;

(2) be levied and collected only for public purposes;

(3) not be unjust, excessive, oppressive, or confiscatory;

(4) not be contrary to law, public policy, national economic policy, or in restraint of
trade;

(c) The collection of local taxes, fees, charges and other impositions shall in no case be left
to any private person;

(d) The revenue collected pursuant to the provisions of this Code shall inure solely to the
benefit of, and be subject to the disposition by, the local government unit levying the tax, fee,
charge or other imposition unless otherwise specifically provided herein; and,

(e) Each local government unit shall, as far as practicable, evolve a progressive system of
taxation.

SECTION 133. Common Limitations on the Taxing Powers of Local Government Units. – Unless
otherwise provided herein, the exercise of the taxing powers of provinces, cities, municipalities, and
barangays shall not extend to the levy of the following:

(a) Income tax, except when levied on banks and other financial institutions;

(b) Documentary stamp tax;

(c) Taxes on estates, inheritance, gifts, legacies and other acquisitions mortis causa, except
as otherwise provided herein;
 (d) Customs duties, registration fees of vessel and wharage on wharves, tonnage dues, and
all other kinds of customs fees, charges and dues except wharfage on wharves constructed
and maintained by the local government unit concerned;

(e) Taxes, fees, and charges and other impositions upon goods carried into or out of, or
passing through, the territorial jurisdictions of local government units in the guise of charges
for wharfage, tolls for bridges or otherwise, or other taxes, fees, or charges in any form
whatsoever upon such goods or merchandise;

(f) Taxes, fees or charges on agricultural and aquatic products when sold by marginal
farmers or fishermen;

(g) Taxes on business enterprises certified to by the Board of Investments as pioneer or non-
pioneer for a period of six (6) and four (4) years, respectively from the date of registration;

(h) Excise taxes on articles enumerated under the National Internal Revenue Code, as
amended, and taxes, fees or charges on petroleum products;

(i) Percentage or value-added tax (VAT) on sales, barters or exchanges or similar

transactions on goods or services except as otherwise provided herein;

(j) Taxes on the gross receipts of transportation contractors and persons engaged in the
transportation of passengers or freight by hire and common carriers by air, land or water,
except as provided in this Code;

(k) Taxes on premiums paid by way of reinsurance or retrocession;

(l) Taxes, fees or charges for the registration of motor vehicles and for the issuance of all
kinds of licenses or permits for the driving thereof, except tricycles;

(m) Taxes, fees, or other charges on Philippine products actually exported, except as
otherwise provided herein;

(n) Taxes, fees, or charges, on Countryside and Barangay Business Enterprises and
cooperatives duly registered under R.A. No. 6810 and Republic Act Numbered Sixty-nine
hundred thirty-eight (R.A. No. 6938) otherwise known as the "Cooperative Code of the
Philippines" respectively; and

(o) Taxes, fees or charges of any kind on the National Government, its agencies and
instrumentalities, and local government units.

SECTION 151. Scope of Taxing Powers. – Except as otherwise provided in this Code, the city, may
levy the taxes, fees, and charges which the province or municipality may impose: Provided,
however, That the taxes, fees and charges levied and collected by highly urbanized and
independent component cities shall accrue to them and distributed in accordance with the provisions
of this Code.

The rates of taxes that the city may levy may exceed the maximum rates allowed for the province or
municipality by not more than fifty percent (50%) except the rates of professional and amusement
taxes.
SECTION 186. Power to Levy Other Taxes, Fees or Charges. – Local government units may
exercise the power to levy taxes, fees or charges on any base or subject not otherwise specifically
enumerated herein or taxed under the provisions of the National Internal Revenue Code, as
amended, or other applicable laws: Provided, That the taxes, fees, or charges shall not be unjust,
excessive, oppressive, confiscatory or contrary to declared national policy: Provided, further, That
the ordinance levying such taxes, fees or charges shall not be enacted without any prior public
hearing conducted for the purpose.

On the Socialized Housing Tax

Contrary to petitioner’s submission, the 1987 Constitution explicitly espouses the view that the use of
property bears a social function and that all economic agents shall contribute to the common
good.  The Court already recognized this in Social Justice Society (SJS), et al. v. Hon. Atienza, Jr.:
90 91

Property has not only an individual function, insofar as it has to provide for the needs of the owner,
but also a social function insofar as it has to provide for the needs of the other members of society.
The principle is this:

Police power proceeds from the principle 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, no r injurious
to the right of the community. Rights of property, like all other social and conventional rights, are
subject to 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 an d controlling power vested in them by the constitution, may think necessary and
expedient. 92

Police power, which flows from the recognition that salus populi est suprema lex (the welfare of the
people is the supreme law), is the plenary power vested in the legislature to make statutes and
ordinances to promote the health, morals, peace, education, good order or safety and general
welfare of the people.  Property rights of individuals may be subjected to restraints and burdens in
93

order to fulfill the objectives of the government in the exercise of police power.   In this jurisdiction, it
94

is well-entrenched that taxation may be made the implement of the state’s police power. 95

Ordinance No. SP-2095 imposes a Socialized Housing Tax equivalent to 0.5% on the assessed
value of land in excess of Php100,000.00. This special assessment is the same tax referred to in
R.A. No. 7279 or the UDHA.  The SHT is one of the sources of funds for urban development and
96

housing program.  Section 43 of the law provides:

97

Sec. 43. Socialized Housing Tax . – Consistent with the constitutional principle that the ownership
and enjoyment of property bear a social function and to raise funds for the Program, all local
government units are hereby authorized to impose an additional one-half percent (0.5%) tax on the
assessed value of all lands in urban areas in excess of Fifty thousand pesos (₱50,000.00).

The rationale of the SHT is found in the preambular clauses of the subject ordinance, to wit:

WHEREAS, the imposition of additional tax is intended to provide the City Government with
sufficient funds to initiate, implement and undertake Socialized Housing Projects and other related
preliminary activities;
WHEREAS, the imposition of 0.5% tax will benefit the Socialized Housing Programs and Projects of
the City Government, specifically the marginalized sector through the acquisition of properties for
human settlements;

WHEREAS, the removal of the urban blight will definitely increase fair market value of properties in
the city[.]

The above-quoted are consistent with the UDHA, which the LGUs are charged to implement in their
respective localities in coordination with the Housing and Urban Development Coordinating Council,
the national housing agencies, the Presidential Commission for the Urban Poor, the private sector,
and other non-government organizations.  It is the declared policy of the State to undertake a
98

comprehensive and continuing urban development and housing program that shall, among others,
uplift the conditions of the underprivileged and homeless citizens in urban areas and in resettlement
areas, and provide for the rational use and development of urban land in order to bring a bout,
among others, reduction in urban dysfunctions, particularly those that adversely affect public health,
safety and ecology, and access to land and housing by the underprivileged and homeless
citizens.  Urban renewal and resettlement shall include the rehabilitation and development of
99

blighted and slum areas  and the resettlement of program beneficiaries in accordance with the
100

provisions of the UDHA.  Under the UDHA, socialized housing  shall be the primary strategy in
101 102

providing shelter for the underprivileged and homeless.  The LGU or the NHA, in cooperation with
103

the private developers and concerned agencies, shall provide socialized housing or re settlement
areas with basic services and facilities such as potable water, power and electricity, and an
adequate power distribution system, sewerage facilities, and an efficient and adequate solid waste
disposal system; and access to primary roads and transportation facilities.  The provisions for
104

health, education, communications, security, recreation, relief and welfare shall also be planned and
be given priority for implementation by the LGU and concerned agencies in cooperation with the
private sector and the beneficiaries themselves. 105

Moreover, within two years from the effectivity of the UDHA, the LGUs, in coordination with the NHA,
are directed to implement the relocation and resettlement of persons living in danger areas such as
esteros , railroad tracks, garbage dumps, riverbanks, shorelines, waterways, and other public places
like sidewalks, roads, parks, and playgrounds.  In coordination with the NHA, the LG Us shall
106

provide relocation or resettlement sites with basic services and facilities and access to employment
and livelihood opportunities sufficient to meet the basic needs of the affected families.
107

Clearly, the SHT charged by the Quezon City Government is a tax which is within its power to
impose. Aside from the specific authority vested by Section 43 of the UDHA, cities are allowed to
exercise such other powers and discharge such other functions and responsibilities as are
necessary, appropriate, or incidental to efficient and effective provision of the basic services and
facilities which include, among others, programs and projects for low-cost housing and other mass
dwellings.  The collections made accrue to its socialized housing programs and projects.
108

The tax is not a pure exercise of taxing power or merely to raise revenue; it is levied with a
regulatory purpose. The levy is primarily in the exercise of the police power for the general welfare of
the entire city. It is greatly imbued with public interest. Removing slum areas in Quezon City is not
only beneficial to the underprivileged and homeless constituents but advantageous to the real
property owners as well. The situation will improve the value of the their property investments, fully
enjoying the same in view of an orderly, secure, and safe community, and will enhance the quality of
life of the poor, making them law-abiding constituents and better consumers of business products.
Though broad and far-reaching, police power is subordinate to constitutional limitations and is
subject to the requirement that its exercise must be reasonable and for the public good.  In the
109

words of City of Manila v. Hon. Laguio, Jr.: 110

The police power granted to local government units must always be exercised with utmost
observance of the rights of the people to due process and equal protection of the law. Such power
cannot be exercised whimsically, arbitrarily or despotically as its exercise is subject to a qualification,
limitation or restriction demanded by the respect and regard due to the prescription of the
fundamental law, particularly those forming part of the Bill of Rights. Individual rights, it bears
emphasis, may be adversely affected only to the extent that may fairly be required by the legitimate
demands of public interest or public welfare. Due process requires the intrinsic validity of the law in
interfering with the rights of the person to his life, liberty and property.

xxxx

To successfully invoke the exercise of police power as the rationale for the enactment of the
Ordinance, and to free it from the imputation of constitutional infirmity, not only must it appear that
the interests of the public generally, as distinguished from those of a particular class, require an
interference with private rights, but the means adopted must be reasonably necessary for the
accomplishment of the purpose and not unduly oppressive upon individuals. It must be evident that
no other alternative for the accomplishment of the purpose less intrusive of private rights can work. A
reasonable relation must exist between the purposes of the police measure and the means
employed for its accomplishment, for even under the guise of protecting the public interest, personal
rights and those pertaining to private property will not be permitted to be arbitrarily invaded.

Lacking a concurrence of these two requisites, the police measure shall be struck down as an
arbitrary intrusion into private rights – a violation of the due process clause.
111

As with the State, LGUs may be considered as having properly exercised their police power only if
there is a lawful subject and a lawful method or, to be precise, if the following requisites are met: (1)
the interests of the public generally, as distinguished from those of a particular class, require its
exercise and (2) the mean s employed are reasonably necessary for the accomplishment of the
purpose and not unduly oppressive upon individuals. 112

In this case, petitioner argues that the SHT is a penalty imposed on real property owners because it
burdens them with expenses to provide funds for the housing of informal settlers, and that it is a
class legislation since it favors the latter who occupy properties which is not their own and pay no
taxes.

We disagree.

Equal protection requires that all persons or things similarly situated should be treated alike, both as
to rights conferred and responsibilities imposed.  The guarantee means that no person or class of
113

persons shall be denied the same protection of laws which is enjoyed by other persons or other
classes in like circumstances.  Similar subjects should not be treated differently so as to give undue
114

favor to some and unjustly discriminate against others.  The law may, therefore, treat and regulate
115

one class differently from another class provided there are real and substantial differences to
distinguish one class from another. 116

An ordinance based on reasonable classification does not violate the constitutional guaranty of the
equal protection of the law. The requirements for a valid and reasonable classification are: (1) it must
rest on substantial distinctions; (2) it must be germane to the purpose of the law; (3) it must not be
limited to existing conditions only; and (4) it must apply equally to all members of the same
class. For the purpose of undertaking a comprehensive and continuing urban development and
117

housing program, the disparities between a real property owner and an informal settler as two
distinct classes are too obvious and need not be discussed at length. The differentiation conforms to
the practical dictates of justice and equity and is not discriminatory within the meaning of the
Constitution. Notably, the public purpose of a tax may legally exist even if the motive which impelled
the legislature to impose the tax was to favor one over another.  It is inherent in the power to tax
118

that a State is free to select the subjects of taxation.  Inequities which result from a singling out of
119

one particular class for taxation or exemption infringe no constitutional limitation.

120

Further, the reasonableness of Ordinance No. SP-2095 cannot be disputed. It is not confiscatory or
oppressive since the tax being imposed therein is below what the UDHA actually allows. As pointed
out by respondents, while the law authorizes LGUs to collect SHT on lands with an assessed value
of more than ₱50,000.00, the questioned ordinance only covers lands with an assessed value
exceeding ₱100,000.00. Even better, on certain conditions, the ordinance grants a tax credit
equivalent to the total amount of the special assessment paid beginning in the sixth (6th) year of its
effectivity. Far from being obnoxious, the provisions of the subject ordinance are fair and just.

On the Garbage Fee

In the United States of America, it has been held that the authority of a municipality to regulate
garbage falls within its police power to protect public health, safety, and welfare.  As opined, the
121

purposes and policy underpinnings of the police power to regulate the collection and disposal of
solid waste are: (1) to preserve and protect the public health and welfare as well as the environment
by minimizing or eliminating a source of disease and preventing and abating nuisances; and (2) to
defray costs and ensure financial stability of the system for the benefit of the entire community, with
the sum of all charges marshalled and designed to pay for the expense of a systemic refuse disposal
scheme. 122

Ordinances regulating waste removal carry a strong presumption of

validity.  Not surprisingly, the overwhelming majority of U.S. cases addressing a city's authority to
123

impose mandatory garbage service and fees have upheld the ordinances against constitutional and
statutory challenges. 124

A municipality has an affirmative duty to supervise and control the collection of garbage within its
corporate limits.  The LGC specifically assigns the responsibility of regulation and oversight of solid
125

waste to local governing bodies because the Legislature determined that such bodies were in the
best position to develop efficient waste management programs.  To impose on local governments
126

the responsibility to regulate solid waste but not grant them the authority necessary to fulfill the same
would lead to an absurd result."  As held in one U.S. case:
127

x x x When a municipality has general authority to regulate a particular subject matter, the manner
and means of exercising those powers, where not specifically prescribed by the legislature, are left
to the discretion of the municipal authorities. x x x Leaving the manner of exercising municipal
powers to the discretion of municipal authorities "implies a range of reasonableness within which a
municipality's exercise of discretion will not be interfered with or upset by the judiciary."
128

In this jurisdiction, pursuant to Section 16 of the LGC and in the proper exercise of its corporate
powers under Section 22 of the same, the Sangguniang Panlungsod of Quezon City, like other local
legislative bodies, is empowered to enact ordinances, approve resolutions, and appropriate funds for
the genera l welfare of the city and its inhabitants. Section 16 of the LGC provides:
129
SECTION 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 general welfare clause is the delegation in statutory form of the police power of the State to
LGUs.  The provisions related thereto are liberally interpreted to give more powers to LGUs in
130

accelerating economic development and upgrading the quality of life for the people in the
community.  Wide discretion is vested on the legislative authority to determine not only what the
131

interests of the public require but also what measures are necessary for the protection of such
interests since the Sanggunian is in the best position to determine the needs of its constituents. 132

One of the operative principles of decentralization is that, subject to the provisions of the LGC and
national policies, the LGUs shall share with the national government the responsibility in the
management and maintenance of ecological balance within their territorial jurisdiction.  In this
133

regard, cities are allowed to exercise such other powers and discharge such other functions and
responsibilities as are necessary, appropriate, or incidental to efficient and effective provision of the
basic services and facilities which include, among others, solid waste disposal system or
environmental management system and services or facilities related to general hygiene and
sanitation.  R.A. No. 9003, or the Ecological Solid Waste Management Act of 2000,  affirms this
134 135

authority as it expresses that the LGUs shall be primarily responsible for the implementation and
enforcement of its provisions within their respective jurisdictions while establishing a cooperative
effort among the national government, other local government units, non-government organizations,
and the private sector.136

Necessarily, LGUs are statutorily sanctioned to impose and collect such reasonable fees and
charges for services rendered.  "Charges" refer to pecuniary liability, as rents or fees against
137

persons or property, while "Fee" means a charge fixed by law or ordinance for the regulation or
inspection of a business or activity. 138

The fee imposed for garbage collections under Ordinance No. SP-2235 is a charge fixed for the
regulation of an activity. The basis for this could be discerned from the foreword of said Ordinance,
to wit:

WHEREAS, Quezon City being the largest and premiere city in the Philippines in terms of population
and urban geographical areas, apart from being competent and efficient in the delivery of public
service, apparently requires a big budgetary allocation in order to address the problems relative and
connected to the prompt and efficient delivery of basic services such as the effective system of
waste management, public information programs on proper garb age and proper waste disposal,
including the imposition of waste regulatory measures;

WHEREAS, to help augment the funds to be spent for the city’s waste management system, the City
Government through the Sangguniang Panlungsod deems it necessary to impose a schedule of
reasonable fees or charges for the garbage collection services for residential (domestic household)
that it renders to the public.
Certainly, as opposed to petitioner’s opinion, the garbage fee is not a tax. In Smart Communications,
Inc. v. Municipality of Malvar, Batangas , the Court had the occasion to distinguish these two
139

concepts:

In Progressive Development Corporation v. Quezon City, the Court declared that "if the generating of
revenue is the primary purpose and regulation is merely incidental, the imposition is a tax; but if
regulation is the primary purpose, the fact that incidentally revenue is also obtained does not make
the imposition a tax."

In Victorias Milling Co., Inc. v. Municipality of Victorias, the Court reiterated that the purpose and
effect of the imposition determine whether it is a tax or a fee, and that the lack of any standards for
such imposition gives the presumption that the same is a tax.

We accordingly say that the designation given by the municipal authorities does not decide whether
the imposition is properly a license tax or a license fee.  The determining factors are the purpose
1awp++i1

and effect of the imposition as may be apparent from the provisions of the ordinance. Thus, "[w]hen
no police inspection, supervision, or regulation is provided, nor any standard set for the applicant to
establish, or that he agrees to attain or maintain, but any and all persons engaged in the business
designated, without qualification or hindrance, may come, and a license on payment of the stipulated
sum will issue, to do business, subject to no prescribed rule of conduct and under no guardian eye,
but according to the unrestrained judgment or fancy of the applicant and licensee, the presumption is
strong that the power of taxation, and not the police power, is being exercised."

In Georgia, U.S.A., assessments for garbage collection services have been consistently treated as a
fee and not a tax.140

In another U.S. case,  the garbage fee was considered as a "service charge" rather than a tax as it
141

was actually a fee for a service given by the city which had previously been provided at no cost to its
citizens.

Hence, not being a tax, the contention that the garbage fee under Ordinance No. SP-2235 violates
the rule on double taxation  must necessarily fail.
142

Nonetheless, although a special charge, tax, or assessment may be imposed by a municipal

corporation, it must be reasonably commensurate to the cost of providing the garbage service.  To 143

pass judicial scrutiny, a regulatory fee must not produce revenue in excess of the cost of the
regulation because such fee will be construed as an illegal tax when the revenue generated by the
regulation exceeds the cost of the regulation. 144

Petitioner argues that the Quezon City Government already collects garbage fee under Section 47 of
R.A. No. 9003, which authorizes LGUs to impose fees in amounts sufficient to pay the costs of
preparing, adopting, and implementing a solid waste management plan, and that it has access to the
SWM Fund under Section 46 of the same law. Moreover, Ordinance No. S-2235 is inconsistent with
R.A. No. 9003, because the ordinance emphasizes the collection and payment of garbage fee with
no concern for segregation, composting and recycling of wastes. It also skips the mandate of the law
calling for the active involvement of the barangay in the collection, segregation, and recycling of
garbage.

We now turn to the pertinent provisions of R.A. No. 9003.

Under R.A. No. 9003, it is the declared policy of the State to adopt a systematic, comprehensive and
ecological solid waste management program which shall, among others, ensure the proper
segregation, collection, transport, storage, treatment and disposal of solid waste through the
formulation and adoption of the best environmental practices in ecological waste management.  The 145

law provides that segregation and collection of solid waste shall be conducted at the barangay level,
specifically for biodegradable, compostable and reusable wastes, while the collection of non-
recyclable materials and special wastes shall be the responsibility of the municipality or
city.  Mandatory segregation of solid wastes shall primarily be conducted at the source, to include
146

household, institutional, industrial, commercial and agricultural sources.  Segregation at source

147

refers to a solid waste management practice of separating, at the point of origin, different materials
found in soli d waste in order to promote recycling and re-use of resources and to reduce the volume
of waste for collection and disposal.  Based on Rule XVII of the Department of Environment and
148

Natural Resources (DENR) Administrative Order No. 2001-34, Series of 2001,  which is the
149

Implementing Rules and Regulations ( IRR ) of R.A. No. 9003, barangays shall be responsible for
the collection, segregation, and recycling of biodegradable, recyclable , compostable and reusable
wastes. 150

For the purpose, a Materials Recovery Facility (MRF), which shall receive biodegradable wastes for
composting and mixed non-biodegradable wastes for final segregation, re-use and recycling, is to be
established in every barangay or cluster of barangays. 151

According to R.A. 9003, an LGU, through its local solid waste management board, is mandated by
law to prepare a 10-year solid waste management plan consistent with the National Solid Waste
Management Framework.  The plan shall be for the re-use, recycling and composting of wastes
152

generated in its jurisdiction; ensure the efficient management of solid waste generated within its
jurisdiction; and place primary emphasis on implementation of all feasible re-use, recycling, and
composting programs while identifying the amount of landfill and transformation capacity that will be
needed for solid waste which cannot be re-used, recycled, or composted.  One of the components
153

of the so lid waste management plan is source reduction:

(e) Source reduction – The source reduction component shall include a program and implementation
schedule which shows the methods by which the LGU will, in combination with the recycling and
composting components, reduce a sufficient amount of solid waste disposed of in accordance with
the diversion requirements of Section 20.

The source reduction component shall describe the following:

(1) strategies in reducing the volume of solid waste generated at source;

(2) measures for implementing such strategies and the resources necessary to carry out
such activities;

(3) other appropriate waste reduction technologies that may also be considered, provide d
that such technologies conform with the standards set pursuant to this Act;

(4) the types of wastes to be reduced pursuant to Section 15 of this Act;

(5) the methods that the LGU will use to determine the categories of solid wastes to be
diverted from disposal at a disposal facility through re-use , recycling and composting; and
 (6) new facilities and of expansion of existing facilities which will be needed to implement re-
use, recycling and composting.

The LGU source reduction component shall include the evaluation and identification of rate
structures and fees for the purpose of reducing the amount of waste generated, and other source
reduction strategies, including but not limited to, program s and economic incentives provided under
Sec. 45 of this Act to reduce the use of non-recyclable materials, replace disposable materials and
products with reusable materials and products, reduce packaging, and increase the efficiency of the
use of paper, cardboard, glass, metal, and other materials. The waste reduction activities of the
community shall al so take into account, among others, local capability, economic viability, technical
requirements, social concerns, disposition of residual waste and environmental impact: Provided ,
That, projection of future facilities needed and estimated cost shall be incorporated in the plan. x x
x154

The solid waste management pl an shall also include an implementation schedule for solid waste
diversion:

SEC. 20. Establishing Mandatory Solid Waste Diversion. – Each LGU plan shall include an
implementation schedule which shows that within five (5) years after the effectivity of this Act, the
LGU shall divert at least 25% of all solid waste from waste disposal facilities through re-use,
recycling, and composting activities and other resource recovery activities: Provided , That the waste
diversion goals shall be increased every three (3) years thereafter: Provided , further, That nothing in
this Section prohibits a local government unit from implementing re-use, recycling, and composting
activities designed to exceed the goal.

The baseline for the twenty-five percent (25%) shall be derived from the waste characterization
result  that each LGU is mandated to undertake. In accordance with Section 46 of R.A. No. 9003,
155 156

the LGUs are entitled to avail of the SWM Fund on the basis of their approved solid waste
management plan. Aside from this, they may also impose SWM Fees under Section 47 of the law,
which states:

SEC. 47. Authority to Collect Solid Waste Management Fees – The local government unit shall
impose fees in amounts sufficient to pay the costs of preparing, adopting, and implementing a solid
waste management plan prepared pursuant to this Act. The fees shall be based on the following
minimum factors:

(a) types of solid waste;

(b) amount/volume of waste; and

(c) distance of the transfer station to the waste management facility.

The fees shall be used to pay the actual costs incurred by the LGU in collecting the local fees. In
determining the amounts of the fees, an LGU shall include only those costs directly related to the
adoption and implementation of the plan and the setting and collection of the local fees.

Rule XVII of the IRR of R.A. No. 9003 sets forth the details:

Section 1. Power to Collect Solid Waste Management Fees . – The Local SWM Board/Local SWM
Cluster Board shall impose fees on the SWM services provided for by the LGU and/or any
authorized organization or unit. In determining the amounts of the fees, a Local SWM Board/Local
SWM Cluster Board shall include only those costs directly related to the adoption and
implementation of the SWM Plan and the setting and collection of the local fees. This power to
impose fees may be ceded to the private sector and civil society groups which have been duly
accredited by the Local SWM Boar d/Local SWM Cluster Board; provided, the SWM fees shall be
covered by a Contract or Memorandum of Agreement between the respective boa rd and the private
sector or civil society group.

The fees shall pay for the costs of preparing, adopting and implementing a SWM Plan prepared
pursuant to the Act. Further, the fees shall also be used to pay the actual costs incurred in collecting
the local fees and for project sustainability.

Section 2. Basis of SWM Service Fees

Reasonable SWM service fees shall be computed based on but not limited to the following minimum
factors:

a) Types of solid waste to include special waste

b) amount/volume of waste

c) distance of the transfer station to the waste management facility

d) capacity or type of LGU constituency

e) cost of construction

f) cost of management

g) type of technology

Section 3. Collection of Fees. – Fees may be collected corresponding to the following levels:

a) Barangay – The Barangay may impose fees for collection and segregation of
biodegradable, compostable and reusable wastes from households, commerce, other
sources of domestic wastes, and for the use of Barangay MRFs. The computation of the fees
shall be established by the respective SWM boards. The manner of collection of the fees
shall be dependent on the style of administration of respective Barangay Councils. However,
all transactions shall follow the Commission on Audit rules on collection of fees.

b) Municipality – The municipal and city councils may impose fees on the barangay MRFs for
the collection and transport of non-recyclable and special wastes and for the disposal of
these into the sanitary landfill. The level and procedure for exacting fees shall be defined by
the Local SWM Board/Local SWM Cluster Board and supported by LGU ordinances;
however, payments shall be consistent with the accounting system of government.

c) Private Sector/Civil Society Group – On the basis of the stipulations of contract or

Memorandum of Agreement, the private sector or civil society group shall impose fees for
collection, transport and tipping in their SLFs. Receipts and invoices shall be issued to the
paying public or to the government.
From the afore-quoted provisions, it is clear that the authority of a municipality or city to impose fees
is limited to the collection and transport of non-recyclable and special wastes and for the disposal of
these into the sanitary landfill. Barangays, on the other hand, have the authority to impose fees for
the collection and segregation of biodegradable, compostable and reusable wastes from
households, commerce, other sources of domestic wastes, and for the use of barangay MRFs. This
is but consistent with

Section 10 of R.A. No. 9003 directing that segregation and collection of biodegradable, compostable
and reusable wastes shall be conducted at the barangay level, while the collection of non-recyclable
materials and special wastes shall be the responsibility of the municipality or city.

In this case, the alleged bases of Ordinance No. S-2235 in imposing the garbage fee is the volume
of waste currently generated by each person in Quezon City, which purportedly stands at 0.66
kilogram per day, and the increasing trend of waste generation for the past three
years.  Respondents
157

did not elaborate any further. The figure presented does not reflect the specific types of wastes
generated – whether residential, market, commercial, industrial, construction/demolition, street
waste, agricultural, agro-industrial, institutional, etc. It is reasonable, therefore, for the Court to
presume that such amount pertains to the totality of wastes, without any distinction, generated by
Quezon City constituents. To reiterate, however, the authority of a municipality or city to impose fees
extends only to those related to the collection and transport of non-recyclable and special wastes.

Granting, for the sake of argument, that the 0.66 kilogram of solid waste per day refers only to non-
recyclable and special wastes, still, We cannot sustain the validity of Ordinance No. S-2235. It
violates the equal protection clause of the Constitution and the provisions of the LGC that an
ordinance must be equitable and based as far as practicable on the taxpayer’s ability to pay, and not
unjust, excessive, oppressive, confiscatory. 158

In the subject ordinance, the rates of the imposable fee depend on land or floor area and whether
the payee is an occupant of a lot, condominium, social housing project or apartment. For easy
reference, the relevant provision is again quoted below:

On all domestic households in Quezon City;

LAND AREA IMPOSABLE FEE

Less than 200 sq. m. PHP 100.00

201 sq. m. – 500 sq. m. PHP 200.00

501 sq. m. – 1,000 sq. m. PHP 300.00

1,001 sq. m. – 1,500 sq. m. PHP 400.00

1,501 sq. m. – 2,000 sq. m. or more PHP 500.00

On all condominium unit and socialized housing projects/units in Quezon City;

FLOOR AREA IMPOSABLE FEE

Less than 40 sq. m. PHP 25.00
 41 sq. m. – 60 sq. m. PHP 50.00

61 sq. m. – 100 sq. m. PHP 75.00

101 sq. m. – 150 sq. m. PH₱100.00

151 sq. m. – 200 sq. [m.] or more PHP 200.00

On high-rise Condominium Units

a) High-rise Condominium – The Homeowners Association of high rise condominiums shall

pay the annual garbage fee on the total size of the entire condominium and socialized
Housing Unit and an additional garbage fee shall be collected based on area occupied for
every unit already so ld or being amortized.

b) High-rise apartment units – Owners of high-rise apartment units shall pay the annual
garbage fee on the total lot size of the entire apartment and an additional garbage fee based
on the schedule prescribed herein for every unit occupied.

For the purpose of garbage collection, there is, in fact, no substantial distinction between an
occupant of a lot, on one hand, and an occupant of a unit in a condominium, socialized housing
project or apartment, on the other hand. Most likely, garbage output produced by these types of
occupants is uniform and does not vary to a large degree; thus, a similar schedule of fee is both just
and equitable. 159

The rates being charged by the ordinance are unjust and inequitable: a resident of a 200 sq. m. unit
in a condominium or socialized housing project has to pay twice the amount than a resident of a lot
similar in size; unlike unit occupants, all occupants of a lot with an area of 200 sq. m. and less have
to pay a fixed rate of Php100.00; and the same amount of garbage fee is imposed regardless of
whether the resident is from a condominium or from a socialized housing project.

Indeed, the classifications under Ordinance No. S-2235 are not germane to its declared purpose of
"promoting shared responsibility with the residents to attack their common mindless attitude in over-
consuming the present resources and in generating waste."  Instead of simplistically categorizing
160

the payee into land or floor occupant of a lot or unit of a condominium, socialized housing project or
apartment, respondent City Council should have considered factors that could truly measure the
amount of wastes generated and the appropriate fee for its collection. Factors include, among
others, household age and size, accessibility to waste collection, population density of the barangay
or district, capacity to pay, and actual occupancy of the property. R.A. No. 9003 may also be looked
into for guidance. Under said law, WM service fees may be computed based on minimum factors
such as type s of solid waste to include special waste, amount/volume of waste, distance of the
transfer station to the waste management facility, capacity or type of LGU constituency, cost of
construction, cost of management, and type of technology. With respect to utility rates set by
municipalities, a municipality has the right to classify consumers under reasonable classifications
based upon factors such as the cost of service, the purpose for which the service or the product is
received, the quantity or the amount received, the different character of the service furnished, the
time of its use or any other matter which presents a substantial difference as a ground of
distinction. [A] lack of uniformity in the rate charged is not necessarily unlawful discrimination. The
161

establishment of classifications and the charging of different rates for the several classes is not
unreasonable and does not violate the requirements of equality and uniformity. Discrimination to be
unlawful must draw an unfair line or strike an unfair balance between those in like circumstances
having equal rights and privileges. Discrimination with respect to rates charged does not vitiate
unless it is arbitrary and without a reasonable fact basis or justification.
162

On top of an unreasonable classification, the penalty clause of Ordinance No. SP-2235, which
states:

SECTION 3. Penalty Clause – A penalty of 25% of the garbage fee due plus an interest of 2% per
month or a fraction thereof (interest) shall be charged against a household owner who refuses to pay
the garbage fee herein imposed. lacks the limitation required by Section 168 of the LGC, which
provides:

SECTION 168. Surcharges and Penalties on Unpaid Taxes, Fees, or Charges. – The sanggunian
may impose a surcharge not exceeding twenty-five (25%) of the amount of taxes, fees or charges
not paid on time and an interest at the rate not exceeding two percent (2%) per month of the unpaid
taxes, fees or charges including surcharges, until such amount is fully paid but in no case shall the
total interest on the unpaid amount or portion thereof exceed thirty-six (36) months. (Emphasis
supplied)

Finally, on the issue of publication of the two challenged ordinances.

Petitioner argues that the garbage fee was collected even if the required publication of its approval
had not yet elapsed. He notes that he paid his realty tax on January 7, 2014 which already included
the garbage fee. Respondents counter that if the law provides for its own effectivity, publication in
the Official Gazette is not necessary so long as it is not penal in nature. Allegedly, Ordinance No.
SP-2095 took effect after its publication while Ordinance No. SP-2235 became effective after its
approval on December 26, 2013.

The pertinent provisions of the LGC state:

SECTION 59. Effectivity of Ordinances or Resolutions. – (a) Unless otherwise stated in the
ordinance or the resolution approving the local development plan and public investment program,
the same shall take effect after ten (10) days from the date a copy thereof is posted in a bulletin
board at the entrance of the provincial capital or city, municipal, or barangay hall, as the case may
be, and in at least two (2) other conspicuous places in the local government unit concerned.

(b) The secretary to the sanggunian concerned shall cause the posting of an ordinance or
resolution in the bulletin board at the entrance of the provincial capital and the city,
municipal, or barangay hall in at least two

(2) conspicuous places in the local government unit concerned not later than five (5) days
after approval thereof.

The text of the ordinance or resolution shall be disseminated and posted in Filipino or
English and in the language or dialect understood by the majority of the people in the local
government unit concerned, and the secretary to the sanggunian shall record such fact in a
book kept for the purpose, stating the dates of approval and posting.

(c) The gist of all ordinances with penal sanctions shall be published in a newspaper of
general circulation within the province where the local legislative body concerned belongs. In
the absence of any newspaper of general circulation within the province, posting of such
 ordinances shall be made in all municipalities and cities of the province where the
sanggunian of origin is situated.

(d) In the case of highly urbanized and independent component cities, the main features of
the ordinance or resolution duly enacted or adopted shall, in addition to being posted, be
published once in a local newspaper of general circulation within the city: Provided, That in
the absence thereof the ordinance or resolution shall be published in any newspaper of
general circulation.

SECTION 188. Publication of Tax Ordinances and Revenue Measures. – Within ten (10) days after
their approval, certified true copies of all provincial, city, and municipal tax ordinances or revenue
measures shall be published in full for three (3) consecutive days in a newspaper of local circulation:
Provided, however, That in provinces, cities and municipalities where there are no newspapers of
local circulation, the same may be posted in at least two (2) conspicuous and publicly accessible
places. (Emphasis supplied)

On October 17, 2011, respondent Quezon City Council enacted Ordinance No. SP-2095, which
provides that it would take effect after its publication in a newspaper of general circulation.  On the
163

other hand, Ordinance No. SP-2235, which was passed by the City Council on December 16, 2013,
provides that it would be effective upon its approval. 164

Ten (10) days after its enactment, or on December 26, 2013, respondent City Mayor approved the
same. 165

The case records are bereft of any evidence to prove petitioner’s negative allegation that
respondents did not comply with the posting and publication requirements of the law. Thus, We are
constrained not to give credit to his unsupported claim.

WHEREFORE, the petition is PARTIALLY GRANTED. The constitutionality and legality of Ordinance
No. SP-2095, S-2011, or the "Socialized Housing Tax of Quezon City," is· SUSTAINED for being
consistent ·with Section·43 of Republic Act No. ·7279. On the other hand, Ordinance No. SP-2235,
S-2013, which collects an annual garbage fee on all domestic households in Quezon City, is hereby
declared as UNCONSTITUTIONAL AND ILLEGAL. Respondents are DIRECTED to REFUND with
reasonable dispatch the sums of money collected relative to its enforcement. The temporary
restraining order issued by the Court on February 5, 2014 is LIFTED with respect to Ordinance No.
SP-2095. In contrast, respondents are PERMANENTLY ENJOINED from taking any further action to
enforce Ordinance No. SP. 2235.

SO ORDERED

G.R. No. 177807               October 11, 2011

EMILIO GANCAYCO, Petitioner,
vs.
CITY GOVERNMENT OF QUEZON CITY AND METRO MANILA DEVELOPMENT
AUTHORITY, Respondents.

x - - - - - - - - - - - - - - - - - - - - - - -x

G.R. No. 177933

METRO MANILA DEVELOPMENT AUTHORITY, Petitioner,
vs.
JUSTICE EMILIO A. GANCAYCO (Retired), Respondent,

DECISION

SERENO, J.:

Before us are consolidated Petitions for Review under Rule 45 of the Rules of Court assailing the
Decision1 promulgated on 18 July 2006 and the Resolution 2 dated 10 May 2007 of the Court of
Appeals in CA-G.R. SP No. 84648.

The Facts

In the early 1950s, retired Justice Emilio A. Gancayco bought a parcel of land located at 746
Epifanio delos Santos Avenue (EDSA),3 Quezon City with an area of 375 square meters and
covered by Transfer Certificate of Title (TCT) No. RT114558.

On 27 March 1956, the Quezon City Council issued Ordinance No. 2904, entitled "An Ordinance
Requiring the Construction of Arcades, for Commercial Buildings to be Constructed in Zones
Designated as Business Zones in the Zoning Plan of Quezon City, and Providing Penalties in
Violation Thereof."4

An arcade is defined as any portion of a building above the first floor projecting over the sidewalk
beyond the first storey wall used as protection for pedestrians against rain or sun. 5

Ordinance No. 2904 required the relevant property owner to construct an arcade with a width of 4.50
meters and height of 5.00 meters along EDSA, from the north side of Santolan Road to one lot after
Liberty Avenue, and from one lot before Central Boulevard to the Botocan transmission line.

At the outset, it bears emphasis that at the time Ordinance No. 2904 was passed by the city council,
there was yet no building code passed by the national legislature. Thus, the regulation of the
construction of buildings was left to the discretion of local government units. Under this particular
ordinance, the city council required that the arcade is to be created by constructing the wall of the
ground floor facing the sidewalk a few meters away from the property line. Thus, the building owner
is not allowed to construct his wall up to the edge of the property line, thereby creating a space or
shelter under the first floor. In effect, property owners relinquish the use of the space for use as an
arcade for pedestrians, instead of using it for their own purposes.

The ordinance was amended several times. On 8 August 1960, properties located at the Quezon
City-San Juan boundary were exempted by Ordinance No. 60-4477 from the construction of
arcades. This ordinance was further amended by Ordinance No. 60-4513, extending the exemption
to commercial buildings from Balete Street to Seattle Street. Ordinance No. 6603 dated 1 March
1966 meanwhile reduced the width of the arcades to three meters for buildings along V. Luna Road,
Central District, Quezon City.

The ordinance covered the property of Justice Gancayco. Subsequently, sometime in 1965, Justice
Gancayco sought the exemption of a two-storey building being constructed on his property from the
application of Ordinance No. 2904 that he be exempted from constructing an arcade on his property.
On 2 February 1966, the City Council acted favorably on Justice Gancayco’s request and issued
Resolution No. 7161, S-66, "subject to the condition that upon notice by the City Engineer, the owner
shall, within reasonable time, demolish the enclosure of said arcade at his own expense when public
interest so demands."6

Decades after, in March 2003, the Metropolitan Manila Development Authority (MMDA) conducted
operations to clear obstructions along the sidewalk of EDSA in Quezon City pursuant to Metro
Manila Council’s (MMC) Resolution No. 02-28, Series of 2002. 7 The resolution authorized the MMDA
and local government units to "clear the sidewalks, streets, avenues, alleys, bridges, parks and other
public places in Metro Manila of all illegal structures and obstructions." 8

On 28 April 2003, the MMDA sent a notice of demolition to Justice Gancayco alleging that a portion
of his building violated the National Building Code of the Philippines (Building Code) 9 in relation to
Ordinance No. 2904. The MMDA gave Justice Gancayco fifteen (15) days to clear the portion of the
building that was supposed to be an arcade along EDSA.10

Justice Gancayco did not comply with the notice. Soon after the lapse of the fifteen (15) days, the
MMDA proceeded to demolish the party wall, or what was referred to as the "wing walls," of the
ground floor structure. The records of the present case are not entirely clear on the extent of the
demolition; nevertheless, the fact of demolition was not disputed. At the time of the demolition, the
affected portion of the building was being used as a restaurant.

On 29 May 2003, Justice Gancayco filed a Petition 11 with prayer for a temporary restraining order
and/or writ of preliminary injunction before the Regional Trial Court (RTC) of Quezon City, docketed
as Civil Case No. Q03-49693, seeking to prohibit the MMDA and the City Government of Quezon
City from demolishing his property. In his Petition, 12 he alleged that the ordinance authorized the
taking of private property without due process of law and just compensation, because the
construction of an arcade will require 67.5 square meters from the 375 square meter property. In
addition, he claimed that the ordinance was selective and discriminatory in its scope and application
when it allowed the owners of the buildings located in the Quezon City-San Juan boundary to Cubao
Rotonda, and Balete to Seattle Streets to construct arcades at their option. He thus sought the
declaration of nullity of Ordinance No. 2904 and the payment of damages. Alternately, he prayed for
the payment of just compensation should the court hold the ordinance valid.

The City Government of Quezon City claimed that the ordinance was a valid exercise of police
power, regulating the use of property in a business zone. In addition, it pointed out that Justice
Gancayco was already barred by estoppel, laches and prescription.

Similarly, the MMDA alleged that Justice Gancayco could not seek the nullification of an ordinance
that he had already violated, and that the ordinance enjoyed the presumption of constitutionality. It
further stated that the questioned property was a public nuisance impeding the safe passage of
pedestrians. Finally, the MMDA claimed that it was merely implementing the legal easement
established by Ordinance No. 2904.13

The RTC rendered its Decision on 30 September 2003 in favor of Justice Gancayco. 14 It held that the
questioned ordinance was unconstitutional, ruling that it allowed the taking of private property for
public use without just compensation. The RTC said that because 67.5 square meters out of Justice
Gancayco’s 375 square meters of property were being taken without compensation for the public’s
benefit, the ordinance was confiscatory and oppressive. It likewise held that the ordinance violated
owners’ right to equal protection of laws. The dispositive portion thus states:
WHEREFORE, the petition is hereby granted and the Court hereby declares Quezon City Ordinance
No. 2094,15 Series of 1956 to be unconstitutional, invalid and void ab initio. The respondents are
hereby permanently enjoined from enforcing and implementing the said ordinance, and the
respondent MMDA is hereby directed to immediately restore the portion of the party wall or wing wall
of the building of the petitioner it destroyed to its original condition.

IT IS SO ORDERED.

The MMDA thereafter appealed from the Decision of the trial court. On 18 July 2006, the Court of
Appeals (CA) partly granted the appeal.16 The CA upheld the validity of Ordinance No. 2904 and
lifted the injunction against the enforcement and implementation of the ordinance. In so doing, it held
that the ordinance was a valid exercise of the right of the local government unit to promote the
general welfare of its constituents pursuant to its police powers. The CA also ruled that the
ordinance established a valid classification of property owners with regard to the construction of
arcades in their respective properties depending on the location. The CA further stated that there
was no taking of private property, since the owner still enjoyed the beneficial ownership of the
property, to wit:

Even with the requirement of the construction of arcaded sidewalks within his commercial lot,
appellee still retains the beneficial ownership of the said property. Thus, there is no "taking" for
public use which must be subject to just compensation. While the arcaded sidewalks contribute to
the public good, for providing safety and comfort to passersby, the ultimate benefit from the same
still redounds to appellee, his commercial establishment being at the forefront of a busy thoroughfare
like EDSA. The arcaded sidewalks, by their nature, assure clients of the commercial establishments
thereat some kind of protection from accidents and other hazards. Without doubt, this sense of
protection can be a boon to the business activity therein engaged. 17

Nevertheless, the CA held that the MMDA went beyond its powers when it demolished the subject
property. It further found that Resolution No. 02-28 only refers to sidewalks, streets, avenues, alleys,
bridges, parks and other public places in Metro Manila, thus excluding Justice Gancayco’s private
property. Lastly, the CA stated that the MMDA is not clothed with the authority to declare, prevent or
abate nuisances. Thus, the dispositive portion stated:

WHEREFORE, the appeals are PARTLY GRANTED. The Decision dated September 30, 2003 of
the Regional Trial Court, Branch 224, Quezon City, is MODIFIED, as follows:

1) The validity and constitutionality of Ordinance No. 2094, 18 Series of 1956, issued by the
City Council of Quezon City, is UPHELD; and

2) The injunction against the enforcement and implementation of the said Ordinance is
LIFTED.

SO ORDERED.

This ruling prompted the MMDA and Justice Gancayco to file their respective Motions for Partial
Reconsideration.19

On 10 May 2007, the CA denied the motions stating that the parties did not present new issues nor
offer grounds that would merit the reconsideration of the Court. 20
Dissatisfied with the ruling of the CA, Justice Gancayco and the MMDA filed their respective
Petitions for Review before this Court. The issues raised by the parties are summarized as follows:

I. WHETHER OR NOT JUSTICE GANCAYCO WAS ESTOPPED FROM ASSAILING THE

VALIDITY OF ORDINANCE NO. 2904.

II. WHETHER OR NOT ORDINANCE NO. 2904 IS CONSTITUTIONAL.

III. WHETHER OR NOT THE WING WALL OF JUSTICE GANCAYCO’S BUILDING IS A

PUBLIC NUISANCE.

IV. WHETHER OR NOT THE MMDA LEGALLY DEMOLISHED THE PROPERTY OF

JUSTICE GANCAYCO.

The Court’s Ruling

Estoppel

The MMDA and the City Government of Quezon City both claim that Justice Gancayco was
estopped from challenging the ordinance, because, in 1965, he asked for an exemption from the
application of the ordinance. According to them, Justice Gancayco thereby recognized the power of
the city government to regulate the construction of buildings.

To recall, Justice Gancayco questioned the constitutionality of the ordinance on two grounds: (1)
whether the ordinance "takes" private property without due process of law and just compensation;
and (2) whether the ordinance violates the equal protection of rights because it allowed exemptions
from its application.

On the first ground, we find that Justice Gancayco may still question the constitutionality of the
ordinance to determine whether or not the ordinance constitutes a "taking" of private property
without due process of law and just compensation. It was only in 2003 when he was allegedly
deprived of his property when the MMDA demolished a portion of the building. Because he was
granted an exemption in 1966, there was no "taking" yet to speak of.

Moreover, in Acebedo Optical Company, Inc. v. Court of Appeals, 21 we held:

It is therefore decisively clear that estoppel cannot apply in this case. The fact that petitioner
acquiesced in the special conditions imposed by the City Mayor in subject business permit does not
preclude it from challenging the said imposition, which is ultra vires or beyond the ambit of authority
of respondent City Mayor. Ultra vires acts or acts which are clearly beyond the scope of one's
authority are null and void and cannot be given any effect. The doctrine of estoppel cannot operate
to give effect to an act which is otherwise null and void or ultra vires. (Emphasis supplied.)

Recently, in British American Tobacco v. Camacho,22 we likewise held:

We find that petitioner was not guilty of estoppel. When it made the undertaking to comply with all
issuances of the BIR, which at that time it considered as valid, petitioner did not commit any false
misrepresentation or misleading act. Indeed, petitioner cannot be faulted for initially undertaking to
comply with, and subjecting itself to the operation of Section 145(C), and only later on filing the
subject case praying for the declaration of its unconstitutionality when the circumstances change and
the law results in what it perceives to be unlawful discrimination. The mere fact that a law has been
relied upon in the past and all that time has not been attacked as unconstitutional is not a ground for
considering petitioner estopped from assailing its validity. For courts will pass upon a constitutional
question only when presented before it in bona fide cases for determination, and the fact that the
question has not been raised before is not a valid reason for refusing to allow it to be raised later.
(Emphasis supplied.)

Anent the second ground, we find that Justice Gancayco may not question the ordinance on the
ground of equal protection when he also benefited from the exemption. It bears emphasis that
Justice Gancayco himself requested for an exemption from the application of the ordinance in 1965
and was eventually granted one. Moreover, he was still enjoying the exemption at the time of the
demolition as there was yet no valid notice from the city engineer. Thus, while the ordinance may be
attacked with regard to its different treatment of properties that appears to be similarly situated,
Justice Gancayco is not the proper person to do so.

Zoning and the regulation of the

construction of buildings are valid

exercises of police power .

In MMDA v. Bel-Air Village Association, 23 we discussed the nature of police powers exercised by
local government units, to wit:

Police power is an inherent attribute of sovereignty. It has been defined as the power vested by the
Constitution in the legislature 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 for the
subjects of the same. The power is plenary and its scope is vast and pervasive, reaching and
justifying measures for public health, public safety, public morals, and the general welfare.

It bears stressing that police power is lodged primarily in the National Legislature. It cannot be
exercised by any group or body of individuals not possessing legislative power. The National
Legislature, however, may delegate this power to the President and administrative boards as well as
the lawmaking bodies of municipal corporations or local government units. Once delegated, the
agents can exercise only such legislative powers as are conferred on them by the national
lawmaking body.

To resolve the issue on the constitutionality of the ordinance, we must first determine whether there
was a valid delegation of police power. Then we can determine whether the City Government of
Quezon City acted within the limits of the delegation.

It is clear that Congress expressly granted the city government, through the city council, police
power by virtue of Section 12(oo) of Republic Act No. 537, or the Revised Charter of Quezon
City,24 which states:

To make such further ordinances and regulations not repugnant to law as may be necessary to carry
into effect and discharge the powers and duties conferred by this Act and such as it shall deem
necessary and proper to provide for the health and safety, promote the prosperity, improve the
morals, peace, good order, comfort, and convenience of the city and the inhabitants thereof, and for
the protection of property therein; and enforce obedience thereto with such lawful fines or penalties
as the City Council may prescribe under the provisions of subsection (jj) of this section.
Specifically, on the powers of the city government to regulate the construction of buildings, the
Charter also expressly provided that the city government had the power to regulate the kinds of
buildings and structures that may be erected within fire limits and the manner of constructing and
repairing them.25

With regard meanwhile to the power of the local government units to issue zoning ordinances, we
apply Social Justice Society v. Atienza.26 In that case, the Sangguniang Panlungsod of Manila City
enacted an ordinance on 28 November 2001 reclassifying certain areas of the city from industrial to
commercial. As a result of the zoning ordinance, the oil terminals located in those areas were no
longer allowed. Though the oil companies contended that they stood to lose billions of pesos, this
Court upheld the power of the city government to pass the assailed ordinance, stating:

In the exercise of police power, property rights of individuals may be subjected to restraints and
burdens in order to fulfil the objectives of the government. Otherwise stated, the government may
enact legislation that may interfere with personal liberty, property, lawful businesses and occupations
to promote the general welfare. However, the interference must be reasonable and not arbitrary. And
to forestall arbitrariness, the methods or means used to protect public health, morals, safety or
welfare must have a reasonable relation to the end in view.

The means adopted by the Sanggunian was the enactment of a zoning ordinance which reclassified
the area where the depot is situated from industrial to commercial. A zoning ordinance is defined as
a local city or municipal legislation which logically arranges, prescribes, defines and apportions a
given political subdivision into specific land uses as present and future projection of needs. As a
result of the zoning, the continued operation of the businesses of the oil companies in their present
location will no longer be permitted. The power to establish zones for industrial, commercial and
residential uses is derived from the police power itself and is exercised for the protection and benefit
of the residents of a locality. Consequently, the enactment of Ordinance No. 8027 is within the power
of the Sangguniang Panlungsod of the City of Manila and any resulting burden on those affected
cannot be said to be unjust... (Emphasis supplied)

In Carlos Superdrug v. Department of Social Welfare and Development, 27 we also held:

For this reason, when the conditions so demand as determined by the legislature, property rights
must bow to the primacy of police power because property rights, though sheltered by due process,
must yield to general welfare.

Police power as an attribute to promote the common good would be diluted considerably if on the
mere plea of petitioners that they will suffer loss of earnings and capital, the questioned provision is
invalidated. Moreover, in the absence of evidence demonstrating the alleged confiscatory effect of
the provision in question, there is no basis for its nullification in view of the presumption of validity
which every law has in its favor. (Emphasis supplied.)

In the case at bar, it is clear that the primary objectives of the city council of Quezon City when it
issued the questioned ordinance ordering the construction of arcades were the health and safety of
the city and its inhabitants; the promotion of their prosperity; and the improvement of their morals,
peace, good order, comfort, and the convenience. These arcades provide safe and convenient
passage along the sidewalk for commuters and pedestrians, not just the residents of Quezon City.
More especially so because the contested portion of the building is located on a busy segment of the
city, in a business zone along EDSA.

Corollarily, the policy of the Building Code,28 which was passed after the Quezon City Ordinance,
supports the purpose for the enactment of Ordinance No. 2904. The Building Code states:
Section 102. Declaration of Policy. – It is hereby declared to be the policy of the State to safeguard
life, health, property, and public welfare, consistent with the principles of sound environmental
management and control; and to this end, make it the purpose of this Code to provide for all
buildings and structures, a framework of minimum standards and requirements to regulate and
control their location, site, design quality of materials, construction, occupancy, and maintenance.

Section 1004 likewise requires the construction of arcades whenever existing or zoning ordinances
require it. Apparently, the law allows the local government units to determine whether arcades are
necessary within their respective jurisdictions.

Justice Gancayco argues that there is a three-meter sidewalk in front of his property line, and the
arcade should be constructed above that sidewalk rather than within his property line. We do not
need to address this argument inasmuch as it raises the issue of the wisdom of the city ordinance, a
matter we will not and need not delve into.

To reiterate, at the time that the ordinance was passed, there was no national building code
enforced to guide the city council; thus, there was no law of national application that prohibited the
city council from regulating the construction of buildings, arcades and sidewalks in their jurisdiction.

The "wing walls" of the building are not

nuisances per se.

The MMDA claims that the portion of the building in question is a nuisance per se.

We disagree.

The fact that in 1966 the City Council gave Justice Gancayco an exemption from constructing an
arcade is an indication that the wing walls of the building are not nuisances per se. The wing walls
do not per se immediately and adversely affect the safety of persons and property. The fact that an
ordinance may declare a structure illegal does not necessarily make that structure a nuisance.

Article 694 of the Civil Code defines nuisance as any act, omission, establishment, business,
condition or property, or anything else that (1) injures or endangers the health or safety of others; (2)
annoys or offends the senses; (3) shocks, defies or disregards decency or morality; (4) obstructs or
interferes with the free passage of any public highway or street, or any body of water; or, (5) hinders
or impairs the use of property. A nuisance may be per se or per accidens. A nuisance per se is that
which affects the immediate safety of persons and property and may summarily be abated under the
undefined law of necessity.29

Clearly, when Justice Gancayco was given a permit to construct the building, the city council or the
city engineer did not consider the building, or its demolished portion, to be a threat to the safety of
persons and property. This fact alone should have warned the MMDA against summarily
demolishing the structure.

Neither does the MMDA have the power to declare a thing a nuisance. Only courts of law have the
power to determine whether a thing is a nuisance. In AC Enterprises v. Frabelle Properties
Corp.,30 we held:

We agree with petitioner's contention that, under Section 447(a)(3)(i) of R.A. No. 7160, otherwise
known as the Local Government Code, the Sangguniang Panglungsod is empowered to enact
ordinances declaring, preventing or abating noise and other forms of nuisance. It bears stressing,
however, that the Sangguniang Bayan cannot declare a particular thing as a nuisance per se and
order its condemnation. It does not have the power to find, as a fact, that a particular thing is a
nuisance when such thing is not a nuisance per se; nor can it authorize the extrajudicial
condemnation and destruction of that as a nuisance which in its nature, situation or use is not such.
Those things must be determined and resolved in the ordinary courts of law. If a thing be in fact, a
nuisance due to the manner of its operation, that question cannot be determined by a mere
resolution of the Sangguniang Bayan. (Emphasis supplied.)

MMDA illegally demolished

the property of Justice Gancayco.

MMDA alleges that by virtue of MMDA Resolution No. 02-28, Series of 2002, it is empowered to
demolish Justice Gancayco’s property. It insists that the Metro Manila Council authorized the MMDA
and the local government units to clear the sidewalks, streets, avenues, alleys, bridges, parks and
other public places in Metro Manila of all illegal structures and obstructions. It further alleges that it
demolished the property pursuant to the Building Code in relation to Ordinance No. 2904 as
amended.

However, the Building Code clearly provides the process by which a building may be demolished.
The authority to order the demolition of any structure lies with the Building Official. The pertinent
provisions of the Building Code provide:

SECTION 205. Building Officials. — Except as otherwise provided herein, the Building Official shall
be responsible for carrying out the provisions of this Code in the field as well as the enforcement of
orders and decisions made pursuant thereto.

Due to the exigencies of the service, the Secretary may designate incumbent Public Works District
Engineers, City Engineers and Municipal Engineers act as Building Officials in their respective areas
of jurisdiction.

The designation made by the Secretary under this Section shall continue until regular positions of
Building Official are provided or unless sooner terminated for causes provided by law or decree.

xxx xxx xxx

SECTION 207. Duties of a Building Official. — In his respective territorial jurisdiction, the Building
Official shall be primarily responsible for the enforcement of the provisions of this Code as well as of
the implementing rules and regulations issued therefor. He is the official charged with the duties of
issuing building permits.

In the performance of his duties, a Building Official may enter any building or its premises at all
reasonable times to inspect and determine compliance with the requirements of this Code, and the
terms and conditions provided for in the building permit as issued.

When any building work is found to be contrary to the provisions of this Code, the Building Official
may order the work stopped and prescribe the terms and/or conditions when the work will be allowed
to resume. Likewise, the Building Official is authorized to order the discontinuance of the occupancy
or use of any building or structure or portion thereof found to be occupied or used contrary to the
provisions of this Code.
 xxx xxx xxx

SECTION 215. Abatement of Dangerous Buildings. — When any building or structure is found or
declared to be dangerous or ruinous, the Building Official shall order its repair, vacation or demolition
depending upon the degree of danger to life, health, or safety. This is without prejudice to further
action that may be taken under the provisions of Articles 482 and 694 to 707 of the Civil Code of the
Philippines. (Emphasis supplied.)

MMDA v. Trackworks Rail Transit Advertising, Vending and Promotions, Inc.31 is applicable to the
case at bar. In that case, MMDA, invoking its charter and the Building Code, summarily dismantled
the advertising media installed on the Metro Rail Transit (MRT) 3. This Court held:

It is futile for MMDA to simply invoke its legal mandate to justify the dismantling of Trackworks'
billboards, signages and other advertising media. MMDA simply had no power on its own to
dismantle, remove, or destroy the billboards, signages and other advertising media installed on the
MRT3 structure by Trackworks. In Metropolitan Manila Development Authority v. Bel-Air Village
Association, Inc., Metropolitan Manila Development Authority v. Viron Transportation Co., Inc.,
and Metropolitan Manila Development Authority v. Garin, the Court had the occasion to rule that
MMDA's powers were limited to the formulation, coordination, regulation, implementation,
preparation, management, monitoring, setting of policies, installing a system, and administration.
Nothing in Republic Act No. 7924 granted MMDA police power, let alone legislative power.

Clarifying the real nature of MMDA, the Court held:

...The MMDA is, as termed in the charter itself, a "development authority". It is an agency created for
the purpose of laying down policies and coordinating with the various national government agencies,
people's organizations, non-governmental organizations and the private sector for the efficient and
expeditious delivery of basic services in the vast metropolitan area. All its functions are
administrative in nature and these are actually summed up in the charter itself, viz:

Sec.2. Creation of the Metropolitan Manila Development Authority.- xxx.

The MMDA shall perform planning, monitoring and coordinative functions, and in the process
exercise regulatory and supervisory authority over the delivery of metro-wide services within Metro
Manila, without diminution of the autonomy of local government units concerning purely local
matters.

The Court also agrees with the CA's ruling that MMDA Regulation No. 96-009 and MMC
Memorandum Circular No. 88-09 did not apply to Trackworks' billboards, signages and other
advertising media. The prohibition against posting, installation and display of billboards, signages
and other advertising media applied only to public areas, but MRT3, being private property pursuant
to the BLT agreement between the Government and MRTC, was not one of the areas as to which
the prohibition applied. Moreover, MMC Memorandum Circular No. 88-09 did not apply to
Trackworks' billboards, signages and other advertising media in MRT3, because it did not
specifically cover MRT3, and because it was issued a year prior to the construction of MRT3 on the
center island of EDSA. Clearly, MMC Memorandum Circular No. 88-09 could not have included
MRT3 in its prohibition.

MMDA's insistence that it was only implementing Presidential Decree No. 1096 (Building Code) and
its implementing rules and regulations is not persuasive. The power to enforce the provisions of the
Building Code was lodged in the Department of Public Works and Highways (DPWH), not in MMDA,
considering the law's following provision, thus:

Sec. 201. Responsibility for Administration and Enforcement. -

The administration and enforcement of the provisions of this Code including the imposition of
penalties for administrative violations thereof is hereby vested in the Secretary of Public Works,
Transportation and Communications, hereinafter referred to as the "Secretary."

There is also no evidence showing that MMDA had been delegated by DPWH to implement the
Building Code. (Emphasis supplied.)

Additionally, the penalty prescribed by Ordinance No. 2904 itself does not include the demolition of
illegally constructed buildings in case of violations. Instead, it merely prescribes a punishment of "a
fine of not more than two hundred pesos (₱200.00) or by imprisonment of not more than thirty (30)
days, or by both such fine and imprisonment at the discretion of the Court, Provided, that if the
violation is committed by a corporation, partnership, or any juridical entity, the Manager, managing
partner, or any person charged with the management thereof shall be held responsible therefor."
The ordinance itself also clearly states that it is the regular courts that will determine whether there
was a violation of the ordinance.

As pointed out in Trackworks, the MMDA does not have the power to enact ordinances. Thus, it
cannot supplement the provisions of Quezon City Ordinance No. 2904 merely through its Resolution
No. 02-28.

Lastly, the MMDA claims that the City Government of Quezon City may be considered to have
approved the demolition of the structure, simply because then Quezon City Mayor Feliciano R.
Belmonte signed MMDA Resolution No. 02-28. In effect, the city government delegated these
powers to the MMDA. The powers referred to are those that include the power to declare, prevent
and abate a nuisance32 and to further impose the penalty of removal or demolition of the building or
structure by the owner or by the city at the expense of the owner. 33

MMDA’s argument does not hold water. There was no valid delegation of powers to the MMDA.
Contrary to the claim of the MMDA, the City Government of Quezon City washed its hands off the
acts of the former. In its Answer,34 the city government stated that "the demolition was undertaken by
the MMDA only, without the participation and/or consent of Quezon City." Therefore, the MMDA
acted on its own and should be held solely liable for the destruction of the portion of Justice
Gancayco’s building.

WHEREFORE, in view of the foregoing, the Decision of the Court of Appeals in CA-G.R. SP No.
84648 is AFFIRMED.

SO ORDERED

G.R. No. 100152             March 31, 2000

ACEBEDO OPTICAL COMPANY, INC., petitioner,

vs.
THE HONORABLE COURT OF APPEALS, Hon. MAMINDIARA MANGOTARA, in his capacity as
Presiding Judge of the RTC, 12th Judicial Region, Br. 1, Iligan City; SAMAHANG
OPTOMETRIST Sa PILIPINAS — Iligan City Chapter, LEO T. CAHANAP, City Legal Officer, and
Hon. CAMILO P. CABILI, City Mayor of Iligan, respondents.
PURISIMA, J.:

At bar is a petition for review under Rule 45 of the Rules of Court seeking to nullify the dismissal by
the Court of Appeals of the original petition for certiorari, prohibition and mandamus filed by the
herein petitioner against the City Mayor and City Legal Officer of Iligan and the Samahang
Optometrist sa Pilipinas — Iligan Chapter (SOPI, for brevity).

The antecedent facts leading to the filing of the instant petition are as follows:

Petitioner applied with the Office of the City Mayor of Iligan for a business permit. After consideration
of petitioner's application and the opposition interposed thereto by local optometrists, respondent
City Mayor issued Business Permit No. 5342 subject to the following conditions:

1. Since it is a corporation, Acebedo cannot put up an optical clinic but only a commercial
store;

2. Acebedo cannot examine and/or prescribe reading and similar optical glasses for patients,
because these are functions of optical clinics;

3. Acebedo cannot sell reading and similar eyeglasses without a prescription having first
been made by an independent optometrist (not its employee) or independent optical clinic.
Acebedo can only sell directly to the public, without need of a prescription, Ray-Ban and
similar eyeglasses;

4. Acebedo cannot advertise optical lenses and eyeglasses, but can advertise Ray-Ban and
similar glasses and frames;

5. Acebedo is allowed to grind lenses but only upon the prescription of an independent
optometrist. 1

On December 5, 1988, private respondent Samahan ng Optometrist Sa Pilipinas (SOPI), Iligan

Chapter, through its Acting President, Dr. Frances B. Apostol, lodged a complaint against the
petitioner before the Office of the City Mayor, alleging that Acebedo had violated the conditions set
forth in its business permit and requesting the cancellation and/or revocation of such permit.

Acting on such complaint, then City Mayor Camilo P. Cabili designated City Legal Officer Leo T.
Cahanap to conduct an investigation on the matter. On July 12, 1989, respondent City Legal Officer
submitted a report to the City Mayor finding the herein petitioner guilty of violating all the conditions
of its business permit and recommending the disqualification of petitioner from operating its business
in Iligan City. The report further advised that no new permit shall be granted to petitioner for the year
1989 and should only be given time to wind up its affairs.

On July 19, 1989, the City Mayor sent petitioner a Notice of Resolution and Cancellation of Business
Permit effective as of said date and giving petitioner three (3) months to wind up its affairs.

On October 17, 1989, petitioner brought a petition for certiorari, prohibition and mandamus with

prayer for restraining order/preliminary injunction against the respondents, City Mayor, City Legal
Officer and Samahan ng Optometrists sa Pilipinas-Iligan City Chapter (SOPI), docketed as Civil
Case No. 1497 before the Regional Trial Court of Iligan City, Branch I. Petitioner alleged that (1) it
was denied due process because it was not given an opportunity to present its evidence during the
investigation conducted by the City Legal Officer; (2) it was denied equal protection of the laws as
the limitations imposed on its business permit were not imposed on similar businesses in Iligan City;
(3) the City Mayor had no authority to impose the special conditions on its business permit; and (4)
the City Legal Officer had no authority to conduct the investigation as the matter falls within the
exclusive jurisdiction of the Professional Regulation Commission and the Board of Optometry.

Respondent SOPI interposed a Motion to Dismiss the Petition on the ground of non-exhaustion of
administrative remedies but on November 24, 1989, Presiding Judge Mamindiara P. Mangotara
deferred resolution of such Motion to Dismiss until after trial of the case on the merits. However, the
prayer for a writ of preliminary injunction was granted. Thereafter, respondent SOPI filed its answer. 1âwphi1.nêt

On May 30, 1990, the trial court dismissed the petition for failure to exhaust administrative remedies,
and dissolved the writ of preliminary injunction it earlier issued. Petitioner's motion for
reconsideration met the same fate. It was denied by an Order dated June 28, 1990.

On October 3, 1990, instead of taking an appeal, petitioner filed a petition for certiorari, prohibition
and mandamus with the Court of Appeals seeking to set aside the questioned Order of Dismissal,
branding the same as tainted with grave abuse of discretion on the part of the trial court.

On January 24, 1991, the Ninth Division  of the Court of Appeals dismissed the petition for lack of
2 

merit. Petitioner's motion reconsideration was also denied in the Resolution dated May 15, 1991.

Undaunted, petitioner has come before this court via the present petition, theorizing that:

A.

THE RESPONDENT COURT, WHILE CORRECTLY HOLDING THAT THE RESPONDENT

CITY MAYOR ACTED BEYOND HIS AUTHORITY IN IMPOSING THE SPECIAL
CONDITIONS IN THE PERMIT AS THEY HAD NO BASIS IN ANY LAW OR ORDINANCE,
ERRED IN HOLDING THAT THE SAID SPECIAL CONDITIONS NEVERTHELESS
BECAME BINDING ON PETITIONER UPON ITS ACCEPTANCE THEREOF AS A PRIVATE
AGREEMENT OR CONTRACT.

B.

THE RESPONDENT COURT OF APPEALS ERRED IN HOLDING THAT THE CONTRACT

BETWEEN PETITIONER AND THE CITY OF ILIGAN WAS ENTERED INTO BY THE
LATTER IN THE PERFORMANCE OF ITS PROPRIETARY FUNCTIONS.

The petition is impressed with merit.

Although petitioner agrees with the finding of the Court of Appeals that respondent City Mayor acted
beyond the scope of his authority in imposing the assailed conditions in subject business permit, it
has excepted to the ruling of the Court of Appeals that the said conditions nonetheless became
binding on petitioner, once accepted, as a private agreement or contract. Petitioner maintains that
the said special conditions are null and void for being ultra vires and cannot be given effect; and
therefore, the principle of estoppel cannot apply against it.

On the other hand, the public respondents, City Mayor and City Legal Officer, private respondent
SOPI and the Office of the Solicitor General contend that as a valid exercise of police power,
respondent City Mayor has the authority to impose, as he did, special conditions in the grant of
business permits.
Police power as an inherent attribute of sovereignty is the power to prescribe regulations to promote
the health, morals, peace, education, good order or safety and general welfare of the people.  The
9 

State, through the legislature, has delegated the exercise of police power to local government units,
as agencies of the State, in order to effectively accomplish and carry out the declared objects of their
creation.  This delegation of police power is embodied in the general welfare clause of the Local
4 

Government Code which provides:

Sec. 6. 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 scope of police power has been held to be so comprehensive as to encompass almost all
matters affecting the health, safety, peace, order, morals, comfort and convenience of the
community. Police power is essentially regulatory in nature and the power to issue licenses or grant
business permits, if exercised for a regulatory and not revenue-raising purpose, is within the ambit of
this power.  5

The authority of city mayors to issue or grant licenses and business permits is beyond cavil. It is
provided for by law. Section 171, paragraph 2 (n) of Batas Pambansa Bilang 337 otherwise known
as the Local Government Code of 1983, reads:

Sec. 171. The City Mayor shall:

x x x           x x x          x x x

n) Grant or refuse to grant, pursuant to law, city licenses or permits, and revoke the same for
violation of law or ordinance or the conditions upon which they are granted.

However, the power to grant or issue licenses or business permits must always be exercised in
accordance with law, with utmost observance of the rights of all concerned to due process and equal
protection of the law.

Succinct and in point is the ruling of this Court, that:

. . . While a business may be regulated, such regulation must, however, be within the bounds
of reason, i.e., the regulatory ordinance must be reasonable, and its provision cannot be
oppressive amounting to an arbitrary interference with the business or calling subject of
regulation. A lawful business or calling may not, under the guise of regulation, be
unreasonably interfered with even by the exercise of police power. . . .

x x x           x x x          x x x
 . . . The exercise of police power by the local government is valid unless it contravenes the
fundamental law of the land or an act of the legislature, or unless it is against public policy or
is unreasonable, oppressive, partial, discriminating or in derogation of a common right.  6

In the case under consideration, the business permit granted by respondent City Mayor to petitioner
was burdened with several conditions. Petitioner agrees with the holding by the Court of Appeals
that respondent City Mayor acted beyond his authority in imposing such special conditions in its
permit as the same have no basis in the law or ordinance. Public respondents and private
respondent SOPI, on the other hand, are one in saying that the imposition of said special conditions
on petitioner's business permit is well within the authority of the City Mayor as a valid exercise of
police power.

As aptly discussed by the Solicitor General in his Comment, the power to issue licenses and permits
necessarily includes the corollary power to revoke, withdraw or cancel the same. And the power to
revoke or cancel, likewise includes the power to restrict through the imposition of certain conditions.
In the case of Austin-Hardware, Inc. vs. Court of Appeals,  it was held that the power to license
7 

carries with it the authority to provide reasonable terms and conditions under which the licensed
business shall be conducted. As the Solicitor General puts it:

If the City Mayor is empowered to grant or refuse to grant a license, which is a broader
power, it stands to reason that he can also exercise a lesser power that is reasonably
incidental to his express power, i.e. to restrict a license through the imposition of certain
conditions, especially so that there is no positive prohibition to the exercise of such
prerogative by the City Mayor, nor is there any particular official or body vested with such
authority. 
8

However, the present inquiry does not stop there, as the Solicitor General believes. The power or
authority of the City Mayor to impose conditions or restrictions in the business permit is indisputable.
What petitioner assails are the conditions imposed in its particular case which, it complains, amount
to a confiscation of the business in which petitioner is engaged.

Distinction must be made between the grant of a license or permit to do business and the issuance
of a license to engage in the practice of a particular profession. The first is usually granted by the
local authorities and the second is issued by the Board or Commission tasked to regulate the
particular profession. A business permit authorizes the person, natural or otherwise, to engage in
business or some form of commercial activity. A professional license, on the other hand, is the grant
of authority to a natural person to engage in the practice or exercise of his or her profession.

In the case at bar, what is sought by petitioner from respondent City Mayor is a permit to engage in
the business of running an optical shop. It does not purport to seek a license to engage in the
practice of optometry as a corporate body or entity, although it does have in its employ, persons who
are duly licensed to practice optometry by the Board of Examiners in Optometry.

The case of Samahan ng Optometrists sa Pilipinas vs. Acebedo International Corporation, G.R. No.

117097,  promulgated by this Court on March 21, 1997, is in point. The factual antecedents of that
9 

case are similar to those of the case under consideration and the issue ultimately resolved therein is
exactly the same issue posed for resolution by this Court en banc.

In the said case, the Acebedo International Corporation filed with the Office of the Municipal Mayor
an application for a business permit for the operation of a branch of Acebedo Optical in Candon,
Ilocos Sur. The application was opposed by the Samahan ng Optometrists sa Pilipinas-Ilocos Sur
Chapter, theorizing that Acebedo is a juridical entity not qualified to practice optometry. A committee
was created by the Office of the Mayor to study private respondent's application. Upon
recommendation of the said committee, Acebedo's application for a business permit was denied.
Acebedo filed a petition with the Regional Trial Court but the same was dismissed. On appeal,
however, the Court of Appeals reversed the trial court's disposition, prompting the Samahan ng
Optometrists to elevate the matter to this Court.

The First Division of this Court, then composed of Honorable Justice Teodoro Padilla, Josue
Bellosillo, Jose Vitug and Santiago Kapunan, with Honorable Justice Regino Hermosisima, Jr.
as ponente, denied the petition and ruled in favor of respondent Acebedo International Corporation,
holding that "the fact that private respondent hires optometrists who practice their profession in the
course of their employment in private respondent's optical shops, does not translate into a practice
of optometry by private respondent itself,"  The Court further elucidated that in both the old and new
10 

Optometry Law, R.A. No. 1998, superseded by R.A. No. 8050, it is significant to note that there is no
prohibition against the hiring by corporations of optometrists. The Court concluded thus:

All told, there is no law that prohibits the hiring by corporations of optometrists or considers
the hiring by corporations of optometrists as a practice by the corporation itself of the
profession of optometry.

In the present case, the objective of the imposition of subject conditions on petitioner's business
permit could be attained by requiring the optometrists in petitioner's employ to produce a valid
certificate of registration as optometrist, from the Board of Examiners in Optometry. A business
permit is issued primarily to regulate the conduct of business and the City Mayor cannot, through the
issuance of such permit, regulate the practice of a profession, like that of optometry. Such a function
is within the exclusive domain of the administrative agency specifically empowered by law to
supervise the profession, in this case the Professional Regulations Commission and the Board of
Examiners in Optometry.

It is significant to note that during the deliberations of the bicameral conference committee of the
Senate and the House of Representatives on R.A. 8050 (Senate Bill No. 1998 and House Bill No.
14100), the committee failed to reach a consensus as to the prohibition on indirect practice of
optometry by corporations. The proponent of the bill, former Senator Freddie Webb, admitted thus:

Senator Webb: xxx xxx xxx

The focus of contention remains to be the proposal of prohibiting the indirect practice of
optometry by corporations.  We took a second look and even a third look at the issue in the
1âwphi1

bicameral conference, but a compromise remained elusive.  11

Former Senator Leticia Ramos-Shahani likewise voted her reservation in casting her vote:

Senator Shahani: Mr. President.

The optometry bills have evoked controversial views from the members of the panel. While
we realize the need to uplift the standards of optometry as a profession, the consesnsus of
both Houses was to avoid touching sensitive issues which properly belong to judicial
determination. Thus, the bicameral conference committee decided to leave the issue of
indirect practice of optometry and the use of trade names open to the wisdom of the Courts
which are vested with the prerogative of interpreting the laws.  12
From the foregoing, it is thus evident that Congress has not adopted a unanimous position on the
matter of prohibition of indirect practice of optometry by corporations, specifically on the hiring and
employment of licensed optometrists by optical corporations. It is clear that Congress left the
resolution of such issue for judicial determination, and it is therefore proper for this Court to resolve
the issue.

Even in the United States, jurisprudence varies and there is a conflict of opinions among the federal
courts as to the right of a corporation or individual not himself licensed, to hire and employ licensed
optometrists. 13

Courts have distinguished between optometry as a learned profession in the category of law and
medicine, and optometry as a mechanical art. And, insofar as the courts regard optometry as merely
a mechanical art, they have tended to find nothing objectionable in the making and selling of
eyeglasses, spectacles and lenses by corporations so long as the patient is actually examined and
prescribed for by a qualified practitioner.  14

The primary purpose of the statute regulating the practice of optometry is to insure that optometrical
services are to be rendered by competent and licensed persons in order to protect the health and
physical welfare of the people from the dangers engendered by unlicensed practice. Such purpose
may be fully accomplished although the person rendering the service is employed by a corporation.  15

Furthermore, it was ruled that the employment of a qualified optometrist by a corporation is not
against public policy.  Unless prohibited by statutes, a corporation has all the contractual rights that
16 

an individual has  and it does not become the practice of medicine or optometry because of the
17 

presence of a physician or optometrist.  The manufacturing, selling, trading and bartering of

18 

eyeglasses and spectacles as articles of merchandise do not constitute the practice of optometry.  19

In the case of Dvorine vs. Castelberg Jewelry Corporation,  defendant corporation conducted as

20 

part of its business, a department for the sale of eyeglasses and the furnishing of optometrical
services to its clients. It employed a registered optometrist who was compensated at a regular salary
and commission and who was furnished instruments and appliances needed for the work, as well as
an office. In holding that corporation was not engaged in the practice of optometry, the court ruled
that there is no public policy forbidding the commercialization of optometry, as in law and medicine,
and recognized the general practice of making it a commercial business by advertising and selling
eyeglasses.

To accomplish the objective of the regulation, a state may provide by statute that corporations
cannot sell eyeglasses, spectacles, and lenses unless a duly licensed physician or a duly qualified
optometrist is in charge of, and in personal attendance at the place where such articles are sold.  In21 

such a case, the patient's primary and essential safeguard lies in the optometrist's control of the
"treatment" by means of prescription and preliminary and final examination.  22

In analogy, it is noteworthy that private hospitals are maintained by corporations incorporated for the
purpose of furnishing medical and surgical treatment. In the course of providing such treatments,
these corporations employ physicians, surgeons and medical practitioners, in the same way that in
the course of manufacturing and selling eyeglasses, eye frames and optical lenses, optical shops
hire licensed optometrists to examine, prescribe and dispense ophthalmic lenses. No one has ever
charged that these corporations are engaged in the practice of medicine. There is indeed no valid
basis for treating corporations engaged in the business of running optical shops differently.

It also bears stressing, as petitioner has pointed out, that the public and private respondents did not
appeal from the ruling of the Court of Appeals. Consequently, the holding by the Court of Appeals
that the act of respondent City Mayor in imposing the questioned special conditions on petitioner's
business permit is ultra vires cannot be put into issue here by the respondents. It is well-settled that:

A party who has not appealed from the decision may not obtain any affirmative relief from the
appellate court other than what he had obtain from the lower court, if any, whose decision is
brought up on appeal.  23

. . . an appellee who is not an appellant may assign errors in his brief where his purpose is to
maintain the judgment on other grounds, but he cannot seek modification or reversal of the
judgment or affirmative relief unless he has also appealed.  24

Thus, respondents' submission that the imposition of subject special conditions on petitioner's
business permit is not ultra vires cannot prevail over the finding and ruling by the Court of Appeals
from which they (respondents) did not appeal.

Anent the second assigned error, petitioner maintains that its business permit issued by the City
Mayor is not a contract entered into by Iligan City in the exercise of its proprietary functions, such
that although petitioner agreed to such conditions, it cannot be held in estoppel since ultra vires acts
cannot be given effect.

Respondents, on the other hand, agree with the ruling of the Court of Appeals that the business
permit in question is in the nature of a contract between Iligan City and the herein petitioner, the
terms and conditions of which are binding upon agreement, and that petitioner is estopped from
questioning the same. Moreover, in the Resolution denying petitioner's motion for reconsideration,
the Court of Appeals held that the contract between the petitioner and the City of Iligan was entered
into by the latter in the performance of its proprietary functions.

This Court holds otherwise. It had occasion to rule that a license or permit is not in the nature of a
contract but a special privilege.

. . . a license or a permit is not a contract between the sovereignty and the licensee or
permitee, and is not a property in the constitutional sense, as to which the constitutional
proscription against impairment of the obligation of contracts may extend. A license is rather
in the nature of a special privilege, of a permission or authority to do what is within its terms.
It is not in any way vested, permanent or absolute.  25

It is therefore decisively clear that estoppel cannot apply in this case. The fact that petitioner
acquiesced in the special conditions imposed by the City Mayor in subject business permit does not
preclude it from challenging the said imposition, which is ultra vires or beyond the ambit of authority
of respondent City Mayor. Ultra vires acts or acts which are clearly beyond the scope of one's
authority are null and void and cannot be given any effect. The doctrine of estoppel cannot operate
to give effect to an act which is otherwise null and void or ultra vires.

The Court of Appeals erred in adjudging subject business permit as having been issued by
responded City Mayor in the performance of proprietary functions of Iligan City. As hereinabove
elaborated upon, the issuance of business licenses and permits by a municipality or city is
essentially regulatory in nature. The authority, which devolved upon local government units to issue
or grant such licenses or permits, is essentially in the exercise of the police power of the State within
the contemplation of the general welfare clause of the Local Government Code.
WHEREFORE, the petition is GRANTED; the Decision of the Court of Appeals in CA-GR SP No.
22995 REVERSED: and the respondent City Mayor is hereby ordered to reissue petitioner's
business permit in accordance with law and with this disposition. No pronouncement as to costs.

SO ORDERED

G.R. No. 118127             April 12, 2005

CITY OF MANILA, HON. ALFREDO S. LIM as the Mayor of the City of Manila, HON. JOSELITO
L. ATIENZA, in his capacity as Vice-Mayor of the City of Manila and Presiding Officer of the
City Council of Manila, HON. ERNESTO A. NIEVA, HON. GONZALO P. GONZALES, HON.
AVELINO S. CAILIAN, HON. ROBERTO C. OCAMPO, HON. ALBERTO DOMINGO, HON.
HONORIO U. LOPEZ, HON. FRANCISCO G. VARONA, JR., HON. ROMUALDO S. MARANAN,
HON. NESTOR C. PONCE, JR., HON. HUMBERTO B. BASCO, HON. FLAVIANO F.
CONCEPCION, JR., HON. ROMEO G. RIVERA, HON. MANUEL M. ZARCAL, HON. PEDRO S. DE
JESUS, HON. BERNARDITO C. ANG, HON. MANUEL L. QUIN, HON. JHOSEP Y. LOPEZ, HON.
CHIKA G. GO, HON. VICTORIANO A. MELENDEZ, HON. ERNESTO V.P. MACEDA, JR., HON.
ROLANDO P. NIETO, HON. DANILO V. ROLEDA, HON. GERINO A. TOLENTINO, JR., HON. MA.
PAZ E. HERRERA, HON. JOEY D. HIZON, HON. FELIXBERTO D. ESPIRITU, HON. KARLO Q.
BUTIONG, HON. ROGELIO P. DELA PAZ, HON. BERNARDO D. RAGAZA, HON. MA. CORAZON
R. CABALLES, HON. CASIMIRO C. SISON, HON. BIENVINIDO M. ABANTE, JR., HON. MA.
LOURDES M. ISIP, HON. ALEXANDER S. RICAFORT, HON. ERNESTO F. RIVERA, HON.
LEONARDO L. ANGAT, and HON. JOCELYN B. DAWIS, in their capacity as councilors of the
City of Manila, Petitioner,
vs.
HON. PERFECTO A.S. LAGUIO, JR., as Presiding Judge, RTC, Manila and MALATE TOURIST
DEVELOPMENT CORPORATION, Respondents.

DECISION

TINGA, J.:

I know only that what is moral is what you feel good after and what is immoral is what you
feel bad after.

Ernest Hermingway
Death in the Afternoon, Ch. 1

It is a moral and political axiom that any dishonorable act, if performed by oneself, is less
immoral than if performed by someone else, who would be well-intentioned in his dishonesty.

J. Christopher  Gerald
Bonaparte in Egypt, Ch. I

The Court's commitment to the protection of morals is secondary to its fealty to the fundamental law
of the land. It is foremost a guardian of the Constitution but not the conscience of individuals. And if it
need be, the Court will not hesitate to "make the hammer fall, and heavily" in the words of Justice
Laurel, and uphold the constitutional guarantees when faced with laws that, though not lacking in
zeal to promote morality, nevertheless fail to pass the test of constitutionality.
The pivotal issue in this Petition under Rule 45 (then Rule 42) of the Revised Rules on Civil
1 

Procedure seeking the reversal of the Decision in Civil Case No. 93-66511 of the Regional Trial
2 

Court (RTC) of Manila, Branch 18 (lower court), is the validity of Ordinance No. 7783
3 

(the Ordinance) of the City of Manila.

4

The antecedents are as follows:

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
5 

in Malate which was licensed as a motel although duly accredited with the Department of Tourism as
a hotel. On 28 June 1993, MTDC filed a Petition for Declaratory Relief with Prayer for a Writ of
6 

Preliminary Injunction and/or Temporary Restraining Order (RTC Petition) with the lower court
7 

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.
8

Enacted by the City Council on 9 March 1993 and approved by petitioner City Mayor on 30 March
9 

1993, 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. 10

The Ordinance is reproduced in full, hereunder:

SECTION 1. Any provision of existing laws and ordinances to the contrary

notwithstanding, no person, partnership, corporation or entity shall, in the Ermita-
Malate area bounded by Teodoro M. Kalaw Sr. Street in the North, Taft Avenue in the East,
Vito Cruz Street in the South and Roxas Boulevard in the West, pursuant to P.D. 499 be
allowed or authorized to contract and engage in, any business providing certain forms
of amusement, entertainment, services and facilities where women are used as tools
in entertainment and which tend to disturb the community, annoy the inhabitants, and
adversely affect the social and moral welfare of the community, such as but not limited
to:

1. Sauna Parlors

2. Massage Parlors

3. Karaoke Bars

4. Beerhouses

5. Night Clubs

6. Day Clubs

7. Super Clubs
 8. Discotheques

9. Cabarets

10. Dance Halls

11. Motels

12. Inns

SEC. 2 The City Mayor, the City Treasurer or any person acting in behalf of the said
officials are prohibited from issuing permits, temporary or otherwise, or from granting
licenses and accepting payments for the operation of business enumerated in the
preceding section.

SEC. 3. Owners and/or operator of establishments engaged in, or devoted to, the

businesses enumerated in Section 1 hereof are hereby given three (3) months from the
date of approval of this ordinance within which to wind up business operations or to
transfer to any place outside of the Ermita-Malate area or convert said businesses to
other kinds of business allowable within the area, such as but not limited to:

1. Curio or antique shop

2. Souvenir Shops

3. Handicrafts display centers

4. Art galleries

5. Records and music shops

6. Restaurants

7. Coffee shops

8. Flower shops

9. Music lounge and sing-along restaurants, with well-defined activities for

wholesome family entertainment that cater to both local and foreign clientele.

10. Theaters engaged in the exhibition, not only of motion pictures but also of cultural
shows, stage and theatrical plays, art exhibitions, concerts and the like.

11. Businesses allowable within the law and medium intensity districts as provided
for in the zoning ordinances for Metropolitan Manila, except new warehouse or open-
storage depot, dock or yard, motor repair shop, gasoline service station, light industry
with any machinery, or funeral establishments.

SEC. 4. Any person violating any provisions of this ordinance, shall upon conviction,
be punished by imprisonment of one (1) year or fine of FIVE THOUSAND (P5,000.00)
 PESOS, or both, at the discretion of the Court, PROVIDED, that in case of juridical person,
the President, the General Manager, or person-in-charge of operation shall be liable thereof;
PROVIDED FURTHER, that in case of subsequent violation and conviction, the
premises of the erring establishment shall be closed and padlocked permanently.

SEC. 5. This ordinance shall take effect upon approval.

Enacted by the City Council of Manila at its regular session today, March 9, 1993.

Approved by His Honor, the Mayor on March 30, 1993. (Emphasis supplied)

In the RTC Petition, MTDC argued that the Ordinance erroneously and improperly included in its
enumeration of prohibited establishments, motels and inns such as MTDC's Victoria Court
considering that these were not establishments for "amusement" or "entertainment" and they were
not "services or facilities for entertainment," nor did they use women as "tools for entertainment," and
neither did they "disturb the community," "annoy the inhabitants" or "adversely affect the social and
moral welfare of the community." 11

MTDC further advanced that the Ordinance was invalid and unconstitutional for the following
reasons: (1) The City Council has no power to prohibit the operation of motels as Section 458 (a) 4
(iv) of the Local Government Code of 1991 (the Code) grants to the City Council only the power to
12 

regulate the establishment, operation and maintenance of hotels, motels, inns, pension houses,
lodging houses and other similar establishments; (2) The Ordinance is void as it is violative of
Presidential Decree (P.D.) No. 499 which specifically declared portions of the Ermita-Malate area as
13 

a commercial zone with certain restrictions; (3) The Ordinance does not constitute a proper exercise
of police power as the compulsory closure of the motel business has no reasonable relation to the
legitimate municipal interests sought to be protected; (4) The Ordinance constitutes an ex post
facto law by punishing the operation of Victoria Court which was a legitimate business prior to its
enactment; (5) The Ordinance violates MTDC's constitutional rights in that: (a) it is confiscatory and
constitutes an invasion of plaintiff's property rights; (b) the City Council has no power to find as a fact
that a particular thing is a nuisance per se nor does it have the power to extrajudicially destroy it; and
(6) The Ordinance constitutes a denial of equal protection under the law as no reasonable basis
exists for prohibiting the operation of motels and inns, but not pension houses, hotels, lodging
houses or other similar establishments, and for prohibiting said business in the Ermita-Malate area
but not outside of this area. 14

In their Answer dated 23 July 1993, petitioners City of Manila and Lim maintained that the City
15 

Council had the power to "prohibit certain forms of entertainment in order to protect the social and
moral welfare of the community" as provided for in Section 458 (a) 4 (vii) of the Local Government
Code, which  reads,  thus:
16 

Section 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:

....

(4) Regulate activities relative to the use of land, buildings and structures within the city in
order to promote the general welfare and for said purpose shall:
 ....

(vii) Regulate the establishment, operation, and maintenance of any entertainment or

amusement facilities, including theatrical performances, circuses, billiard pools,
public dancing schools, public dance halls, sauna baths, massage parlors, and other
places for entertainment or amusement; regulate such other events or activities for
amusement or entertainment, particularly those which tend to disturb the community
or annoy the inhabitants, or require the suspension or suppression of the same; or,
prohibit certain forms of amusement or entertainment in order to protect the social
and moral welfare of the community.

Citing Kwong Sing v. City of Manila, petitioners insisted that the power of regulation spoken of in the
17 

above-quoted provision included the power to control, to govern and to restrain places of exhibition
and amusement. 18

Petitioners likewise asserted that the Ordinance was enacted by the City Council of Manila to protect
the social and moral welfare of the community in conjunction with its police power as found in Article
III, Section 18(kk) of Republic Act No. 409, otherwise known as the Revised Charter of the City of
19 

Manila (Revised Charter of Manila) which reads, thus:

20 

ARTICLE III

THE MUNICIPAL BOARD

.  .  .

Section 18. Legislative powers. – The Municipal Board shall have the following legislative
powers:

.  .  .

(kk) To enact all ordinances it may deem necessary and proper for the sanitation and safety,
the furtherance of the prosperity, and the promotion of the morality, peace, good order,
comfort, convenience, and general welfare of the city and its inhabitants, and such others as
may be necessary to carry into effect and discharge the powers and duties conferred by this
chapter; and to fix penalties for the violation of ordinances which shall not exceed two
hundred pesos fine or six months' imprisonment, or both such fine and imprisonment, for a
single offense.

Further, the petitioners noted, the Ordinance had the presumption of validity; hence, private
respondent had the burden to prove its illegality or unconstitutionality.
21

Petitioners also maintained that there was no inconsistency between P.D. 499 and the Ordinance as
the latter simply disauthorized certain forms of businesses and allowed the Ermita-Malate area to
remain a commercial zone. The Ordinance, the petitioners likewise claimed, cannot be assailed
22 

as ex post facto as it was prospective in operation. The Ordinance also did not infringe the equal
23 

protection clause and cannot be denounced as class legislation as there existed substantial and real
differences between the Ermita-Malate area and other places in the City of Manila. 24
On 28 June 1993, respondent Judge Perfecto A.S. Laguio, Jr. (Judge Laguio) issued an ex-parte
temporary restraining order against the enforcement of the Ordinance. And on 16 July 1993, again
25 

in an intrepid gesture, he granted the writ of preliminary injunction prayed for by MTDC. 26

After trial, on 25 November 1994, Judge Laguio rendered the assailed Decision, enjoining the
petitioners from implementing the Ordinance. The dispositive portion of said Decision reads: 27

WHEREFORE, judgment is hereby rendered declaring Ordinance No. 778[3], Series of

1993, of the City of Manila null and void, and making permanent the writ of preliminary
injunction that had been issued by this Court against the defendant. No costs.

SO ORDERED. 28

Petitioners filed with the lower court a Notice of Appeal on 12 December 1994, manifesting that they
29 

are elevating the case to this Court under then Rule 42 on pure questions of law. 30

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
31 

commercial establishments, except those specified therein; and (3) It erred in declaring
the Ordinance void and unconstitutional. 32

In the Petition and in its Memorandum, petitioners in essence repeat the assertions they made

33 

before the lower court. They contend that the assailed Ordinance was enacted in the exercise of the
inherent and plenary power of the State and the general welfare clause exercised by local
government units provided for in Art. 3, Sec. 18 (kk) of the Revised Charter of Manila and
conjunctively, Section 458 (a) 4 (vii) of the Code. They allege that the Ordinance is a valid exercise
34 

of police power; it does not contravene P.D. 499; and that it enjoys the presumption of validity. 35

In its Memorandum dated 27 May 1996, private respondent maintains that the Ordinance is ultra

36 

vires and that it is void for being repugnant to the general law. It reiterates that the
questioned Ordinance is not a valid exercise of police power; that it is violative of due process,
confiscatory and amounts to an arbitrary interference with its lawful business; that it is violative of the
equal protection clause; and that it confers on petitioner City Mayor or any officer unregulated
discretion in the execution of the Ordinance absent rules to guide and control his actions.

This is an opportune time to express the Court's deep sentiment and tenderness for the Ermita-
Malate area being its home for several decades. A long-time resident, the Court witnessed the area's
many turn of events. It relished its glory days and endured its days of infamy. Much as the Court
harks back to the resplendent era of the Old Manila and yearns to restore its lost grandeur, it
believes that the Ordinance is not the fitting means to that end.  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 Ordinance is so replete with constitutional infirmities that almost every sentence thereof violates
a constitutional provision. The prohibitions and sanctions therein transgress the cardinal rights of
persons enshrined by the Constitution. The Court is called upon to shelter these rights from attempts
at rendering them worthless.
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. 37

Anent the first criterion, ordinances shall only be valid when they are not contrary to the Constitution
and to the laws. The Ordinance must satisfy two requirements: it must pass muster under the test of
38 

constitutionality and the test of consistency with the prevailing laws. That ordinances should be
constitutional uphold the principle of the supremacy of the Constitution. The requirement that the
enactment must not violate existing law gives stress to the precept that local government units are
able to legislate only by virtue of their derivative legislative power, a delegation of legislative power
from the national legislature.  The delegate cannot be superior to the principal or exercise powers
higher than those of the latter.
39

This 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. The
national legislature is still the principal of the local government units, which cannot defy its will or
modify or violate it. 40

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. Local government units, as agencies of the State, are
endowed with police power in order to effectively accomplish and carry out the declared objects of
their creation. This delegated police power is found in Section 16 of the Code, known as the general
41 

welfare clause, viz:

SECTION 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.

Local government units exercise police power through their respective legislative bodies; in this
case, the sangguniang panlungsod or the city council. The Code empowers the legislative bodies to
"enact ordinances, approve resolutions and appropriate funds for the general welfare of the
province/city/municipality and its inhabitants pursuant to Section 16 of the Code and in the proper
exercise of the corporate powers of the province/city/ municipality provided under the Code. The42 

inquiry in this Petition is concerned with the validity of the exercise of such delegated power.

The Ordinance contravenes

the Constitution

The police power of the City Council, however broad and far-reaching, is subordinate to the
constitutional limitations thereon; and is subject to the limitation that its exercise must be reasonable
and for the public good. In the case at bar, the enactment of the Ordinance was an invalid exercise
43 

of delegated power as it is unconstitutional and repugnant to general laws.

The relevant constitutional provisions are the following:

SEC. 5. The maintenance of peace and order, the protection of life, liberty, and property, and
the promotion of the general welfare are essential for the enjoyment by all the people of the
blessings of democracy. 44

SEC. 14. The State recognizes the role of women in nation-building, and shall ensure the
fundamental equality before the law of women and men. 45

SEC. 1. No person shall be deprived of life, liberty or property without due process of law,
nor shall any person be denied the equal protection of laws. 46

Sec. 9. Private property shall not be taken for public use without just compensation. 47

A. The Ordinance infringes
the Due Process Clause

The constitutional safeguard of due process is embodied in the fiat "(N)o person shall be deprived of
life, liberty or property without due process of law. . . ."
48

There is no controlling and precise definition of due process.  It furnishes though a standard to which
governmental action should conform in order that deprivation of life, liberty or property, in each
appropriate case, be valid.  This standard is aptly described as a responsiveness to the supremacy
of reason, obedience to the dictates of justice, and as such it is a limitation upon the exercise of the
49 

police power.50

The purpose of the guaranty is to prevent governmental encroachment against the life, liberty and
property of individuals; to secure the individual from the arbitrary exercise of the powers of the
government, unrestrained by the established principles of private rights and distributive justice; to
protect property from confiscation by legislative enactments, from seizure, forfeiture, and destruction
without a trial and conviction by the ordinary mode of judicial procedure; and to secure to all persons
equal and impartial justice and the benefit of the general law.51

The guaranty serves as a protection against arbitrary regulation, and private corporations and
partnerships are "persons" within the scope of the guaranty insofar as their property is concerned. 52

This clause has been interpreted as imposing two separate limits on government, usually called
"procedural due process" and "substantive due process."

Procedural due process, as the phrase implies, refers to the procedures that the government must
follow before it deprives a person of life, liberty, or property. Classic procedural due process issues
are concerned with what kind of notice and what form of hearing the government must provide when
it takes a particular action. 53

Substantive due process, as that phrase connotes, asks whether the government has an adequate
reason for taking away a person's life, liberty, or property. In other words, substantive due process
looks to whether there is a sufficient justification for the government's action. Case law in the United
54 

States (U.S.) tells us that whether there is such a justification depends very much on the level of
scrutiny used. For example, if a law is in an area where only rational basis review is applied,
55 

substantive due process is met so long as the law is rationally related to a legitimate government
purpose.  But if it is an area where strict scrutiny is used, such as for protecting fundamental rights,
then the government will meet substantive due process only if it can prove that the law is necessary
to achieve a compelling government purpose. 56

The police power granted to local government units must always be exercised with utmost
observance of the rights of the people to due process and equal protection of the law. Such power
cannot be exercised whimsically, arbitrarily or despotically as its exercise is subject to a
57 

qualification, limitation or restriction demanded by the respect and regard due to the prescription of
the fundamental law, particularly those forming part of the Bill of Rights. Individual rights, it bears
emphasis, may be adversely affected only to the extent that may fairly be required by the legitimate
demands of public interest or public welfare. Due process requires the intrinsic validity of the law in
58 

interfering with the rights of the person to his life, liberty and property.
59

Requisites for the valid exercise

of Police Power are not met

To successfully invoke the exercise of police power as the rationale for the enactment of
the Ordinance, and to free it from the imputation of constitutional infirmity, not only must it appear
that the interests of the public generally, as distinguished from those of a particular class, require an
interference with private rights, but the means adopted must be reasonably necessary for the
accomplishment of the purpose and not unduly oppressive upon individuals. It must be evident that
60 

no other alternative for the accomplishment of the purpose less intrusive of private rights can work. 
A reasonable relation must exist between the purposes of the police measure and the means
employed for its accomplishment, for even under the guise of protecting the public interest, personal
rights and those pertaining to private property will not be permitted to be arbitrarily invaded.
61

Lacking a concurrence of these two requisites, the police measure shall be struck down as an
arbitrary intrusion into private rights a violation of the due process clause.
62 

The Ordinance was enacted to address and arrest the social ills purportedly spawned by the
establishments in the Ermita-Malate area which are allegedly operated under the deceptive veneer
of legitimate, licensed and tax-paying nightclubs, bars, karaoke bars, girlie houses, cocktail lounges,
hotels and motels.  Petitioners insist that even the Court in the case of Ermita-Malate Hotel and
Motel Operators Association, Inc. v. City Mayor of Manila had already taken judicial notice of the
63 

"alarming increase in the rate of prostitution, adultery and fornication in Manila traceable in great part
to 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." 64

The object of the Ordinance was, accordingly, the promotion and protection of the social and moral
values of the community. Granting for the sake of argument that the objectives of the Ordinance are
within the scope of the City Council's police powers, the means employed for the accomplishment
thereof were unreasonable and unduly oppressive.

It is undoubtedly one of the fundamental duties of the City of Manila to make all reasonable
regulations looking to the promotion of the moral and social values of the community. However, the
worthy aim of fostering public morals and the eradication of the community's social ills can be
achieved through means less restrictive of private rights; it can be attained by reasonable restrictions
rather than by an absolute prohibition. The closing down and transfer of businesses or their
conversion into businesses "allowed" under the Ordinance have no reasonable relation to the
accomplishment of its purposes. Otherwise stated, the prohibition of the enumerated establishments
will not per se protect and promote the social and moral welfare of the community; it will not in itself
eradicate the alluded social ills of prostitution, adultery, fornication nor will it arrest the spread of
sexual disease in Manila.

Conceding for the nonce that the Ermita-Malate area teems with houses of ill-repute and
establishments of the like which the City Council may lawfully prohibit, it is baseless and
65 

insupportable to bring within that classification sauna parlors, massage parlors, karaoke bars, night
clubs, day clubs, super clubs, discotheques, cabarets, dance halls, motels and inns. This is not
warranted under the accepted definitions of these terms. The enumerated establishments are lawful
pursuits which are not per se offensive to the moral welfare of the community.

That these are used as arenas to consummate illicit sexual affairs and as venues to further the
illegal prostitution is of no moment. We lay stress on the acrid truth that sexual immorality, being a
human frailty, may take place in the most innocent of places that it may even take place in the
substitute establishments enumerated under Section 3 of the Ordinance.  If the flawed logic of
the Ordinance were to be followed, in the remote instance that an immoral sexual act transpires in a
church cloister or a court chamber, we would behold the spectacle of the City of Manila ordering the
closure of the church or court concerned.  Every house, building, park, curb, street or even vehicles
for that matter will not be exempt from the prohibition. Simply because there are no "pure" places
where there are impure men. Indeed, even the Scripture and the Tradition of Christians churches
continually recall the presence and universality of sin in man's history. 66

The problem, it needs to be pointed out, is not the establishment, which by its nature cannot be said
to be injurious to the health or comfort of the community and which in itself is amoral, but the
deplorable human activity that may occur within its premises. While a motel may be used as a venue
for immoral sexual activity, it cannot for that reason alone be punished. It cannot be classified as a
house of ill-repute or as a nuisance per se on a mere likelihood or a naked assumption. If that were
so and if that were allowed, then the Ermita-Malate area would not only be purged of its supposed
social ills, it would be extinguished of its soul as well as every human activity, reprehensible or not,
in its every nook and cranny would be laid bare to the estimation of the authorities.

The Ordinance seeks to legislate morality but fails to address the core issues of morality. Try as
the Ordinance may to shape morality, it should not foster the illusion that it can make a moral man
out of it because immorality is not a thing, a building or establishment; it is in the hearts of men. The
City Council instead should regulate human conduct that occurs inside the establishments, but not to
the detriment of liberty and privacy which are covenants, premiums and blessings of democracy.

While petitioners' earnestness at curbing clearly objectionable social ills is commendable, they
unwittingly punish even the proprietors and operators of "wholesome," "innocent" establishments. In
the instant case, there is a clear invasion of personal or property rights, personal in the case of those
individuals desirous of owning, operating and patronizing those motels and property in terms of the
investments made and the salaries to be paid to those therein employed. If the City of Manila so
desires to put an end to prostitution, fornication and other social ills, it can instead impose
reasonable regulations such as daily inspections of the establishments for any violation of the
conditions of their licenses or permits; it may exercise its authority to suspend or revoke their
licenses for these violations; and it may even impose increased license fees. In other words, there
67 

are other means to reasonably accomplish the desired end.

Means employed are

constitutionally infirm
The Ordinance disallows the operation of sauna parlors, massage parlors, karaoke bars,
beerhouses, night clubs, day clubs, super clubs, discotheques, cabarets, dance halls, motels and
inns in the Ermita-Malate area. In Section 3 thereof, owners and/or operators of the enumerated
establishments are given three (3) months from the date of approval of the Ordinance within which
"to wind up business operations or to transfer to any place outside the Ermita-Malate area or convert
said businesses to other kinds of business allowable within the area." Further, it states in Section 4
that in cases of subsequent violations of the provisions of the Ordinance, the "premises of the erring
establishment shall be closed and padlocked permanently."

It is readily apparent that the means employed by the Ordinance for the achievement of its purposes,
the governmental interference itself, infringes on the constitutional guarantees of a person's
fundamental right to liberty and property.

Liberty as guaranteed by the Constitution was defined by Justice Malcolm to include "the right to
exist and the right to be free from arbitrary restraint or servitude. The term cannot be dwarfed into
mere freedom from physical restraint of the person of the citizen, but is deemed to embrace the right
of man to enjoy the facilities with which he has been endowed by his Creator, subject only to such
restraint as are necessary for the common welfare." In accordance with this case, the rights of the
68 

citizen to be free to use his faculties in all lawful ways; to live and work where he will; to earn his
livelihood by any lawful calling; and to pursue any avocation are all deemed embraced in the
concept of liberty.
69

The U.S. Supreme Court in the case of Roth v. Board of Regents, sought to clarify the meaning of
70 

"liberty."  It said:

While the Court has not attempted to define with exactness the liberty. . . guaranteed [by the
Fifth and Fourteenth Amendments], the term denotes not merely freedom from bodily
restraint but also the right of the individual to contract, to engage in any of the common
occupations of life, to acquire useful knowledge, to marry, establish a home and bring up
children, to worship God according to the dictates of his own conscience, and generally to
enjoy those privileges long recognized…as essential to the orderly pursuit of happiness by
free men. In a Constitution for a free people, there can be no doubt that the meaning of
"liberty" must be broad indeed.

In another case, it also confirmed that liberty protected by the due process clause includes personal
decisions relating to marriage, procreation, contraception, family relationships, child rearing, and
education. In explaining the respect the Constitution demands for the autonomy of the person in
making these choices, the U.S. Supreme Court explained:

These matters, involving the most intimate and personal choices a person may make in a
lifetime, choices central to personal dignity and autonomy, are central to the liberty protected
by the Fourteenth Amendment. At the heart of liberty is the right to define one's own concept
of existence, of meaning, of universe, and of the mystery of human life. Beliefs about these
matters could not define the attributes of personhood where they formed under compulsion
of the State. 71

Persons desirous to own, operate and patronize the enumerated establishments under Section 1 of
the Ordinance may seek autonomy for these purposes.

Motel patrons who are single and unmarried may invoke this right to autonomy to consummate their
bonds in intimate sexual conduct within the motel's premisesbe it stressed that their consensual
sexual behavior does not contravene any fundamental state policy as contained in the
Constitution.   Adults have a right to choose to forge such relationships with others in the confines of
72 

their own private lives and still retain their dignity as free persons. The liberty protected by the
Constitution allows persons the right to make this choice. Their right to liberty under the due process
73 

clause gives them the full right to engage in their conduct without intervention of the government, as
long as they do not run afoul of the law. Liberty should be the rule and restraint the exception.

Liberty in the constitutional sense not only means freedom from unlawful government restraint; it
must include privacy as well, if it is to be a repository of freedom. The right to be let alone is the
beginning of all freedomit is the most comprehensive of rights and the right most valued by
civilized men. 74

The concept of liberty compels respect for the individual whose claim to privacy and interference
demands respect. As the case of Morfe v. Mutuc, borrowing the words of Laski, so very aptly stated:
75 

Man is one among many, obstinately refusing reduction to unity. His separateness, his
isolation, are indefeasible; indeed, they are so fundamental that they are the basis on which
his civic obligations are built. He cannot abandon the consequences of his isolation, which
are, broadly speaking, that his experience is private, and the will built out of that experience
personal to himself. If he surrenders his will to others, he surrenders himself. If his will is set
by the will of others, he ceases to be a master of himself. I cannot believe that a man no
longer a master of himself is in any real sense free.

Indeed, the right to privacy as a constitutional right was recognized in Morfe, the invasion of which
should be justified by a compelling state interest. Morfe accorded recognition to the right to privacy
independently of its identification with liberty; in itself it is fully deserving of constitutional protection.
Governmental powers should stop short of certain intrusions into the personal life of the citizen. 76

There is a great temptation to have an extended discussion on these civil liberties but the Court
chooses to exercise restraint and restrict itself to the issues presented when it should. The previous
pronouncements of the Court are not to be interpreted as a license for adults to engage in criminal
conduct. The reprehensibility of such conduct is not diminished. The Court only reaffirms and
guarantees their right to make this choice. Should they be prosecuted for their illegal conduct, they
should suffer the consequences of the choice they have made. That, ultimately, is their choice.

Modality employed is
unlawful taking

In addition, the Ordinance is unreasonable and oppressive as it substantially divests the respondent

of the beneficial use of its property. The Ordinance in Section 1 thereof forbids the running of the
77 

enumerated businesses in the Ermita-Malate area and in Section 3 instructs its owners/operators to
wind up business operations or to transfer outside the area or convert said businesses into allowed
businesses. An ordinance which permanently restricts the use of property that it can not be used for
any reasonable purpose goes beyond regulation and must be recognized as a taking of the property
without just compensation. It is intrusive and violative of the private property rights of individuals.
78 

The Constitution expressly provides in Article III, Section 9, that "private property shall not be taken
for public use without just compensation." The provision is the most important protection of property
rights in the Constitution. This is a restriction on the general power of the government to take
property. The constitutional provision is about ensuring that the government does not confiscate the
property of some to give it to others. In part too, it is about loss spreading. If the government takes
away a person's property to benefit society, then society should pay. The principal purpose of the
guarantee is "to bar the Government from forcing some people alone to bear public burdens which,
in all fairness and justice, should be borne by the public as a whole.79

There are two different types of taking that can be identified. A "possessory" taking occurs when the
government confiscates or physically occupies property. A "regulatory" taking occurs when the
government's regulation leaves no reasonable economically viable use of the property. 80

In the landmark case of Pennsylvania Coal v. Mahon, it was held that a taking also could be found if
81 

government regulation of the use of property went "too far."  When regulation reaches a certain
magnitude, in most if not in all cases there must be an exercise of eminent domain and
compensation to support the act. While property may be regulated to a certain extent, if regulation
goes too far it will be recognized as a taking.
82

No formula or rule can be devised to answer the questions of what is too far and when regulation
becomes a taking. In Mahon, Justice Holmes recognized that it was "a question of degree and
therefore cannot be disposed of by general propositions." On many other occasions as well, the U.S.
Supreme Court has said that the issue of when regulation constitutes a taking is a matter of
considering the facts in each case. The Court asks whether justice and fairness require that the
economic loss caused by public action must be compensated by the government and thus borne by
the public as a whole, or whether the loss should remain concentrated on those few persons subject
to the public action.
83

What is crucial in judicial consideration of regulatory takings is that government regulation is a taking
if it leaves no reasonable economically viable use of property in a manner that interferes with
reasonable expectations for use. A regulation that permanently denies all economically beneficial or
84 

productive use of land is, from the owner's point of view, equivalent to a "taking" unless principles of
nuisance or property law that existed when the owner acquired the land make the use
prohibitable. When the owner of real property has been called upon to sacrifice all economically
85 

beneficial uses in the name of the common good, that is, to leave his property economically idle, he
has suffered a taking. 86

A regulation which denies all economically beneficial or productive use of land will require
compensation under the takings clause. Where a regulation places limitations on land that fall short
of eliminating all economically beneficial use, a taking nonetheless may have occurred, depending
on a complex of factors including the regulation's economic effect on the landowner, the extent to
which the regulation interferes with reasonable investment-backed expectations and the character of
government action. These inquiries are informed by the purpose of the takings clause which is to
prevent the government from forcing some people alone to bear public burdens which, in all fairness
and justice, should be borne by the public as a whole. 87

A restriction on use of property may also constitute a "taking" if not reasonably necessary to the
effectuation of a substantial public purpose or if it has an unduly harsh impact on the distinct
investment-backed expectations of the owner. 88

The Ordinance gives the owners and operators of the "prohibited" establishments three (3) months
from its approval within which to "wind up business operations or to transfer to any place outside of
the Ermita-Malate area or convert said businesses to other kinds of business allowable within the
area." The directive to "wind up business operations" amounts to a closure of the establishment, a
permanent deprivation of property, and is practically confiscatory.  Unless the owner converts his
establishment to accommodate an "allowed" business, the structure which housed the previous
business will be left empty and gathering dust. Suppose he transfers it to another area, he will
likewise leave the entire establishment idle. Consideration must be given to the substantial amount
of money invested to build the edifices which the owner reasonably expects to be returned within a
period of time. It is apparent that the Ordinance leaves no reasonable economically viable use of
property in a manner that interferes with reasonable expectations for use.

The second and third options to transfer to any place outside of the Ermita-Malate area or to
convert into allowed businessesare confiscatory as well. The penalty of permanent closure in
cases of subsequent violations found in Section 4 of the Ordinance is also equivalent to a "taking" of
private property.

The second option instructs the owners to abandon their property and build another one outside the
Ermita-Malate area.  In every sense, it qualifies as a taking without just compensation with an
additional burden imposed on the owner to build another establishment solely from his coffers. The
proffered solution does not put an end to the "problem," it merely relocates it. Not only is this
impractical, it is unreasonable, onerous and oppressive. The conversion into allowed enterprises is
just as ridiculous. How may the respondent convert a motel into a restaurant or a coffee shop, art
gallery or music lounge without essentially destroying its property? This is a taking of private
property without due process of law, nay, even without compensation.

The penalty of closure likewise constitutes unlawful taking that should be compensated by the
government. The burden on the owner to convert or transfer his business, otherwise it will be closed
permanently after a subsequent violation should be borne by the public as this end benefits them as
a whole.

Petitioners cannot take refuge in classifying the measure as a zoning ordinance. A zoning ordinance,
although a valid exercise of police power, which limits a "wholesome" property to a use which can
not reasonably be made of it constitutes the taking of such property without just compensation. 
Private property which is not noxious nor intended for noxious purposes may not, by zoning, be
destroyed without compensation. Such principle finds no support in the principles of justice as we
know them.  The police powers of local government units which have always received broad and
liberal interpretation cannot be stretched to cover this particular taking.

Distinction should be made between destruction from necessity and eminent domain.  It needs
restating that the property taken in the exercise of police power is destroyed because it is noxious or
intended for a noxious purpose while the property taken under the power of eminent domain is
intended for a public use or purpose and is therefore "wholesome." If it be of public benefit that a
89 

"wholesome" property remain unused or relegated to a particular purpose, then certainly the public
should bear the cost of reasonable compensation for the condemnation of private property for public
use.90

Further, the Ordinance fails to set up any standard to guide or limit the petitioners' actions. It in no
way controls or guides the discretion vested in them. It provides no definition of the establishments
covered by it and it fails to set forth the conditions when the establishments come within its ambit of
prohibition. The Ordinance confers upon the mayor arbitrary and unrestricted power to close down
establishments. Ordinances such as this, which make possible abuses in its execution, depending
upon no conditions or qualifications whatsoever other than the unregulated arbitrary will of the city
authorities as the touchstone by which its validity is to be tested, are unreasonable and invalid.
The Ordinance should have established a rule by which its impartial enforcement could be secured. 91

Ordinances placing restrictions upon the lawful use of property must, in order to be valid and
constitutional, specify the rules and conditions to be observed and conduct to avoid; and must not
admit of the exercise, or of an opportunity for the exercise, of unbridled discretion by the law
enforcers in carrying out its provisions.
92
Thus, in Coates v. City of Cincinnati, as cited in People v. Nazario,      the U.S. Supreme Court
93  94 

struck down an ordinance that had made it illegal for "three or more persons to assemble on any
sidewalk and there conduct themselves in a manner annoying to persons passing by." The
ordinance was nullified as it imposed no standard at all "because one may never know in advance
what 'annoys some people but does not annoy others.' "

Similarly, the Ordinance does not specify the standards to ascertain which establishments "tend to
disturb the community," "annoy the inhabitants," and "adversely affect the social and moral welfare
of the community." The cited case supports the nullification of the Ordinance for lack of
comprehensible standards to guide the law enforcers in carrying out its provisions.

Petitioners cannot therefore order the closure of the enumerated establishments without infringing
the due process clause. These lawful establishments may be regulated, but not prevented from
carrying on their business.  This is a sweeping exercise of police power that is a result of a lack of
imagination on the part of the City Council and which amounts to an interference into personal and
private rights which the Court will not countenance. In this regard, we take a resolute stand to uphold
the constitutional guarantee of the right to liberty and property.

Worthy of note is an example derived from the U.S. of a reasonable regulation which is a far cry from
the ill-considered Ordinance enacted by the City Council.

In FW/PBS, INC. v. Dallas, the city of Dallas adopted a comprehensive ordinance regulating
95 

"sexually oriented businesses," which are defined to include adult arcades, bookstores, video stores,
cabarets, motels, and theaters as well as escort agencies, nude model studio and sexual encounter
centers. Among other things, the ordinance required that such businesses be licensed. A group of
motel owners were among the three groups of businesses that filed separate suits challenging the
ordinance. The motel owners asserted that the city violated the due process clause by failing to
produce adequate support for its supposition that renting room for fewer than ten (10) hours resulted
in increased crime and other secondary effects. They likewise argued than the ten (10)-hour
limitation on the rental of motel rooms placed an unconstitutional burden on the right to freedom of
association. Anent the first contention, the U.S. Supreme Court held that the reasonableness of the
legislative judgment combined with a study which the city considered, was adequate to support the
city's determination that motels permitting room rentals for fewer than ten (10 ) hours should be
included within the licensing scheme. As regards the second point, the Court held that limiting motel
room rentals to ten (10) hours will have no discernible effect on personal bonds as those bonds that
are formed from the use of a motel room for fewer than ten (10) hours are not those that have played
a critical role in the culture and traditions of the nation by cultivating and transmitting shared ideals
and beliefs.

The ordinance challenged in the above-cited case merely regulated the targeted businesses. It
imposed reasonable restrictions; hence, its validity was upheld.

The case of Ermita Malate Hotel and Motel Operators Association, Inc. v. City Mayor of Manila, it 96 

needs pointing out, is also different from this case in that what was involved therein was a measure
which regulated the mode in which motels may conduct business in order to put an end to practices
which could encourage vice and immorality. Necessarily, there was no valid objection on due
process or equal protection grounds as the ordinance did not prohibit motels. The Ordinance in this
case however is not a regulatory measure but is an exercise of an assumed power to prohibit. 97

The foregoing premises show that the Ordinance is an unwarranted and unlawful curtailment of
property and personal rights of citizens. For being unreasonable and an undue restraint of trade, it
cannot, even under the guise of exercising police power, be upheld as valid.
B.  The Ordinance violates Equal
Protection Clause

Equal protection requires that all persons or things similarly situated should be treated alike, both as
to rights conferred and responsibilities imposed. Similar subjects, in other words, should not be
treated differently, so as to give undue favor to some and unjustly discriminate against others. The
98 

guarantee means that no person or class of persons shall be denied the same protection of laws
which is enjoyed by other persons or other classes in like circumstances. The "equal protection of
99 

the laws is a pledge of the protection of equal laws." It limits governmental discrimination. The
100 

equal protection clause extends to artificial persons but only insofar as their property is concerned. 101

The Court has explained the scope of the equal protection clause in this wise:

… What does it signify? To quote from J.M. Tuason & Co. v. Land Tenure Administration:
"The ideal situation is for the law's benefits to be available to all, that none be placed outside
the sphere of its coverage. Only thus could chance and favor be excluded and the affairs of
men governed by that serene and impartial uniformity, which is of the very essence of the
idea of law." There is recognition, however, in the opinion that what in fact exists "cannot
approximate the ideal. Nor is the law susceptible to the reproach that it does not take into
account the realities of the situation. The constitutional guarantee then is not to be given a
meaning that disregards what is, what does in fact exist. To assure that the general welfare
be promoted, which is the end of law, a regulatory measure may cut into the rights to liberty
and property. Those adversely affected may under such circumstances invoke the equal
protection clause only if they can show that the governmental act assailed, far from being
inspired by the attainment of the common weal was prompted by the spirit of hostility, or at
the very least, discrimination that finds no support in reason." Classification is thus not ruled
out, it being sufficient to quote from the Tuason decision anew "that the laws operate equally
and uniformly on all persons under similar circumstances or that all persons must be treated
in the same manner, the conditions not being different, both in the privileges conferred and
the liabilities imposed. Favoritism and undue preference cannot be allowed. For the principle
is that equal protection and security shall be given to every person under circumstances
which, if not identical, are analogous. If law be looked upon in terms of burden or charges,
those that fall within a class should be treated in the same fashion, whatever restrictions cast
on some in the group equally binding on the rest. 102

Legislative bodies are allowed to classify the subjects of legislation. If the classification is
reasonable, the law may operate only on some and not all of the people without violating the equal
protection clause. The classification must, as an indispensable requisite, not be arbitrary. To be
103 

valid, it must conform to the following requirements:

1) It must be based on substantial distinctions.

2) It must be germane to the purposes of the law.

3) It must not be limited to existing conditions only.

4) It must apply equally to all members of the class. 104

In the Court's view, there are no substantial distinctions between motels, inns, pension houses,
hotels, lodging houses or other similar establishments. By definition, all are commercial
establishments providing lodging and usually meals and other services for the public. No reason
exists for prohibiting motels and inns but not pension houses, hotels, lodging houses or other similar
establishments. The classification in the instant case is invalid as similar subjects are not similarly
treated, both as to rights conferred and obligations imposed. It is arbitrary as it does not rest on
substantial distinctions bearing a just and fair relation to the purpose of the Ordinance.

The Court likewise cannot see the logic for prohibiting the business and operation of motels in the
Ermita-Malate area but not outside of this area.  A noxious establishment does not become any less
noxious if located outside the area.

The standard "where women are used as tools for entertainment" is also discriminatory as
prostitutionone of the hinted ills the Ordinance aims to banishis not a profession exclusive to
women. Both men and women have an equal propensity to engage in prostitution. It is not any less
grave a sin when men engage in it. And why would the assumption that there is an ongoing immoral
activity apply only when women are employed and be inapposite when men are in harness? This
discrimination based on gender violates equal protection as it is not substantially related to important
government objectives. Thus, the discrimination is invalid.
105 

Failing the test of constitutionality, the Ordinance likewise failed to pass the test of consistency with
prevailing laws.

C.    The Ordinance is repugnant

to general laws; it is ultra vires

The Ordinance is in contravention of the Code as the latter merely empowers local government units
to regulate, and not prohibit, the establishments enumerated in Section 1 thereof.

The power of the City Council to regulate by ordinances the establishment, operation, and
maintenance of motels, hotels and other similar establishments is found in Section 458 (a) 4 (iv),
which provides that:

Section 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:

.  .  .

(4) Regulate activities relative to the use of land, buildings and structures within the city in
order to promote the general welfare and for said purpose shall:

.  .  .

(iv) Regulate the establishment, operation and maintenance of cafes, restaurants,

beerhouses, hotels, motels, inns, pension houses, lodging houses, and other similar
establishments, including tourist guides and transports .  .  .  .

While its power to regulate the establishment, operation and maintenance of any entertainment or
amusement facilities, and to prohibit certain forms of amusement or entertainment is provided under
Section 458 (a) 4 (vii) of the Code, which reads as follows:
 Section 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:

.  .  .

(4) Regulate activities relative to the use of land, buildings and structures within the city in
order to promote the general welfare and for said purpose shall:

.  .  .

(vii) Regulate the establishment, operation, and maintenance of any entertainment or

amusement facilities, including theatrical performances, circuses, billiard pools,
public dancing schools, public dance halls, sauna baths, massage parlors, and other
places for entertainment or amusement; regulate such other events or activities for
amusement or entertainment, particularly those which tend to disturb the community
or annoy the inhabitants, or require the suspension or suppression of the same; or,
prohibit certain forms of amusement or entertainment in order to protect the social
and moral welfare of the community.

Clearly, with respect to cafes, restaurants, beerhouses, hotels, motels, inns, pension houses,
lodging houses, and other similar establishments, the only power of the City Council to legislate
relative thereto is to regulate them to promote the general welfare. The Code still withholds from
cities the power to suppress and prohibit altogether the establishment, operation and maintenance of
such establishments. It is well to recall the rulings of the Court in Kwong Sing v. City of Manila that:
106 

The word "regulate," as used in subsection (l), section 2444 of the Administrative Code,
means and includes the power to control, to govern, and to restrain; but "regulate" should not
be construed as synonymous with "suppress" or "prohibit." Consequently, under the power to
regulate laundries, the municipal authorities could make proper police regulations as to the
mode in which the employment or business shall be exercised. 107

And in People v. Esguerra, wherein the Court nullified an ordinance of the Municipality of Tacloban
108 

which prohibited the selling, giving and dispensing of liquor ratiocinating that the municipality is
empowered only to regulate the same and not prohibit. The Court therein declared that:

(A)s a general rule when a municipal corporation is specifically given authority or power to
regulate or to license and regulate the liquor traffic, power to prohibit is impliedly withheld. 109

These doctrines still hold contrary to petitioners' assertion that they were modified by the Code
110 

vesting upon City Councils prohibitory powers.

Similarly, the City Council exercises regulatory powers over public dancing schools, public dance
halls, sauna baths, massage parlors, and other places for entertainment or amusement as found in
the first clause of Section 458 (a) 4 (vii). Its powers to regulate, suppress and suspend "such other
events or activities for amusement or entertainment, particularly those which tend to disturb the
community or annoy the inhabitants" and to "prohibit certain forms of amusement or entertainment in
order to protect the social and moral welfare of the community" are stated in the second and third
clauses, respectively of the same Section.  The several powers of the City Council as provided in
Section 458 (a) 4 (vii) of the Code, it is pertinent to emphasize, are separated by semi-colons (;), the
use of which indicates that the clauses in which these powers are set forth are independent of each
other albeit closely related to justify being put together in a single enumeration or paragraph. These
111 

powers, therefore, should not be confused, commingled or consolidated as to create a

conglomerated and unified power of regulation, suppression and prohibition. 112

The Congress unequivocably specified the establishments and forms of amusement or

entertainment subject to regulation among which are beerhouses, hotels, motels, inns, pension
houses, lodging houses, and other similar establishments (Section 458 (a) 4 (iv)), public dancing
schools, public dance halls, sauna baths, massage parlors, and other places for entertainment or
amusement (Section 458 (a) 4 (vii)). This enumeration therefore cannot be included as among "other
events or activities for amusement or entertainment, particularly those which tend to disturb the
community or annoy the inhabitants" or "certain forms of amusement or entertainment" which the
City Council may suspend, suppress or prohibit.

The rule is that the City Council has only such powers as are expressly granted to it and those which
are necessarily implied or incidental to the exercise thereof.  By reason of its limited powers and the
nature thereof, said powers are to be construed strictissimi juris and any doubt or ambiguity arising
out of the terms used in granting said powers must be construed against the City
Council. Moreover, it is a general rule in statutory construction that the express mention of one
113 

person, thing, or consequence is tantamount to an express exclusion of all others. Expressio unius

est exclusio alterium. This maxim is based upon the rules of logic and the natural workings of human
mind. It is particularly applicable in the construction of such statutes as create new rights or
remedies, impose penalties or punishments, or otherwise come under the rule of strict construction. 114

The argument that the City Council is empowered to enact the Ordinance by virtue of the general
welfare clause of the Code and of Art. 3, Sec. 18 (kk) of the Revised Charter of Manila is likewise
without merit. On the first point, the ruling of the Court in People v. Esguerra, is instructive. It held
115 

that:

The powers conferred upon a municipal council in the general welfare clause, or section
2238 of the Revised Administrative Code, refers to matters not covered by the other
provisions of the same Code, and therefore it can not be applied to intoxicating liquors, for
the power to regulate the selling, giving away and dispensing thereof is granted specifically
by section 2242 (g) to municipal councils. To hold that, under the general power granted by
section 2238,  a municipal council may enact the ordinance in question, notwithstanding the
provision of section 2242 (g), would be to make the latter superfluous and nugatory, because
the power to prohibit, includes the power to regulate, the selling, giving away and dispensing
of intoxicating liquors.

On the second point, it suffices to say that the Code being a later expression of the legislative will
must necessarily prevail and override the earlier law, the Revised Charter of Manila. Legis
posteriores priores contrarias abrogant, or later statute repeals prior ones which are repugnant
thereto. As between two laws on the same subject matter, which are irreconcilably inconsistent, that
which is passed later prevails, since it is the latest expression of legislative will. If there is an
116 

inconsistency or repugnance between two statutes, both relating to the same subject matter, which
cannot be removed by any fair and reasonable method of interpretation, it is the latest expression of
the legislative will which must prevail and override the earlier.117

Implied repeals are those which take place when a subsequently enacted law contains provisions
contrary to those of an existing law but no provisions expressly repealing them. Such repeals have
been divided into two general classes: those which occur where an act is so inconsistent or
irreconcilable with an existing prior act that only one of the two can remain in force and those which
occur when an act covers the whole subject of an earlier act and is intended to be a substitute
therefor. The validity of such a repeal is sustained on the ground that the latest expression of the
legislative will should prevail.
118

In addition, Section 534(f) of the Code states that "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." Thus, submitting to petitioners' interpretation that the Revised Charter of Manila
empowers the City Council to prohibit motels, that portion of the Charter stating such must be
considered repealed by the Code as it is at variance with the latter's provisions granting the City
Council mere regulatory powers.

It is well to point out that petitioners also cannot seek cover under the general welfare clause
authorizing the abatement of nuisances without judicial proceedings. That tenet applies to a
nuisance per se, or one which affects the immediate safety of persons and property and may be
summarily abated under the undefined law of necessity. It can not be said that motels are injurious
to the rights of property, health or comfort of the community. It is a legitimate business. If it be a
nuisance per accidens it may be so proven in a hearing conducted for that purpose. A motel is
not per se a nuisance warranting its summary abatement without judicial intervention. 119

Notably, the City Council was conferred powers to prevent and prohibit certain activities and
establishments in another section of the Code which is reproduced as follows:

Section 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:

.  .  .

(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, gambling and 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;

.  .  .

If it were the intention of Congress to confer upon the City Council the power to prohibit the
establishments enumerated in Section 1 of the Ordinance, it would have so declared in uncertain
terms by adding them to the list of the matters it may prohibit under the above-quoted Section.
The Ordinance now vainly attempts to lump these establishments with houses of ill-repute and
expand the City Council's powers in the second and third clauses of Section 458 (a) 4 (vii) of the
Code in an effort to overreach its prohibitory powers. It is evident that these establishments may only
be regulated in their establishment, operation and maintenance.
It is important to distinguish the punishable activities from the establishments themselves. That these
establishments are recognized legitimate enterprises can be gleaned from another Section of the
Code. Section 131 under the Title on Local Government Taxation expressly mentioned proprietors or
operators of massage clinics, sauna, Turkish and Swedish baths, hotels, motels and lodging houses
as among the "contractors" defined in paragraph (h) thereof.  The same Section also defined
"amusement" as a "pleasurable diversion and entertainment," "synonymous to relaxation, avocation,
pastime or fun;" and "amusement places" to include "theaters, cinemas, concert halls, circuses and
other places of amusement where one seeks admission to entertain oneself by seeing or viewing the
show or performances." Thus, it can be inferred that the Code considers these establishments as
legitimate enterprises and activities. It is well to recall the maxim reddendo singula singulis which
means that words in different parts of a statute must be referred to their appropriate connection,
giving to each in its place, its proper force and effect, and, if possible, rendering none of them
useless or superfluous, even if strict grammatical construction demands otherwise. Likewise, where
words under consideration appear in different sections or are widely dispersed throughout an act the
same principle applies. 120

Not only does the Ordinance contravene the Code, it likewise runs counter to the provisions of P.D.
499. As correctly argued by MTDC, the statute had already converted the residential Ermita-Malate
area into a commercial area. The decree allowed the establishment and operation of all kinds of
commercial establishments except warehouse or open storage depot, dump or yard, motor repair
shop, gasoline service station, light industry with any machinery or funeral establishment. The rule is
that for an ordinance to be valid and to have force and effect, it must not only be within the powers of
the council to enact but the same must not be in conflict with or repugnant to the general law. As 121 

succinctly illustrated in Solicitor General v. Metropolitan Manila Authority:

122

The requirement that the enactment must not violate existing law explains itself. Local
political subdivisions are able to legislate only by virtue of a valid delegation of legislative
power from the national legislature (except only that the power to create their own sources of
revenue and to levy taxes is conferred by the Constitution itself). They are mere agents
vested with what is called the power of subordinate legislation. As delegates of the
Congress, the local government units cannot contravene but must obey at all times the will of
their principal. In the case before us, the enactment in question, which are merely local in
origin cannot prevail against the decree, which has the force and effect of a statute. 123

Petitioners contend that the Ordinance enjoys the presumption of validity. While this may be the rule,
it has already been held that although the presumption is always in favor of the validity or
reasonableness of the ordinance, such presumption must nevertheless be set aside when the
invalidity or unreasonableness appears on the face of the ordinance itself or is established by proper
evidence. The exercise of police power by the local government is valid unless it contravenes the
fundamental law of the land, or an act of the legislature, or unless it is against public policy or is
unreasonable, oppressive, partial, discriminating or in derogation of a common right. 124

Conclusion

All considered, the Ordinance invades fundamental personal and property rights and impairs
personal privileges. It is constitutionally infirm. The Ordinance contravenes statutes; it is
discriminatory and unreasonable in its operation; it is not sufficiently detailed and explicit that abuses
may attend the enforcement of its sanctions. And not to be forgotten, the City Council under the
Code had no power to enact the Ordinance and is therefore ultra vires, null and void.

Concededly, the challenged Ordinance was enacted with the best of motives and shares the
concern of the public for the cleansing of the Ermita-Malate area of its social sins. Police power
legislation of such character deserves the full endorsement of the judiciary we reiterate our
support for it. But inspite of its virtuous aims, the enactment of the Ordinance has no statutory or
constitutional authority to stand on. Local legislative bodies, in this case, the City Council, cannot
prohibit the operation of the enumerated establishments under Section 1 thereof or order their
transfer or conversion without infringing the constitutional guarantees of due process and equal
protection of laws not even under the guise of police power.

WHEREFORE, the Petition is hereby DENIED and the decision of the Regional Trial Court declaring
the Ordinance void is AFFIRMED.  Costs against petitioners.

SO ORDERED