G.R. No. 111953 December 12, 1997 HON. RENATO C.

CORONA, in his capacity as Assistant Secretary for Legal Affairs, HON. JESUS B. GARCIA, in his capacity as Acting Secretary, Department of Transportation and Communications, and ROGELIO A. DAYAN, in his capacity as General Manager of Philippine Ports Authority, petitioners, vs. UNITED HARBOR PILOTS ASSOCIATION OF THE PHILIPPINES and MANILA PILOTS ASSOCIATION, respondents.

discipline and thereby afford better protection to the port users through the improvement of pilotage services." This was implemented by providing therein that "all existing regular appointments which have been previously issued either by the Bureau of Customs or the PPA shall remain valid up to 31 December 1992 only" and that "all appointments to harbor pilot positions in all pilotage districts shall, henceforth, be only for a term of one (1) year from date of effectivity subject to yearly renewal or cancellation by the Authority after conduct of a rigid evaluation of performance." On August 12, 1992, respondents United Harbor Pilots Association and the Manila Pilots Association, through Capt. Alberto C. Compas, questioned PPA-AO No. 04-92 before the Department of Transportation and Communication, but they were informed by then DOTC Secretary Jesus B. Garcia that "the matter of reviewing, recalling or annulling PPA's administrative issuances lies exclusively with its Board of Directors as its governing body." Meanwhile, on August 31, 1992, the PPA issued Memorandum Order No. 8 08-92 which laid down the criteria or factors to be considered in the 9 reappointment of harbor pilot, viz.: (1) Qualifying Factors: safety record and 10 physical/mental medical exam report and (2) Criteria for Evaluation: promptness in servicing vessels, compliance with PPA Pilotage Guidelines, number of years as a harbor pilot, average GRT of vessels serviced as pilot, awards/commendations as harbor pilot, and age. Respondents reiterated their request for the suspension of the implementation of PPA-AO No. 04-92, but Secretary Garcia insisted on his position that the matter was within the jurisdiction of the Board of Directors of the PPA. Compas appealed this ruling to the Office of the President (OP), reiterating his arguments before the DOTC. On December 23, 1992, the OP issued an order directing the PPA to hold in abeyance the implementation of PPA-AO No. 04-92. In its answer, the PPA countered that said administrative order was issued in the exercise of its administrative control and supervision over harbor pilots under Section 6-a (viii), Article IV of P.D. No. 857, as amended, and it, along with its implementing guidelines, was intended to restore order in the ports and to improve the quality of port services. On March 17, 1993, the OP, through then Assistant Executive Secretary for Legal Affairs Renato C. Corona, dismissed the appeal/petition and lifted the 11 restraining order issued earlier. He concluded that PPA-AO No. 04-92 applied to all harbor pilots and, for all intents and purposes, was not the act of Dayan, but of the PPA, which was merely implementing Section 6 of P.D.

ROMERO, J.: In issuing Administrative Order No. 04-92 (PPA-AO No. 04-92), limiting the term of appointment of harbor pilots to one year subject to yearly renewal or cancellation, did the Philippine Ports Authority (PPA) violate respondents' right to exercise their profession and their right to due process of law? The PPA was created on July 11, 1974, by virtue of Presidential Decree No. 505. On December 23, 1975, Presidential Decree No. 857 was issued revising the PPA's charter. Pursuant to its power of control, regulation, and 1 supervision of pilots and the pilotage profession, the PPA promulgated 2 PPA-AO-03-85 on March 21, 1985, which embodied the "Rules and Regulations Governing Pilotage Services, the Conduct of Pilots and Pilotage Fees in Philippine Ports." These rules mandate, inter alia, that aspiring pilots 3 must be holders of pilot licenses and must train as probationary pilots in outports for three months and in the Port of Manila for four months. It is only 4 after they have achieved satisfactory performance that they are given 5 permanent and regular appointments by the PPA itself to exercise harbor pilotage until they reach the age of 70, unless sooner removed by reason of 6 mental or physical unfitness by the PPA General Manager. Harbor pilots in every harbor district are further required to organize themselves into pilot associations which would make available such equipment as may be required by the PPA for effective pilotage services. In view of this mandate, pilot associations invested in floating, communications, and office equipment. In fact, every new pilot appointed by the PPA automatically becomes a member of a pilot association and is required to pay a proportionate equivalent equity or capital before being allowed to assume his duties, as reimbursement to the association concerned of the amount it paid to his predecessor. Subsequently, then PPA General Manager Rogelio A. Dayan issued PPA-AO 7 No. 04-92 on July 15, 1992, whose avowed policy was to "instill effective

No. 857, mandating it "to control, regulate and supervise pilotage and conduct of pilots in any port district." On the alleged unconstitutionality and illegality of PPA-AO No. 04-92 and its implementing memoranda and circulars, Secretary Corona opined that: The exercise of one's profession falls within the constitutional guarantee against wrongful deprivation of, or interference with, property rights without due process. In the limited context of this case. PPA-AO 04-92 does not constitute a wrongful interference with, let alone a wrongful deprivation of, the property rights of those affected thereby. As may be noted, the issuance aims no more than to improve pilotage services by limiting the appointment to harbor pilot positions to one year, subject to renewal or cancellation after a rigid evaluation of the appointee's performance. PPA-AO 04-92 does not forbid, but merely regulates, the exercise by harbor pilots of their profession in PPA's jurisdictional area. (Emphasis supplied) Finally, as regards the alleged "absence of ample prior consultation" before the issuance of the administrative order, Secretary Corona cited Section 26 of P.D. No. 857, which merely requires the PPA to consult with "relevant Government agencies." Since the PPA Board of Directors is composed of the Secretaries of the DOTC, the Department of Public Works and Highways, the Department of Finance, and the Department of Environment and Natural Resources, as well as the Director-General of the National Economic Development Agency, the Administrator of the Maritime Industry Authority (MARINA), and the private sector representative who, due to his knowledge and expertise, was appointed by the President to the Board, he concluded that the law has been sufficiently complied with by the PPA in issuing the assailed administrative order. Consequently, respondents filed a petition for certiorari, prohibition and injunction with prayer for the issuance of a temporary restraining order and damages, before Branch 6 of the Regional Trial Court of Manila, which was docketed as Civil Case No. 93-65673. On September 6, 1993, the trial court 12 rendered the following judgment: WHEREFORE, for all the foregoing, this Court hereby rules that: 1. Respondents (herein petitioners) have acted excess jurisdiction and with grave abuse of discretion and in a capricious, whimsical and arbitrary manner in promulgating PPA Administrative Order 0492 including all its implementing Memoranda, Circulars and Orders;

2. PPA Administrative Order 04-92 and its implementing Circulars and Orders are declared null and void; 3. The respondents are permanently enjoined from implementing PPA Administrative Order 04-92 and its implementing Memoranda, Circulars and Orders. No costs. SO ORDERED. The court a quo pointed out that the Bureau of Customs, the precursor of the PPA, recognized pilotage as a profession and, therefore, a property right 13 under Callanta v. Carnation Philippines, Inc. Thus, abbreviating the term within which that privilege may be exercised would be an interference with the property rights of the harbor pilots. Consequently, any "withdrawal or alteration" of such property right must be strictly made in accordance with the constitutional mandate of due process of law. This was apparently not followed by the PPA when it did not conduct public hearings prior to the issuance of PPA-AO No. 04-92; respondents allegedly learned about it only after its publication in the newspapers. From this decision, petitioners elevated their case to this Court on certiorari. After carefully examining the records and deliberating on the arguments of the parties, the Court is convinced that PPA-AO No. 04-92 was issued in stark disregard of respondents' right against deprivation of property without due process of law. Consequently, the instant petition must be denied. Section 1 of the Bill of Rights lays down what is known as the "due process clause" of the Constitution, viz.: Sec. 1. No person shall be deprived of life, liberty, or property without due process of law, . . . In order to fall within the aegis of this provision, two conditions must concur, namely, that there is a deprivation and that such deprivation is done without proper observance of due process. When one speaks of due process of law, however, a distinction must be made between matters of procedure and matters of substance. In essence, procedural due process "refers to the method or manner by which the law is enforced," while substantive due process "requires that the law itself, not merely the procedures by which the 14 law would be enforced, is fair, reasonable, and just." PPA-AO No. 04-92 must be examined in light of this distinction.

Respondents argue that due process was not observed in the adoption of PPA-AO No. 04-92 allegedly because no hearing was conducted whereby "relevant government agencies" and the pilots themselves could ventilate their views. They are obviously referring to the procedural aspect of the enactment. Fortunately, the Court has maintained a clear position in this regard, a stance it has stressed in the recent case of Lumiqued v. Hon. 15 Exevea, where it declared that "(a)s long as a party was given the opportunity to defend his interests in due course, he cannot be said to have been denied due process of law, for this opportunity to be heard is the very essence of due process. Moreover, this constitutional mandate is deemed satisfied if a person is granted an opportunity to seek reconsideration of the action or ruling complained of." In the case at bar, respondents questioned PPA-AO No. 04-92 no less than 16 four times before the matter was finally elevated to this Tribunal. Their arguments on this score, however, fail to persuade. While respondents emphasize that the Philippine Coast Guard, "which issues the licenses of 17 pilots after administering the pilots' examinations," was not consulted, the facts show that the MARINA, which took over the licensing function of the Philippine Coast Guard, was duly represented in the Board of Directors of the PPA. Thus, petitioners correctly argued that, there being no matters of naval defense involved in the issuance of the administrative order, the Philippine 18 Coast Guard need not be consulted. Neither does the fact that the pilots themselves were not consulted in any way taint the validity of the administrative order. As a general rule, notice and hearing, as the fundamental requirements of procedural due process, are essential only when an administrative body exercises its quasi-judicial function. In the performance of its executive or legislative functions, such as issuing rules and regulations, an administrative body need not comply with 19 the requirements of notice and hearing. Upon the other hand, it is also contended that the sole and exclusive right to the exercise of harbor pilotage by pilots is a settled issue. Respondents aver that said right has become vested and can only be "withdrawn or shortened" by observing the constitutional mandate of due process of law. Their argument has thus shifted from the procedural to one of substance. It is here where PPA-AO No. 04-92 fails to meet the condition set by the organic law. There is no dispute that pilotage as a profession has taken on the nature of a property right. Even petitioner Corona recognized this when he stated in his March 17, 1993, decision that "(t)he exercise of one's profession falls within the constitutional guarantee against wrongful deprivation of, or interference 20 with, property rights without due process." He merely expressed the opinion the "(i)n the limited context of this case, PPA-AO 04-92 does not constitute a wrongful interference with, let alone a wrongful deprivation of,

the property rights of those affected thereby, and that "PPA-AO 04-95 does not forbid, but merely regulates, the exercise by harbor pilots of their profession." As will be presently demonstrated, such supposition is gravely erroneous and tends to perpetuate an administrative order which is not only unreasonable but also superfluous. Pilotage, just like other professions, may be practiced only by duly licensed individuals. Licensure is "the granting of license especially to practice a profession." It is also "the system of granting licenses (as for professional 21 practice) in accordance with establishment standards." A license is a right or permission granted by some competent authority to carry on a business or 22 do an act which, without such license, would be illegal. Before harbor pilots can earn a license to practice their profession, they literally have to pass through the proverbial eye of a needle by taking, not one but five examinations, each followed by actual training and practice. Thus, the court a quo observed: Petitioners (herein respondents) contend, and the respondents (herein petitioners) do not deny, the here (sic) in this jurisdiction, before a person can be a harbor pilot, he must pass five (5) government professional examinations, namely, (1) For Third Mate and after which he must work, train and practice on board a vessel for at least a year; (2) For Second Mate and after which he must work, train and practice for at least a year; (3) For Chief Mate and after which he must work, train and practice for at least a year; (4) For a Master Mariner and after which he must work as Captain of vessel for at least two (2) years to qualify for an examination to be a pilot; and finally, of course, that given for pilots. Their license is granted in the form of an appointment which allows them to engage in pilotage until they retire at the age 70 years. This is a vested right. Under the terms of PPA-AO No. 04-92, "(a)ll existing regular appointments which have been previously issued by the Bureau of Customs or the PPA shall remain valid up to 31 December 1992 only," and "(a)ll appointments to harbor pilot positions in all pilotage districts shall, henceforth, be only for a term of one (1) year from date of effectivity subject to renewal or cancellation by the Authority after conduct of a rigid evaluation of performance." It is readily apparent that PPA-AO No. 04-92 unduly restricts the right of harbor pilots to enjoy their profession before their compulsory retirement. In the past, they enjoyed a measure of security knowing that after passing five examinations and undergoing years of on-the-job training, they would have a license which they could use until their retirement, unless sooner revoked by the PPA for mental or physical unfitness. Under the new issuance, they have

to contend with an annual cancellation of their license which can be temporary or permanent depending on the outcome of their performance evaluation. Veteran pilots and neophytes alike are suddenly confronted with one-year terms which ipso facto expire at the end of that period. Renewal of their license is now dependent on a "rigid evaluation of performance" which is conducted only after the license has already been cancelled. Hence, the use of the term "renewal." It is this pre-evaluation cancellation which primarily makes PPA-AO No. 04-92 unreasonable and constitutionally infirm. In a real sense, it is a deprivation of property without due process of law. The Court notes that PPA-AO No. 04-92 and PPA-MO No. 08-92 are already covered by PPA-AO No. 03-85, which is still operational. Respondents are 23 correct in pointing out that PPA-AO No. 04-92 is a "surplusage" and, therefore, an unnecessary enactment. PPA-AO 03-85 is a comprehensive order setting forth the "Rules and Regulations Governing Pilotage Services, the Conduct of Pilots and Pilotage Fees in Philippine Ports." It provides, inter alia, for the qualification, appointment, performance evaluation, disciplining and removal of harbor pilots matters which are duplicated in PPA-AO No. 04-92 and its implementing memorandum order. Since it adds nothing new or substantial, PPA-AO No. 04-92 must be struck down. Finally, respondents' insinuation that then PPA General Manager Dayan was responsible for the issuance of the questioned administrative order may have some factual basis; after all, power and authority were vested in his office to propose rules and regulations. The trial court's finding of animosity between him and private respondents might likewise have a grain of truth. Yet the number of cases filed in court between private respondents and Dayan, including cases which have reached this Court, cannot certainly be considered the primordial reason for the issuance of PPA-AO No. 04-92. In the absence of proof to the contrary, Dayan should be presumed to have acted in accordance with law and the best of professional motives. In any event, his actions are certainly always subject to scrutiny by higher administrative authorities. WHEREFORE, the instant petition is hereby DISMISSED and the assailed decision of the court a quo dated September 6, 1993, in Civil Case No. 9365673 is AFFIRMED. No pronouncement as to costs. SO ORDERED.

G.R. No. 84818 December 18, 1989 PHILIPPINE COMMUNICATIONS SATELLITE CORPORATION, petitioner, vs. JOSE LUIS A. ALCUAZ, as NTC Commissioner, and NATIONAL TELECOMMUNICATIONS COMMISSION, respondents. Rilloraza, Africa, De Ocampo & Africa for petitioner. Victor de la Serna for respondent Alcuaz.

REGALADO, J.: This case is posed as one of first impression in the sense that it involves the public utility services of the petitioner Philippine Communications Satellite Corporation (PHILCOMSAT, for short) which is the only one rendering such services in the Philippines. The petition before us seeks to annul and set aside an Order issued by respondent Commissioner Jose Luis Alcuaz of the National Telecommunications Commission (hereafter, NTC), dated September 2, 1988, which directs the provisional reduction of the rates which may be charged by petitioner for certain specified lines of its services by fifteen percent (15%) with the reservation to make further reductions later, for being violative of the constitutional prohibition against undue delegation of legislative power and a denial of procedural, as well as substantive, due process of law. The antecedental facts as summarized by petitioner are not in dispute. By virtue of Republic Act No. 5514, PHILCOMSAT was granted "a franchise to establish, construct, maintain and operate in the Philippines, at such places as the grantee may select, station or stations and associated equipment and facilities for international satellite communications." Under this franchise, it was likewise granted the authority to "construct and operate such ground facilities as needed to deliver telecommunications services from the communications satellite system and ground terminal or terminals." Pursuant to said franchise, petitioner puts on record that it undertook the following activities and established the following installations: 1. In 1967, PHILCOMSAT established its provisional earth station in Pinugay, Rizal.
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2. In 1968, earth station standard "A" antenna (Pinugay I) was established. Pinugay I provided direct satellite communication links with the Pacific Ocean Region (the United States, Australia, Canada, Hawaii, Guam, Korea, Thailand, China [PROC], New Zealand and Brunei) thru the Pacific Ocean INTELSAT satellite. 3. In 1971, a second earth station standard "A" antenna(Pinugay III) was established. Pinugay II provided links with the Indian Ocean Region (major cities in Europe, Middle East, Africa, and other Asia Pacific countries operating within the region) thru the Indian Ocean INTELSAT satellite. 4. In 1983, a third earth station standard "B" antenna (Pinugay III) was established to temporarily assume the functions of Pinugay I and then Pinugay II while they were being refurbished. Pinugay III now serves as spare or reserved antenna for possible contingencies. 5. In 1983, PHILCOMSAT constructed and installed a standard "B" antenna at Clark Air Field, Pampanga as a television receive-only earth station which provides the U.S. Military bases with a 24-hour television service. 6. In 1989, petitioner completed the installation of a third standard "A" earth station (Pinugay IV) to take over the links 3 in Pinugay I due to obsolescence. By designation of the Republic of the Philippines, the petitioner is also the sole signatory for the Philippines in the Agreement and the Operating Agreement relating to the International Telecommunications Satellite Organization (INTELSAT) of 115 member nations, as well as in the Convention and the Operating Agreement of the International Maritime Satellite Organization (INMARSAT) of 53 member nations, which two global commercial telecommunications satellite corporations were collectively established by various states in line with the principles set forth in Resolution 1721 (XVI) of the General Assembly of the United Nations. Since 1968, the petitioner has been leasing its satellite circuits to: 1. Philippine Long Distance Telephone Company; 2. Philippine Global Communications, Inc.;

3. Eastern Telecommunications Phils., Inc.; 4. Globe Mackay Cable and Radio Corp. ITT; and 5. Capitol Wireless, Inc. or their predecessors-in-interest. The satellite services thus provided by petitioner enable said international carriers to serve the public with indispensable communication services, such as overseas telephone, telex, facsimile, telegrams, high speed data, live television in full color, and television standard conversion from European to American or vice versa. Under Section 5 of Republic Act No. 5514, petitioner was exempt from the jurisdiction of the then Public Service Commission, now respondent NTC. However, pursuant to Executive Order No. 196 issued on June 17, 1987, petitioner was placed under the jurisdiction, control and regulation of respondent NTC, including all its facilities and services and the fixing of rates. Implementing said Executive Order No. 196, respondents required petitioner to apply for the requisite certificate of public convenience and necessity covering its facilities and the services it renders, as well as the corresponding authority to charge rates therefor. Consequently, under date of September 9, 1987, petitioner filed with 4 respondent NTC an application for authority to continue operating and maintaining the same facilities it has been continuously operating and maintaining since 1967, to continue providing the international satellite communications services it has likewise been providing since 1967, and to charge the current rates applied for in rendering such services. Pending hearing, it also applied for a provisional authority so that it can continue to operate and maintain the above mentioned facilities, provide the services and charge therefor the aforesaid rates therein applied for. On September 16, 1987, petitioner was granted a provisional authority to continue operating its existing facilities, to render the services it was then offering, and to charge the rates it was then charging. This authority was 5 valid for six (6) months from the date of said order. When said provisional authority expired on March 17, 1988, it was extended for another six (6) months, or up to September 16, 1988. The NTC order now in controversy had further extended the provisional authority of the petitioner for another six (6) months, counted from September 16, 1988, but it directed the petitioner to charge modified reduced rates through a reduction of fifteen percent (15%) on the present authorized rates. Respondent Commissioner ordered said reduction on the following ground:

The Commission in its on-going review of present service rates takes note that after an initial evaluation by the Rates Regulation Division of the Common Carriers Authorization Department of the financial statements of applicant, there is merit in a REDUCTION in some of applicant's rates, subject to further reductions, should the Commission finds (sic) in its further evaluation that more reduction should be effected either on the basis of a provisional authorization or in the 6 final consideration of the case. PHILCOMSAT assails the above-quoted order for the following reasons: 1. The enabling act (Executive Order No. 546) of respondent NTC empowering it to fix rates for public service communications does not provide the necessary standards constitutionally required, hence there is an undue delegation of legislative power, particularly the adjudicatory powers of NTC; 2. Assuming arguendo that the rate-fixing power was properly and constitutionally conferred, the same was exercised in an unconstitutional manner, hence it is ultra vires, in that (a) the questioned order violates procedural due process for having been issued without prior notice and hearing; and (b) the rate reduction it imposes is unjust, unreasonable and confiscatory, thus constitutive of a violation of substantive due process. I. Petitioner asseverates that nowhere in the provisions of Executive Order No. 546, providing for the creation of respondent NTC and granting its ratefixing powers, nor of Executive Order No. 196, placing petitioner under the jurisdiction of respondent NTC, can it be inferred that respondent NTC is guided by any standard in the exercise of its rate-fixing and adjudicatory powers. While petitioner in its petition-in-chief raised the issue of undue delegation of legislative power, it subsequently clarified its said submission to mean that the order mandating a reduction of certain rates is undue delegation not of legislative but of quasi-judicial power to respondent NTC, the exercise of which allegedly requires an express conferment by the legislative body. Whichever way it is presented, petitioner is in effect questioning the constitutionality of Executive Orders Nos. 546 and 196 on the ground that the same do not fix a standard for the exercise of the power therein conferred. We hold otherwise. Fundamental is the rule that delegation of legislative power may be sustained only upon the ground that some standard for its exercise is provided and that the legislature in making the delegation has prescribed the manner of the

exercise of the delegated power. Therefore, when the administrative agency concerned, respondent NTC in this case, establishes a rate, its act must both be non- confiscatory and must have been established in the manner prescribed by the legislature; otherwise, in the absence of a fixed standard, the delegation of power becomes unconstitutional. In case of a delegation of rate-fixing power, the only standard which the legislature is required to prescribe for the guidance of the administrative authority is that the rate be reasonable and just. However, it has been held that even in the absence of an express requirement as to reasonableness, this standard may be implied.
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It becomes important then to ascertain the nature of the power delegated to respondent NTC and the manner required by the statute for the lawful exercise thereof. Pursuant to Executive Orders Nos. 546 and 196, respondent NTC is empowered, among others, to determine and prescribe rates pertinent to the operation of public service communications which necessarily include the power to promulgate rules and regulations in connection therewith. And, under Section 15(g) of Executive Order No. 546, respondent NTC should be guided by the requirements of public safety, public interest and reasonable feasibility of maintaining effective competition of private entities in communications and broadcasting facilities. Likewise, in Section 6(d) thereof, which provides for the creation of the Ministry of Transportation and Communications with control and supervision over respondent NTC, it is specifically provided that the national economic viability of the entire network or components of the communications systems contemplated therein should be maintained at reasonable rates. We need not go into an in-depth analysis of the pertinent provisions of the law in order to conclude that respondent NTC, in the exercise of its rate-fixing power, is limited by the requirements of public safety, public interest, reasonable feasibility and reasonable rates, which conjointly more than satisfy the requirements of a valid delegation of legislative power. II. On another tack, petitioner submits that the questioned order violates procedural due process because it was issued motu proprio, without notice to petitioner and without the benefit of a hearing. Petitioner laments that said order was based merely on an "initial evaluation," which is a unilateral evaluation, but had petitioner been given an opportunity to present its side before the order in question was issued, the confiscatory nature of the rate reduction and the consequent deterioration of the public service could have been shown and demonstrated to respondents. Petitioner argues that the function involved in the rate fixing-power of NTC is adjudicatory and hence quasi-judicial, not quasi- legislative; thus, notice and hearing are necessary and the absence thereof results in a violation of due process.

Respondents admit that the application of a policy like the fixing of rates as exercised by administrative bodies is quasi-judicial rather than quasilegislative: that where the function of the administrative agency is legislative, notice and hearing are not required, but where an order applies to a named 8 person, as in the instant case, the function involved is adjudicatory. Nonetheless, they insist that under the facts obtaining the order in question need not be preceded by a hearing, not because it was issued pursuant to respondent NTC's legislative function but because the assailed order is merely interlocutory, it being an incident in the ongoing proceedings on petitioner's application for a certificate of public convenience; and that petitioner is not the only primary source of data or information since respondent is currently engaged in a continuing review of the rates charged. We find merit in petitioner's contention. In Vigan Electric Light Co., Inc. vs. Public Service Commission, we made a categorical classification as to when the rate-filing power of administrative bodies is quasi-judicial and when it is legislative, thus: Moreover, although the rule-making power and even the power to fix rates- when such rules and/or rates are meant to apply to all enterprises of a given kind throughout the Philippines-may partake of a legislative character, such is not the nature of the order complained of. Indeed, the same applies exclusively to petitioner herein. What is more, it is predicated upon the finding of fact-based upon a report submitted by the General Auditing Office-that petitioner is making a profit of more than 12% of its invested capital, which is denied by petitioner. Obviously, the latter is entitled to cross-examine the maker of said report, and to introduce evidence to disprove the contents thereof and/or explain or complement the same, as well as to refute the conclusion drawn therefrom by the respondent. In other words, in making said finding of fact, respondent performed a function partaking of a quasi-judicial character, the valid exercise of which demands previous notice and hearing. This rule was further explained in the subsequent case of The Central Bank 10 of the Philippines vs. Cloribel, et al. to wit: It is also clear from the authorities that where the function of the administrative body is legislative, notice of hearing is not required by due process of law (See Oppenheimer, Administrative Law, 2 Md. L.R. 185, 204, supra, where it is said: 'If the nature of the administrative agency is essentially
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legislative, the requirements of notice and hearing are not necessary. The validity of a rule of future action which affects a group, if vested rights of liberty or property are not involved, is not determined according to the same rules which apply in the case of the direct application of a policy to a specific individual) ... It is said in 73 C.J.S. Public Administrative Bodies and Procedure, sec. 130, pages 452 and 453: 'Aside from statute, the necessity of notice and hearing in an administrative proceeding depends on the character of the proceeding and the circumstances involved. In so far as generalization is possible in view of the great variety of administrative proceedings, it may be stated as a general rule that notice and hearing are not essential to the validity of administrative action where the administrative body acts in the exercise of executive, administrative, or legislative functions; but where a public administrative body acts in a judicial or quasi-judicial matter, and its acts are particular and immediate rather than general and prospective, the person whose rights or property may be 11 affected by the action is entitled to notice and hearing. The order in question which was issued by respondent Alcuaz no doubt contains all the attributes of a quasi-judicial adjudication. Foremost is the fact that said order pertains exclusively to petitioner and to no other. Further, it is premised on a finding of fact, although patently superficial, that there is merit in a reduction of some of the rates charged- based on an initial evaluation of petitioner's financial statements-without affording petitioner the benefit of an explanation as to what particular aspect or aspects of the financial statements warranted a corresponding rate reduction. No rationalization was offered nor were the attending contingencies, if any, discussed, which prompted respondents to impose as much as a fifteen percent (15%) rate reduction. It is not far-fetched to assume that petitioner could be in a better position to rationalize its rates vis-a-vis the viability of its business requirements. The rates it charges result from an exhaustive and detailed study it conducts of the multi-faceted intricacies attendant to a public service undertaking of such nature and magnitude. We are, therefore, inclined to lend greater credence to petitioner's ratiocination that an immediate reduction in its rates would adversely affect its operations and the quality of its service to the public considering the maintenance requirements, the projects it still has to undertake and the financial outlay involved. Notably, petitioner was not even afforded the opportunity to cross-examine the inspector who issued the report on which respondent NTC based its questioned order. At any rate, there remains the categorical admission made by respondent NTC that the questioned order was issued pursuant to its quasi-judicial

functions. It, however, insists that notice and hearing are not necessary since the assailed order is merely incidental to the entire proceedings and, therefore, temporary in nature. This postulate is bereft of merit. While respondents may fix a temporary rate pending final determination of the application of petitioner, such rate-fixing order, temporary though it may be, is not exempt from the statutory procedural requirements of notice and hearing, as well as the requirement of reasonableness. Assuming that such power is vested in NTC, it may not exercise the same in an arbitrary and confiscatory manner. Categorizing such an order as temporary in nature does not perforce entail the applicability of a different rule of statutory procedure than would otherwise be applied to any other order on the same matter unless otherwise provided by the applicable law. In the case at bar, the applicable statutory provision is Section 16(c) of the Public Service Act which provides: Section 16. Proceedings of the Commission, upon notice and hearing the Commission shall have power, upon proper notice and hearing in accordance with the rules and provisions of this Act, subject to the limitations and exceptions mentioned and saving provisions to the contrary: xxx xxx xxx (c) To fix and determine individual or joint rates, ... which shall be imposed, observed and followed thereafter by any public service; ... There is no reason to assume that the aforesaid provision does not apply to respondent NTC, there being no limiting, excepting, or saving provisions to the contrary in Executive Orders Nos. 546 and 196. It is thus clear that with regard to rate-fixing, respondent has no authority to make such order without first giving petitioner a hearing, whether the order be temporary or permanent, and it is immaterial whether the same is made upon a complaint, a summary investigation, or upon the commission's own motion as in the present case. That such a hearing is required is evident in respondents' order of September 16, 1987 in NTC Case No. 87-94 which granted PHILCOMSAT a provisional authority "to continue operating its existing facilities, to render the services it presently offers, and to charge the rates as reduced by them "under the condition that "(s)ubject to hearing and the final consideration of the merit of this application, the Commission may 12 modify, revise or amend the rates ..."

While it may be true that for purposes of rate-fixing respondents may have other sources of information or data, still, since a hearing is essential, respondent NTC should act solely on the basis of the evidence before it and not on knowledge or information otherwise acquired by it but which is not offered in evidence or, even if so adduced, petitioner was given no opportunity to controvert. Again, the order requires the new reduced rates to be made effective on a specified date. It becomes a final legislative act as to the period during which 13 it has to remain in force pending the final determination of the case. An order of respondent NTC prescribing reduced rates, even for a temporary period, could be unjust, unreasonable or even confiscatory, especially if the rates are unreasonably low, since the utility permanently loses its just revenue during the prescribed period. In fact, such order is in effect final insofar as the revenue during the period covered by the order is concerned. Upon a showing, therefore, that the order requiring a reduced rate is confiscatory, and will unduly deprive petitioner of a reasonable return upon its property, a declaration of its nullity becomes inductible, which brings us to the issue on substantive due process. III. Petitioner contends that the rate reduction is confiscatory in that its implementation would virtually result in a cessation of its operations and eventual closure of business. On the other hand, respondents assert that since petitioner is operating its communications satellite facilities through a legislative franchise, as such grantee it has no vested right therein. What it has is merely a privilege or license which may be revoked at will by the State at any time without necessarily violating any vested property right of herein petitioner. While petitioner concedes this thesis of respondent, it counters that the withdrawal of such privilege should nevertheless be neither whimsical nor arbitrary, but it must be fair and reasonable. There is no question that petitioner is a mere grantee of a legislative franchise which is subject to amendment, alteration, or repeal by Congress 14 when the common good so requires. Apparently, therefore, such grant cannot be unilaterally revoked absent a showing that the termination of the operation of said utility is required by the common good. The rule is that the power of the State to regulate the conduct and business of public utilities is limited by the consideration that it is not the owner of the property of the utility, or clothed with the general power of management incident to ownership, since the private right of ownership to such property remains and is not to be destroyed by the regulatory power. The power to regulate is not the power to destroy useful and harmless enterprises, but is the power to protect, foster, promote, preserve, and control with due regard for the interest, first and foremost, of the public, then of the utility and of its patrons. Any regulation, therefore, which operates as an effective

confiscation of private property or constitutes an arbitrary or unreasonable infringement of property rights is void, because it is repugnant to the 15 constitutional guaranties of due process and equal protection of the laws. Hence, the inherent power and authority of the State, or its authorized agent, to regulate the rates charged by public utilities should be subject always to the requirement that the rates so fixed shall be reasonable and just. A commission has no power to fix rates which are unreasonable or to regulate them arbitrarily. This basic requirement of reasonableness comprehends such rates which must not be so low as to be confiscatory, or too high as to 16 be oppressive. What is a just and reasonable rate is not a question of formula but of sound 17 business judgment based upon the evidence it is a question of fact calling for the exercise of discretion, good sense, and a fair, enlightened and 18 independent judgment. In determining whether a rate is confiscatory, it is essential also to consider the given situation, requirements and opportunities of the utility. A method often employed in determining reasonableness is the fair return upon the value of the property to the public utility. Competition is also a very important factor in determining the reasonableness of rates since a carrier is allowed to make such rates as are necessary to meet 19 competition. A cursory perusal of the assailed order reveals that the rate reduction is solely and primarily based on the initial evaluation made on the financial statements of petitioner, contrary to respondent NTC's allegation that it has several other sources of information without, however, divulging such sources. Furthermore, it did not as much as make an attempt to elaborate on how it arrived at the prescribed rates. It just perfunctorily declared that based on the financial statements, there is merit for a rate reduction without any elucidation on what implications and conclusions were necessarily inferred by it from said statements. Nor did it deign to explain how the data reflected in the financial statements influenced its decision to impose a rate reduction. On the other hand, petitioner may likely suffer a severe drawback, with the consequent detriment to the public service, should the order of respondent NTC turn out to be unreasonable and improvident. The business in which petitioner is engaged is unique in that its machinery and equipment have always to be taken in relation to the equipment on the other end of the transmission arrangement. Any lack, aging, acquisition, rehabilitation, or refurbishment of machinery and equipment necessarily entails a major adjustment or innovation on the business of petitioner. As pointed out by petitioner, any change in the sending end abroad has to be matched with the corresponding change in the receiving end in the Philippines. Conversely, any in the receiving end abroad has to be matched with the corresponding change in the sending end in the Philippines. An inability on the part of

petitioner to meet the variegations demanded be technology could result in a deterioration or total failure of the service of satellite communications. At present, petitioner is engaged in several projects aimed at refurbishing, rehabilitating, and renewing its machinery and equipment in order to keep up with the continuing charges of the times and to maintain its facilities at a competitive level with the technological advances abroad. There projected undertakings were formulated on the premise that rates are maintained at their present or at reasonable levels. Hence, an undue reduction thereof may practically lead to a cessation of its business. While we concede the primacy of the public interest in an adequate and efficient service, the same is not necessarily to be equated with reduced rates. Reasonableness in the rates assumes that the same is fair to both the public utility and the consumer. Consequently, we hold that the challenged order, particularly on the issue of rates provided therein, being violative of the due process clause is void and should be nullified. Respondents should now proceed, as they should heretofore have done, with the hearing and determination of petitioner's pending application for a certificate of public convenience and necessity and in which proceeding the subject of rates involved in the present controversy, as well as other matter involved in said application, be duly adjudicated with reasonable dispatch and with due observance of our pronouncements herein. WHEREFORE, the writ prayed for is GRANTED and the order of respondents, dated September 2, 1988, in NTC Case No. 87-94 is hereby SET ASIDE. The temporary restraining order issued under our resolution of September 13, 1988, as specifically directed against the aforesaid order of respondents on the matter of existing rates on petitioner's present authorized services, is hereby made permanent. SO ORDERED.

G.R. No. L-5060

January 26, 1910

THE UNITED STATES, plaintiff-appellee, vs. LUIS TORIBIO, defendant-appellant. Rodriguez & Del Rosario, for appellant. Attorney-General Villamor, for appellee. CARSON, J.: The evidence of record fully sustains the findings of the trial court that the appellant slaughtered or caused to be slaughtered for human consumption, the carabao described in the information, without a permit from the municipal treasure of the municipality wherein it was slaughtered, in violation of the provisions of sections 30 and 33 of Act No. 1147, an Act regulating the registration, branding, and slaughter of large cattle. It appears that in the town of Carmen, in the Province of Bohol, wherein the animal was slaughtered there is no municipal slaughterhouse, and counsel for appellant contends that under such circumstances the provisions of Act No. 1147 do not prohibit nor penalize the slaughter of large cattle without a permit of the municipal treasure. Sections 30, 31, 32, and 33 of the Act are as follows: SEC. 30. No large cattle shall be slaughtered or killed for food at the municipal slaughterhouse except upon permit secured from the municipal treasure. Before issuing the permit for the slaughter of large cattle for human consumption, the municipal treasurer shall require for branded cattle the production of the original certificate of ownership and certificates of transfer showing title in the person applying for the permit, and for unbranded cattle such evidence as may satisfy said treasurer as to the ownership of the animals for which permit to slaughter has been requested. SEC. 31. No permit to slaughter has been carabaos shall be granted by the municipal treasurer unless such animals are unfit for agricultural work or for draft purposes, and in no event shall a permit be given to slaughter for food any animal of any kind which is not fit for human consumption. SEC. 32. The municipal treasurer shall keep a record of all permits for slaughter issued by him, and such record shall show the name and residence of the owner, and the class, sex, age, brands, knots of radiated hair commonly know as remolinos or cowlicks, and other

marks of identification of the animal for the slaughter of which permit is issued and the date on which such permit is issued. Names of owners shall be alphabetically arranged in the record, together with date of permit. A copy of the record of permits granted for slaughter shall be forwarded monthly to the provincial treasurer, who shall file and properly index the same under the name of the owner, together with date of permit. SEC. 33. Any person slaughtering or causing to be slaughtered for human consumption or killing for food at the municipal slaughterhouse any large cattle except upon permit duly secured from the municipal treasurer, shall be punished by a fine of not less than ten nor more than five hundred pesos, Philippine currency, or by imprisonment for not less than one month nor more than six months, or by both such fine and imprisonment, in the discretion of the court. It is contended that the proper construction of the language of these provisions limits the prohibition contained in section 30 and the penalty imposed in section 33 to cases (1) of slaughter of large cattle for human consumption in a municipal slaughter without a permit duly secured from the municipal treasurer, and (2) cases of killing of large cattle for food in a municipal slaughterhouse without a permit duly secured from the municipal treasurer; and it is urged that the municipality of Carmen not being provided with a municipal slaughterhouse, neither the prohibition nor the penalty is applicable to cases of slaughter of large cattle without a permit in that municipality. We are of opinion, however, that the prohibition contained in section 30 refers (1) to the slaughter of large cattle for human consumption, anywhere, without a permit duly secured from the municipal treasurer, and (2) expressly and specifically to the killing for food of large cattle at a municipal slaughterhouse without such permit; and that the penalty provided in section 33 applies generally to the slaughter of large cattle for human consumption, anywhere, without a permit duly secured from the municipal treasurer, and specifically to the killing for food of large cattle at a municipal slaughterhouse without such permit. It may be admitted at once, that the pertinent language of those sections taken by itself and examined apart from the context fairly admits of two constructions: one whereby the phrase "at the municipal slaughterhouse" may be taken as limiting and restricting both the word "slaughtered" and the words "killed for food" in section 30, and the words "slaughtering or causing

to be slaughtered for human consumption" and the words "killing for food" in section 33; and the other whereby the phrase "at the municipal slaughterhouse" may be taken as limiting and restricting merely the words "killed for food" and "killing for food" as used in those sections. But upon a reading of the whole Act, and keeping in mind the manifest and expressed purpose and object of its enactment, it is very clear that the latter construction is that which should be adopted. The Act primarily seeks to protect the "large cattle" of the Philippine Islands against theft and to make easy the recovery and return of such cattle to their proper owners when lost, strayed, or stolen. To this end it provides an elaborate and compulsory system for the separate branding and registry of ownership of all such cattle throughout the Islands, whereby owners are enabled readily and easily to establish their title; it prohibits and invalidates all transfers of large cattle unaccompanied by certificates of transfer issued by the proper officer in the municipality where the contract of sale is made; and it provides also for the disposition of thieves or persons unlawfully in possession, so as to protect the rights of the true owners. All this, manifestly, in order to make it difficult for any one but the rightful owner of such cattle to retain them in his possession or to dispose of them to others. But the usefulness of this elaborate and compulsory system of identification, resting as it does on the official registry of the brands and marks on each separate animal throughout the Islands, would be largely impaired, if not totally destroyed, if such animals were requiring proof of ownership and the production of certificates of registry by the person slaughtering or causing them to be slaughtered, and this especially if the animals were slaughtered privately or in a clandestine manner outside of a municipal slaughterhouse. Hence, as it would appear, sections 30 and 33 prohibit and penalize the slaughter for human consumption or killing for food at a municipal slaughterhouse of such animals without a permit issued by the municipal treasurer, and section 32 provides for the keeping of detailed records of all such permits in the office of the municipal and also of the provincial treasurer. If, however, the construction be placed on these sections which is contended for by the appellant, it will readily be seen that all these carefully worked out provisions for the registry and record of the brands and marks of identification of all large cattle in the Islands would prove in large part abortion, since thieves and persons unlawfully in possession of such cattle, and naturally would, evade the provisions of the law by slaughtering them outside of municipal slaughterhouses, and thus enjoy the fruits of their wrongdoing without exposing themselves to the danger of detection incident to the bringing of the animals to the public slaughterhouse, where the brands and other identification marks might be scrutinized and proof of ownership required.

Where the language of a statute is fairly susceptible of two or more constructions, that construction should be adopted which will most tend to give effect to the manifest intent of the lawmaker and promote the object for which the statute was enacted, and a construction should be rejected which would tend to render abortive other provisions of the statute and to defeat the object which the legislator sought to attain by its enactment. We are of opinion, therefore, that sections 30 and 33 of the Act prohibit and penalize the slaughtering or causing to be slaughtered for human consumption of large cattle at any place without the permit provided for in section 30. It is not essential that an explanation be found for the express prohibition in these sections of the "killing for food at a municipal slaughterhouse" of such animals, despite the fact that this prohibition is clearly included in the general prohibition of the slaughter of such animals for human consumption anywhere; but it is not improbable that the requirement for the issue of a permit in such cases was expressly and specifically mentioned out of superabundance of precaution, and to avoid all possibility of misunderstanding in the event that some of the municipalities should be disposed to modify or vary the general provisions of the law by the passage of local ordinances or regulations for the control of municipal slaughterhouse. Similar reasoning applied to the specific provisions of section 31 of the Act leads to the same conclusion. One of the secondary purposes of the law, as set out in that section, is to prevent the slaughter for food of carabaos fit for agricultural and draft purposes, and of all animals unfit for human consumption. A construction which would limit the prohibitions and penalties prescribed in the statute to the killing of such animals in municipal slaughterhouses, leaving unprohibited and unpenalized their slaughter outside of such establishments, so manifestly tends to defeat the purpose and object of the legislator, that unless imperatively demanded by the language of the statute it should be rejected; and, as we have already indicated, the language of the statute is clearly susceptible of the construction which we have placed upon it, which tends to make effective the provisions of this as well as all the other sections of the Act. It appears that the defendant did in fact apply for a permit to slaughter his carabao, and that it was denied him on the ground that the animal was not unfit "for agricultural work or for draft purposes." Counsel for appellant contends that the statute, in so far as it undertakes to penalize the slaughter of carabaos for human consumption as food, without first obtaining a permit which can not be procured in the event that the animal is not unfit "for agricultural work or draft purposes," is unconstitutional and in violation of the terms of section 5 of the Philippine Bill (Act of Congress, July 1, 1902), which provides that "no law shall be enacted which shall deprive any person of life, liberty, or property without due process of law."

It is not quite clear from the argument of counsel whether his contention is that this provision of the statute constitutes a taking of property for public use in the exercise of the right of eminent domain without providing for the compensation of the owners, or that it is an undue and unauthorized exercise of the police power of the State. But whatever may be the basis of his contention, we are of opinion, appropriating, with necessary modifications understood, the language of that great jurist, Chief Justice Shaw (in the case of Com. vs. Tewksbury, 11 Met., 55, where the question involved was the constitutionality of a statute prohibiting and penalizing the taking or carrying away by any person, including the owner, of any stones, gravel, or sand, from any of the beaches in the town of Chesea,) that the law in question "is not a taking of the property for public use, within the meaning of the constitution, but is a just and legitimate exercise of the power of the legislature to regulate and restrain such particular use of the property as would be inconsistent with or injurious to the rights of the public. All property is acquired and held under the tacit condition that it shall not be so used as to injure the equal rights of others or greatly impair the public rights and interest of the community." It may be conceded that the benificial use and exclusive enjoyment of the property of all carabao owners in these Islands is to a greater or less degree interfered with by the provisions of the statute; and that, without inquiring what quantum of interest thus passes from the owners of such cattle, it is an interest the deprivation of which detracts from their right and authority, and in some degree interferes with their exclusive possession and control of their property, so that if the regulations in question were enacted for purely private purpose, the statute, in so far as these regulations are concerned, would be a violation of the provisions of the Philippine Bill relied on be appellant; but we are satisfied that it is not such a taking, such an interference with the right and title of the owners, as is involved in the exercise by the State of the right of eminent domain, so as to entitle these owners to compensation, and that it is no more than "a just restrain of an injurious private use of the property, which the legislature had authority to impose." In the case of Com. vs. Alger (7 Cush., 53, 84), wherein the doctrine laid down in Com. vs. Tewksbury (supra) was reviewed and affirmed, the same eminent jurist who wrote the former opinion, in distinguishing the exercise of the right of eminent domain from the exercise of the sovereign police powers of the State, said: We think it is settled principle, growing out of the nature of wellordered civil society, that every holder of property, however absolute and unqualified may be his title, holds it under the implied liability that his use of it may be so regulated that is shall not be injurious to the equal enjoyment of others having an equal right to the enjoyment of their property, nor injurious to the rights of the community. . . .

Rights of property, like all other social and conventional rights, are subject to such reasonable limitations in their enjoyment as shall prevent them from being injurious, and to such reasonable restrain and regulations establish by law, as the legislature, under the governing and controlling power vested in them by the constitution, may think necessary and expedient. This is very different from the right of eminent domain, the right of a government to take and appropriate private property to public use, whenever the public exigency requires it; which can be done only on condition of providing a reasonable compensation therefor. The power we allude to is rather the police power, the power vested in the legislature by the constitution, to make, ordain, and establish all manner of wholesome and reasonable laws, statutes, and ordinances, either with penalties or without, not repugnant to the constitution, as they shall judge to be for the good and welfare of the commonwealth, and of the subjects of the same. It is much easier to perceive and realize the existence and sources of this power than to mark its boundaries or prescribe limits to its exercise. Applying these principles, we are opinion that the restrain placed by the law on the slaughter for human consumption of carabaos fit for agricultural work and draft purpose is not an appropriation of property interests to a "public use," and is not, therefore, within the principle of the exercise by the State of the right of eminent domain. It is fact a mere restriction or limitation upon a private use, which the legislature deemed to be determental to the public welfare. And we think that an examination of the general provisions of the statute in relation to the public interest which it seeks to safeguard and the public necessities for which it provides, leaves no room for doubt that the limitations and restraints imposed upon the exercise of rights of ownership by the particular provisions of the statute under consideration were imposed not for private purposes but, strictly, in the promotion of the "general welfare" and "the public interest" in the exercise of the sovereign police power which every State possesses for the general public welfare and which "reaches to every species of property within the commonwealth." For several years prior to the enactment of the statute a virulent contagious or infectious disease had threatened the total extinction of carabaos in these Islands, in many sections sweeping away seventy, eighty, and in some cases as much as ninety and even one hundred per cent of these animals. Agriculture being the principal occupation of the people, and the carabao being the work animal almost exclusively in use in the fields as well as for draft purposes, the ravages of the disease with which they were infected struck an almost vital blow at the material welfare of the country. large areas

of productive land lay waste for years, and the production of rice, the staple food of the inhabitants of the Islands, fell off to such an extent that the impoverished people were compelled to spend many millions of pesos in its importation, notwithstanding the fact that with sufficient work animals to cultivate the fields the arable rice lands of the country could easily be made to produce a supply more that sufficient for its own needs. The drain upon the resources of the Islands was such that famine soon began to make itself felt, hope sank in the breast of the people, and in many provinces the energies of the breadwinners seemed to be paralyzed by the apparently hopeless struggle for existence with which they were confronted. To meet these conditions, large sums of money were expended by the Government in relieving the immediate needs of the starving people, three millions of dollars were voted by the Congress of the United States as a relief or famine fund, public works were undertaken to furnish employment in the provinces where the need was most pressing, and every effort made to alleviate the suffering incident to the widespread failure of the crops throughout the Islands, due in large measure to the lack of animals fit for agricultural work and draft purposes. Such measures, however, could only temporarily relieve the situation, because in an agricultural community material progress and permanent prosperity could hardly be hoped for in the absence of the work animals upon which such a community must necessarily rely for the cultivation of the fields and the transportation of the products of the fields to market. Accordingly efforts were made by the Government to increase the supply of these animals by importation, but, as appears from the official reports on this subject, hope for the future depended largely on the conservation of those animals which had been spared from the ravages of the diseased, and their redistribution throughout the Islands where the need for them was greatest. At large expense, the services of experts were employed, with a view to the discovery and applications of preventive and curative remedies, and it is hoped that these measures have proved in some degree successful in protecting the present inadequate supply of large cattle, and that the gradual increase and redistribution of these animals throughout the Archipelago, in response to the operation of the laws of supply and demand, will ultimately results in practically relieving those sections which suffered most by the loss of their work animals. As was to be expected under such conditions, the price of carabaos rapidly increase from the three to five fold or more, and it may fairly be presumed that even if the conservative measures now adopted prove entirely successful, the scant supply will keep the price of these animals at a high figure until the natural increase shall have more nearly equalized the supply to the demand.

Coincident with and probably intimately connected with this sudden rise in the price of cattle, the crime of cattle stealing became extremely prevalent throughout the Islands, necessitating the enactment of a special law penalizing with the severest penalties the theft of carabaos and other personal property by roving bands; and it must be assumed from the legislative authority found that the general welfare of the Islands necessitated the enactment of special and somewhat burdensome provisions for the branding and registration of large cattle, and supervision and restriction of their slaughter for food. It will hardly be questioned that the provisions of the statute touching the branding and registration of such cattle, and prohibiting and penalizing the slaughter of diseased cattle for food were enacted in the due and proper exercise of the police power of the State; and we are of opinion that, under all the circumstances, the provision of the statute prohibiting and penalizing the slaughter for human consumption of carabaos fit for work were in like manner enacted in the due and proper exercise of that power, justified by the exigent necessities of existing conditions, and the right of the State to protect itself against the overwhelming disaster incident to the further reduction of the supply of animals fit for agricultural work or draft purposes. It is, we think, a fact of common knowledge in these Islands, and disclosed by the official reports and records of the administrative and legislative departments of the Government, that not merely the material welfare and future prosperity of this agricultural community were threatened by the ravages of the disease which swept away the work animals during the years prior to the enactment of the law under consideration, but that the very life and existence of the inhabitants of these Islands as a civilized people would be more or less imperiled by the continued destruction of large cattle by disease or otherwise. Confronted by such conditions, there can be no doubt of the right of the Legislature to adopt reasonable measures for the preservation of work animals, even to the extent of prohibiting and penalizing what would, under ordinary conditions, be a perfectly legitimate and proper exercise of rights of ownership and control of the private property of the citizen. The police power rests upon necessity and the right of self-protection and if ever the invasion of private property by police regulation can be justified, we think that the reasonable restriction placed upon the use of carabaos by the provision of the law under discussion must be held to be authorized as a reasonable and proper exercise of that power. As stated by Mr. Justice Brown in his opinion in the case of Lawton vs. Steele (152 U.S., 133, 136): The extent and limits of what is known as the police power have been a fruitful subject of discussion in the appellate courts of nearly every State in the Union. It is universally conceded to include everything essential to the public safely, health, and morals, and to

justify the destruction or abatement, by summary proceedings, of whatever may be regarded as a public nuisance. Under this power it has been held that the State may order the destruction of a house falling to decay or otherwise endangering the lives of passers-by; the demolition of such as are in the path of a conflagration; the slaughter of diseased cattle; the destruction of decayed or unwholesome food; the prohibition of wooden buildings in cities; the regulation of railways and other means of public conveyance, and of interments in burial grounds; the restriction of objectionable trades to certain localities; the compulsary vaccination of children; the confinement of the insane or those afficted with contagious deceases; the restraint of vagrants, beggars, and habitual drunkards; the suppression of obscene publications and houses of ill fame; and the prohibition of gambling houses and places where intoxicating liquors are sold. Beyond this, however, the State may interfere wherever the public interests demand it, and in this particular a large discretion is necessarily vested in the legislature to determine, not only what the interests of the public require, but what measures are necessary for the protection of such interests. (Barbier vs. Connolly, 113 U. S., 27; Kidd vs. Pearson, 128 U. S., 1.) To justify the State in thus interposing its authority in behalf of the public, it must appear, first, that the interests of the public generally, as distinguished from those of a particular class, require such interference; and, second, that the means are reasonably necessary for the accomplishment of the purpose, and not unduly oppressive upon individuals. The legislature may not, under the guise of protecting the public interests, arbitrarily interfere with private business, or impose unusual and unnecessary restrictions upon lawful occupations. In other words, its determination as to what is a proper exercise of its police powers is not final or conclusive, but is subject to the supervision of the court. From what has been said, we think it is clear that the enactment of the provisions of the statute under consideration was required by "the interests of the public generally, as distinguished from those of a particular class;" and that the prohibition of the slaughter of carabaos for human consumption, so long as these animals are fit for agricultural work or draft purposes was a "reasonably necessary" limitation on private ownership, to protect the community from the loss of the services of such animals by their slaughter by improvident owners, tempted either by greed of momentary gain, or by a desire to enjoy the luxury of animal food, even when by so doing the productive power of the community may be measurably and dangerously affected. Chief Justice Redfield, in Thorpe vs. Rutland & Burlington R. R. Co. (27 Vt., 140), said (p. 149) that by this "general police power of the State, persons and property are subjected to all kinds of restraints and burdens, in order to

secure the general comfort, health, and prosperity of the State; of the perfect right in the legislature to do which no question ever was, or, upon acknowledge and general principles, ever can be made, so far as natural persons are concerned." And Cooley in his "Constitutional Limitations" (6th ed., p. 738) says: It would be quite impossible to enumerate all the instances in which the police power is or may be exercised, because the various cases in which the exercise by one individual of his rights may conflict with a similar exercise by others, or may be detrimental to the public order or safety, are infinite in number and in variety. And there are other cases where it becomes necessary for the public authorities to interfere with the control by individuals of their property, and even to destroy it, where the owners themselves have fully observed all their duties to their fellows and to the State, but where, nevertheless, some controlling public necessity demands the interference or destruction. A strong instance of this description is where it becomes necessary to take, use, or destroy the private property of individuals to prevent the spreading of a fire, the ravages of a pestilence, the advance of a hostile army, or any other great public calamity. Here the individual is in no degree in fault, but his interest must yield to that "necessity" which "knows no law." The establishment of limits within the denser portions of cities and villages within which buildings constructed of inflammable materials shall not be erected or repaired may also, in some cases, be equivalent to a destruction of private property; but regulations for this purpose have been sustained notwithstanding this result. Wharf lines may also be established for the general good, even though they prevent the owners of waterfronts from building out on soil which constitutes private property. And, whenever the legislature deem it necessary to the protection of a harbor to forbid the removal of stones, gravel, or sand from the beach, they may establish regulations to that effect under penalties, and make them applicable to the owners of the soil equally with other persons. Such regulations are only "a just restraint of an injurious use of property, which the legislature have authority" to impose. So a particular use of property may sometimes be forbidden, where, by a change of circumstances, and without the fault of the power, that which was once lawful, proper, and unobjectionable has now become a public nuisance, endangering the public health or the public safety. Milldams are sometimes destroyed upon this grounds; and churchyards which prove, in the advance of urban population, to be detrimental to the public health, or in danger of becoming so, are liable to be closed against further use for cemetery purposes.

These citations from some of the highest judicial and text-book authorities in the United States clearly indicate the wide scope and extent which has there been given to the doctrine us in our opinion that the provision of the statute in question being a proper exercise of that power is not in violation of the terms of section 5 of the Philippine Bill, which provide that "no law shall be enacted which shall deprive any person of life, liberty, or property without due process of law," a provision which itself is adopted from the Constitution of the United States, and is found in substance in the constitution of most if not all of the States of the Union. The judgment of conviction and the sentence imposed by the trial court should be affirmed with the costs of this instance against the appellant. So ordered. G.R. No. 74457 March 20, 1987 RESTITUTO YNOT, petitioner, vs. INTERMEDIATE APPELLATE COURT, THE STATION COMMANDER, INTEGRATED NATIONAL POLICE, BAROTAC NUEVO, ILOILO and THE REGIONAL DIRECTOR, BUREAU OF ANIMAL INDUSTRY, REGION IV, ILOILO CITY, respondents. Ramon A. Gonzales for petitioner.

against inter-provincial movement of carabaos by transporting carabeef instead; and WHEREAS, in order to achieve the purposes and objectives of Executive Order No. 626 and the prohibition against interprovincial movement of carabaos, it is necessary to strengthen the said Executive Order and provide for the disposition of the carabaos and carabeef subject of the violation; NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by virtue of the powers vested in me by the Constitution, do hereby promulgate the following: SECTION 1. Executive Order No. 626 is hereby amended such that henceforth, no carabao regardless of age, sex, physical condition or purpose and no carabeef shall be transported from one province to another. The carabao or carabeef transported in violation of this Executive Order as amended shall be subject to confiscation and forfeiture by the government, to be distributed to charitable institutions and other similar institutions as the Chairman of the National Meat Inspection Commission may ay see fit, in the case of carabeef, and to deserving farmers through dispersal as the Director of Animal Industry may see fit, in the case of carabaos. SECTION 2. This Executive Order shall take effect immediately. Done in the City of Manila, this 25th day of October, in the year of Our Lord, nineteen hundred and eighty. The petitioner had transported six carabaos in a pump boat from Masbate to Iloilo on January 13, 1984, when they were confiscated by the police station commander of Barotac Nuevo, Iloilo, for violation of the above measure. 1 The petitioner sued for recovery, and the Regional Trial Court of Iloilo City issued a writ of replevin upon his filing of a supersedeas bond of P12,000.00. After considering the merits of the case, the court sustained the confiscation of the carabaos and, since they could no longer be produced, ordered the confiscation of the bond. The court also declined to rule on the constitutionality of the executive order, as raise by the petitioner, for lack of 2 authority and also for its presumed validity.

CRUZ, J.: The essence of due process is distilled in the immortal cry of Themistocles to Alcibiades "Strike but hear me first!" It is this cry that the petitioner in effect repeats here as he challenges the constitutionality of Executive Order No. 626-A. The said executive order reads in full as follows: WHEREAS, the President has given orders prohibiting the interprovincial movement of carabaos and the slaughtering of carabaos not complying with the requirements of Executive Order No. 626 particularly with respect to age; WHEREAS, it has been observed that despite such orders the violators still manage to circumvent the prohibition

The petitioner appealed the decision to the Intermediate Appellate Court,* which upheld the trial court, ** and he has now come before us in this petition for review on certiorari. The thrust of his petition is that the executive order is unconstitutional insofar as it authorizes outright confiscation of the carabao or carabeef being transported across provincial boundaries. His claim is that the penalty is invalid because it is imposed without according the owner a right to be heard before a competent and impartial court as guaranteed by due process. He complains that the measure should not have been presumed, and so sustained, as constitutional. There is also a challenge to the improper exercise of the legislative power by the former President under Amendment 4 No. 6 of the 1973 Constitution. While also involving the same executive order, the case of Pesigan v. 5 Angeles is not applicable here. The question raised there was the necessity of the previous publication of the measure in the Official Gazette before it could be considered enforceable. We imposed the requirement then on the basis of due process of law. In doing so, however, this Court did not, as contended by the Solicitor General, impliedly affirm the constitutionality of Executive Order No. 626-A. That is an entirely different matter. This Court has declared that while lower courts should observe a becoming modesty in examining constitutional questions, they are nonetheless not prevented from resolving the same whenever warranted, subject only to 6 review by the highest tribunal. We have jurisdiction under the Constitution to "review, revise, reverse, modify or affirm on appeal or certiorari, as the law or rules of court may provide," final judgments and orders of lower courts in, 7 among others, all cases involving the constitutionality of certain measures. This simply means that the resolution of such cases may be made in the first instance by these lower courts. And while it is true that laws are presumed to be constitutional, that presumption is not by any means conclusive and in fact may be rebutted. Indeed, if there be a clear showing of their invalidity, and of the need to declare them so, then "will be the time to make the hammer fall, and heavily," 8 to recall Justice Laurel's trenchant warning. Stated otherwise, courts should not follow the path of least resistance by simply presuming the constitutionality of a law when it is questioned. On the contrary, they should probe the issue more deeply, to relieve the abscess, paraphrasing another 9 distinguished jurist, and so heal the wound or excise the affliction. Judicial power authorizes this; and when the exercise is demanded, there should be no shirking of the task for fear of retaliation, or loss of favor, or

popular censure, or any other similar inhibition unworthy of the bench, especially this Court. The challenged measure is denominated an executive order but it is really presidential decree, promulgating a new rule instead of merely implementing an existing law. It was issued by President Marcos not for the purpose of taking care that the laws were faithfully executed but in the exercise of his legislative authority under Amendment No. 6. It was provided thereunder that whenever in his judgment there existed a grave emergency or a threat or imminence thereof or whenever the legislature failed or was unable to act adequately on any matter that in his judgment required immediate action, he could, in order to meet the exigency, issue decrees, orders or letters of instruction that were to have the force and effect of law. As there is no showing of any exigency to justify the exercise of that extraordinary power then, the petitioner has reason, indeed, to question the validity of the executive order. Nevertheless, since the determination of the grounds was supposed to have been made by the President "in his judgment, " a phrase that will lead to protracted discussion not really necessary at this time, we reserve resolution of this matter until a more appropriate occasion. For the nonce, we confine ourselves to the more fundamental question of due process. It is part of the art of constitution-making that the provisions of the charter be cast in precise and unmistakable language to avoid controversies that might arise on their correct interpretation. That is the Ideal. In the case of the due process clause, however, this rule was deliberately not followed and the wording was purposely kept ambiguous. In fact, a proposal to delineate it more clearly was submitted in the Constitutional Convention of 1934, but it was rejected by Delegate Jose P. Laurel, Chairman of the Committee on the Bill of Rights, who forcefully argued against it. He was sustained by the body. 10 The due process clause was kept intentionally vague so it would remain also conveniently resilient. This was felt necessary because due process is not, like some provisions of the fundamental law, an "iron rule" laying down an implacable and immutable command for all seasons and all persons. Flexibility must be the best virtue of the guaranty. The very elasticity of the due process clause was meant to make it adapt easily to every situation, enlarging or constricting its protection as the changing times and circumstances may require. Aware of this, the courts have also hesitated to adopt their own specific description of due process lest they confine themselves in a legal straitjacket that will deprive them of the elbow room they may need to vary the meaning of the clause whenever indicated. Instead, they have preferred to leave the import of the protection open-ended, as it were, to be "gradually ascertained

by the process of inclusion and exclusion in the course of the decision of cases as they arise." 11 Thus, Justice Felix Frankfurter of the U.S. Supreme Court, for example, would go no farther than to define due process and in so doing sums it all up as nothing more and nothing less than "the embodiment of the sporting Idea of fair play." 12 When the barons of England extracted from their sovereign liege the reluctant promise that that Crown would thenceforth not proceed against the life liberty or property of any of its subjects except by the lawful judgment of his peers or the law of the land, they thereby won for themselves and their progeny that splendid guaranty of fairness that is now the hallmark of the free society. The solemn vow that King John made at Runnymede in 1215 has since then resounded through the ages, as a ringing reminder to all rulers, benevolent or base, that every person, when confronted by the stern visage of the law, is entitled to have his say in a fair and open hearing of his cause. The closed mind has no place in the open society. It is part of the sporting Idea of fair play to hear "the other side" before an opinion is formed or a decision is made by those who sit in judgment. Obviously, one side is only one-half of the question; the other half must also be considered if an impartial verdict is to be reached based on an informed appreciation of the issues in contention. It is indispensable that the two sides complement each other, as unto the bow the arrow, in leading to the correct ruling after examination of the problem not from one or the other perspective only but in its totality. A judgment based on less that this full appraisal, on the pretext that a hearing is unnecessary or useless, is tainted with the vice of bias or intolerance or ignorance, or worst of all, in repressive regimes, the insolence of power. The minimum requirements of due process are notice and hearing 13 which, generally speaking, may not be dispensed with because they are intended as a safeguard against official arbitrariness. It is a gratifying commentary on our judicial system that the jurisprudence of this country is rich with applications of this guaranty as proof of our fealty to the rule of law and the ancient rudiments of fair play. We have consistently declared that every person, faced by the awesome power of the State, is entitled to "the law of the land," which Daniel Webster described almost two hundred years ago in the famous Dartmouth College Case, 14 as "the law which hears before it condemns, which proceeds upon inquiry and renders judgment only after trial." It has to be so if the rights of every person are to be secured beyond the reach of officials who, out of mistaken zeal or plain arrogance, would degrade the due process clause into a worn and empty catchword. This is not to say that notice and hearing are imperative in every case for, to be sure, there are a number of admitted exceptions. The conclusive presumption, for example, bars the admission of contrary evidence as long as such presumption is based on human experience or there is a rational

connection between the fact proved and the fact ultimately presumed therefrom. 15 There are instances when the need for expeditions action will justify omission of these requisites, as in the summary abatement of a nuisance per se, like a mad dog on the loose, which may be killed on sight because of the immediate danger it poses to the safety and lives of the people. Pornographic materials, contaminated meat and narcotic drugs are inherently pernicious and may be summarily destroyed. The passport of a person sought for a criminal offense may be cancelled without hearing, to compel his return to the country he has fled. 16 Filthy restaurants may be summarily padlocked in the interest of the public health and bawdy houses to protect the public morals. 17 In such instances, previous judicial hearing may be omitted without violation of due process in view of the nature of the property involved or the urgency of the need to protect the general welfare from a clear and present danger. The protection of the general welfare is the particular function of the police power which both restraints and is restrained by due process. The police power is simply defined as the power inherent in the State to regulate liberty and property for the promotion of the general welfare. 18 By reason of its function, it extends to all the great public needs and is described as the most pervasive, the least limitable and the most demanding of the three inherent powers of the State, far outpacing taxation and eminent domain. The individual, as a member of society, is hemmed in by the police power, which affects him even before he is born and follows him still after he is dead from the womb to beyond the tomb in practically everything he does or owns. Its reach is virtually limitless. It is a ubiquitous and often unwelcome intrusion. Even so, as long as the activity or the property has some relevance to the public welfare, its regulation under the police power is not only proper but necessary. And the justification is found in the venerable Latin maxims, Salus populi est suprema lex and Sic utere tuo ut alienum non laedas, which call for the subordination of individual interests to the benefit of the greater number. It is this power that is now invoked by the government to justify Executive Order No. 626-A, amending the basic rule in Executive Order No. 626, prohibiting the slaughter of carabaos except under certain conditions. The original measure was issued for the reason, as expressed in one of its Whereases, that "present conditions demand that the carabaos and the buffaloes be conserved for the benefit of the small farmers who rely on them for energy needs." We affirm at the outset the need for such a measure. In the face of the worsening energy crisis and the increased dependence of our farms on these traditional beasts of burden, the government would have been remiss, indeed, if it had not taken steps to protect and preserve them. A similar prohibition was challenged in United States v. Toribio, 19 where a law regulating the registration, branding and slaughter of large cattle was

claimed to be a deprivation of property without due process of law. The defendant had been convicted thereunder for having slaughtered his own carabao without the required permit, and he appealed to the Supreme Court. The conviction was affirmed. The law was sustained as a valid police measure to prevent the indiscriminate killing of carabaos, which were then badly needed by farmers. An epidemic had stricken many of these animals and the reduction of their number had resulted in an acute decline in agricultural output, which in turn had caused an incipient famine. Furthermore, because of the scarcity of the animals and the consequent increase in their price, cattle-rustling had spread alarmingly, necessitating more effective measures for the registration and branding of these animals. The Court held that the questioned statute was a valid exercise of the police power and declared in part as follows: To justify the State in thus interposing its authority in behalf of the public, it must appear, first, that the interests of the public generally, as distinguished from those of a particular class, require such interference; and second, that the means are reasonably necessary for the accomplishment of the purpose, and not unduly oppressive upon individuals. ... From what has been said, we think it is clear that the enactment of the provisions of the statute under consideration was required by "the interests of the public generally, as distinguished from those of a particular class" and that the prohibition of the slaughter of carabaos for human consumption, so long as these animals are fit for agricultural work or draft purposes was a "reasonably necessary" limitation on private ownership, to protect the community from the loss of the services of such animals by their slaughter by improvident owners, tempted either by greed of momentary gain, or by a desire to enjoy the luxury of animal food, even when by so doing the productive power of the community may be measurably and dangerously affected. In the light of the tests mentioned above, we hold with the Toribio Case that the carabao, as the poor man's tractor, so to speak, has a direct relevance to the public welfare and so is a lawful subject of Executive Order No. 626. The method chosen in the basic measure is also reasonably necessary for the purpose sought to be achieved and not unduly oppressive upon individuals, again following the above-cited doctrine. There is no doubt that by banning the slaughter of these animals except where they are at least seven years old if male and eleven years old if female upon issuance of the necessary permit, the executive order will be conserving those still fit for farm work or breeding and preventing their improvident depletion.

But while conceding that the amendatory measure has the same lawful subject as the original executive order, we cannot say with equal certainty that it complies with the second requirement, viz., that there be a lawful method. We note that to strengthen the original measure, Executive Order No. 626-A imposes an absolute ban not on the slaughter of the carabaos but on their movement, providing that "no carabao regardless of age, sex, physical condition or purpose (sic) and no carabeef shall be transported from one province to another." The object of the prohibition escapes us. The reasonable connection between the means employed and the purpose sought to be achieved by the questioned measure is missing We do not see how the prohibition of the inter-provincial transport of carabaos can prevent their indiscriminate slaughter, considering that they can be killed anywhere, with no less difficulty in one province than in another. Obviously, retaining the carabaos in one province will not prevent their slaughter there, any more than moving them to another province will make it easier to kill them there. As for the carabeef, the prohibition is made to apply to it as otherwise, so says executive order, it could be easily circumvented by simply killing the animal. Perhaps so. However, if the movement of the live animals for the purpose of preventing their slaughter cannot be prohibited, it should follow that there is no reason either to prohibit their transfer as, not to be flippant dead meat. Even if a reasonable relation between the means and the end were to be assumed, we would still have to reckon with the sanction that the measure applies for violation of the prohibition. The penalty is outright confiscation of the carabao or carabeef being transported, to be meted out by the executive authorities, usually the police only. In the Toribio Case, the statute was sustained because the penalty prescribed was fine and imprisonment, to be imposed by the court after trial and conviction of the accused. Under the challenged measure, significantly, no such trial is prescribed, and the property being transported is immediately impounded by the police and declared, by the measure itself, as forfeited to the government. In the instant case, the carabaos were arbitrarily confiscated by the police station commander, were returned to the petitioner only after he had filed a complaint for recovery and given a supersedeas bond of P12,000.00, which was ordered confiscated upon his failure to produce the carabaos when ordered by the trial court. The executive order defined the prohibition, convicted the petitioner and immediately imposed punishment, which was carried out forthright. The measure struck at once and pounced upon the petitioner without giving him a chance to be heard, thus denying him the centuries-old guaranty of elementary fair play. It has already been remarked that there are occasions when notice and hearing may be validly dispensed with notwithstanding the usual requirement

for these minimum guarantees of due process. It is also conceded that summary action may be validly taken in administrative proceedings as 20 procedural due process is not necessarily judicial only. In the exceptional cases accepted, however. there is a justification for the omission of the right to a previous hearing, to wit, the immediacy of the problem sought to be corrected and the urgency of the need to correct it. In the case before us, there was no such pressure of time or action calling for the petitioner's peremptory treatment. The properties involved were not even inimical per se as to require their instant destruction. There certainly was no reason why the offense prohibited by the executive order should not have been proved first in a court of justice, with the accused being accorded all the rights safeguarded to him under the Constitution. Considering that, as we 21 held in Pesigan v. Angeles, Executive Order No. 626-A is penal in nature, the violation thereof should have been pronounced not by the police only but by a court of justice, which alone would have had the authority to impose the prescribed penalty, and only after trial and conviction of the accused. We also mark, on top of all this, the questionable manner of the disposition of the confiscated property as prescribed in the questioned executive order. It is there authorized that the seized property shall "be distributed to charitable institutions and other similar institutions as the Chairman of the National Meat Inspection Commission may see fit, in the case of carabeef, and to deserving farmers through dispersal as the Director of Animal Industry may see fit, in the case of carabaos." (Emphasis supplied.) The phrase "may see fit" is an extremely generous and dangerous condition, if condition it is. It is laden with perilous opportunities for partiality and abuse, and even corruption. One searches in vain for the usual standard and the reasonable guidelines, or better still, the limitations that the said officers must observe when they make their distribution. There is none. Their options are apparently boundless. Who shall be the fortunate beneficiaries of their generosity and by what criteria shall they be chosen? Only the officers named can supply the answer, they and they alone may choose the grantee as they see fit, and in their own exclusive discretion. Definitely, there is here a "roving commission," a wide and sweeping authority that is not "canalized within banks that keep it from overflowing," in short, a clearly profligate and therefore invalid delegation of legislative powers. To sum up then, we find that the challenged measure is an invalid exercise of the police power because the method employed to conserve the carabaos is not reasonably necessary to the purpose of the law and, worse, is unduly oppressive. Due process is violated because the owner of the property confiscated is denied the right to be heard in his defense and is immediately condemned and punished. The conferment on the administrative authorities of the power to adjudge the guilt of the supposed offender is a clear encroachment on judicial functions and militates against the doctrine of

separation of powers. There is, finally, also an invalid delegation of legislative powers to the officers mentioned therein who are granted unlimited discretion in the distribution of the properties arbitrarily taken. For these reasons, we hereby declare Executive Order No. 626-A unconstitutional. We agree with the respondent court, however, that the police station commander who confiscated the petitioner's carabaos is not liable in damages for enforcing the executive order in accordance with its mandate. The law was at that time presumptively valid, and it was his obligation, as a member of the police, to enforce it. It would have been impertinent of him, being a mere subordinate of the President, to declare the executive order unconstitutional and, on his own responsibility alone, refuse to execute it. Even the trial court, in fact, and the Court of Appeals itself did not feel they had the competence, for all their superior authority, to question the order we now annul. The Court notes that if the petitioner had not seen fit to assert and protect his rights as he saw them, this case would never have reached us and the taking of his property under the challenged measure would have become a fait accompli despite its invalidity. We commend him for his spirit. Without the present challenge, the matter would have ended in that pump boat in Masbate and another violation of the Constitution, for all its obviousness, would have been perpetrated, allowed without protest, and soon forgotten in the limbo of relinquished rights. The strength of democracy lies not in the rights it guarantees but in the courage of the people to invoke them whenever they are ignored or violated. Rights are but weapons on the wall if, like expensive tapestry, all they do is embellish and impress. Rights, as weapons, must be a promise of protection. They become truly meaningful, and fulfill the role assigned to them in the free society, if they are kept bright and sharp with use by those who are not afraid to assert them. WHEREFORE, Executive Order No. 626-A is hereby declared unconstitutional. Except as affirmed above, the decision of the Court of Appeals is reversed. The supersedeas bond is cancelled and the amount thereof is ordered restored to the petitioner. No costs. SO ORDERED.

G.R. No. 77372 April 29, 1988 LUPO L. LUPANGCO, RAYMOND S. MANGKAL, NORMAN A. MESINA, ALEXANDER R. REGUYAL, JOCELYN P. CATAPANG, ENRICO V. REGALADO, JEROME O. ARCEGA, ERNESTOC. BLAS, JR., ELPEDIO M. ALMAZAN, KARL CAESAR R. RIMANDO, petitioner, vs. COURT OF APPEALS and PROFESSIONAL REGULATION COMMISSION, respondent. Balgos & Perez Law Offices for petitioners. The Solicitor General for respondents.

immediately proceeding every examination day including examination day. Any examinee violating this instruction shall be subject to the sanctions prescribed by Sec. 8, Art. III of the Rules and 1 Regulations of the Commission. On October 16, 1986, herein petitioners, all reviewees preparing to take the licensure examinations in accountancy schedule on October 25 and November 2 of the same year, filed on their own behalf of all others similarly situated like them, with the Regional Trial Court of Manila, Branch XXXII, a complaint for injuction with a prayer with the issuance of a writ of a preliminary injunction against respondent PRC to restrain the latter from enforcing the above-mentioned resolution and to declare the same unconstitution. Respondent PRC filed a motion to dismiss on October 21, 1987 on the ground that the lower court had no jurisdiction to review and to enjoin the enforcement of its resolution. In an Order of October 21, 1987, the lower court declared that it had jurisdiction to try the case and enjoined the respondent commission from enforcing and giving effect to Resolution No. 105 which it found to be unconstitutional. Not satisfied therewith, respondent PRC, on November 10, 1986, filed with the Court of Appeals a petition for the nullification of the above Order of the lower court. Said petiton was granted in the Decision of the Court of Appeals promulagated on January 13, 1987, to wit: WHEREFORE, finding the petition meritorious the same is hereby GRANTED and the other dated October 21, 1986 issued by respondent court is declared null and void. The respondent court is further directed to dismiss with prejudice Civil Case No. 86-37950 for want of jurisdiction over the subject matter thereof. No cost in this instance. SO ORDERED. Hence, this petition. The Court of Appeals, in deciding that the Regional Trial Court of Manila had no jurisdiction to entertain the case and to enjoin the enforcement of the Resolution No. 105, stated as its basis its conclusion that the Professional Regulation Commission and the Regional Trial Court are co-equal bodies. Thus it held
2

GANCAYCO, J.: Is the Regional Trial Court of the same category as the Professional Regulation Commission so that it cannot pass upon the validity of the administrative acts of the latter? Can this Commission lawfully prohibit the examiness from attending review classes, receiving handout materials, tips, or the like three (3) days before the date of the examination? Theses are the issues presented to the court by this petition for certiorari to review the decision of the Court of Appeals promulagated on January 13, 1987, in CAG.R. SP No. 10598, * declaring null and void the other dated Ocober 21, 1986 issued by the Regional Trial Court of Manila, Branch 32 in Civil Case No. 86-37950 entitled " Lupo L. Lupangco, et al. vs. Professional Regulation Commission." The records shows the following undisputed facts: On or about October 6, 1986, herein respondent Professional Regulation Commission (PRC) issued Resolution No. 105 as parts of its "Additional Instructions to Examiness," to all those applying for admission to take the licensure examinations in accountancy. The resolution embodied the following pertinent provisions: No examinee shall attend any review class, briefing, conference or the like conducted by, or shall receive any hand-out, review material, or any tip from any school, college or university, or any review center or the like or any reviewer, lecturer, instructor official or employee of any of the aforementioned or similars institutions during the three days

That the petitioner Professional Regulatory Commission is at least a co-equal body with the Regional Trial Court is beyond question, and co-equal bodies have no power to control 3 each other or interfere with each other's acts. To strenghten its position, the Court of Appeals relied heavily on National 4 5 Electrification Administration vs. Mendoza, which cites Pineda vs. Lantin 6 and Philippine Pacific Fishing, Inc. vs. Luna, where this Court held that a Court of First Instance cannot interfere with the orders of the Securities and Exchange Commission, the two being co-equal bodies. After a close scrutiny of the facts and the record of this case, We rule in favor of the petitioner. The cases cited by respondent court are not in point. It is glaringly apparent that the reason why this Court ruled that the Court of First Instance could not interfere with the orders of the Securities and Exchange Commission was that this was so provided for by the law. In Pineda vs. Lantin, We explained that whenever a party is aggrieved by or disagree with an order or ruling of the Securities and Exchange Commission, he cannot seek relief from courts of general jurisdiction since under the Rules of Court and Commonwealth Act No. 83, as amended by Republic Act No. 635, creating and setting forth the powers and functions of the old Securities and Exchange Commission, his remedy is to go the Supreme Court on a petition for review. Likewise, in Philippine Pacific Fishing Co., Inc. vs. Luna, it was stressed that if an order of the Securities and Exchange Commission is erroneous, the appropriate remedy take is first, within the Commission itself, then, to the Supreme Court as mandated in Presidential Decree No. 902-A, the law creating the new Securities and Exchange Commission. Nowhere in the said cases was it held that a Court of First Instance has no jurisdiction over all other government agencies. On the contrary, the ruling was specifically limited to the Securities and Exchange Commission. The respondent court erred when it place the Securities and Exchange Commission and the Professional Regulation Commsision in the same category. As alraedy mentioned, with respect to the Securities and Exchange Commission, the laws cited explicitly provide with the procedure that need be taken when one is aggrieved by its order or ruling. Upon the other hand, there is no law providing for the next course of action for a party who wants to question a ruling or order of the Professional Regulation Commission. Unlike Commonwealth Act No. 83 and Presidential Decree No. 902-A, there is no provision in Presidential Decree No. 223, creating the Professional Regulation Commission, that orders or resolutions of the Commission are appealable either to the Court of Appeals or to theSupreme Court.

Consequently, Civil Case No. 86-37950, which was filed in order to enjoin the enforcement of a resolution of the respondent Professional Regulation Commission alleged to be unconstitutional, should fall within the general 7 jurisdiction of the Court of First Instance, now the Regional Trial Court. What is clear from Presidential Decree No. 223 is that the Professional Regulation Commission is attached to the Office of the President for general 8 direction and coordination. Well settled in our jurisprudence is the view that even acts of the Office of the President may be reviewed by the Court of First 9 Instance (now the Regional Trial Court). In Medalla vs. Sayo, this rule was thoroughly propounded on, to wit: In so far as jurisdiction of the Court below to review by certiorari decisions and/or resolutions of the Civil Service Commission and of the residential Executive Asssistant is concerned, there should be no question but that the power of judicial review should be upheld. The following rulings buttress this conclusion: The objection to a judicial review of a Presidential act arises from a failure to recognize the most important principle in our system of government, i.e., the separation of powers into three co-equal departments, the executives, the legislative and the judicial, each supreme within its own assigned powers and duties. When a presidential act is challenged before the courts of justice, it is not to be implied therefrom that the Executive is being made subject and subordinate to the courts. The legality of his acts are under judicial review, not because the Executive is inferior to the courts, but because the law is above the Chief Executive himself, and the courts seek only to interpret, apply or implement it (the law). A judicial review of the President's decision on a case of an employee decided by the Civil Service Board of Appeals should be viewed in this light and the bringing of the case to the Courts should be governed by the same principles as govern the jucucial review of all administrative acts of all 10 administrative officers.

Republic vs. Presiding Judge, CFI of Lanao del Norte, Br. II, is another case in point. Here, "the Executive Office"' of the Department of Education and Culture issued Memorandum Order No. 93 under the authority of then Secretary of Education Juan Manuel. As in this case, a complaint for injunction was filed with the Court of First Instance of Lanao del Norte because, allegedly, the enforcement of the circular would impair some contracts already entered into by public school teachers. It was the contention of petitioner therein that "the Court of First Instance is not empowered to amend, reverse and modify what is otherwise the clear and explicit provision of the memorandum circular issued by the Executive Office which has the force and effect of law." In resolving the issue, We held: ... We definitely state that respondent Court lawfully acquired jurisdiction in Civil Case No. II-240 (8) because the plaintiff therein asked the lower court for relief, in the form of injunction, in defense of a legal right (freedom to enter into contracts) . . . . . Hence there is a clear infringement of private respondent's constitutional right to enter into agreements not contrary to law, which might run the risk of being violated by the threatened implementation of Executive Office Memorandum Circular No. 93, dated February 5, 1968, which prohibits, with certain exceptions, cashiers and disbursing officers from honoring special powers of attorney executed by the payee employees. The respondent Court is not only right but duty bound to take cognizance of cases of this nature wherein a constitutional and statutory right is allegedly infringed by the administrative action of a government office. Courts of first Instance have original jurisdiction over all civil actions in which the subject of the litigation is not capable of pecuniary 12 estimation (Sec. 44, Republic Act 296, as amended). (Emphasis supplied.) In San Miguel Corporation vs. Avelino, We ruled that a judge of the Court of First Instance has the authority to decide on the validity of a city tax ordinance even after its validity had been contested before the Secretary of Justice and an opinion thereon had been rendered. In view of the foregoing, We find no cogent reason why Resolution No. 105, issued by the respondent Professional Regulation Commission, should be exempted from the general jurisdiction of the Regional Trial Court.
13

11

Respondent PRC, on the other hand, contends that under Section 9, paragraph 3 of B.P. Blg. 129, it is the Court of Appeals which has jurisdiction over the case. The said law provides: SEC. 9. Jurisdiction. The Intermediate Appellate Court shall exercise: xxx xxx xxx (3) Exclusive appellate jurisdiction over all final judgments, decisions, resolutions, orders, or awards of Regional Trial Courts and quasi-judicial agencies, instrumentalities, boards or commissions, except those falling within the appellate jurisdiction of the Supreme Court in accordance with the Constitution, the provisions of this Act, and of subparagraph (1) of the third paragraph and subparagraph (4) of the fourth paragraph of Section 17 of the Judiciary Act of 1948. The contention is devoid of merit. In order to invoke the exclusive appellate jurisdiction of the Court of Appeals as provided for in Section 9, paragraph 3 of B.P. Blg. 129, there has to be a final order or ruling which resulted from proceedings wherein the administrative body involved exercised its quasi-judicial functions. In Black's Law Dictionary, quasi-judicial is defined as a term applied to the action, 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. To expound thereon, quasi-judicial adjudication would mean a determination of rights, privileges and duties resulting in a 14 decision or order which applies to a specific situation . This does not cover rules and regulations of general applicability issued by the administrative body to implement its purely administrative policies and functions like Resolution No. 105 which was adopted by the respondent PRC as a measure to preserve the integrity of licensure examinations. The above rule was adhered to in Filipinas Engineering and Machine Shop 15 vs. Ferrer. In this case, the issue presented was whether or not the Court of First Instance had jurisdiction over a case involving an order of the Commission on Elections awarding a contract to a private party which originated from an invitation to bid. The said issue came about because under the laws then in force, final awards, judgments, decisions or orders of the Commission on Elections fall within the exclusive jurisdiction of the Supreme Court by way of certiorari. Hence, it has been consistently held that "it is the Supreme Court, not the Court of First Instance, which has exclusive

jurisdiction to review on certiorari final decisions, orders, or rulings of the Commission on Elections relative to the conduct of elections and the 16 enforcement of election laws." As to whether or not the Court of First Instance had jurisdiction in saidcase, We said: We are however, far from convinced that an order of the COMELEC awarding a contract to a private party, as a result of its choice among various proposals submitted in response to its invitation to bid comes within the purview of a "final order" which is exclusively and directly appealable to this court on certiorari. What is contemplated by the term "final orders, rulings and decisions, of the COMELEC reviewable by certiorari by the Supreme Court as provided by law are those rendered in actions or proceedings before the COMELEC and taken cognizance of by the said body in the exercise of its adjudicatory or quasi-judicial powers. (Emphasis supplied.) xxx xxx xxx We agree with petitioner's contention that the order of the Commission granting the award to a bidder is not an order rendered in a legal controversy before it wherein the parties filed their respective pleadings and presented evidence after which the questioned order was issued; and that this order of the commission was issued pursuant to its authority to enter into contracts in relation to election purposes. In short, the COMELEC resolution awarding the contract in favor of Acme was not issued pursuant to its quasi-judicial functions but merely as an incident of its inherent administrative functions over the conduct of elections, and hence, the said resolution may not be deemed as a "final order reviewable by certiorari by the Supreme Court. Being non-judicial in character, no contempt order may be imposed by the COMELEC from said order, and no direct and exclusive appeal by certiorari to this Tribunal lie from such order. Any question arising from said order may be well taken in an ordinary civil action before the 17 trial courts. (Emphasis supplied.) One other case that should be mentioned in this regard is Salud vs. Central 18 Bank of the Philippines. Here, petitioner Central Bank, like respondent in this case, argued that under Section 9, paragraph 3 of B.P. Blg. 129, orders

of the Monetary Board are appealable only to the Intermediate Appellate Court. Thus: The Central Bank and its Liquidator also postulate, for the very first time, that the Monetary Board is among the "quasijudicial ... boards" whose judgments are within the exclusive appellate jurisdiction of the IAC; hence, it is only said Court, "to the exclusion of the Regional Trial Courts," that may 19 review the Monetary Board's resolutions. Anent the posture of the Central Bank, We made the following pronouncement: The contention is utterly devoid of merit. The IAC has no appellate jurisdiction over resolution or orders of the Monetary Board. No law prescribes any mode of appeal from 20 the Monetary Board to the IAC. In view of the foregoing, We hold that the Regional Trial Court has jurisdiction to entertain Civil Case No. 86-37950 and enjoin the respondent PRC from enforcing its resolution. Although We have finally settled the issue of jurisdiction, We find it imperative to decide once and for all the validity of Resolution No. 105 so as to provide the much awaited relief to those who are and will be affected by it. Of course, We realize that the questioned resolution was adopted for a commendable purpose which is "to preserve the integrity and purity of the licensure examinations." However, its good aim cannot be a cloak to conceal its constitutional infirmities. On its face, it can be readily seen that it is unreasonable in that an examinee cannot even attend any review class, briefing, conference or the like, or receive any hand-out, review material, or any tip from any school, collge or university, or any review center or the like or any reviewer, lecturer, instructor, official or employee of any of the 21 aforementioned or similar institutions . ... The unreasonableness is more obvious in that one who is caught committing the prohibited acts even without any ill motives will be barred from taking future examinations conducted by the respondent PRC. Furthermore, it is inconceivable how the Commission can manage to have a watchful eye on each and every examinee during the three days before the examination period. It is an aixiom in administrative law that administrative authorities should not act arbitrarily and capriciously in the issuance of rules and regulations. To be

valid, such rules and regulations must be reasonable and fairly adapted to the end in view. If shown to bear no reasonable relation to the purposes for which they are authorized to be issued, then they must be held to be invalid.
22

Resolution No. 105 is not only unreasonable and arbitrary, it also infringes on the examinees' right to liberty guaranteed by the Constitution. Respondent PRC has no authority to dictate on the reviewees as to how they should prepare themselves for the licensure examinations. They cannot be restrained from taking all the lawful steps needed to assure the fulfillment of their ambition to become public accountants. They have every right to make use of their faculties in attaining success in their endeavors. They should be allowed to enjoy their freedom to acquire useful knowledge that will promote their personal growth. As defined in a decision of the United States Supreme Court: The term "liberty" means more than mere freedom from physical restraint or the bounds of a prison. It means freedom to go where one may choose and to act in such a manner not inconsistent with the equal rights of others, as his judgment may dictate for the promotion of his happiness, to pursue such callings and vocations as may be most suitable to develop his capacities, and giv to them their 23 highest enjoyment. Another evident objection to Resolution No. 105 is that it violates the academic freedom of the schools concerned. Respondent PRC cannot interfere with the conduct of review that review schools and centers believe would best enable their enrolees to meet the standards required before becoming a full fledged public accountant. Unless the means or methods of instruction are clearly found to be inefficient, impractical, or riddled with corruption, review schools and centers may not be stopped from helping out their students. At this juncture, We call attention to Our pronouncement in 24 Garcia vs. The Faculty Admission Committee, Loyola School of Theology, regarding academic freedom to wit: ... It would follow then that the school or college itself is possessed of such a right. It decides for itself its aims and objectives and how best to attain them. It is free from outside coercion or interference save possibly when the overriding public welfare calls for some restraint. It has a wide sphere of autonomy certainly extending to the choice of students. This constitutional provision is not to be construed in a niggardly manner or in a grudging fashion.

Needless to say, the enforcement of Resolution No. 105 is not a guarantee that the alleged leakages in the licensure examinations will be eradicated or at least minimized. Making the examinees suffer by depriving them of legitimate means of review or preparation on those last three precious dayswhen they should be refreshing themselves with all that they have learned in the review classes and preparing their mental and psychological make-up for the examination day itself-would be like uprooting the tree to get ride of a rotten branch. What is needed to be done by the respondent is to find out the source of such leakages and stop it right there. If corrupt officials or personnel should be terminated from their loss, then so be it. Fixers or swindlers should be flushed out. Strict guidelines to be observed by examiners should be set up and if violations are committed, then licenses should be suspended or revoked. These are all within the powers of the respondent commission as provided for in Presidential Decree No. 223. But by all means the right and freedom of the examinees to avail of all legitimate means to prepare for the examinations should not be curtailed. In the light of the above, We hereby REVERSE and SET ASIDE, the decision of the Court of Appeals in CA-G.R. SP No. 10591 and another judgment is hereby rendered declaring Resolution No. 105 null and void and of no force and effect for being unconstitutional. This decision is immediately executory. No costs. SO ORDERED.

G.R. No. L-24693

July 31, 1967

ERMITA-MALATE HOTEL AND MOTEL OPERATORS ASSOCIATION, INC., HOTEL DEL MAR INC. and GO CHIU, petitioners-appellees, vs. THE HONORABLE CITY MAYOR OF MANILA, respondent-appellant. VICTOR ALABANZA, intervenor-appellee. Panganiban, Abad and Associates Law Office for respondent-appellant. J. M. Aruego, Tenchavez and Associates for intervenor-appellee. FERNANDO, J.: The principal question in this appeal from a judgment of the lower court in an action for prohibition is whether Ordinance No. 4760 of the City of Manila is violative of the due process clause. The lower court held that it is and adjudged it "unconstitutional, and, therefore, null and void." For reasons to be more specifically set forth, such judgment must be reversed, there being a failure of the requisite showing to sustain an attack against its validity. The petition for prohibition against Ordinance No. 4760 was filed on July 5, 1963 by the petitioners, Ermita-Malate Hotel and Motel Operators Association, one of its members, Hotel del Mar Inc., and a certain Go Chiu, who is "the president and general manager of the second petitioner" against the respondent Mayor of the City of Manila who was sued in his capacity as such "charged with the general power and duty to enforce ordinances of the City of Manila and to give the necessary orders for the faithful execution and enforcement of such ordinances." (par. 1). It was alleged that the petitioner non-stock corporation is dedicated to the promotion and protection of the interest of its eighteen (18) members "operating hotels and motels, characterized as legitimate businesses duly licensed by both national and city authorities, regularly paying taxes, employing and giving livelihood to not less than 2,500 person and representing an investment of more than P3 1 million." (par. 2). It was then alleged that on June 13, 1963, the Municipal Board of the City of Manila enacted Ordinance No. 4760, approved on June 14, 1963 by the then Vice-Mayor Herminio Astorga, who was at the time acting as Mayor of the City of Manila. (par. 3). After which the alleged grievances against the ordinance were set forth in detail. There was the assertion of its being beyond the powers of the Municipal Board of the City of Manila to enact insofar as it would regulate motels, on the ground that in the revised charter of the City of Manila or in any other law, no reference is made to motels; that Section 1 of the challenged ordinance is unconstitutional and void for being unreasonable and violative of due process insofar as it would impose P6,000.00 fee per

annum for first class motels and P4,500.00 for second class motels; that the provision in the same section which would require the owner, manager, keeper or duly authorized representative of a hotel, motel, or lodging house to refrain from entertaining or accepting any guest or customer or letting any room or other quarter to any person or persons without his filling up the prescribed form in a lobby open to public view at all times and in his presence, wherein the surname, given name and middle name, the date of birth, the address, the occupation, the sex, the nationality, the length of stay and the number of companions in the room, if any, with the name, relationship, age and sex would be specified, with data furnished as to his residence certificate as well as his passport number, if any, coupled with a certification that a person signing such form has personally filled it up and affixed his signature in the presence of such owner, manager, keeper or duly authorized representative, with such registration forms and records kept and bound together, it also being provided that the premises and facilities of such hotels, motels and lodging houses would be open for inspection either by the City Mayor, or the Chief of Police, or their duly authorized representatives is unconstitutional and void again on due process grounds, not only for being arbitrary, unreasonable or oppressive but also for being vague, indefinite and uncertain, and likewise for the alleged invasion of the right to privacy and the guaranty against self-incrimination; that Section 2 of the challenged ordinance classifying motels into two classes and requiring the maintenance of certain minimum facilities in first class motels such as a telephone in each room, a dining room or, restaurant and laundry similarly offends against the due process clause for being arbitrary, unreasonable and oppressive, a conclusion which applies to the portion of the ordinance requiring second class motels to have a dining room; that the provision of Section 2 of the challenged ordinance prohibiting a person less than 18 years old from being accepted in such hotels, motels, lodging houses, tavern or common inn unless accompanied by parents or a lawful guardian and making it unlawful for the owner, manager, keeper or duly authorized representative of such establishments to lease any room or portion thereof more than twice every 24 hours, runs counter to the due process guaranty for lack of certainty and for its unreasonable, arbitrary and oppressive character; and that insofar as the penalty provided for in Section 4 of the challenged ordinance for a subsequent conviction would, cause the automatic cancellation of the license of the offended party, in effect causing the destruction of the business and loss of its investments, there is once again a transgression of the due process clause. There was a plea for the issuance of preliminary injunction and for a final judgment declaring the above ordinance null and void and unenforceable. The lower court on July 6, 1963 issued a writ of preliminary injunction ordering respondent Mayor to refrain from enforcing said Ordinance No. 4760 from and after July 8, 1963.

In the a answer filed on August 3, 1963, there was an admission of the personal circumstances regarding the respondent Mayor and of the fact that petitioners are licensed to engage in the hotel or motel business in the City of Manila, of the provisions of the cited Ordinance but a denial of its alleged nullity, whether on statutory or constitutional grounds. After setting forth that the petition did fail to state a cause of action and that the challenged ordinance bears a reasonable relation, to a proper purpose, which is to curb immorality, a valid and proper exercise of the police power and that only the guests or customers not before the court could complain of the alleged invasion of the right to privacy and the guaranty against self incrimination, with the assertion that the issuance of the preliminary injunction ex parte was contrary to law, respondent Mayor prayed for, its dissolution and the dismissal of the petition. Instead of evidence being offered by both parties, there was submitted a stipulation of facts dated September 28, 1964, which reads: 1. That the petitioners Ermita-Malate Hotel and Motel Operators Association, Inc. and Hotel del Mar Inc. are duly organized and existing under the laws of the Philippines, both with offices in the City of Manila, while the petitioner Go Chin is the president and general manager of Hotel del Mar Inc., and the intervenor Victor Alabanza is a resident of Baguio City, all having the capacity to sue and be sued; 2. That the respondent Mayor is the duly elected and incumbent City Mayor and chief executive of the City of Manila charged with the general power and duty to enforce ordinances of the City of Manila and to give the necessary orders for the faithful execution and enforcement of such ordinances; 3. That the petitioners are duly licensed to engage in the business of operating hotels and motels in Malate and Ermita districts in Manila; 4. That on June 13, 1963, the Municipal Board of the City of Manila enacted Ordinance No. 4760, which was approved on June 14, 1963, by Vice-Mayor Herminio Astorga, then the acting City Mayor of Manila, in the absence of the respondent regular City Mayor, amending sections 661, 662, 668-a, 668-b and 669 of the compilation of the ordinances of the City of Manila besides inserting therein three new sections. This ordinance is similar to the one vetoed by the respondent Mayor (Annex A) for the reasons stated in its 4th Indorsement dated February 15, 1963 (Annex B); 5. That the explanatory note signed by then Councilor Herminio Astorga was submitted with the proposed ordinance (now Ordinance

4760) to the Municipal Board, copy of which is attached hereto as Annex C; 6. That the City of Manila derived in 1963 an annual income of P101,904.05 from license fees paid by the 105 hotels and motels (including herein petitioners) operating in the City of Manila.1wph1.t Thereafter came a memorandum for respondent on January 22, 1965, wherein stress was laid on the presumption of the validity of the challenged ordinance, the burden of showing its lack of conformity to the Constitution resting on the party who assails it, citing not only U.S. v. Salaveria, but likewise applicable American authorities. Such a memorandum likewise refuted point by point the arguments advanced by petitioners against its validity. Then barely two weeks later, on February 4, 1965, the memorandum for petitioners was filed reiterating in detail what was set forth in the petition, with citations of what they considered to be applicable American authorities and praying for a judgment declaring the challenged ordinance "null and void and unenforceable" and making permanent the writ of preliminary injunction issued. After referring to the motels and hotels, which are members of the petitioners association, and referring to the alleged constitutional questions raised by the party, the lower court observed: "The only remaining issue here being purely a question of law, the parties, with the nod of the Court, agreed to file memoranda and thereafter, to submit the case for decision of the Court." It does appear obvious then that without any evidence submitted by the parties, the decision passed upon the alleged infirmity on constitutional grounds of the challenged ordinance, dismissing as is undoubtedly right and proper the untenable objection on the alleged lack of authority of the City of Manila to regulate motels, and came to the conclusion that "the challenged Ordinance No. 4760 of the City of Manila, would be unconstitutional and, therefore, null and void." It made permanent the preliminary injunction issued against respondent Mayor and his agents "to restrain him from enforcing the ordinance in question." Hence this appeal. As noted at the outset, the judgment must be reversed. A decent regard for constitutional doctrines of a fundamental character ought to have admonished the lower court against such a sweeping condemnation of the challenged ordinance. Its decision cannot be allowed to stand, consistently with what has hitherto been the accepted standards of constitutional adjudication, in both procedural and substantive aspects. Primarily what calls for a reversal of such a decision is the absence of any evidence to offset the presumption of validity that attaches to a challenged

statute or ordinance. As was expressed categorically by Justice Malcolm: "The presumption is all in favor of validity x x x . The action of the elected representatives of the people cannot be lightly set aside. The councilors must, in the very nature of things, be familiar with the necessities of their particular municipality and with all the facts and circumstances which surround the subject and necessitate action. The local legislative body, by enacting the ordinance, has in effect given notice that the regulations are essential to the well being of the people x x x . The Judiciary should not lightly set aside legislative action when there is not a clear invasion of 2 personal or property rights under the guise of police regulation. It admits of no doubt therefore that there being a presumption of validity, the necessity for evidence to rebut it is unavoidable, unless the statute or ordinance is void on its face which is not the case here. The principle has been nowhere better expressed than in the leading case of O'Gorman & 3 Young v. Hartford Fire Insurance Co., where the American Supreme Court through Justice Brandeis tersely and succinctly summed up the matter thus: The statute here questioned deals with a subject clearly within the scope of the police power. We are asked to declare it void on the ground that the specific method of regulation prescribed is unreasonable and hence deprives the plaintiff of due process of law. As underlying questions of fact may condition the constitutionality of legislation of this character, the resumption of constitutionality must prevail in the absence of some factual foundation of record for overthrowing the statute." No such factual foundation being laid in the present case, the lower court deciding the matter on the pleadings and the stipulation of facts, the presumption of validity must prevail and the judgment against the ordinance set aside. Nor may petitioners assert with plausibility that on its face the ordinance is fatally defective as being repugnant to the due process clause of the Constitution. The mantle of protection associated with the due process guaranty does not cover petitioners. This particular manifestation of a police power measure being specifically aimed to safeguard public morals is immune from such imputation of nullity resting purely on conjecture and unsupported by anything of substance. To hold otherwise would be to unduly restrict and narrow the scope of police power which has been properly characterized as the most essential, insistent and the least limitable of 4 5 powers, extending as it does "to all the great public needs." It would be, to paraphrase another leading decision, to destroy the very purpose of the state if it could be deprived or allowed itself to be deprived of its competence to 6 promote public health, public morals, public safety and the genera welfare. Negatively put, police power is "that inherent and plenary power in the State which enables it to prohibit all that is hurt full to the comfort, safety, and 7 welfare of society.

There is no question but that the challenged ordinance was precisely enacted to minimize certain practices hurtful to public morals. The explanatory note of the Councilor Herminio Astorga included as annex to the stipulation of facts, speaks of the alarming increase in the rate of prostitution, adultery and fornication in Manila traceable in great part to the existence of motels, which "provide a necessary atmosphere for clandestine entry, presence and exit" and thus become the "ideal haven for prostitutes and thrill-seekers." The challenged ordinance then proposes to check the clandestine harboring of transients and guests of these establishments by requiring these transients and guests to fill up a registration form, prepared for the purpose, in a lobby open to public view at all times, and by introducing several other amendatory provisions calculated to shatter the privacy that characterizes the registration of transients and guests." Moreover, the increase in the licensed fees was intended to discourage "establishments of the kind from operating for purpose other than legal" and at the same time, to increase "the income of the city government." It would appear therefore that the stipulation of facts, far from sustaining any attack against the validity of the ordinance, argues eloquently for it. It is a fact worth noting that this Court has invariably stamped with the seal of its approval, ordinances punishing vagrancy and classifying a pimp or 8 procurer as a vagrant; provide a license tax for and regulating the 9 10 maintenance or operation of public dance halls; prohibiting gambling; 11 12 prohibiting jueteng; and monte; prohibiting playing of panguingui on days 13 other than Sundays or legal holidays; prohibiting the operation of pinball 14 machines; and prohibiting any person from keeping, conducting or maintaining an opium joint or visiting a place where opium is smoked or 15 otherwise used, all of which are intended to protect public morals. On the legislative organs of the government, whether national or local, primarily rest the exercise of the police power, which, it cannot be too often emphasized, is the power to prescribe regulations to promote the health, morals, peace, good order, safety and general welfare of the people. In view of the requirements of due process, equal protection and other applicable constitutional guaranties however, the exercise of such police power insofar as it may affect the life, liberty or property of any person is subject to judicial inquiry. Where such exercise of police power may be considered as either capricious, whimsical, unjust or unreasonable, a denial of due process or a violation of any other applicable constitutional guaranty may call for correction by the courts. We are thus led to considering the insistent, almost shrill tone, in which the 16 objection is raised to the question of due process. There is no controlling and precise definition of due process. It furnishes though a standard to which the governmental action should conform in order that deprivation of life, liberty or property, in each appropriate case, be valid. What then is the

standard of due process which must exist both as a procedural and a substantive requisite to free the challenged ordinance, or any governmental action for that matter, from the imputation of legal infirmity sufficient to spell its doom? It is responsiveness to the supremacy of reason, obedience to the dictates of justice. Negatively put, arbitrariness is ruled out and unfairness avoided. To satisfy the due process requirement, official action, to paraphrase Cardozo, must not outrun the bounds of reason and result in sheer oppression. Due process is thus hostile to any official action marred by lack of reasonableness. Correctly it has been identified as freedom from 17 arbitrariness. It is the embodiment of the sporting idea of fair play. It exacts fealty "to those strivings for justice" and judges the act of officialdom of whatever branch "in the light of reason drawn from considerations of fairness 18 that reflect [democratic] traditions of legal and political thought." It is not a narrow or "technical conception with fixed content unrelated to time, place 19 and circumstances," decisions based on such a clause requiring a "close 20 and perceptive inquiry into fundamental principles of our society." Questions of due process are not to be treated narrowly or pedantically in 21 slavery to form or phrases. It would thus be an affront to reason to stigmatize an ordinance enacted precisely to meet what a municipal lawmaking body considers an evil of rather serious proportion an arbitrary and capricious exercise of authority. It would seem that what should be deemed unreasonable and what would amount to an abdication of the power to govern is inaction in the face of an admitted deterioration of the state of public morals. To be more specific, the Municipal Board of the City of Manila felt the need for a remedial measure. It provided it with the enactment of the challenged ordinance. A strong case must be found in the records, and, as has been set forth, none is even attempted here to attach to an ordinance of such character the taint of nullity for an alleged failure to meet the due process requirement. Nor does it lend any semblance even of deceptive plausibility to petitioners' indictment of Ordinance No. 4760 on due process grounds to single out such features as the increased fees for motels and hotels, the curtailment of the area of freedom to contract, and, in certain particulars, its alleged vagueness. Admittedly there was a decided increase of the annual license fees provided for by the challenged ordinance for hotels and motels, 150% for the former and over 200% for the latter, first-class motels being required to pay a P6,000 annual fee and second-class motels, P4,500 yearly. It has been the settled law however, as far back as 1922 that municipal license fees could be classified into those imposed for regulating occupations or regular enterprises, for the regulation or restriction of non-useful occupations or 22 enterprises and for revenue purposes only. As was explained more in detail in the above Cu Unjieng case: (2) Licenses for non-useful occupations are also incidental to the police power and the right to exact a fee may be implied from the power to license and regulate, but in fixing amount of the license

fees the municipal corporations are allowed a much wider discretion in this class of cases than in the former, and aside from applying the well-known legal principle that municipal ordinances must not be unreasonable, oppressive, or tyrannical, courts have, as a general rule, declined to interfere with such discretion. The desirability of imposing restraint upon the number of persons who might otherwise engage in non-useful enterprises is, of course, generally an important factor in the determination of the amount of this kind of license fee. Hence license fees clearly in the nature of privilege taxes for revenue have frequently been upheld, especially in of licenses for the sale of liquors. In fact, in the latter cases the fees have rarely been 23 declared unreasonable. Moreover in the equally leading case of Lutz v. Araneta this Court affirmed the doctrine earlier announced by the American Supreme Court that taxation may be made to implement the state's police power. Only the other day, this Court had occasion to affirm that the broad taxing authority conferred by the Local Autonomy Act of 1959 to cities and municipalities is sufficiently plenary to cover a wide range of subjects with the only limitation that the tax so levied 25 is for public purposes, just and uniform. As a matter of fact, even without reference to the wide latitude enjoyed by the City of Manila in imposing licenses for revenue, it has been explicitly held in one case that "much discretion is given to municipal corporations in determining the amount," here the license fee of the operator of a massage 26 clinic, even if it were viewed purely as a police power measure. The discussion of this particular matter may fitly close with this pertinent citation from another decision of significance: "It is urged on behalf of the plaintiffsappellees that the enforcement of the ordinance could deprive them of their lawful occupation and means of livelihood because they can not rent stalls in the public markets. But it appears that plaintiffs are also dealers in refrigerated or cold storage meat, the sale of which outside the city markets under certain conditions is permitted x x x . And surely, the mere fact, that some individuals in the community may be deprived of their present business or a particular mode of earning a living cannot prevent the exercise of the police power. As was said in a case, persons licensed to pursue occupations which may in the public need and interest be affected by the exercise of the police power embark in these occupations subject to the disadvantages 27 which may result from the legal exercise of that power." Nor does the restriction on the freedom to contract, insofar as the challenged ordinance makes it unlawful for the owner, manager, keeper or duly authorized representative of any hotel, motel, lodging house, tavern, common inn or the like, to lease or rent room or portion thereof more than twice every 24 hours, with a proviso that in all cases full payment shall be charged, call for a different conclusion. Again, such a limitation cannot be viewed as a transgression against the command of due process. It is neither
24

unreasonable nor arbitrary. Precisely it was intended to curb the opportunity for the immoral or illegitimate use to which such premises could be, and, according to the explanatory note, are being devoted. How could it then be arbitrary or oppressive when there appears a correspondence between the undeniable existence of an undesirable situation and the legislative attempt at correction. Moreover, petitioners cannot be unaware that every regulation of conduct amounts to curtailment of liberty which as pointed out by Justice Malcolm cannot be absolute. Thus: "One thought which runs through all these different conceptions of liberty is plainly apparent. It is this: 'Liberty' as understood in democracies, is not license; it is 'liberty regulated by law.' Implied in the term is restraint by law for the good of the individual and for the greater good of the peace and order of society and the general well-being. No man can do exactly as he pleases. Every man must renounce unbridled license. The right of the individual is necessarily subject to reasonable restraint by general law for the common good x x x The liberty of the citizen may be restrained in the interest of the public health, or of the public order 28 and safety, or otherwise within the proper scope of the police power." A similar observation was made by Justice Laurel: "Public welfare, then, lies at the bottom of the enactment of said law, and the state in order to promote the general welfare may interfere with personal liberty, with property, and with business and occupations. Persons and property may be subjected to all kinds of restraints and burdens, in order to secure the general comfort, health, and prosperity of the state x x x To this fundamental aim of our Government the rights of the individual are subordinated. Liberty is a blessing without which life is a misery, but liberty should not be made to prevail over authority because then society will fall into anarchy. Neither should authority be made to prevail over liberty because then the individual will fall into slavery. The citizen should achieve the required balance of liberty and authority in his mind through education and personal discipline, so that there may be established the resultant equilibrium, which means peace and 29 order and happiness for all. It is noteworthy that the only decision of this Court nullifying legislation 30 because of undue deprivation of freedom to contract, People v. Pomar, no longer "retains its virtuality as a living principle. The policy of laissez faire has to some extent given way to the assumption by the government of the right of 31 intervention even in contractual relations affected with public interest. What may be stressed sufficiently is that if the liberty involved were freedom of the mind or the person, the standard for the validity of governmental acts is much more rigorous and exacting, but where the liberty curtailed affects at the most 32 rights of property, the permissible scope of regulatory measure is wider. How justify then the allegation of a denial of due process? Lastly, there is the attempt to impugn the ordinance on another due process ground by invoking the principles of vagueness or uncertainty. It would

appear from a recital in the petition itself that what seems to be the gravamen of the alleged grievance is that the provisions are too detailed and specific rather than vague or uncertain. Petitioners, however, point to the requirement that a guest should give the name, relationship, age and sex of the companion or companions as indefinite and uncertain in view of the necessity for determining whether the companion or companions referred to are those arriving with the customer or guest at the time of the registry or entering the room With him at about the same time or coming at any indefinite time later to join him; a proviso in one of its sections which cast doubt as to whether the maintenance of a restaurant in a motel is dependent upon the discretion of its owners or operators; another proviso which from their standpoint would require a guess as to whether the "full rate of payment" to be charged for every such lease thereof means a full day's or merely a half-day's rate. It may be asked, do these allegations suffice to render the ordinance void on its face for alleged vagueness or uncertainty? To ask the question is to answer it. From Connally v. General Construction 33 34 Co. to Adderley v. Florida, the principle has been consistently upheld that what makes a statute susceptible to such a charge is an enactment either forbidding or requiring the doing of an act that men of common intelligence must necessarily guess at its meaning and differ as to its application. Is this the situation before us? A citation from Justice Holmes would prove illuminating: "We agree to all the generalities about not supplying criminal laws with what they omit but there is no canon against using common sense 35 in construing laws as saying what they obviously mean." That is all then that this case presents. As it stands, with all due allowance for the arguments pressed with such vigor and determination, the attack against the validity of the challenged ordinance cannot be considered a success. Far from it. Respect for constitutional law principles so uniformly held and so uninterruptedly adhered to by this Court compels a reversal of the appealed decision. Wherefore, the judgment of the lower court is reversed and the injunction issued lifted forthwith. With costs.

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 2 Revised Rules on Civil Procedure seeking the reversal of the Decision in Civil Case No. 93-66511 of the Regional Trial Court (RTC) of Manila, Branch 3 18 (lower court), is the validity of Ordinance No. 7783 (the Ordinance) of the 4 City of Manila. 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 5 lodging houses. It built and opened Victoria Court in Malate which was licensed as a motel although duly accredited with the Department of Tourism 6 as a hotel. On 28 June 1993, MTDC filed a Petition for Declaratory Relief with Prayer for a Writ of Preliminary Injunction and/or Temporary Restraining 7 Order (RTC Petition) with the lower court impleading as defendants, herein petitioners City of Manila, Hon. Alfredo S. Lim (Lim), Hon. Joselito L. Atienza, and the members of the City Council of Manila (City Council). MTDC prayed that the Ordinance, insofar as it includes motels and inns as among its 8 prohibited establishments, be declared invalid and unconstitutional. Enacted by the City Council on 9 March 1993 and approved by petitioner City Mayor on 30 March 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 10 VIOLATION THEREOF, AND FOR OTHER PURPOSES. 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,
9 1

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 welldefined 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 11 community." MTDC further advanced that the Ordinance was invalid and unconstitutional for the following reasons: (1) The City Council has no power to prohibit the 12 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 regulate the establishment, operation and maintenance of hotels, motels, inns, pension houses, lodging houses and other similar establishments; (2) The Ordinance 13 is void as it is violative of Presidential Decree (P.D.) No. 499 which specifically declared portions of the Ermita-Malate area as 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 14 but not outside of this area. In their Answer dated 23 July 1993, petitioners City of Manila and Lim maintained that the City 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 16 Code, which reads, thus:
15

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 above-quoted provision included the power to 18 control, to govern and to restrain places of exhibition and amusement. 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 19 Republic Act No. 409, otherwise known as the Revised Charter of the City 20 of Manila (Revised Charter of Manila) which reads, thus:
17

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 21 unconstitutionality. 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 22 zone. The Ordinance, the petitioners likewise claimed, cannot be assailed 23 as ex post facto as it was prospective in operation. The Ordinance also did not infringe the equal protection clause and cannot be denounced as class legislation as there existed substantial and real differences between the 24 Ermita-Malate area and other places in the City of Manila. On 28 June 1993, respondent Judge Perfecto A.S. Laguio, Jr. (Judge Laguio) issued an ex-parte temporary restraining order against the 25 enforcement of the Ordinance. And on 16 July 1993, again in an intrepid 26 gesture, he granted the writ of preliminary injunction prayed for by MTDC. After trial, on 25 November 1994, Judge Laguio rendered the assailed Decision, enjoining the petitioners from implementing the Ordinance. The 27 dispositive portion of said Decision reads:

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 are elevating the case to this Court under then 30 Rule 42 on pure questions of law. 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 31 that the questioned Ordinance contravenes P.D. 499 which allows operators of all kinds of commercial establishments, except those specified therein; and (3) It erred in declaring the Ordinance void and 32 unconstitutional. In the Petition and in its Memorandum, petitioners in essence repeat the assertions they made 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 34 conjunctively, Section 458 (a) 4 (vii) of the Code. They allege that the Ordinance is a valid exercise of police power; it does not contravene P.D. 35 499; and that it enjoys the presumption of validity. In its Memorandum dated 27 May 1996, private respondent maintains that the Ordinance is ultra 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
36 33

29

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 37 unreasonable. Anent the first criterion, ordinances shall only be valid when they are not 38 contrary to the Constitution and to the laws. The Ordinance must satisfy two requirements: it must pass muster under the test of 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 39 exercise powers higher than those of the latter. 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 40 violate it. 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 41 creation. This delegated police power is found in Section 16 of the Code, known as the general welfare clause, viz: SECTION 16. General WelfareEvery 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/ 42 municipality provided under the Code. The 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 43 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 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 44 democracy. SEC. 14. The State recognizes the role of women in nation-building, and shall ensure the fundamental equality before the law of women 45 and men. 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 46 protection of laws.

Sec. 9. Private property shall not be taken for public use without just 47 compensation. 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 48 law. . . ." 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, 49 obedience to the dictates of justice, and as such it is a limitation upon the 50 exercise of the police power. 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 51 benefit of the general law. The guaranty serves as a protection against arbitrary regulation, and private corporations and partnerships are "persons" within the scope of the guaranty 52 insofar as their property is concerned. 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 53 takes a particular action. 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 54 a sufficient justification for the government's action. Case law in the United 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, 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 56 government purpose. 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 57 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 58 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, 59 liberty and property. 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 60 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 61 property will not be permitted to be arbitrarily invaded. Lacking a concurrence of these two requisites, the police measure shall be 62 struck down as an arbitrary intrusion into private rights a violation of the due process clause. 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

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Ermita-Malate Hotel and Motel Operators Association, Inc. v. City Mayor of 63 Manila had already taken judicial notice of the "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 64 prostitutes and thrill-seekers." 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 65 prohibit, it is baseless and 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 66 the presence and universality of sin in man's history. 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 67 suspend or revoke their licenses for these violations; and it may even impose increased license fees. In other words, there 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, 68 subject only to such restraint as are necessary for the common welfare." In accordance with this case, the rights of the 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 69 embraced in the concept of liberty. The U.S. Supreme Court in the case of Roth v. Board of Regents, clarify the meaning of "liberty." It said:
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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 71 State. 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 be it stressed that their consensualconduct within the motel's premises sexual behavior does not contravene any fundamental state policy as contained in the 72 Constitution. Adults have a right to choose to forge such relationships with others in the confines of their own private lives and still retain their dignity as free persons. The liberty protected by the Constitution allows persons the 73 right to make this choice. Their right to liberty under the due process 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 it is the most comprehensive of rightsis the beginning of all freedom and the right most valued by civilized 74 men. The concept of liberty compels respect for the individual whose claim to 75 privacy and interference demands respect. As the case of Morfe v. Mutuc, borrowing the words of Laski, so very aptly stated: 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

sought to

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 recognizedas 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

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 76 personal life of the citizen. 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 77 divests the respondent of the beneficial use of its property. The Ordinance in Section 1 thereof forbids the running of the 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 78 property without just compensation. It is intrusive and violative of the private property rights of individuals. 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 79 public as a whole. 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 80 leaves no reasonable economically viable use of the property.

In the landmark case of Pennsylvania Coal v. Mahon, it was held that a taking also could be found if 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 82 regulation goes too far it will be recognized as a taking. 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 83 persons subject to the public action. 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 84 expectations for use. A regulation that permanently denies all economically beneficial or productive use of land is, from the owner's point of view, equivalent to a "taking" unless principles of nuisance or property law that 85 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 beneficial uses in the name of the common good, that is, to leave his 86 property economically idle, he has suffered a taking. 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 87 whole. 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 88 of the owner.

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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. to transfer to anyThe second and third options place outside of the ErmitaMalate area or to convert into allowed are confiscatory as well. The penalty of permanent closure inbusinesses 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 89 public use or purpose and is therefore "wholesome." If it be of public benefit that a "wholesome" property remain unused or relegated to a particular purpose, then certainly the public should bear the cost of reasonable 90 compensation for the condemnation of private property for public use. 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 91 which its impartial enforcement could be secured. 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 92 carrying out its provisions. Thus, in Coates v. City of Cincinnati, as cited in People v. Nazario, the U.S. Supreme Court 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
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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 "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. 96 City Mayor of Manila, it 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 97 measure but is an exercise of an assumed power to prohibit.
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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 98 give undue favor to some and unjustly discriminate against others. The 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 99 in like circumstances. The "equal protection of the laws is a pledge of the 100 protection of equal laws." It limits governmental discrimination. The equal protection clause extends to artificial persons but only insofar as their 101 property is concerned. 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 102 some in the group equally binding on the rest. 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 103 the people without violating the equal protection clause. The classification must, as an indispensable requisite, not be arbitrary. To be 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.
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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

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 one of the hintedentertainment" is also discriminatory as prostitution ills the Ordinance is not a profession excluaims to banishsive 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 105 important government objectives. Thus, the discrimination is invalid.

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 106 Court in Kwong Sing v. City of Manila that: 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 107 business shall be exercised. And in People v. Esguerra, wherein the Court nullified an ordinance of the Municipality of Tacloban 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:
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(A)s a general rule when a municipal corporation is specifically given authority or power to regulate or to license and regulate the liquor 109 traffic, power to prohibit is impliedly withheld. These doctrines still hold contrary to petitioners' assertion that they were modified by the Code 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 111 paragraph. These powers, therefore, should not be confused, commingled or consolidated as to create a conglomerated and unified power of 112 regulation, suppression and prohibition. 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 113 against the City Council. Moreover, it is a general rule in statutory construction that the express mention of one 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
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such statutes as create new rights or remedies, impose penalties or 114 punishments, or otherwise come under the rule of strict construction. 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 115 ruling of the Court in People v. Esguerra, is instructive. It held 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 116 will. If there is an 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 117 legislative will which must prevail and override the earlier. 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 118 should prevail. 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 119 warranting its summary abatement without judicial intervention. 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 120 are widely dispersed throughout an act the same principle applies. 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 121 general law. As succinctly illustrated in Solicitor General v. Metropolitan 122 Manila Authority: 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 123 decree, which has the force and effect of a statute. 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 124 common right. 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 we reiterate our support for it. But inspite of its virtuousjudiciary 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 not even under the guise of policeprocess and equal protection of laws 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.

G.R. No. 122846

January 20, 2009

WHITE LIGHT CORPORATION, TITANIUM CORPORATION and STA. MESA TOURIST & DEVELOPMENT CORPORATION, Petitioners, vs. CITY OF MANILA, represented by DE CASTRO, MAYOR ALFREDO S. LIM, Respondent. DECISION Tinga, J.: With another city ordinance of Manila also principally involving the tourist district as subject, the Court is confronted anew with the incessant clash between government power and individual liberty in tandem with the archetypal tension between law and morality. In City of Manila v. Laguio, Jr., the Court affirmed the nullification of a city ordinance barring the operation of motels and inns, among other establishments, within the Ermita-Malate area. The petition at bar assails a similarly-motivated city ordinance that prohibits those same establishments from offering short-time admission, as well as pro-rated or "wash up" rates for such abbreviated stays. Our earlier decision tested the city ordinance against our sacred constitutional rights to liberty, due process and equal protection of law. The same parameters apply to the present petition. This Petition under Rule 45 of the Revised Rules on Civil Procedure, which 3 seeks the reversal of the Decision in C.A.-G.R. S.P. No. 33316 of the Court of Appeals, challenges the validity of Manila City Ordinance No. 7774 entitled, "An Ordinance Prohibiting Short-Time Admission, Short-Time Admission Rates, and Wash-Up Rate Schemes in Hotels, Motels, Inns, Lodging Houses, Pension Houses, and Similar Establishments in the City of Manila" (the Ordinance). I.
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SEC. 2. Title. This ordinance shall be known as "An Ordinance" prohibiting short time admission in hotels, motels, lodging houses, pension houses and similar establishments in the City of Manila. SEC. 3. Pursuant to the above policy, short-time admission and rate [sic], wash-up rate or other similarly concocted terms, are hereby prohibited in hotels, motels, inns, lodging houses, pension houses and similar establishments in the City of Manila. SEC. 4. Definition of Term[s]. Short-time admission shall mean admittance and charging of room rate for less than twelve (12) hours at any given time or the renting out of rooms more than twice a day or any other term that may be concocted by owners or managers of said establishments but would mean the same or would bear the same meaning. SEC. 5. Penalty Clause. Any person or corporation who shall violate any provision of this ordinance shall upon conviction thereof be punished by a fine of Five Thousand (P5,000.00) Pesos or imprisonment for a period of not exceeding one (1) year or both such fine and imprisonment at the discretion of the court; Provided, That in case of [a] juridical person, the president, the manager, or the persons in charge of the operation thereof shall be liable: Provided, further, That in case of subsequent conviction for the same offense, the business license of the guilty party shall automatically be cancelled. SEC. 6. Repealing Clause. Any or all provisions of City ordinances not consistent with or contrary to this measure or any portion hereof are hereby deemed repealed. SEC. 7. Effectivity. This ordinance shall take effect immediately upon approval. Enacted by the city Council of Manila at its regular session today, November 10, 1992. Approved by His Honor, the Mayor on December 3, 1992.

The facts are as follows: On December 3, 1992, City Mayor Alfredo S. Lim (Mayor Lim) signed into 4 law the Ordinance. The Ordinance is reproduced in full, hereunder: SECTION 1. Declaration of Policy. It is hereby the declared policy of the City Government to protect the best interest, health and welfare, and the morality of its constituents in general and the youth in particular. On December 15, 1992, the Malate Tourist and Development Corporation (MTDC) filed a complaint for declaratory relief with prayer for a writ of 5 preliminary injunction and/or temporary restraining order ( TRO) with the Regional Trial Court (RTC) of Manila, Branch 9 impleading as defendant, 6 herein respondent City of Manila (the City) represented by Mayor Lim. MTDC prayed that the Ordinance, insofar as it includes motels and inns as among its prohibited establishments, be declared invalid and unconstitutional. MTDC claimed that as owner and operator of the Victoria

Court in Malate, Manila it was authorized by Presidential Decree (P.D.) No. 259 to admit customers on a short time basis as well as to charge customers wash up rates for stays of only three hours. On December 21, 1992, petitioners White Light Corporation (WLC), Titanium Corporation (TC) and Sta. Mesa Tourist and Development Corporation (STDC) filed a motion to intervene and to admit attached complaint-in7 intervention on the ground that the Ordinance directly affects their business 8 interests as operators of drive-in-hotels and motels in Manila. The three companies are components of the Anito Group of Companies which owns 9 and operates several hotels and motels in Metro Manila. On December 23, 1992, the RTC granted the motion to intervene. The RTC also notified the Solicitor General of the proceedings pursuant to then Rule 64, Section 4 of the Rules of Court. On the same date, MTDC moved to 11 withdraw as plaintiff. On December 28, 1992, the RTC granted MTDC's motion to withdraw. The RTC issued a TRO on January 14, 1993, directing the City to cease and 13 desist from enforcing the Ordinance. The City filed an Answer dated January 22, 1993 alleging that the Ordinance is a legitimate exercise of 14 police power. On February 8, 1993, the RTC issued a writ of preliminary injunction ordering 15 the city to desist from the enforcement of the Ordinance. A month later, on March 8, 1993, the Solicitor General filed his Comment arguing that the Ordinance is constitutional. During the pre-trial conference, the WLC, TC and STDC agreed to submit the 16 case for decision without trial as the case involved a purely legal question. On October 20, 1993, the RTC rendered a decision declaring the Ordinance null and void. The dispositive portion of the decision reads: WHEREFORE, in view of all the foregoing, [O]rdinance No. 7774 of the City of Manila is hereby declared null and void. Accordingly, the preliminary injunction heretofor issued is hereby made permanent. SO ORDERED.
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right to operate economic enterprises. Finally, from the observation that the illicit relationships the Ordinance sought to dissuade could nonetheless be consummated by simply paying for a 12-hour stay, the RTC likened the law 19 to the ordinance annulled in Ynot v. Intermediate Appellate Court, where the legitimate purpose of preventing indiscriminate slaughter of carabaos was sought to be effected through an inter-province ban on the transport of carabaos and carabeef. The City later filed a petition for review on certiorari with the Supreme 20 Court. The petition was docketed as G.R. No. 112471. However in a resolution dated January 26, 1994, the Court treated the petition as a petition 21 for certiorari and referred the petition to the Court of Appeals. Before the Court of Appeals, the City asserted that the Ordinance is a valid exercise of police power pursuant to Section 458 (4)(iv) of the Local Government Code which confers on cities, among other local government units, the power: [To] 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 22 transports. The Ordinance, it is argued, is also a valid exercise of the power of the City under Article III, Section 18(kk) of the Revised Manila Charter, thus: "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 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 23 for a single offense. Petitioners argued that the Ordinance is unconstitutional and void since it violates the right to privacy and the freedom of movement; it is an invalid exercise of police power; and it is an unreasonable and oppressive interference in their business. The Court of Appeals reversed the decision of the RTC and affirmed the 24 constitutionality of the Ordinance. First, it held that the Ordinance did not violate the right to privacy or the freedom of movement, as it only penalizes the owners or operators of establishments that admit individuals for short time stays. Second, the virtually limitless reach of police power is only

The RTC noted that the ordinance "strikes at the personal liberty of the 18 individual guaranteed and jealously guarded by the Constitution." Reference was made to the provisions of the Constitution encouraging private enterprises and the incentive to needed investment, as well as the

constrained by having a lawful object obtained through a lawful method. The lawful objective of the Ordinance is satisfied since it aims to curb immoral activities. There is a lawful method since the establishments are still allowed to operate. Third, the adverse effect on the establishments is justified by the well-being of its constituents in general. Finally, as held in Ermita-Malate Motel Operators Association v. City Mayor of Manila, liberty is regulated by law. TC, WLC and STDC come to this Court via petition for review on certiorari. In their petition and Memorandum, petitioners in essence repeat the assertions they made before the Court of Appeals. They contend that the assailed Ordinance is an invalid exercise of police power. II. We must address the threshold issue of petitioners standing. Petitioners allege that as owners of establishments offering "wash-up" rates, their business is being unlawfully interfered with by the Ordinance. However, petitioners also allege that the equal protection rights of their clients are also being interfered with. Thus, the crux of the matter is whether or not these establishments have the requisite standing to plead for protection of their patrons' equal protection rights. Standing or locus standi is the ability of a party to demonstrate to the court sufficient connection to and harm from the law or action challenged to support that party's participation in the case. More importantly, the doctrine of 26 standing is built on the principle of separation of powers, sparing as it does unnecessary interference or invalidation by the judicial branch of the actions rendered by its co-equal branches of government. The requirement of standing is a core component of the judicial system 27 derived directly from the Constitution. The constitutional component of standing doctrine incorporates concepts which concededly are not 28 susceptible of precise definition. In this jurisdiction, the extancy of "a direct and personal interest" presents the most obvious cause, as well as the 29 standard test for a petitioner's standing. In a similar vein, the United States Supreme Court reviewed and elaborated on the meaning of the three constitutional standing requirements of injury, causation, and redressability in 30 Allen v. Wright. Nonetheless, the general rules on standing admit of several exceptions such as the overbreadth doctrine, taxpayer suits, third party standing and, 31 especially in the Philippines, the doctrine of transcendental importance.
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For this particular set of facts, the concept of third party standing as an 32 exception and the overbreadth doctrine are appropriate. In Powers v. Ohio, the United States Supreme Court wrote that: "We have recognized the right of litigants to bring actions on behalf of third parties, provided three important criteria are satisfied: the litigant must have suffered an injury-in-fact, thus giving him or her a "sufficiently concrete interest" in the outcome of the issue in dispute; the litigant must have a close relation to the third party; and there must exist some hindrance to the third party's ability to protect his or her own 33 interests." Herein, it is clear that the business interests of the petitioners are likewise injured by the Ordinance. They rely on the patronage of their customers for their continued viability which appears to be threatened by the enforcement of the Ordinance. The relative silence in constitutional litigation of such special interest groups in our nation such as the American Civil Liberties Union in the United States may also be construed as a hindrance 34 for customers to bring suit. American jurisprudence is replete with examples where parties-in-interest were allowed standing to advocate or invoke the fundamental due process or equal protection claims of other persons or classes of persons injured by 35 state action. In Griswold v. Connecticut, the United States Supreme Court held that physicians had standing to challenge a reproductive health statute that would penalize them as accessories as well as to plead the constitutional protections available to their patients. The Court held that: "The rights of husband and wife, pressed here, are likely to be diluted or adversely affected unless those rights are considered in a suit involving 36 those who have this kind of confidential relation to them." An even more analogous example may be found in Craig v. Boren, wherein the United States Supreme Court held that a licensed beverage vendor has standing to raise the equal protection claim of a male customer challenging a statutory scheme prohibiting the sale of beer to males under the age of 21 and to females under the age of 18. The United States High Court explained that the vendors had standing "by acting as advocates of the rights of third 38 parties who seek access to their market or function." Assuming arguendo that petitioners do not have a relationship with their patrons for the former to assert the rights of the latter, the overbreadth doctrine comes into play. In overbreadth analysis, challengers to government action are in effect permitted to raise the rights of third parties. Generally applied to statutes infringing on the freedom of speech, the overbreadth doctrine applies when a statute needlessly restrains even constitutionally 39 guaranteed rights. In this case, the petitioners claim that the Ordinance makes a sweeping intrusion into the right to liberty of their clients. We can see that based on the allegations in the petition, the Ordinance suffers from overbreadth.
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We thus recognize that the petitioners have a right to assert the constitutional rights of their clients to patronize their establishments for a "wash-rate" time frame. III. To students of jurisprudence, the facts of this case will recall to mind not only the recent City of Manila ruling, but our 1967 decision in Ermita-Malate Hotel 40 and Motel Operations Association, Inc., v. Hon. City Mayor of Manila. Ermita-Malate concerned the City ordinance requiring patrons to fill up a prescribed form stating personal information such as name, gender, nationality, age, address and occupation before they could be admitted to a motel, hotel or lodging house. This earlier ordinance was precisely enacted to minimize certain practices deemed harmful to public morals. A purpose similar to the annulled ordinance in City of Manila which sought a blanket ban on motels, inns and similar establishments in the Ermita-Malate area. However, the constitutionality of the ordinance in Ermita-Malate was sustained by the Court. The common thread that runs through those decisions and the case at bar goes beyond the singularity of the localities covered under the respective ordinances. All three ordinances were enacted with a view of regulating public morals including particular illicit activity in transient lodging establishments. This could be described as the middle case, wherein there is no wholesale ban on motels and hotels but the services offered by these establishments have been severely restricted. At its core, this is another case about the extent to which the State can intrude into and regulate the lives of its citizens. The test of a valid ordinance is well established. A long line of decisions including City of Manila 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 pass 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 41 unreasonable. The Ordinance prohibits two specific and distinct business practices, namely wash rate admissions and renting out a room more than twice a day. The ban is evidently sought to be rooted in the police power as conferred on local government units by the Local Government Code through such implements as the general welfare clause.

A. Police power, while incapable of an exact definition, has been purposely veiled in general terms to underscore its comprehensiveness to meet all exigencies and provide enough room for an efficient and flexible response as 42 the conditions warrant. Police power is based upon the concept of necessity of the State and its corresponding right to protect itself and its 43 people. Police power has been used as justification for numerous and 44 varied actions by the State. These range from the regulation of dance halls, 45 46 47 movie theaters, gas stations and cockpits. The awesome scope of police power is best demonstrated by the fact that in its hundred or so years of presence in our nations legal system, its use has rarely been denied. The apparent goal of the Ordinance is to minimize if not eliminate the use of the covered establishments for illicit sex, prostitution, drug use and alike. These goals, by themselves, are unimpeachable and certainly fall within the ambit of the police power of the State. Yet the desirability of these ends do not sanctify any and all means for their achievement. Those means must align with the Constitution, and our emerging sophisticated analysis of its guarantees to the people. The Bill of Rights stands as a rebuke to the seductive theory of Macchiavelli, and, sometimes even, the political majorities animated by his cynicism. Even as we design the precedents that establish the framework for analysis of due process or equal protection questions, the courts are naturally inhibited by a due deference to the co-equal branches of government as they exercise their political functions. But when we are compelled to nullify executive or legislative actions, yet another form of caution emerges. If the Court were animated by the same passing fancies or turbulent emotions that motivate many political decisions, judicial integrity is compromised by any perception that the judiciary is merely the third political branch of government. We derive our respect and good standing in the annals of history by acting as judicious and neutral arbiters of the rule of law, and there is no surer way to that end than through the development of rigorous and sophisticated legal standards through which the courts analyze the most fundamental and far-reaching constitutional questions of the day. B. The primary constitutional question that confronts us is one of due process, as guaranteed under Section 1, Article III of the Constitution. Due process 48 evades a precise definition. The purpose of the guaranty is to prevent arbitrary governmental encroachment against the life, liberty and property of individuals. The due process guaranty serves as a protection against

arbitrary regulation or seizure. Even corporations and partnerships are protected by the guaranty insofar as their property is concerned. The due process guaranty has traditionally been interpreted as imposing two related but distinct restrictions on government, "procedural due process" and "substantive due process." Procedural due process refers to the procedures that the government must follow before it deprives a person of life, liberty, or 49 property. Procedural due process concerns itself with government action adhering to the established process when it makes an intrusion into the private sphere. Examples range from the form of notice given to the level of formality of a hearing. If due process were confined solely to its procedural aspects, there would arise absurd situation of arbitrary government action, provided the proper formalities are followed. Substantive due process completes the protection envisioned by the due process clause. It inquires whether the government 50 has sufficient justification for depriving a person of life, liberty, or property. The question of substantive due process, moreso than most other fields of law, has reflected dynamism in progressive legal thought tied with the expanded acceptance of fundamental freedoms. Police power, traditionally awesome as it may be, is now confronted with a more rigorous level of analysis before it can be upheld. The vitality though of constitutional due process has not been predicated on the frequency with which it has been utilized to achieve a liberal result for, after all, the libertarian ends should sometimes yield to the prerogatives of the State. Instead, the due process clause has acquired potency because of the sophisticated methodology that has emerged to determine the proper metes and bounds for its application. C. The general test of the validity of an ordinance on substantive due process grounds is best tested when assessed with the evolved footnote 4 test laid 51 down by the U.S. Supreme Court in U.S. v. Carolene Products. Footnote 4 of the Carolene Products case acknowledged that the judiciary would defer to the legislature unless there is a discrimination against a "discrete and 52 insular" minority or infringement of a "fundamental right." Consequently, two standards of judicial review were established: strict scrutiny for laws dealing with freedom of the mind or restricting the political process, and the rational basis standard of review for economic legislation. A third standard, denominated as heightened or immediate scrutiny, was later adopted by the U.S. Supreme Court for evaluating classifications based 53 54 on gender and legitimacy. Immediate scrutiny was adopted by the U.S. 55 Supreme Court in Craig, after the Court declined to do so in Reed v.

Reed. While the test may have first been articulated in equal protection analysis, it has in the United States since been applied in all substantive due process cases as well. We ourselves have often applied the rational basis test mainly in analysis of 57 equal protection challenges. Using the rational basis examination, laws or ordinances are upheld if they rationally further a legitimate governmental 58 interest. Under intermediate review, governmental interest is extensively 59 examined and the availability of less restrictive measures is considered. Applying strict scrutiny, the focus is on the presence of compelling, rather than substantial, governmental interest and on the absence of less restrictive means for achieving that interest. In terms of judicial review of statutes or ordinances, strict scrutiny refers to the standard for determining the quality and the amount of governmental 60 interest brought to justify the regulation of fundamental freedoms. Strict scrutiny is used today to test the validity of laws dealing with the regulation of speech, gender, or race as well as other fundamental rights as expansion 61 from its earlier applications to equal protection. The United States Supreme Court has expanded the scope of strict scrutiny to protect fundamental rights 62 63 64 such as suffrage, judicial access and interstate travel. If we were to take the myopic view that an Ordinance should be analyzed strictly as to its effect only on the petitioners at bar, then it would seem that the only restraint imposed by the law which we are capacitated to act upon is the injury to property sustained by the petitioners, an injury that would warrant the application of the most deferential standard the rational basis test. Yet as earlier stated, we recognize the capacity of the petitioners to invoke as well the constitutional rights of their patrons those persons who would be deprived of availing short time access or wash-up rates to the lodging establishments in question. Viewed cynically, one might say that the infringed rights of these customers were are trivial since they seem shorn of political consequence. Concededly, these are not the sort of cherished rights that, when proscribed, would impel the people to tear up their cedulas. Still, the Bill of Rights does not shelter gravitas alone. Indeed, it is those "trivial" yet fundamental freedoms which the people reflexively exercise any day without the impairing awareness of their constitutional consequence that accurately reflect the degree of liberty enjoyed by the people. Liberty, as integrally incorporated as a fundamental right in the Constitution, is not a Ten Commandments-style enumeration of what may or what may not be done; but rather an atmosphere of freedom where the people do not feel labored under a Big Brother presence as they interact with each other, their society and nature, in a manner innately understood by them as inherent, without doing harm or injury to others.

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D. The rights at stake herein fall within the same fundamental rights to liberty which we upheld in City of Manila v. Hon. Laguio, Jr. We expounded on that most primordial of rights, thus: 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, 65 subject only to such restraint as are necessary for the common welfare."[ ] In accordance with this case, the rights of the 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 66 embraced in the concept of liberty.[ ] The U.S. Supreme Court in the case of Roth v. Board of Regents, sought to clarify the meaning of "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 67 can be no doubt that the meaning of "liberty" must be broad indeed. [Citations omitted] It cannot be denied that the primary animus behind the ordinance is the curtailment of sexual behavior. The City asserts before this Court that the subject establishments "have gained notoriety as venue of prostitution, adultery and fornications in Manila since they provide the necessary atmosphere for clandestine entry, presence and exit and thus became the 68 ideal haven for prostitutes and thrill-seekers." Whether or not this depiction of a mise-en-scene of vice is accurate, it cannot be denied that legitimate sexual behavior among willing married or consenting single adults which is 69 constitutionally protected will be curtailed as well, as it was in the City of Manila case. Our holding therein retains significance for our purposes: 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:

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 70 personal life of the citizen. We cannot discount other legitimate activities which the Ordinance would proscribe or impair. There are very legitimate uses for a wash rate or renting the room out for more than twice a day. Entire families are known to choose pass the time in a motel or hotel whilst the power is momentarily out in their homes. In transit passengers who wish to wash up and rest between trips have a legitimate purpose for abbreviated stays in motels or hotels. Indeed any person or groups of persons in need of comfortable private spaces for a span of a few hours with purposes other than having sex or using illegal drugs can legitimately look to staying in a motel or hotel as a convenient alternative. E. That the Ordinance prevents the lawful uses of a wash rate depriving patrons of a product and the petitioners of lucrative business ties in with another constitutional requisite for the legitimacy of the Ordinance as a police power measure. It must appear that the interests of the public generally, as distinguished from those of a particular class, require an interference with private rights and the means must be reasonably necessary for the 71 accomplishment of the purpose and not unduly oppressive of private rights. It must also be evident that no other alternative for the accomplishment of the purpose less intrusive of private rights can work. More importantly, a reasonable relation must exist between the purposes of the 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 72 property will not be permitted to be arbitrarily invaded.

Lacking a concurrence of these requisites, the police measure shall be struck down as an arbitrary intrusion into private rights. As held in Morfe v. Mutuc, the exercise of police power is subject to judicial review when life, liberty or 73 property is affected. However, this is not in any way meant to take it away from the vastness of State police power whose exercise enjoys the 74 presumption of validity. Similar to the Comelec resolution requiring newspapers to donate advertising 75 space to candidates, this Ordinance is a blunt and heavy instrument. The Ordinance makes no distinction between places frequented by patrons engaged in illicit activities and patrons engaged in legitimate actions. Thus it prevents legitimate use of places where illicit activities are rare or even unheard of. A plain reading of section 3 of the Ordinance shows it makes no classification of places of lodging, thus deems them all susceptible to illicit patronage and subject them without exception to the unjustified prohibition. The Court has professed its deep sentiment and tenderness of the Ermita76 Malate area, its longtime home, and it is skeptical of those who wish to depict our capital city the Pearl of the Orient as a modern-day Sodom or Gomorrah for the Third World set. Those still steeped in Nick Joaquindreams of the grandeur of Old Manila will have to accept that Manila like all evolving big cities, will have its problems. Urban decay is a fact of mega cities such as Manila, and vice is a common problem confronted by the modern metropolis wherever in the world. The solution to such perceived decay is not to prevent legitimate businesses from offering a legitimate product. Rather, cities revive themselves by offering incentives for new businesses to sprout up thus attracting the dynamism of individuals that would bring a new grandeur to Manila. The behavior which the Ordinance seeks to curtail is in fact already prohibited and could in fact be diminished simply by applying existing laws. Less intrusive measures such as curbing the proliferation of prostitutes and drug dealers through active police work would be more effective in easing the situation. So would the strict enforcement of existing laws and regulations penalizing prostitution and drug use. These measures would have minimal intrusion on the businesses of the petitioners and other legitimate merchants. Further, it is apparent that the Ordinance can easily be circumvented by merely paying the whole day rate without any hindrance to those engaged in illicit activities. Moreover, drug dealers and prostitutes can in fact collect "wash rates" from their clientele by charging their customers a portion of the rent for motel rooms and even apartments. IV.

We reiterate that individual rights may be adversely affected only to the extent that may fairly be required by the legitimate demands of public interest or public welfare. The State is a leviathan that must be restrained from needlessly intruding into the lives of its citizens. However well-intentioned the Ordinance may be, it is in effect an arbitrary and whimsical intrusion into the rights of the establishments as well as their patrons. The Ordinance needlessly restrains the operation of the businesses of the petitioners as well as restricting the rights of their patrons without sufficient justification. The Ordinance rashly equates wash rates and renting out a room more than twice a day with immorality without accommodating innocuous intentions. The promotion of public welfare and a sense of morality among citizens deserves the full endorsement of the judiciary provided that such measures 77 do not trample rights this Court is sworn to protect. The notion that the 78 promotion of public morality is a function of the State is as old as Aristotle. The advancement of moral relativism as a school of philosophy does not delegitimize the role of morality in law, even if it may foster wider debate on which particular behavior to penalize. It is conceivable that a society with relatively little shared morality among its citizens could be functional so long as the pursuit of sharply variant moral perspectives yields an adequate 79 accommodation of different interests. To be candid about it, the oft-quoted American maxim that "you cannot legislate morality" is ultimately illegitimate as a matter of law, since as explained by Calabresi, that phrase is more accurately interpreted as meaning that efforts to legislate morality will fail if they are widely at variance 80 with public attitudes about right and wrong. Our penal laws, for one, are founded on age-old moral traditions, and as long as there are widely accepted distinctions between right and wrong, they will remain so oriented. Yet the continuing progression of the human story has seen not only the acceptance of the right-wrong distinction, but also the advent of fundamental liberties as the key to the enjoyment of life to the fullest. Our democracy is distinguished from non-free societies not with any more extensive elaboration on our part of what is moral and immoral, but from our recognition that the individual liberty to make the choices in our lives is innate, and protected by the State. Independent and fair-minded judges themselves are under a moral duty to uphold the Constitution as the embodiment of the rule of law, by reason of their expression of consent to do so when they take the oath of 81 office, and because they are entrusted by the people to uphold the law. Even as the implementation of moral norms remains an indispensable complement to governance, that prerogative is hardly absolute, especially in the face of the norms of due process of liberty. And while the tension may often be left to the courts to relieve, it is possible for the government to avoid

the constitutional conflict by employing more judicious, less drastic means to promote morality. WHEREFORE, the Petition is GRANTED. The Decision of the Court of Appeals is REVERSED, and the Decision of the Regional Trial Court of Manila, Branch 9, is REINSTATED. Ordinance No. 7774 is hereby declared UNCONSTITUTIONAL. No pronouncement as to costs. SO ORDERED. G.R. No. 133640 November 25, 2005 RODOLFO S. BELTRAN, doing business under the name and style, OUR LADY OF FATIMA BLOOD BANK, FELY G. MOSALE, doing business under the name and style, MOTHER SEATON BLOOD BANK; PEOPLES BLOOD BANK, INC.; MARIA VICTORIA T. VITO, M.D., doing business under the name and style, AVENUE BLOOD BANK; JESUS M. GARCIA, M.D., doing business under the name and style, HOLY REDEEMER BLOOD BANK, ALBERT L. LAPITAN, doing business under the name and style, BLUE CROSS BLOOD TRANSFUSION SERVICES; EDGARDO R. RODAS, M.D., doing business under the name and style, RECORD BLOOD BANK, in their individual capacities and for and in behalf of PHILIPPINE ASSOCIATION OF BLOOD BANKS, Petitioners, vs. THE SECRETARY OF HEALTH, Respondent. x ------------------------------------------------ x G.R. No. 133661 DOCTORS BLOOD CENTER, Petitioner, vs. DEPARTMENT OF HEALTH, Respondent. x --------------------------------------------- x G.R. No. 139147 RODOLFO S. BELTRAN, doing business under the name and style, OUR LADY OF FATIMA BLOOD BANK, FELY G. MOSALE, doing business under the name and style, MOTHER SEATON BLOOD BANK; PEOPLES BLOOD BANK, INC.; MARIA VICTORIA T. VITO, M.D., doing business under the name and style, AVENUE BLOOD BANK; JESUS M. GARCIA, M.D., doing business under the name and style, HOLY

REDEEMER BLOOD BANK, ALBERT L. LAPITAN, doing business under the name and style, BLUE CROSS BLOOD TRANSFUSION SERVICES; EDGARDO R. RODAS, M.D., doing business under the name and style, RECORD BLOOD BANK, in their Individual capacities and for and in behalf of PHILIPPINE ASSOCIATION OF BLOOD BANKS, Petitioners, vs. THE SECRETARY OF HEALTH, Respondent. DECISION AZCUNA, J.: Before this Court are petitions assailing primarily the constitutionality of Section 7 of Republic Act No. 7719, otherwise known as the "National Blood Services Act of 1994," and the validity of Administrative Order (A.O.) No. 9, series of 1995 or the Rules and Regulations Implementing Republic Act No. 7719. G.R. No. 133640, entitled "Rodolfo S. Beltran, doing business under the name and style, Our Lady of Fatima Blood Bank, et al., vs. The Secretary of 2 Health" and G.R. No. 133661, entitled "Doctors Blood Bank Center vs. Department of Health" are petitions for certiorari and mandamus, respectively, seeking the annulment of the following: (1) Section 7 of Republic Act No. 7719; and, (2) Administrative Order (A.O.) No. 9, series of 1995. Both petitions likewise pray for the issuance of a writ of prohibitory injunction enjoining the Secretary of Health from implementing and enforcing the aforementioned law and its Implementing Rules and Regulations; and, for a mandatory injunction ordering and commanding the Secretary of Health to grant, issue or renew petitioners license to operate free standing blood banks (FSBB). The above cases were consolidated in a resolution of the Court En Banc 3 dated June 2, 1998. G.R. No. 139147, entitled "Rodolfo S. Beltran, doing business under the name and style, Our Lady of Fatima Blood Bank, et al., vs. The Secretary of Health," on the other hand, is a petition to show cause why respondent Secretary of Health should not be held in contempt of court. This case was originally assigned to the Third Division of this Court and later consolidated with G.R. Nos. 133640 and 133661 in a resolution dated August 5 4, 1999.
4 1

Petitioners comprise the majority of the Board of Directors of the Philippine Association of Blood Banks, a duly registered non-stock and non-profit association composed of free standing blood banks. Public respondent Secretary of Health is being sued in his capacity as the public official directly involved and charged with the enforcement and implementation of the law in question. The facts of the case are as follows: Republic Act No. 7719 or the National Blood Services Act of 1994 was enacted into law on April 2, 1994. The Act seeks to provide an adequate supply of safe blood by promoting voluntary blood donation and by regulating blood banks in the country. It was approved by then President Fidel V. Ramos on May 15, 1994 and was subsequently published in the Official Gazette on August 18, 1994. The law took effect on August 23, 1994. On April 28, 1995, Administrative Order No. 9, Series of 1995, constituting the Implementing Rules and Regulations of said law was promulgated by 6 respondent Secretary of the Department of Health (DOH). Section 7 of R.A. 7719 provides: "Section 7. Phase-out of Commercial Blood Banks - All commercial blood banks shall be phased-out over a period of two (2) years after the effectivity of this Act, extendable to a maximum period of two (2) years by the Secretary." Section 23 of Administrative Order No. 9 provides: "Section 23. Process of Phasing Out. -- The Department shall effect the phasing-out of all commercial blood banks over a period of two (2) years, extendible for a maximum period of two (2) years after the effectivity of R.A. 7719. The decision to extend shall be based on the result of a careful study 8 and review of the blood supply and demand and public safety." Blood banking and blood transfusion services in the country have been arranged in four (4) categories: blood centers run by the Philippine National Red Cross (PNRC), government-run blood services, private hospital blood banks, and commercial blood services. Years prior to the passage of the National Blood Services Act of 1994, petitioners have already been operating commercial blood banks under
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Republic Act No. 1517, entitled "An Act Regulating the Collection, Processing and Sale of Human Blood, and the Establishment and Operation of Blood Banks and Blood Processing Laboratories." The law, which was enacted on June 16, 1956, allowed the establishment and operation by licensed physicians of blood banks and blood processing laboratories. The Bureau of Research and Laboratories (BRL) was created in 1958 and was given the power to regulate clinical laboratories in 1966 under Republic Act No. 4688. In 1971, the Licensure Section was created within the BRL. It was given the duty to enforce the licensure requirements for blood banks as well as clinical laboratories. Due to this development, Administrative Order No. 156, Series of 1971, was issued. The new rules and regulations triggered a stricter enforcement of the Blood Banking Law, which was characterized by frequent spot checks, immediate suspension and communication of such suspensions to hospitals, a more systematic record-keeping and frequent communication with blood banks through monthly information bulletins. Unfortunately, by the 1980s, financial difficulties constrained the BRL to 9 reduce the frequency of its supervisory visits to the blood banks. Meanwhile, in the international scene, concern for the safety of blood and blood products intensified when the dreaded disease Acute Immune Deficiency Syndrome (AIDS) was first described in 1979. In 1980, the International Society of Blood Transfusion (ISBT) formulated the Code of Ethics for Blood Donation and Transfusion. In 1982, the first case of transfusion-associated AIDS was described in an infant. Hence, the ISBT drafted in 1984, a model for a national blood policy outlining certain principles that should be taken into consideration. By 1985, the ISBT had disseminated guidelines requiring AIDS testing of blood and blood products for 10 transfusion. In 1989, another revision of the Blood Banking Guidelines was made. The DOH issued Administrative Order No. 57, Series of 1989, which classified banks into primary, secondary and tertiary depending on the services they provided. The standards were adjusted according to this classification. For instance, floor area requirements varied according to classification level. The new guidelines likewise required Hepatitis B and HIV testing, and that the 11 blood bank be headed by a pathologist or a hematologist. In 1992, the DOH issued Administrative Order No. 118-A institutionalizing the National Blood Services Program (NBSP). The BRL was designated as the central office primarily responsible for the NBSP. The program paved the way for the creation of a committee that will implement the policies of the program and the formation of the Regional Blood Councils. In August 1992, Senate Bill No. 1011, entitled "An Act Promoting Voluntary Blood Donation, Providing for an Adequate Supply of Safe Blood, Regulating

Blood Banks and Providing Penalties for Violations Thereof, and for other 12 Purposes" was introduced in the Senate. Meanwhile, in the House of Representatives, House Bills No. 384, 546, 780 and 1978 were being deliberated to address the issue of safety of the Philippine blood bank system. Subsequently, the Senate and House Bills were referred to the appropriate committees and subsequently 13 consolidated. In January of 1994, the New Tropical Medicine Foundation, with the assistance of the U.S. Agency for International Development (USAID) released its final report of a study on the Philippine blood banking system entitled "Project to Evaluate the Safety of the Philippine Blood Banking System." It was revealed that of the blood units collected in 1992, 64.4 % were supplied by commercial blood banks, 14.5% by the PNRC, 13.7% by government hospital-based blood banks, and 7.4% by private hospital-based blood banks. During the time the study was made, there were only twentyfour (24) registered or licensed free-standing or commercial blood banks in the country. Hence, with these numbers in mind, the study deduced that each commercial blood bank produces five times more blood than the Red Cross and fifteen times more than the government-run blood banks. The study, therefore, showed that the Philippines heavily relied on commercial sources of blood. The study likewise revealed that 99.6% of the donors of commercial blood banks and 77.0% of the donors of private-hospital based blood banks are paid donors. Paid donors are those who receive remuneration for donating their blood. Blood donors of the PNRC and 14 government-run hospitals, on the other hand, are mostly voluntary. It was further found, among other things, that blood sold by persons to blood commercial banks are three times more likely to have any of the four (4) tested infections or blood transfusion transmissible diseases, namely, malaria, syphilis, Hepatitis B and Acquired Immune Deficiency Syndrome 15 (AIDS) than those donated to PNRC. Commercial blood banks give paid donors varying rates around P50 to P150, and because of this arrangement, many of these donors are poor, and often they are students, who need cash immediately. Since they need the money, these donors are not usually honest about their medical or social history. Thus, blood from healthy, voluntary donors who give their true medical and social history are about three times much safer than blood from paid 16 donors. What the study also found alarming is that many Filipino doctors are not yet fully trained on the specific indications for blood component transfusion. They are not aware of the lack of blood supply and do not feel the need to adjust

their practices and use of blood and blood products. It also does not matter 17 to them where the blood comes from. On August 23, 1994, the National Blood Services Act providing for the phase out of commercial blood banks took effect. On April 28, 1995, Administrative Order No. 9, Series of 1995, constituting the Implementing Rules and Regulations of said law was promulgated by DOH. The phase-out period was extended for two years by the DOH pursuant to Section 7 of Republic Act No. 7719 and Section 23 of its Implementing Rules and Regulations. Pursuant to said Act, all commercial blood banks should have been phased out by May 28, 1998. Hence, petitioners were granted by the Secretary of Health their licenses to open and operate a blood bank only until May 27, 1998. On May 20, 1998, prior to the expiration of the licenses granted to petitioners, they filed a petition for certiorari with application for the issuance of a writ of preliminary injunction or temporary restraining order under Rule 65 of the Rules of Court assailing the constitutionality and validity of the aforementioned Act and its Implementing Rules and Regulations. The case was entitled "Rodolfo S. Beltran, doing business under the name and style, Our Lady of Fatima Blood Bank," docketed as G.R. No. 133640. On June 1, 1998, petitioners filed an Amended Petition for Certiorari with Prayer for Issuance of a Temporary Restraining Order, writ of preliminary 18 mandatory injunction and/or status quo ante order. In the aforementioned petition, petitioners assail the constitutionality of the questioned legal provisions, namely, Section 7 of Republic Act No. 7719 and Section 23 of Administrative Order No. 9, Series of 1995, on the following 19 grounds: 1. The questioned legal provisions of the National Blood Services Act and its Implementing Rules violate the equal protection clause for irrationally discriminating against free standing blood banks in a manner which is not germane to the purpose of the law; 2. The questioned provisions of the National Blood Services Act and its Implementing Rules represent undue delegation if not outright abdication of the police power of the state; and, 3. The questioned provisions of the National Blood Services Act and its Implementing Rules are unwarranted deprivation of personal liberty.

On May 22, 1998, the Doctors Blood Center filed a similar petition for mandamus with a prayer for the issuance of a temporary restraining order, preliminary prohibitory and mandatory injunction before this Court entitled "Doctors Blood Center vs. Department of Health," docketed as G.R. No. 20 21 133661. This was consolidated with G.R. No. 133640. Similarly, the petition attacked the constitutionality of Republic Act No. 7719 and its implementing rules and regulations, thus, praying for the issuance of a license to operate commercial blood banks beyond May 27, 1998. Specifically, with regard to Republic Act No. 7719, the petition submitted the 22 following questions for resolution: 1. Was it passed in the exercise of police power, and was it a valid exercise of such power? 2. Does it not amount to deprivation of property without due process? 3. Does it not unlawfully impair the obligation of contracts? 4. With the commercial blood banks being abolished and with no ready machinery to deliver the same supply and services, does R.A. 7719 truly serve the public welfare? On June 2, 1998, this Court issued a Resolution directing respondent DOH to file a consolidated comment. In the same Resolution, the Court issued a temporary restraining order (TRO) for respondent to cease and desist from implementing and enforcing Section 7 of Republic Act No. 7719 and its 23 implementing rules and regulations until further orders from the Court. On August 26, 1998, respondent Secretary of Health filed a Consolidated Comment on the petitions for certiorari and mandamus in G.R. Nos. 133640 and 133661, with opposition to the issuance of a temporary restraining 24 order. In the Consolidated Comment, respondent Secretary of Health submitted that blood from commercial blood banks is unsafe and therefore the State, in the exercise of its police power, can close down commercial blood banks to protect the public. He cited the record of deliberations on Senate Bill No. 1101 which later became Republic Act No. 7719, and the sponsorship speech of Senator Orlando Mercado. The rationale for the closure of these commercial blood banks can be found in the deliberations of Senate Bill No. 1011, excerpts of which are quoted below:

Senator Mercado: I am providing over a period of two years to phase out all commercial blood banks. So that in the end, the new section would have a provision that states: "ALL COMMERCIAL BLOOD BANKS SHALL BE PHASED OUT OVER A PERIOD OF TWO YEARS AFTER THE EFFECTIVITY OF THIS ACT. BLOOD SHALL BE COLLECTED FROM VOLUNTARY DONORS ONLY AND THE SERVICE FEE TO BE CHARGED FOR EVERY BLOOD PRODUCT ISSUED SHALL BE LIMITED TO THE NECESSARY EXPENSES ENTAILED IN COLLECTING AND PROCESSING OF BLOOD. THE SERVICE FEE SHALL BE MADE UNIFORM THROUGH GUIDELINES TO BE SET BY THE DEPARTMENTOF HEALTH." I am supporting Mr. President, the finding of a study called "Project to Evaluate the Safety of the Philippine Blood Banking System." This has been taken note of. This is a study done with the assistance of the USAID by doctors under the New Tropical Medicine Foundation in Alabang. Part of the long-term measures proposed by this particular study is to improve laws, outlaw buying and selling of blood and legally define good manufacturing processes for blood. This goes to the very heart of my amendment which seeks to put into law the principle that blood should not be subject of commerce of man. The Presiding Officer [Senator Aquino]: What does the sponsor say? Senator Webb: Mr. President, just for clarity, I would like to find out how the Gentleman defines a commercial blood bank. I am at a loss at times what a commercial blood bank really is. Senator Mercado: We have a definition, I believe, in the measure, Mr. President. The Presiding Officer [Senator Aquino]: It is a business where profit is considered. Senator Mercado: If the Chairman of the Committee would accept it, we can put a provision on Section 3, a definition of a commercial blood bank, which, as defined in this law, exists for profit and engages in the buying and selling of blood or its components. Senator Webb: That is a good description, Mr. President.

 Senator Mercado: I refer, Mr. President, to a letter written by Dr. Jaime Galvez-Tan, the Chief of Staff, Undersecretary of Health, to the good Chairperson of the Committee on Health. In recommendation No. 4, he says: "The need to phase out all commercial blood banks within a two-year period will give the Department of Health enough time to build up governments capability to provide an adequate supply of blood for the needs of the nation...the use of blood for transfusion is a medical service and not a sale of commodity." Taking into consideration the experience of the National Kidney Institute, which has succeeded in making the hospital 100 percent dependent on voluntary blood donation, here is a success story of a hospital that does not buy blood. All those who are operated on and need blood have to convince their relatives or have to get volunteers who would donate blood If we give the responsibility of the testing of blood to those commercial blood banks, they will cut corners because it will protect their profit. In the first place, the people who sell their blood are the people who are normally in the high-risk category. So we should stop the system of selling and buying blood so that we can go into a national voluntary blood program. It has been said here in this report, and I quote: "Why is buying and selling of blood not safe? This is not safe because a donor who expects payment for his blood will not tell the truth about his illnesses and will deny any risky social behavior such as sexual promiscuity which increases the risk of having syphilis or AIDS or abuse of intravenous addictive drugs. Laboratory tests are of limited value and will not detect early infections. Laboratory tests are required only for four diseases in the Philippines. There are other blood transmissible diseases we do not yet screen for and there could be others where there are no tests available yet. A blood bank owner expecting to gain profit from selling blood will also try his best to limit his expenses. Usually he tries to increase his profit by buying cheaper reagents or test kits, hiring cheaper manpower or skipping some tests altogether. He may also try to sell blood even though these have infections in them. Because there is no existing system of counterchecking these, the blood bank owner can usually get away with many unethical practices.

The experience of Germany, Mr. President is illustrative of this issue. The reason why contaminated blood was sold was that there were corners cut by commercial blood banks in the testing process. They were protecting their 25 profits. The sponsorship speech of Senator Mercado further elucidated his stand on the issue: Senator Mercado: Today, across the country, hundreds of poverty-stricken, sickly and weak Filipinos, who, unemployed, without hope and without money to buy the next meal, will walk into a commercial blood bank, extend their arms and plead that their blood be bought. They will lie about their age, their medical history. They will lie about when they last sold their blood. For doing this, they will receive close to a hundred pesos. This may tide them over for the next few days. Of course, until the next bloodletting. This same blood will travel to the posh city hospitals and urbane medical centers. This same blood will now be bought by the rich at a price over 500% of the value for which it was sold. Between this buying and selling, obviously, someone has made a very fast buck. Every doctor has handled at least one transfusion-related disease in an otherwise normal patient. Patients come in for minor surgery of the hand or whatever and they leave with hepatitis B. A patient comes in for an appendectomy and he leaves with malaria. The worst nightmare: A patient comes in for a Caesarian section and leaves with AIDS. We do not expect good blood from donors who sell their blood because of poverty. The humane dimension of blood transfusion is not in the act of receiving blood, but in the act of giving it For years, our people have been at the mercy of commercial blood banks that lobby their interests among medical technologists, hospital administrators and sometimes even physicians so that a proactive system for collection of blood from healthy donors becomes difficult, tedious and unrewarding. The Department of Health has never institutionalized a comprehensive national program for safe blood and for voluntary blood donation even if this is a serious public health concern and has fallen for the linen of commercial blood bankers, hook, line and sinker because it is more convenient to tell the patient to buy blood.

Commercial blood banks hold us hostage to their threat that if we are to close them down, there will be no blood supply. This is true if the Government does not step in to ensure that safe supply of blood. We cannot allow commercial interest groups to dictate policy on what is and what should be a humanitarian effort. This cannot and will never work because their interest in blood donation is merely monetary. We cannot expect commercial blood banks to take the lead in voluntary blood donation. Only the 26 Government can do it, and the Government must do it." On May 5, 1999, petitioners filed a Motion for Issuance of Expanded Temporary Restraining Order for the Court to order respondent Secretary of Health to cease and desist from announcing the closure of commercial blood banks, compelling the public to source the needed blood from voluntary donors only, and committing similar acts "that will ultimately cause the 27 shutdown of petitioners blood banks." On July 8, 1999, respondent Secretary filed his Comment and/or Opposition to the above motion stating that he has not ordered the closure of commercial blood banks on account of the Temporary Restraining Order (TRO) issued on June 2, 1998 by the Court. In compliance with the TRO, DOH had likewise ceased to distribute the health advisory leaflets, posters and flyers to the public which state that "blood banks are closed or will be closed." According to respondent Secretary, the same were printed and circulated in anticipation of the closure of the commercial blood banks in accordance with R.A. No. 7719, and were printed and circulated prior to the 28 issuance of the TRO. On July 15, 1999, petitioners in G.R. No. 133640 filed a Petition to Show Cause Why Public Respondent Should Not be Held in Contempt of Court, docketed as G.R. No. 139147, citing public respondents willful disobedience of or resistance to the restraining order issued by the Court in the said case. Petitioners alleged that respondents act constitutes circumvention of the temporary restraining order and a mockery of the authority of the Court and 29 the orderly administration of justice. Petitioners added that despite the issuance of the temporary restraining order in G.R. No. 133640, respondent, in his effort to strike down the existence of commercial blood banks, disseminated misleading information under the guise of health advisories, press releases, leaflets, brochures and flyers stating, among others, that "this year [1998] all commercial blood banks will be closed by 27 May. Those who 30 need blood will have to rely on government blood banks." Petitioners further claimed that respondent Secretary of Health announced in a press conference during the Blood Donors Week that commercial blood banks are "illegal and dangerous" and that they "are at the moment protected by a restraining order on the basis that their commercial interest is more important than the lives of the people." These were all posted in bulletin boards and

other conspicuous places in all government hospitals as well as other 31 medical and health centers. In respondent Secretarys Comment to the Petition to Show Cause Why Public Respondent Should Not Be Held in Contempt of Court, dated January 3, 2000, it was explained that nothing was issued by the department ordering the closure of commercial blood banks. The subject health advisory leaflets pertaining to said closure pursuant to Republic Act No. 7719 were printed and circulated prior to the Courts issuance of a temporary restraining order 32 on June 21, 1998. Public respondent further claimed that the primary purpose of the information campaign was "to promote the importance and safety of voluntary blood donation and to educate the public about the hazards of patronizing blood 33 supplies from commercial blood banks." In doing so, he was merely performing his regular functions and duties as the Secretary of Health to protect the health and welfare of the public. Moreover, the DOH is the main proponent of the voluntary blood donation program espoused by Republic Act No. 7719, particularly Section 4 thereof which provides that, in order to ensure the adequate supply of human blood, voluntary blood donation shall be promoted through public education, promotion in schools, professional education, establishment of blood services network, and walking blood donors. Hence, by authority of the law, respondent Secretary contends that he has the duty to promote the program of voluntary blood donation. Certainly, his act of encouraging the public to donate blood voluntarily and educating the people on the risks associated with blood coming from a paid donor promotes general health and welfare and which should be given more 34 importance than the commercial businesses of petitioners. On July 29, 1999, interposing personal and substantial interest in the case as taxpayers and citizens, a Petition-in-Intervention was filed interjecting the same arguments and issues as laid down by petitioners in G.R. No. 133640 and 133661, namely, the unconstitutionality of the Acts, and, the issuance of a writ of prohibitory injunction. The intervenors are the immediate relatives of individuals who had died allegedly because of shortage of blood supply at a 35 critical time. The intervenors contended that Republic Act No. 7719 constitutes undue delegation of legislative powers and unwarranted deprivation of personal 36 liberty.

In a resolution, dated September 7, 1999, and without giving due course to the aforementioned petition, the Court granted the Motion for Intervention that was filed by the above intervenors on August 9, 1999. In his Comment to the petition-in-intervention, respondent Secretary of Health stated that the sale of blood is contrary to the spirit and letter of the Act that "blood donation is a humanitarian act" and "blood transfusion is a professional medical service and not a sale of commodity (Section 2[a] and [b] of Republic Act No. 7719). The act of selling blood or charging fees other 37 than those allowed by law is even penalized under Section 12." Thus, in view of these, the Court is now tasked to pass upon the constitutionality of Section 7 of Republic Act No. 7719 or the National Blood Services Act of 1994 and its Implementing Rules and Regulations. In resolving the controversy, this Court deems it necessary to address the issues and/or questions raised by petitioners concerning the constitutionality of the aforesaid Act in G.R. No. 133640 and 133661 as summarized hereunder: I WHETHER OR NOT SECTION 7 OF R.A. 7719 CONSTITUTES UNDUE DELEGATION OF LEGISLATIVE POWER; II WHETHER OR NOT SECTION 7 OF R.A. 7719 AND ITS IMPLEMENTING RULES AND REGULATIONS VIOLATE THE EQUAL PROTECTION CLAUSE; III WHETHER OR NOT SECTION 7 OF R.A. 7719 AND ITS IMPLEMENTING RULES AND REGULATIONS VIOLATE THE NON-IMPAIRMENT CLAUSE; IV WHETHER OR NOT SECTION 7 OF R.A. 7719 AND ITS IMPLEMENTING RULES AND REGULATIONS CONSTITUTE DEPRIVATION OF PERSONAL LIBERTY AND PROPERTY; V

WHETHER OR NOT R.A. 7719 IS A VALID EXERCISE OF POLICE POWER; and, VI WHETHER OR NOT SECTION 7 OF R.A. 7719 AND ITS IMPLEMENTING RULES AND REGULATIONS TRULY SERVE PUBLIC WELFARE. As to the first ground upon which the constitutionality of the Act is being challenged, it is the contention of petitioners that the phase out of commercial or free standing blood banks is unconstitutional because it is an improper and unwarranted delegation of legislative power. According to petitioners, the Act was incomplete when it was passed by the Legislature, and the latter failed to fix a standard to which the Secretary of Health must conform in the performance of his functions. Petitioners also contend that the two-year extension period that may be granted by the Secretary of Health for the phasing out of commercial blood banks pursuant to Section 7 of the Act constrained the Secretary to legislate, thus constituting undue delegation of legislative power. In testing whether a statute constitutes an undue delegation of legislative power or not, it is usual to inquire whether the statute was complete in all its terms and provisions when it left the hands of the Legislature so that nothing was left to the judgment of the administrative body or any other appointee or 38 delegate of the Legislature. Except as to matters of detail that may be left to be filled in by rules and regulations to be adopted or promulgated by executive officers and administrative boards, an act of the Legislature, as a general rule, is incomplete and hence invalid if it does not lay down any rule or definite standard by which the administrative board may be guided in the 39 exercise of the discretionary powers delegated to it. Republic Act No. 7719 or the National Blood Services Act of 1994 is complete in itself. It is clear from the provisions of the Act that the Legislature intended primarily to safeguard the health of the people and has mandated several measures to attain this objective. One of these is the phase out of commercial blood banks in the country. The law has sufficiently provided a definite standard for the guidance of the Secretary of Health in carrying out its provisions, that is, the promotion of public health by providing a safe and adequate supply of blood through voluntary blood donation. By its provisions, it has conferred the power and authority to the Secretary of Health as to its execution, to be exercised under and in pursuance of the law. Congress may validly delegate to administrative agencies the authority to promulgate rules and regulations to implement a given legislation and 40 effectuate its policies. The Secretary of Health has been given, under

Republic Act No. 7719, broad powers to execute the provisions of said Act. Section 11 of the Act states: "SEC. 11. Rules and Regulations. The implementation of the provisions of the Act shall be in accordance with the rules and regulations to be promulgated by the Secretary, within sixty (60) days from the approval hereof" This is what respondent Secretary exactly did when DOH, by virtue of the administrative bodys authority and expertise in the matter, came out with Administrative Order No.9, series of 1995 or the Rules and Regulations Implementing Republic Act No. 7719. Administrative Order. No. 9 effectively filled in the details of the law for its proper implementation. Specifically, Section 23 of Administrative Order No. 9 provides that the phase-out period for commercial blood banks shall be extended for another two years until May 28, 1998 "based on the result of a careful study and review of the blood supply and demand and public safety." This power to ascertain the existence of facts and conditions upon which the Secretary may effect a period of extension for said phase-out can be delegated by Congress. The true distinction between the power to make laws and discretion as to its execution is illustrated by the fact that the delegation of power to make the law, which necessarily involves a discretion as to what it shall be, and conferring an authority or discretion as to its execution, to be exercised under and in pursuance of the law. The first cannot be done; to the 41 latter no valid objection can be made. In this regard, the Secretary did not go beyond the powers granted to him by the Act when said phase-out period was extended in accordance with the Act as laid out in Section 2 thereof: "SECTION 2. Declaration of Policy In order to promote public health, it is hereby declared the policy of the state: a) to promote and encourage voluntary blood donation by the citizenry and to instill public consciousness of the principle that blood donation is a humanitarian act; b) to lay down the legal principle that the provision of blood for transfusion is a medical service and not a sale of commodity; c) to provide for adequate, safe, affordable and equitable distribution of blood supply and blood products;

d) to inform the public of the need for voluntary blood donation to curb the hazards caused by the commercial sale of blood; e) to teach the benefits and rationale of voluntary blood donation in the existing health subjects of the formal education system in all public and private schools as well as the non-formal system; f) to mobilize all sectors of the community to participate in mechanisms for voluntary and non-profit collection of blood; g) to mandate the Department of Health to establish and organize a National Blood Transfusion Service Network in order to rationalize and improve the provision of adequate and safe supply of blood; h) to provide for adequate assistance to institutions promoting voluntary blood donation and providing non-profit blood services, either through a system of reimbursement for costs from patients who can afford to pay, or donations from governmental and non-governmental entities; i) to require all blood collection units and blood banks/centers to operate on a non-profit basis; j) to establish scientific and professional standards for the operation of blood collection units and blood banks/centers in the Philippines; k) to regulate and ensure the safety of all activities related to the collection, storage and banking of blood; and, l) to require upgrading of blood banks/centers to include preventive services and education to control spread of blood transfusion transmissible diseases." Petitioners also assert that the law and its implementing rules and regulations violate the equal protection clause enshrined in the Constitution because it unduly discriminates against commercial or free standing blood 42 banks in a manner that is not germane to the purpose of the law. What may be regarded as a denial of the equal protection of the laws is a question not always easily determined. No rule that will cover every case can be formulated. Class legislation, discriminating against some and favoring others is prohibited but classification on a reasonable basis and not made arbitrarily or capriciously is permitted. The classification, however, to be reasonable: (a) must be based on substantial distinctions which make real differences; (b) must be germane to the purpose of the law; (c) must not be

limited to existing conditions only; and, (d) must apply equally to each 43 member of the class. Republic Act No. 7719 or The National Blood Services Act of 1994, was enacted for the promotion of public health and welfare. In the aforementioned study conducted by the New Tropical Medicine Foundation, it was revealed that the Philippine blood banking system is disturbingly primitive and unsafe, and with its current condition, the spread of infectious diseases such as malaria, AIDS, Hepatitis B and syphilis chiefly from blood transfusion is unavoidable. The situation becomes more distressing as the study showed that almost 70% of the blood supply in the country is sourced from paid blood donors who are three times riskier than voluntary blood donors because they are unlikely to disclose their medical or social history during the blood 44 screening. The above study led to the passage of Republic Act No. 7719, to instill public consciousness of the importance and benefits of voluntary blood donation, safe blood supply and proper blood collection from healthy donors. To do this, the Legislature decided to order the phase out of commercial blood banks to improve the Philippine blood banking system, to regulate the supply and proper collection of safe blood, and so as not to derail the implementation of the voluntary blood donation program of the government. In lieu of commercial blood banks, non-profit blood banks or blood centers, in strict adherence to professional and scientific standards to be established by 45 the DOH, shall be set in place. Based on the foregoing, the Legislature never intended for the law to create a situation in which unjustifiable discrimination and inequality shall be allowed. To effectuate its policy, a classification was made between nonprofit blood banks/centers and commercial blood banks. We deem the classification to be valid and reasonable for the following reasons: One, it was based on substantial distinctions. The former operates for purely humanitarian reasons and as a medical service while the latter is motivated by profit. Also, while the former wholly encourages voluntary blood donation, the latter treats blood as a sale of commodity. Two, the classification, and the consequent phase out of commercial blood banks is germane to the purpose of the law, that is, to provide the nation with an adequate supply of safe blood by promoting voluntary blood donation and treating blood transfusion as a humanitarian or medical service rather than a commodity. This necessarily involves the phase out of commercial blood banks based on the fact that they operate as a business enterprise, and they

source their blood supply from paid blood donors who are considered unsafe compared to voluntary blood donors as shown by the USAID-sponsored study on the Philippine blood banking system. Three, the Legislature intended for the general application of the law. Its enactment was not solely to address the peculiar circumstances of the situation nor was it intended to apply only to the existing conditions. Lastly, the law applies equally to all commercial blood banks without exception. Having said that, this Court comes to the inquiry as to whether or not Republic Act No. 7719 constitutes a valid exercise of police power. The promotion of public health is a fundamental obligation of the State. The health of the people is a primordial governmental concern. Basically, the National Blood Services Act was enacted in the exerc ise of the States police power in order to promote and preserve public health and safety. Police power of the state is validly exercised if (a) the interest of the public generally, as distinguished from those of a particular class, requires the interference of the State; and, (b) the means employed are reasonably necessary to the attainment of the objective sought to be accomplished and 46 not unduly oppressive upon individuals. In the earlier discussion, the Court has mentioned of the avowed policy of the law for the protection of public health by ensuring an adequate supply of safe blood in the country through voluntary blood donation. Attaining this objective requires the interference of the State given the disturbing condition of the Philippine blood banking system. In serving the interest of the public, and to give meaning to the purpose of the law, the Legislature deemed it necessary to phase out commercial blood banks. This action may seriously affect the owners and operators, as well as the employees, of commercial blood banks but their interests must give way to serve a higher end for the interest of the public. The Court finds that the National Blood Services Act is a valid exercise of the States police power. Therefore, the Legislature, under the circumstances, adopted a course of action that is both necessary and reasonable for the common good. Police power is the State authority to enact legislation that may interfere with personal liberty or property in order to promote the general 47 welfare.

It is in this regard that the Court finds the related grounds and/or issues raised by petitioners, namely, deprivation of personal liberty and property, and violation of the non-impairment clause, to be unmeritorious. Petitioners are of the opinion that the Act is unconstitutional and void because it infringes on the freedom of choice of an individual in connection to what he wants to do with his blood which should be outside the domain of State intervention. Additionally, and in relation to the issue of classification, petitioners asseverate that, indeed, under the Civil Code, the human body and its organs like the heart, the kidney and the liver are outside the commerce of man but this cannot be made to apply to human blood because the latter can be replenished by the body. To treat human blood equally as 48 the human organs would constitute invalid classification. Petitioners likewise claim that the phase out of the commercial blood banks will be disadvantageous to them as it will affect their businesses and existing contracts with hospitals and other health institutions, hence Section 7 of the Act should be struck down because it violates the non-impairment clause provided by the Constitution. As stated above, the State, in order to promote the general welfare, may interfere with personal liberty, with property, and with business and occupations. Thus, persons may be subjected to certain kinds of restraints and burdens in order to secure the general welfare of the State and to this fundamental aim of government, the rights of the individual may be 49 subordinated. Moreover, in the case of Philippine Association of Service Exporters, Inc. v. 50 Drilon, settled is the rule that the non-impairment clause of the Constitution must yield to the loftier purposes targeted by the government. The right granted by this provision must submit to the demands and necessities of the States power of regulation. While the Court understands the grave implications of Section 7 of the law in question, the concern of the Government in this case, however, is not necessarily to maintain profits of business firms. In the ordinary sequence of events, it is profits that suffer as a result of government regulation. Furthermore, the freedom to contract is not absolute; all contracts and all rights are subject to the police power of the State and not only may regulations which affect them be established by the State, but all such regulations must be subject to change from time to time, as the general wellbeing of the community may require, or as the circumstances may change, or 51 as experience may demonstrate the necessity. This doctrine was reiterated 52 in the case of Vda. de Genuino v. Court of Agrarian Relations where the

Court held that individual rights to contract and to property have to give way to police power exercised for public welfare. As for determining whether or not the shutdown of commercial blood banks will truly serve the general public considering the shortage of blood supply in the country as proffered by petitioners, we maintain that the wisdom of the Legislature in the lawful exercise of its power to enact laws cannot be inquired into by the Court. Doing so would be in derogation of the principle of 53 separation of powers. That, under the circumstances, proper regulation of all blood banks without distinction in order to achieve the objective of the law as contended by petitioners is, of course, possible; but, this would be arguing on what the law may be or should be and not what the law is. Between is and ought there is a far cry. The wisdom and propriety of legislation is not for this Court to pass 54 upon. Finally, with regard to the petition for contempt in G.R. No. 139147, on the other hand, the Court finds respondent Secretary of Healths explanation satisfactory. The statements in the flyers and posters were not aimed at influencing or threatening the Court in deciding in favor of the constitutionality of the law. Contempt of court presupposes a contumacious attitude, a flouting or 55 arrogant belligerence in defiance of the court. There is nothing contemptuous about the statements and information contained in the health advisory that were distributed by DOH before the TRO was issued by this Court ordering the former to cease and desist from distributing the same. In sum, the Court has been unable to find any constitutional infirmity in the questioned provisions of the National Blood Services Act of 1994 and its Implementing Rules and Regulations. The fundamental criterion is that all reasonable doubts should be resolved in favor of the constitutionality of a statute. Every law has in its favor the presumption of constitutionality. For a law to be nullified, it must be shown that there is a clear and unequivocal breach of the Constitution. The ground 56 for nullity must be clear and beyond reasonable doubt. Those who petition this Court to declare a law, or parts thereof, unconstitutional must clearly establish the basis therefor. Otherwise, the petition must fail. Based on the grounds raised by petitioners to challenge the constitutionality of the National Blood Services Act of 1994 and its Implementing Rules and Regulations, the Court finds that petitioners have failed to overcome the presumption of constitutionality of the law. As to whether the Act constitutes

a wise legislation, considering the issues being raised by petitioners, is for 57 Congress to determine. WHEREFORE, premises considered, the Court renders judgment as follows: 1. In G.R. Nos. 133640 and 133661, the Court UPHOLDS THE VALIDITY of Section 7 of Republic Act No. 7719, otherwise known as the National Blood Services Act of 1994, and Administrative Order No. 9, Series of 1995 or the Rules and Regulations Implementing Republic Act No. 7719. The petitions are DISMISSED. Consequently, the Temporary Restraining Order issued by this Court on June 2, 1998, is LIFTED. 2. In G.R. No. 139147, the petition seeking to cite the Secretary of Health in contempt of court is DENIED for lack of merit. No costs. SO ORDERED. G.R. No. L-31195 June 5, 1973 PHILIPPINE BLOOMING MILLS EMPLOYMENT ORGANIZATION, NICANOR TOLENTINO, FLORENCIO, PADRIGANO RUFINO, ROXAS MARIANO DE LEON, ASENCION PACIENTE, BONIFACIO VACUNA, BENJAMIN PAGCU and RODULFO MUNSOD, petitioners, vs. PHILIPPINE BLOOMING MILLS CO., INC. and COURT OF INDUSTRIAL RELATIONS, respondents. L.S. Osorio & P.B. Castillo and J.C. Espinas & Associates for petitioners. Demetrio B. Salem & Associates for private respondent.

Petitioners claim that on March 1, 1969, they decided to stage a mass demonstration at Malacaang on March 4, 1969, in protest against alleged abuses of the Pasig police, to be participated in by the workers in the first shift (from 6 A.M. to 2 P.M.) as well as those in the regular second and third shifts (from 7 A.M. to 4 P.M. and from 8 A.M. to 5 P.M., respectively); and that they informed the respondent Company of their proposed demonstration. The questioned order dated September 15, 1969, of Associate Judge Joaquin M. Salvador of the respondent Court reproduced the following stipulation of facts of the parties parties 3. That on March 2, 1969 complainant company learned of the projected mass demonstration at Malacaang in protest against alleged abuses of the Pasig Police Department to be participated by the first shift (6:00 AM-2:00 PM) workers as well as those working in the regular shifts (7:00 A.M. to 4:00 PM and 8:00 AM to 5:00 PM) in the morning of March 4, 1969; 4. That a meeting was called by the Company on March 3, 1969 at about 11:00 A.M. at the Company's canteen, and those present were: for the Company: (1) Mr. Arthur L. Ang (2) Atty. S. de Leon, Jr., (3) and all department and section heads. For the PBMEO (1) Florencio Padrigano, (2) Rufino Roxas, (3) Mariano de Leon, (4) Asencion Paciente, (5) Bonifacio Vacuna and (6) Benjamin Pagcu. 5. That the Company asked the union panel to confirm or deny said projected mass demonstration at Malacaang on March 4, 1969. PBMEO thru Benjamin Pagcu who acted as spokesman of the union panel, confirmed the planned demonstration and stated that the demonstration or rally cannot be cancelled because it has already been agreed upon in the meeting. Pagcu explained further that the demonstration has nothing to do with the Company because the union has no quarrel or dispute with Management; 6. That Management, thru Atty. C.S. de Leon, Company personnel manager, informed PBMEO that the demonstration is an inalienable right of the union guaranteed by the Constitution but emphasized, however, that any demonstration for that matter should not unduly prejudice the normal operation of the Company. For which reason, the Company, thru Atty. C.S. de Leon warned the PBMEO representatives that workers who belong to the first and

MAKASIAR, J.: The petitioner Philippine Blooming Mills Employees Organization (hereinafter referred to as PBMEO) is a legitimate labor union composed of the employees of the respondent Philippine Blooming Mills Co., Inc., and petitioners Nicanor Tolentino, Florencio Padrigano, Rufino Roxas, Mariano de Leon, Asencion Paciente, Bonifacio Vacuna, Benjamin Pagcu and Rodulfo Munsod are officers and members of the petitioner Union.

regular shifts, who without previous leave of absence approved by the Company, particularly , the officers present who are the organizers of the demonstration, who shall fail to report for work the following morning (March 4, 1969) shall be dismissed, because such failure is a violation of the existing CBA and, therefore, would be amounting to an illegal strike; 7. That at about 5:00 P.M. on March 3, 1969, another meeting was convoked Company represented by Atty. C.S. de Leon, Jr. The Union panel was composed of: Nicanor Tolentino, Rodolfo Munsod, Benjamin Pagcu and Florencio Padrigano. In this afternoon meeting of March 3, 1969, Company reiterated and appealed to the PBMEO representatives that while all workers may join the Malacaang demonstration, the workers for the first and regular shift of March 4, 1969 should be excused from joining the demonstration and should report for work; and thus utilize the workers in the 2nd and 3rd shifts in order not to violate the provisions of the CBA, particularly Article XXIV: NO LOCKOUT NO STRIKE'. All those who will not follow this warning of the Company shall be dismiss; De Leon reiterated the Company's warning that the officers shall be primarily liable being the organizers of the mass demonstration. The union panel countered that it was rather too late to change their plans inasmuch as the Malacaang demonstration will be held the following morning; and 8. That a certain Mr. Wilfredo Ariston, adviser of PBMEO sent a cablegram to the Company which was received 9:50 A.M., March 4, 1969, the contents of which are as follows: 'REITERATING REQUEST EXCUSE DAY SHIFT EMPLOYEES JOINING DEMONSTRATION MARCH 4, 1969.' (Pars. 3-8, Annex "F", pp. 42-43, rec.) Because the petitioners and their members numbering about 400 proceeded with the demonstration despite the pleas of the respondent Company that the first shift workers should not be required to participate in the demonstration and that the workers in the second and third shifts should be utilized for the demonstration from 6 A.M. to 2 P.M. on March 4, 1969, respondent Company prior notice of the mass demonstration on March 4, 1969, with the respondent Court, a charge against petitioners and other employees who composed the first shift, charging them with a "violation of Section 4(a)-6 in relation to Sections 13 and 14, as well as Section 15, all of Republic Act No. 875, and of the CBA providing for 'No Strike and No Lockout.' " (Annex "A", pp. 19-20, rec.). The charge was accompanied by the joint affidavit of Arthur

L. Ang and Cesareo de Leon, Jr. (Annex "B", pp. 21-24, rec.). Thereafter, a corresponding complaint was filed, dated April 18, 1969, by Acting Chief Prosecutor Antonio T. Tirona and Acting Prosecutor Linda P. Ilagan (Annex "C", pp. 25-30, rec.) In their answer, dated May 9, 1969, herein petitioners claim that they did not violate the existing CBA because they gave the respondent Company prior notice of the mass demonstration on March 4, 1969; that the said mass demonstration was a valid exercise of their constitutional freedom of speech against the alleged abuses of some Pasig policemen; and that their mass demonstration was not a declaration of strike because it was not directed against the respondent firm (Annex "D", pp. 31-34, rec.) After considering the aforementioned stipulation of facts submitted by the parties, Judge Joaquin M. Salvador, in an order dated September 15, 1969, found herein petitioner PBMEO guilty of bargaining in bad faith and herein petitioners Florencio Padrigano, Rufino Roxas, Mariano de Leon, Asencion Paciente, Bonifacio Vacuna, Benjamin Pagcu, Nicanor Tolentino and Rodulfo Munsod as directly responsible for perpetrating the said unfair labor practice and were, as a consequence, considered to have lost their status as employees of the respondent Company (Annex "F", pp. 42-56, rec.) Herein petitioners claim that they received on September 23, 1969, the aforesaid order (p. 11, rec.); and that they filed on September 29, 1969, because September 28, 1969 fell on Sunday (p. 59, rec.), a motion for reconsideration of said order dated September 15, 1969, on the ground that it is contrary to law and the evidence, as well as asked for ten (10) days within which to file their arguments pursuant to Sections 15, 16 and 17 of the Rules of the CIR, as amended (Annex "G", pp. 57-60, rec. ) In its opposition dated October 7, 1969, filed on October 11, 1969 (p. 63, rec.), respondent Company averred that herein petitioners received on September 22, 1969, the order dated September 17 (should be September 15), 1969; that under Section 15 of the amended Rules of the Court of Industrial Relations, herein petitioners had five (5) days from September 22, 1969 or until September 27, 1969, within which to file their motion for reconsideration; and that because their motion for reconsideration was two 1 (2) days late, it should be accordingly dismissed, invoking Bien vs. Castillo, which held among others, that a motion for extension of the five-day period for the filing of a motion for reconsideration should be filed before the said five-day period elapses (Annex "M", pp. 61-64, rec.). Subsequently, herein petitioners filed on October 14, 1969 their written arguments dated October 11, 1969, in support of their motion for reconsideration (Annex "I", pp. 65-73, rec.).

In a resolution dated October 9, 1969, the respondent en banc dismissed the motion for reconsideration of herein petitioners for being pro forma as it was filed beyond the reglementary period prescribed by its Rules (Annex "J", pp. 74-75, rec.), which herein petitioners received on October 28, 196 (pp. 12 & 76, rec.). At the bottom of the notice of the order dated October 9, 1969, which was released on October 24, 1969 and addressed to the counsels of the parties (pp. 75-76, rec.), appear the requirements of Sections 15, 16 and 17, as amended, of the Rules of the Court of Industrial Relations, that a motion for reconsideration shall be filed within five (5) days from receipt of its decision or order and that an appeal from the decision, resolution or order of the C.I.R., sitting en banc, shall be perfected within ten (10) days from receipt thereof (p. 76, rec.). On October 31, 1969, herein petitioners filed with the respondent court a petition for relief from the order dated October 9, 1969, on the ground that their failure to file their motion for reconsideration on time was due to excusable negligence and honest mistake committed by the president of the petitioner Union and of the office clerk of their counsel, attaching thereto the affidavits of the said president and clerk (Annexes "K", "K-1" and "K-2", rec.). Without waiting for any resolution on their petition for relief from the order dated October 9, 1969, herein petitioners filed on November 3, 1969, with the Supreme Court, a notice of appeal (Annex "L", pp. 88-89, rec.). I There is need of briefly restating basic concepts and principles which underlie the issues posed by the case at bar. (1) In a democracy, the preservation and enhancement of the dignity and worth of the human personality is the central core as well as the cardinal article of faith of our civilization. The inviolable character of man as an individual must be "protected to the largest possible extent in his thoughts 2 and in his beliefs as the citadel of his person." (2) The Bill of Rights is designed to preserve the ideals of liberty, equality and security "against the assaults of opportunism, the expediency of the passing hour, the erosion of small encroachments, and the scorn and 3 derision of those who have no patience with general principles." In the pithy language of Mr. Justice Robert Jackson, the purpose of the Bill of Rights is to withdraw "certain subjects from the vicissitudes of political controversy, to place them beyond the reach of majorities and officials, and

to establish them as legal principles to be applied by the courts . One's rights to life, liberty and property, to free speech, or free press, freedom of worship and assembly, and other fundamental rights may not be submitted to a vote; 4 they depend on the outcome of no elections." Laski proclaimed that "the happiness of the individual, not the well-being of the State, was the criterion by which its behaviour was to be judged. His interests, not its power, set the 5 limits to the authority it was entitled to exercise." (3) The freedoms of expression and of assembly as well as the right to petition are included among the immunities reserved by the sovereign people, in the rhetorical aphorism of Justice Holmes, to protect the ideas that we abhor or hate more than the ideas we cherish; or as Socrates insinuated, not only to protect the minority who want to talk, but also to benefit the 6 majority who refuse to listen. And as Justice Douglas cogently stresses it, the liberties of one are the liberties of all; and the liberties of one are not safe 7 unless the liberties of all are protected. (4) The rights of free expression, free assembly and petition, are not only civil rights but also political rights essential to man's enjoyment of his life, to his happiness and to his full and complete fulfillment. Thru these freedoms the citizens can participate not merely in the periodic establishment of the government through their suffrage but also in the administration of public affairs as well as in the discipline of abusive public officers. The citizen is accorded these rights so that he can appeal to the appropriate governmental officers or agencies for redress and protection as well as for the imposition of the lawful sanctions on erring public officers and employees. (5) While the Bill of Rights also protects property rights, the primacy of 8 human rights over property rights is recognized. Because these freedoms are "delicate and vulnerable, as well as supremely precious in our society" and the "threat of sanctions may deter their exercise almost as potently as the actual application of sanctions," they "need breathing space to survive," 9 permitting government regulation only "with narrow specificity." Property and property rights can be lost thru prescription; but human rights are imprescriptible. If human rights are extinguished by the passage of time, then the Bill of Rights is a useless attempt to limit the power of government and ceases to be an efficacious shield against the tyranny of officials, of majorities, of the influential and powerful, and of oligarchs political, economic or otherwise. In the hierarchy of civil liberties, the rights of free expression and of assembly occupy a preferred position as they are essential to the preservation and 10 vitality of our civil and political institutions; and such priority "gives these 11 liberties the sanctity and the sanction not permitting dubious intrusions."

The superiority of these freedoms over property rights is underscored by the fact that a mere reasonable or rational relation between the means employed by the law and its object or purpose that the law is neither arbitrary nor discriminatory nor oppressive would suffice to validate a law which 12 restricts or impairs property rights. On the other hand, a constitutional or valid infringement of human rights requires a more stringent criterion, namely existence of a grave and immediate danger of a substantive evil which the State has the right to prevent. So it has been stressed in the main opinion of Mr. Justice Fernando in Gonzales vs. Comelec and reiterated by the writer of 13 the opinion in Imbong vs. Ferrer. It should be added that Mr. Justice Barredo in Gonzales vs. Comelec, supra, like Justices Douglas, Black and 14 Goldberg in N.Y. Times Co. vs. Sullivan, believes that the freedoms of speech and of the press as well as of peaceful assembly and of petition for redress of grievances are absolute when directed against public officials or "when exercised in relation to our right to choose the men and women by 15 whom we shall be governed," even as Mr. Justice Castro relies on the 16 balancing-of-interests test. Chief Justice Vinson is partial to the improbable danger rule formulated by Chief Judge Learned Hand, viz. whether the gravity of the evil, discounted by its improbability, justifies such invasion of 17 free expression as is necessary to avoid the danger. II The respondent Court of Industrial Relations, after opining that the mass demonstration was not a declaration of strike, concluded that by their "concerted act and the occurrence temporary stoppage of work," herein petitioners are guilty bargaining in bad faith and hence violated the collective bargaining agreement with private respondent Philippine Blooming Mills Co., inc.. Set against and tested by foregoing principles governing a democratic society, such conclusion cannot be sustained. The demonstration held petitioners on March 4, 1969 before Malacaang was against alleged abuses of some Pasig policemen, not against their employer, herein private respondent firm, said demonstrate was purely and completely an exercise of their freedom expression in general and of their right of assembly and petition for redress of grievances in particular before appropriate governmental agency, the Chief Executive, again the police officers of the municipality of Pasig. They exercise their civil and political rights for their mutual aid protection from what they believe were police excesses. As matter of fact, it was the duty of herein private respondent firm to protect herein petitioner Union and its members fro the harassment of local police officers. It was to the interest herein private respondent firm to rally to the defense of, and take up the cudgels for, its employees, so that they can report to work free from harassment, vexation or peril and as consequence perform more efficiently their respective tasks enhance its productivity as well as profits. Herein respondent employer did not even offer to intercede for its employees with the local police. Was it securing peace for itself at the expenses of its

workers? Was it also intimidated by the local police or did it encourage the local police to terrorize or vex its workers? Its failure to defend its own employees all the more weakened the position of its laborers the alleged oppressive police who might have been all the more emboldened thereby subject its lowly employees to further indignities. In seeking sanctuary behind their freedom of expression well as their right of assembly and of petition against alleged persecution of local officialdom, the employees and laborers of herein private respondent firm were fighting for their very survival, utilizing only the weapons afforded them by the Constitution the untrammelled enjoyment of their basic human rights. The pretension of their employer that it would suffer loss or damage by reason of the absence of its employees from 6 o'clock in the morning to 2 o'clock in the afternoon, is a plea for the preservation merely of their property rights. Such apprehended loss or damage would not spell the difference between the life and death of the firm or its owners or its management. The employees' pathetic situation was a stark reality abused, harassment and persecuted as they believed they were by the peace officers of the municipality. As above intimated, the condition in which the employees found themselves visa-vis the local police of Pasig, was a matter that vitally affected their right to individual existence as well as that of their families. Material loss can be repaired or adequately compensated. The debasement of the human being broken in morale and brutalized in spirit-can never be fully evaluated in monetary terms. The wounds fester and the scars remain to humiliate him to his dying day, even as he cries in anguish for retribution, denial of which is like rubbing salt on bruised tissues. As heretofore stated, the primacy of human rights freedom of expression, of peaceful assembly and of petition for redress of grievances over 18 property rights has been sustained. Emphatic reiteration of this basic tenet as a coveted boon at once the shield and armor of the dignity and worth of the human personality, the all-consuming ideal of our enlightened civilization becomes Our duty, if freedom and social justice have any meaning at all for him who toils so that capital can produce economic goods that can generate happiness for all. To regard the demonstration against police officers, not against the employer, as evidence of bad faith in collective bargaining and hence a violation of the collective bargaining agreement and a cause for the dismissal from employment of the demonstrating employees, stretches unduly the compass of the collective bargaining agreement, is "a potent means of inhibiting speech" and therefore inflicts a moral as well as mortal wound on the constitutional guarantees of free expression, of peaceful 19 assembly and of petition. The collective bargaining agreement which fixes the working shifts of the employees, according to the respondent Court Industrial Relations, in effect imposes on the workers the "duty ... to observe regular working hours." The

strain construction of the Court of Industrial Relations that a stipulated working shifts deny the workers the right to stage mass demonstration against police abuses during working hours, constitutes a virtual tyranny over the mind and life the workers and deserves severe condemnation. Renunciation of the freedom should not be predicated on such a slender ground. The mass demonstration staged by the employees on March 4, 1969 could not have been legally enjoined by any court, such an injunction would be trenching upon the freedom expression of the workers, even if it legally 20 appears to be illegal picketing or strike. The respondent Court of Industrial Relations in the case at bar concedes that the mass demonstration was not a declaration of a strike "as the same not rooted in any industrial dispute although there is concerted act and the occurrence of a temporary stoppage work." (Annex "F", p. 45, rec.). The respondent firm claims that there was no need for all its employees to participate in the demonstration and that they suggested to the Union that only the first and regular shift from 6 A.M. to 2 P.M. should report for work in order that loss or damage to the firm will be averted. This stand failed appreciate the sine qua non of an effective demonstration especially by a labor union, namely the complete unity of the Union members as well as their total presence at the demonstration site in order to generate the maximum sympathy for the validity of their cause but also immediately action on the part of the corresponding government agencies with jurisdiction over the issues they raised against the local police. Circulation is one of the aspects 21 of freedom of expression. If demonstrators are reduced by one-third, then by that much the circulation of the issues raised by the demonstration is diminished. The more the participants, the more persons can be apprised of the purpose of the rally. Moreover, the absence of one-third of their members will be regarded as a substantial indication of disunity in their ranks which will enervate their position and abet continued alleged police persecution. At any rate, the Union notified the company two days in advance of their projected demonstration and the company could have made arrangements to counteract or prevent whatever losses it might sustain by reason of the absence of its workers for one day, especially in this case when the Union requested it to excuse only the day-shift employees who will join the demonstration on March 4, 1969 which request the Union reiterated in their telegram received by the company at 9:50 in the morning of March 4, 1969, the day of the mass demonstration (pp. 42-43, rec.). There was a lack of human understanding or compassion on the part of the firm in rejecting the request of the Union for excuse from work for the day shifts in order to carry out its mass demonstration. And to regard as a ground for dismissal the mass demonstration held against the Pasig police, not against the company, is gross vindictiveness on the part of the employer, which is as unchristian as it is unconstitutional.

III The respondent company is the one guilty of unfair labor practice. Because the refusal on the part of the respondent firm to permit all its employees and workers to join the mass demonstration against alleged police abuses and the subsequent separation of the eight (8) petitioners from the service constituted an unconstitutional restraint on the freedom of expression, freedom of assembly and freedom petition for redress of grievances, the respondent firm committed an unfair labor practice defined in Section 4(a-1) in relation to Section 3 of Republic Act No. 875, otherwise known as the Industrial Peace Act. Section 3 of Republic Act No. 8 guarantees to the employees the right "to engage in concert activities for ... mutual aid or protection"; while Section 4(a-1) regards as an unfair labor practice for an employer interfere with, restrain or coerce employees in the exercise their rights guaranteed in Section Three." We repeat that the obvious purpose of the mass demonstration staged by the workers of the respondent firm on March 4, 1969, was for their mutual aid and protection against alleged police abuses, denial of which was interference with or restraint on the right of the employees to engage in such common action to better shield themselves against such alleged police indignities. The insistence on the part of the respondent firm that the workers for the morning and regular shift should not participate in the mass demonstration, under pain of dismissal, was as heretofore stated, "a potent 22 means of inhibiting speech." Such a concerted action for their mutual help and protection deserves at least equal protection as the concerted action of employees in giving publicity to a letter complaint charging bank president with immorality, nepotism, favoritism an discrimination in the appointment and promotion of ban 23 employees. We further ruled in the Republic Savings Bank case, supra, that for the employees to come within the protective mantle of Section 3 in relation to Section 4(a-1) on Republic Act No. 875, "it is not necessary that union activity be involved or that collective bargaining be contemplated," as 24 long as the concerted activity is for the furtherance of their interests. As stated clearly in the stipulation of facts embodied in the questioned order of respondent Court dated September 15, 1969, the company, "while expressly acknowledging, that the demonstration is an inalienable right of the Union guaranteed by the Constitution," nonetheless emphasized that "any demonstration for that matter should not unduly prejudice the normal operation of the company" and "warned the PBMEO representatives that workers who belong to the first and regular shifts, who without previous leave of absence approved by the Company, particularly the officers present who are the organizers of the demonstration, who shall fail to report for work the following morning (March 4, 1969) shall be dismissed, because such failure

is a violation of the existing CBA and, therefore, would be amounting to an illegal strike (;)" (p. III, petitioner's brief). Such threat of dismissal tended to coerce the employees from joining the mass demonstration. However, the issues that the employees raised against the local police, were more important to them because they had the courage to proceed with the demonstration, despite such threat of dismissal. The most that could happen to them was to lose a day's wage by reason of their absence from work on the day of the demonstration. One day's pay means much to a laborer, more especially if he has a family to support. Yet, they were willing to forego their one-day salary hoping that their demonstration would bring about the desired relief from police abuses. But management was adamant in refusing to recognize the superior legitimacy of their right of free speech, free assembly and the right to petition for redress. Because the respondent company ostensibly did not find it necessary to demand from the workers proof of the truth of the alleged abuses inflicted on them by the local police, it thereby concedes that the evidence of such abuses should properly be submitted to the corresponding authorities having jurisdiction over their complaint and to whom such complaint may be referred by the President of the Philippines for proper investigation and action with a view to disciplining the local police officers involved. On the other hand, while the respondent Court of Industrial Relations found that the demonstration "paralyzed to a large extent the operations of the complainant company," the respondent Court of Industrial Relations did not make any finding as to the fact of loss actually sustained by the firm. This significant circumstance can only mean that the firm did not sustain any loss or damage. It did not present evidence as to whether it lost expected profits for failure to comply with purchase orders on that day; or that penalties were exacted from it by customers whose orders could not be filled that day of the demonstration; or that purchase orders were cancelled by the customers by reason of its failure to deliver the materials ordered; or that its own equipment or materials or products were damaged due to absence of its workers on March 4, 1969. On the contrary, the company saved a sizable amount in the form of wages for its hundreds of workers, cost of fuel, water and electric consumption that day. Such savings could have amply compensated for unrealized profits or damages it might have sustained by reason of the absence of its workers for only one day. IV Apart from violating the constitutional guarantees of free speech and assembly as well as the right to petition for redress of grievances of the employees, the dismissal of the eight (8) leaders of the workers for proceeding with the demonstration and consequently being absent from work, constitutes a denial of social justice likewise assured by the

fundamental law to these lowly employees. Section 5 of Article II of the Constitution imposes upon the State "the promotion of social justice to insure the well-being and economic security of all of the people," which guarantee is emphasized by the other directive in Section 6 of Article XIV of the Constitution that "the State shall afford protection to labor ...". Respondent Court of Industrial Relations as an agency of the State is under obligation at all times to give meaning and substance to these constitutional guarantees in favor of the working man; for otherwise these constitutional safeguards would be merely a lot of "meaningless constitutional patter." Under the Industrial Peace Act, the Court of Industrial Relations is enjoined to effect the policy of the law "to eliminate the causes of industrial unrest by encouraging and protecting the exercise by employees of their right to self-organization for the purpose of collective bargaining and for the promotion of their moral, social and economic well-being." It is most unfortunate in the case at bar that respondent Court of Industrial Relations, the very governmental agency designed therefor, failed to implement this policy and failed to keep faith with its avowed mission its raison d'etre as ordained and directed by the Constitution. V It has been likewise established that a violation of a constitutional right divests the court of jurisdiction; and as a consequence its judgment is null and void and confers no rights. Relief from a criminal conviction secured at the sacrifice of constitutional liberties, may be obtained through habeas corpus proceedings even long after the finality of the judgment. Thus, habeas corpus is the remedy to obtain the release of an individual, who is convicted by final judgment through a forced confession, which violated his 25 constitutional right against self-incrimination; or who is denied the right to present evidence in his defense as a deprivation of his liberty without due 26 process of law, even after the accused has already served sentence for 27 twenty-two years. Both the respondents Court of Industrial Relations and private firm trenched upon these constitutional immunities of petitioners. Both failed to accord preference to such rights and aggravated the inhumanity to which the aggrieved workers claimed they had been subjected by the municipal police. Having violated these basic human rights of the laborers, the Court of Industrial Relations ousted itself of jurisdiction and the questioned orders it issued in the instant case are a nullity. Recognition and protection of such 28 freedoms are imperative on all public offices including the courts as well as private citizens and corporations, the exercise and enjoyment of which must not be nullified by mere procedural rule promulgated by the Court Industrial Relations exercising a purely delegate legislative power, when even a law enacted by Congress must yield to the untrammelled enjoyment of these human rights. There is no time limit to the exercise of the freedoms. The right

to enjoy them is not exhausted by the delivery of one speech, the printing of one article or the staging of one demonstration. It is a continuing immunity to be invoked and exercised when exigent and expedient whenever there are errors to be rectified, abuses to be denounced, inhumanities to be condemned. Otherwise these guarantees in the Bill of Rights would be vitiated by rule on procedure prescribing the period for appeal. The battle then would be reduced to a race for time. And in such a contest between an employer and its laborer, the latter eventually loses because he cannot employ the best an dedicated counsel who can defend his interest with the required diligence and zeal, bereft as he is of the financial resources with 28 which to pay for competent legal services. -a VI The Court of Industrial Relations rule prescribes that motion for reconsideration of its order or writ should filed within five (5) days from notice thereof and that the arguments in support of said motion shall be filed within ten (10) days from the date of filing of such motion for reconsideration (Sec. 16). As above intimated, these rules of procedure were promulgated by the 29 Court of Industrial Relations pursuant to a legislative delegation. The motion for reconsideration was filed on September 29, 1969, or seven (7) days from notice on September 22, 1969 of the order dated September 15, 1969 or two (2) days late. Petitioners claim that they could have filed it on September 28, 1969, but it was a Sunday. Does the mere fact that the motion for reconsideration was filed two (2) days late defeat the rights of the petitioning employees? Or more directly and concretely, does the inadvertent omission to comply with a mere Court of Industrial Relations procedural rule governing the period for filing a motion for reconsideration or appeal in labor cases, promulgated pursuant to a legislative delegation, prevail over constitutional rights? The answer should be obvious in the light of the aforecited cases. To accord supremacy to the foregoing rules of the Court of Industrial Relations over basic human rights sheltered by the Constitution, is not only incompatible with the basic tenet of constitutional government that the Constitution is superior to any statute or subordinate rules and regulations, but also does violence to natural reason and logic. The dominance and superiority of the constitutional right over the aforesaid Court of Industrial Relations procedural rule of necessity should be affirmed. Such a Court of Industrial Relations rule as applied in this case does not implement or reinforce or strengthen the constitutional rights affected,' but instead constrict the same to the point of nullifying the enjoyment thereof by the petitioning employees. Said Court of Industrial Relations rule, promulgated as it was pursuant to a mere legislative delegation, is unreasonable and therefore is beyond the authority granted by the Constitution and the law. A period of five (5) days within which to file a

motion for reconsideration is too short, especially for the aggrieved workers, who usually do not have the ready funds to meet the necessary expenses therefor. In case of the Court of Appeals and the Supreme Court, a period of fifteen (15) days has been fixed for the filing of the motion for re hearing or reconsideration (See. 10, Rule 51; Sec. 1, Rule 52; Sec. 1, Rule 56, Revised Rules of Court). The delay in the filing of the motion for reconsideration could have been only one day if September 28, 1969 was not a Sunday. This fact accentuates the unreasonableness of the Court of Industrial are concerned. It should be stressed here that the motion for reconsideration dated September 27, 1969, is based on the ground that the order sought to be reconsidered "is not in accordance with law, evidence and facts adduced during the hearing," and likewise prays for an extension of ten (10) days within which to file arguments pursuant to Sections 15, 16 and 17 of the Rules of the Court of Industrial Relations (Annex "G", pp. 57-60, rec.); although the arguments were actually filed by the herein petitioners on October 14, 1969 (Annex "I", pp. 70-73, rec.), long after the 10-day period required for the filing of such supporting arguments counted from the filing of the motion for reconsideration. Herein petitioners received only on October 28, 1969 the resolution dated October 9, 1969 dismissing the motion for reconsideration for being pro forma since it was filed beyond the reglementary period (Annex "J", pp. 74-75, rec.) It is true that We ruled in several cases that where a motion to reconsider is filed out of time, or where the arguments in suppf such motion are filed beyond the 10 day reglementary period provided for by the Court of Industrial 29 Relations rules, the order or decision subject of -a reconsideration becomes final and unappealable. But in all these cases, the constitutional rights of free expression, free assembly and petition were not involved. It is a procedural rule that generally all causes of action and defenses presently available must be specifically raised in the complaint or answer; so that any cause of action or defense not raised in such pleadings, is deemed waived. However, a constitutional issue can be raised any time, even for the first time on appeal, if it appears that the determination of the constitutional issue is necessary to a decision of the case, the very lis mota of the case without the resolution of which no final and complete determination of the 30 dispute can be made. It is thus seen that a procedural rule of Congress or of the Supreme Court gives way to a constitutional right. In the instant case, the procedural rule of the Court of Industrial Relations, a creature of Congress, must likewise yield to the constitutional rights invoked by herein petitioners even before the institution of the unfair labor practice charged against them and in their defense to the said charge.

In the case at bar, enforcement of the basic human freedoms sheltered no less by the organic law, is a most compelling reason to deny application of a 30 Court of Industrial Relations rule which impinges on such human rights. -a It is an accepted principle that the Supreme Court has the inherent power to "suspend its own rules or to except a particular case from its operation, 30 whenever the purposes of justice require." -b Mr. Justice Barredo in his 30 concurring opinion in Estrada vs. Sto. Domingo. -c reiterated this principle and added that Under this authority, this Court is enabled to cove with all situations without concerning itself about procedural niceties that do not square with the need to do justice, in any case, without further loss of time, provided that the right of the parties to a full day in court is not substantially impaired. Thus, this Court may treat an appeal as a certiorari and viceversa. In other words, when all the material facts are spread in the records before Us, and all the parties have been duly heard, it matters little that the error of the court a quo is of judgment or of jurisdiction. We can then and there render the appropriate judgment. Is within the contemplation of this doctrine that as it is perfectly legal and within the power of this Court to strike down in an appeal acts without or in excess of jurisdiction or committed with grave abuse of discretion, it cannot be beyond the admit of its authority, in appropriate cases, to reverse in a certain proceed in any error of judgment of a court a quo which cannot be exactly categorized as a flaw of jurisdiction. If there can be any doubt, which I do not entertain, on whether or not the errors this Court has found in the decision of the Court of Appeals are short of being jurisdiction nullities or excesses, this Court would still be on firm legal grounds should it choose to reverse said decision here and now even if such errors can be considered as mere mistakes of judgment or only as faults in the exercise of jurisdiction, so as to avoid the unnecessary return of this case to the lower court for the sole purpose of pursuing the ordinary course of an appeal. 30 (Emphasis supplied). -d Insistence on the application of the questioned Court industrial Relations rule in this particular case at bar would an unreasoning adherence to "Procedural niceties" which denies justice to the herein laborers, whose basic human freedoms, including the right to survive, must be according supremacy over the property rights of their employer firm which has been given a full hearing on this case, especially when, as in the case at bar, no actual material damage has be demonstrated as having been inflicted on its property rights.

If We can disregard our own rules when justice requires it, obedience to the Constitution renders more imperative the suspension of a Court of Industrial Relations rule that clash with the human rights sanctioned and shielded with resolution concern by the specific guarantees outlined in the organic law. It should be stressed that the application in the instant case Section 15 of the Court of Industrial Relations rules relied upon by herein respondent firm is unreasonable and therefore such application becomes unconstitutional as it subverts the human rights of petitioning labor union and workers in the light of the peculiar facts and circumstances revealed by the record. The suspension of the application of Section 15 of the Court of Industrial Relations rules with reference to the case at is also authorized by Section 20 of Commonwealth Act No. 103, the C.I.R. charter, which enjoins the Court of Industrial Relations to "act according to justice and equity and substantial merits of the case, without regard to technicalities or legal forms ..." On several occasions, We emphasized this doctrine which was re-stated by Mr. Justice Barredo, speaking for the Court, in the 1970 case of Kapisanan, 30 etc. vs. Hamilton, etc., et. al., -e thus: As to the point that the evidence being offered by the petitioners in the motion for new trial is not "newly discovered," as such term is understood in the rules of procedure for the ordinary courts, We hold that such criterion is not binding upon the Court of Industrial Relations. Under Section 20 of Commonwealth Act No. 103, 'The Court of Industrial Relations shall adopt its, rules or procedure and shall have such other powers as generally pertain to a court of justice: Provided, however, That in the hearing, investigation and determination of any question or controversy and in exercising any duties and power under this Act, the Court shall act according to justice and equity and substantial merits of the case, without regard to technicalities or legal forms and shall not be bound by any technical rules of legal evidence but may inform its mind in such manner as it may deem just and equitable.' By this provision the industrial court is disengaged from the rigidity of the technicalities applicable to ordinary courts. Said court is not even restricted to the specific relief demanded by the parties but may issue such orders as may be deemed necessary or expedient for the purpose of settling the dispute or dispelling any doubts that may give rise to future disputes. (Ang Tibay v. C.I.R., G.R. No. 46496, Feb. 17, 1940; Manila Trading & Supply Co. v. Phil. Labor, 71 Phil. 124.) For these reasons, We believe that this provision is ample enough to have enabled the respondent court to

consider whether or not its previous ruling that petitioners constitute a minority was founded on fact, without regard to the technical meaning of newly discovered evidence. ... (Alonso v. Villamor, 16 Phil. 315; Chua Kiong v. Whitaker, 46 Phil. 578). (emphasis supplied.) To apply Section 15 of the Court of Industrial Relations rules with "pedantic rigor" in the instant case is to rule in effect that the poor workers, who can illafford an alert competent lawyer, can no longer seek the sanctuary of human freedoms secured to them by the fundamental law, simply because their counsel erroneously believing that he received a copy of the decision on September 23, 1969, instead of September 22, 1969 - filed his motion for reconsideration September 29, 1969, which practically is only one day late considering that September 28, 1969 was a Sunday. Many a time, this Court deviated from procedure technicalities when they ceased to be instruments of justice, for the attainment of which such rules have been devised. Summarizing the jurisprudence on this score, Mr. Justice 30 Fernando, speaking for a unanimous Court in Palma vs. Oreta, -f Stated: As was so aptly expressed by Justice Moreland in Alonso v. Villamor (16 Phil. 315 [1910]. The Villamor decision was cited with approval in Register of Deeds v. Phil. Nat. Bank, 84 Phil. 600 [1949]; Potenciano v. Court of Appeals, 104 Phil. 156 [1958] and Uy v. Uy, 14243, June 30, 1961, 2 SCRA 675.), decided as far back as 1910, "technicality. when it deserts its proper-office as an aid to justice and becomes its great hindrance and chief enemy, deserves scant consideration from courts." (Ibid., p, 322.) To that norm, this Court has remained committed. The late Justice Recto in Blanco v. Bernabe, (63 Phil. 124 [1936]) was of a similar mind. For him the interpretation of procedural rule should never "sacrifice the ends justice." While "procedural laws are no other than technicalities" view them in their entirety, 'they were adopted not as ends themselves for the compliance with which courts have organized and function, but as means conducive to the realization the administration of the law and of justice (Ibid., p.,128). We have remained steadfastly opposed, in the highly rhetorical language Justice Felix, to "a sacrifice of substantial rights of a litigant in altar of sophisticated technicalities with impairment of the sacred principles of justice." (Potenciano v. Court of Appeals, 104 Phil. 156, 161 [1958]). As succinctly put by Justice Makalintal, they "should give way to the realities of the situation." (Urbayan v. Caltex, L-15379, Aug. 31, 1962, 5 SCRA 1016, 1019). In the latest decision in point

promulgated in 1968, (Udan v. Amon, (1968, 23 SCRA citing McEntee v. Manotok, L-14968, Oct. 27, 1961, 3 SCRA 272.) Justice Zaldivar was partial to an earlier formulation of Justice Labrador that rules of procedure "are not to be applied in a very rigid, technical sense"; but are intended "to 30 help secure substantial justice." (Ibid., p. 843) ... -g Even if the questioned Court of Industrial Relations orders and rule were to be given effect, the dismissal or termination of the employment of the petitioning eight (8) leaders of the Union is harsh for a one-day absence from work. The respondent Court itself recognized the severity of such a sanction when it did not include the dismissal of the other 393 employees who are members of the same Union and who participated in the demonstration against the Pasig police. As a matter of fact, upon the intercession of the Secretary of Labor, the Union members who are not officers, were not dismissed and only the Union itself and its thirteen (13) officers were specifically named as respondents in the unfair labor practice charge filed against them by the firm (pp. 16-20, respondent's Brief; Annexes "A", "B" and "C", pp. 20-30, rec.). Counsel for respondent firm insinuates that not all the 400 or so employee participated in the demonstration, for which reason only the Union and its thirteen (13) officers were specifically named in the unfair labor practice charge (p. 20, respondent's brief). If that were so, then many, if not all, of the morning and regular shifts reported for work on March 4, 1969 and that, as a consequence, the firm continued in operation that day and did not sustain any damage. The appropriate penalty if it deserves any penalty at all should have been simply to charge said one-day absence against their vacation or sick leave. But to dismiss the eight (8) leaders of the petitioner Union is a most cruel penalty, since as aforestated the Union leaders depend on their wages for their daily sustenance as well as that of their respective families aside from the fact that it is a lethal blow to unionism, while at the same time strengthening the oppressive hand of the petty tyrants in the localities. Mr. Justice Douglas articulated this pointed reminder: The challenge to our liberties comes frequently not from those who consciously seek to destroy our system of Government, but from men of goodwill good men who allow their proper concerns to blind them to the fact that what they propose to accomplish involves an impairment of liberty. ... The Motives of these men are often commendable. What we must remember, however, is that preservation of liberties

does not depend on motives. A suppression of liberty has the same effect whether the suppress or be a reformer or an outlaw. The only protection against misguided zeal is a constant alertness of the infractions of the guarantees of liberty contained in our Constitution. Each surrender of liberty to the demands of the moment makes easier another, larger surrender. The battle over the Bill of Rights is a never ending one. ... The liberties of any person are the liberties of all of us.

organization that includes concerted activity for mutual aid and protection, (Section 3 of the Industrial Peace Act ...) This is the view of some members of this Court. For, as has been aptly stated, the joining in protests or demands, even by a small group of employees, if in furtherance of their interests as such, is a concerted activity protected by the Industrial Peace Act. It is not necessary that union activity be involved or that collective bargaining be contemplated. (Annot., 6 A.L.R. 2d 416 [1949]). xxx xxx xxx

... In short, the Liberties of none are safe unless the liberties of all are protected. ... But even if we should sense no danger to our own liberties, even if we feel secure because we belong to a group that is important and respected, we must recognize that our Bill of Rights is a code of fair play for the less fortunate that we in all honor and good conscience must be 31 observe. The case at bar is worse. Management has shown not only lack of good-will or good intention, but a complete lack of sympathetic understanding of the plight of its laborers who claim that they are being subjected to indignities by the local police, It was more expedient for the firm to conserve its income or profits than to assist its employees in their fight for their freedoms and security against alleged petty tyrannies of local police officers. This is sheer opportunism. Such opportunism and expediency resorted to by the respondent company assaulted the immunities and welfare of its employees. It was pure and implement selfishness, if not greed. Of happy relevance is the 1967 case of Republic Savings Bank vs. C.I.R., where the petitioner Bank dismissed eight (8) employees for having written and published "a patently libelous letter ... to the Bank president demanding his resignation on the grounds of immorality, nepotism in the appointment and favoritism as well as discrimination in the promotion of bank employees." Therein, thru Mr. Justice Castro, We ruled: It will avail the Bank none to gloat over this admission of the respondents. Assuming that the latter acted in their individual capacities when they wrote the letter-charge they were nonetheless protected for they were engaged in concerted activity, in the exercise of their right of self
32

Instead of stifling criticism, the Bank should have allowed the respondents to air their grievances. xxx xxx xxx The Bank defends its action by invoking its right to discipline for what it calls the respondents' libel in giving undue publicity to their letter-charge. To be sure, the right of selforganization of employees is not unlimited (Republic Aviation Corp. vs. NLRB 324 U.S. 793 [1945]), as the right of the employer to discharge for cause (Philippine Education Co. v. Union of Phil. Educ. Employees, L-13773, April 29, 1960) is undenied. The Industrial Peace Act does not touch the normal exercise of the right of the employer to select his employees or to discharge them. It is directed solely against the abuse of that right by interfering with the countervailing right of self organization (Phelps Dodge Corp. v. NLRB 313 U.S. 177 [1941])... xxx xxx xxx In the final sum and substance, this Court is in unanimity that the Bank's conduct, identified as an interference with the employees' right of self-organization or as a retaliatory action, and/or as a refusal to bargain collectively, constituted an unfair labor practice within the meaning and intendment of section 4(a) of the Industrial Peace Act. (Emphasis 33 supplied.) If free expression was accorded recognition and protection to fortify labor unionism in the Republic Savings case, supra, where the complaint assailed the morality and integrity of the bank president no less, such recognition and protection for free speech, free assembly and right to petition are rendered all

the more justifiable and more imperative in the case at bar, where the mass demonstration was not against the company nor any of its officers. WHEREFORE, judgement is hereby rendered: (1) setting aside as null and void the orders of the respondent Court of Industrial Relations dated September 15 and October 9, 1969; and (2) directing the re instatement of the herein eight (8) petitioners, with full back pay from the date of their separation from the service until re instated, minus one day's pay and whatever earnings they might have realized from other sources during their separation from the service. With costs against private respondent Philippine Blooming Company, Inc. G.R. No. L-63915 April 24, 1985 LORENZO M. TAADA, ABRAHAM F. SARMIENTO, and MOVEMENT OF ATTORNEYS FOR BROTHERHOOD, INTEGRITY AND NATIONALISM, INC. [MABINI], petitioners, vs. HON. JUAN C. TUVERA, in his capacity as Executive Assistant to the President, HON. JOAQUIN VENUS, in his capacity as Deputy Executive Assistant to the President , MELQUIADES P. DE LA CRUZ, in his capacity as Director, Malacaang Records Office, and FLORENDO S. PABLO, in his capacity as Director, Bureau of Printing, respondents.

325, 326, 337, 355, 358, 359, 360, 361, 368, 404, 406, 415, 427, 429, 445, 447, 473, 486, 491, 503, 504, 521, 528, 551, 566, 573, 574, 594, 599, 644, 658, 661, 718, 731, 733, 793, 800, 802, 835, 836, 923, 935, 961, 1017-1030, 1050, 10601061, 1085, 1143, 1165, 1166, 1242, 1246, 1250, 1278, 1279, 1300, 1644, 1772, 1808, 1810, 1813-1817, 18191826, 1829-1840, 1842-1847. b] Letter of Instructions Nos.: 10, 39, 49, 72, 107, 108, 116, 130, 136, 141, 150, 153, 155, 161, 173, 180, 187, 188, 192, 193, 199, 202, 204, 205, 209, 211-213, 215-224, 226-228, 231-239, 241-245, 248, 251, 253-261, 263-269, 271-273, 275-283, 285-289, 291, 293, 297-299, 301-303, 309, 312315, 325, 327, 343, 346, 349, 357, 358, 362, 367, 370, 382, 385, 386, 396-397, 405, 438-440, 444- 445, 473, 486, 488, 498, 501, 399, 527, 561, 576, 587, 594, 599, 600, 602, 609, 610, 611, 612, 615, 641, 642, 665, 702, 712-713, 726, 837839, 878-879, 881, 882, 939-940, 964,997,1149-1178,11801278. c] General Orders Nos.: 14, 52, 58, 59, 60, 62, 63, 64 & 65. d] Proclamation Nos.: 1126, 1144, 1147, 1151, 1196, 1270, 1281, 1319-1526, 1529, 1532, 1535, 1538, 1540-1547, 1550-1558, 1561-1588, 1590-1595, 1594-1600, 1606-1609, 1612-1628, 1630-1649, 1694-1695, 1697-1701, 1705-1723, 1731-1734, 1737-1742, 1744, 1746-1751, 1752, 1754, 1762, 1764-1787, 1789-1795, 1797, 1800, 1802-1804, 1806-1807, 1812-1814, 1816, 1825-1826, 1829, 1831-1832, 1835-1836, 1839-1840, 1843-1844, 1846-1847, 1849, 1853-1858, 1860, 1866, 1868, 1870, 1876-1889, 1892, 1900, 1918, 1923, 1933, 1952, 1963, 1965-1966, 1968-1984, 1986-2028, 20302044, 2046-2145, 2147-2161, 2163-2244. e] Executive Orders Nos.: 411, 413, 414, 427, 429-454, 457471, 474-492, 494-507, 509-510, 522, 524-528, 531-532, 536, 538, 543-544, 549, 551-553, 560, 563, 567-568, 570, 574, 593, 594, 598-604, 609, 611- 647, 649-677, 679-703, 705-707, 712-786, 788-852, 854-857. f] Letters of Implementation Nos.: 7, 8, 9, 10, 11-22, 25-27, 39, 50, 51, 59, 76, 80-81, 92, 94, 95, 107, 120, 122, 123. g] Administrative Orders Nos.: 347, 348, 352-354, 360- 378, 380-433, 436-439.

ESCOLIN, J.: Invoking the people's right to be informed on matters of public concern, a 1 right recognized in Section 6, Article IV of the 1973 Philippine Constitution, as well as the principle that laws to be valid and enforceable must be published in the Official Gazette or otherwise effectively promulgated, petitioners seek a writ of mandamus to compel respondent public officials to publish, and/or cause the publication in the Official Gazette of various presidential decrees, letters of instructions, general orders, proclamations, executive orders, letter of implementation and administrative orders. Specifically, the publication of the following presidential issuances is sought: a] Presidential Decrees Nos. 12, 22, 37, 38, 59, 64, 103, 171, 179, 184, 197, 200, 234, 265, 286, 298, 303, 312, 324,

The respondents, through the Solicitor General, would have this case dismissed outright on the ground that petitioners have no legal personality or standing to bring the instant petition. The view is submitted that in the absence of any showing that petitioners are personally and directly affected or prejudiced by the alleged non-publication of the presidential issuances in 2 question said petitioners are without the requisite legal personality to institute this mandamus proceeding, they are not being "aggrieved parties" within the meaning of Section 3, Rule 65 of the Rules of Court, which we quote: SEC. 3. Petition for Mandamus.When any tribunal, corporation, board or person unlawfully neglects the performance of an act which the law specifically enjoins as a duty resulting from an office, trust, or station, or unlawfully excludes another from the use a rd enjoyment of a right or office to which such other is entitled, and there is no other plain, speedy and adequate remedy in the ordinary course of law, the 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 defendant, immediately or at some other specified time, to do the act required to be done to Protect the rights of the petitioner, and to pay the damages sustained by the petitioner by reason of the wrongful acts of the defendant. Upon the other hand, petitioners maintain that since the subject of the petition concerns a public right and its object is to compel the performance of a public duty, they need not show any specific interest for their petition to be given due course. The issue posed is not one of first impression. As early as the 1910 case of 3 Severino vs. Governor General, this Court held that while the general rule is that "a writ of mandamus would be granted to a private individual only in those cases where he has some private or particular interest to be subserved, or some particular right to be protected, independent of that which he holds with the public at large," and "it is for the public officers exclusively to apply for the writ when public rights are to be subserved [Mithchell vs. Boardmen, 79 M.e., 469]," nevertheless, "when the question is one of public right and the object of the mandamus is to procure the enforcement of a public duty, the people are regarded as the real party in interest and the relator at whose instigation the proceedings are instituted need not show that he has any legal or special interest in the result, it being sufficient to show that he is a citizen and as such interested in the execution of the laws [High, Extraordinary Legal Remedies, 3rd ed., sec. 431].

Thus, in said case, this Court recognized the relator Lope Severino, a private individual, as a proper party to the mandamus proceedings brought to compel the Governor General to call a special election for the position of municipal president in the town of Silay, Negros Occidental. Speaking for this Court, Mr. Justice Grant T. Trent said: We are therefore of the opinion that the weight of authority supports the proposition that the relator is a proper party to proceedings of this character when a public right is sought to be enforced. If the general rule in America were otherwise, we think that it would not be applicable to the case at bar for the reason 'that it is always dangerous to apply a general rule to a particular case without keeping in mind the reason for the rule, because, if under the particular circumstances the reason for the rule does not exist, the rule itself is not applicable and reliance upon the rule may well lead to error' No reason exists in the case at bar for applying the general rule insisted upon by counsel for the respondent. The circumstances which surround this case are different from those in the United States, inasmuch as if the relator is not a proper party to these proceedings no other person could be, as we have seen that it is not the duty of the law officer of the Government to appear and represent the people in cases of this character. The reasons given by the Court in recognizing a private citizen's legal personality in the aforementioned case apply squarely to the present petition. Clearly, the right sought to be enforced by petitioners herein is a public right recognized by no less than the fundamental law of the land. If petitioners were not allowed to institute this proceeding, it would indeed be difficult to conceive of any other person to initiate the same, considering that the Solicitor General, the government officer generally empowered to represent the people, has entered his appearance for respondents in this case. Respondents further contend that publication in the Official Gazette is not a sine qua non requirement for the effectivity of laws where the laws themselves provide for their own effectivity dates. It is thus submitted that since the presidential issuances in question contain special provisions as to the date they are to take effect, publication in the Official Gazette is not indispensable for their effectivity. The point stressed is anchored on Article 2 of the Civil Code:

Art. 2. Laws shall take effect after fifteen days following the completion of their publication in the Official Gazette, unless it is otherwise provided, ... The interpretation given by respondent is in accord with this Court's 4 construction of said article. In a long line of decisions, this Court has ruled that publication in the Official Gazette is necessary in those cases where the legislation itself does not provide for its effectivity date-for then the date of publication is material for determining its date of effectivity, which is the fifteenth day following its publication-but not when the law itself provides for the date when it goes into effect. Respondents' argument, however, is logically correct only insofar as it equates the effectivity of laws with the fact of publication. Considered in the light of other statutes applicable to the issue at hand, the conclusion is easily reached that said Article 2 does not preclude the requirement of publication in the Official Gazette, even if the law itself provides for the date of its effectivity. Thus, Section 1 of Commonwealth Act 638 provides as follows: Section 1. There shall be published in the Official Gazette [1] all important legisiative acts and resolutions of a public nature of the, Congress of the Philippines; [2] all executive and administrative orders and proclamations, except such as have no general applicability; [3] decisions or abstracts of decisions of the Supreme Court and the Court of Appeals as may be deemed by said courts of sufficient importance to be so published; [4] such documents or classes of documents as may be required so to be published by law; and [5] such documents or classes of documents as the President of the Philippines shall determine from time to time to have general applicability and legal effect, or which he may authorize so to be published. ... The clear object of the above-quoted provision is to give the general public adequate notice of the various laws which are to regulate their actions and conduct as citizens. Without such notice and publication, there would be no basis for the application of the maxim "ignorantia legis non excusat." It would be the height of injustice to punish or otherwise burden a citizen for the transgression of a law of which he had no notice whatsoever, not even a constructive one. Perhaps at no time since the establishment of the Philippine Republic has the publication of laws taken so vital significance that at this time when the people have bestowed upon the President a power heretofore enjoyed solely by the legislature. While the people are kept abreast by the mass media of

the debates and deliberations in the Batasan Pambansaand for the diligent ones, ready access to the legislative recordsno such publicity accompanies the law-making process of the President. Thus, without publication, the people have no means of knowing what presidential decrees have actually been promulgated, much less a definite way of informing themselves of the specific contents and texts of such decrees. As the Supreme Court of Spain ruled: "Bajo la denominacion generica de leyes, se comprenden tambien los reglamentos, Reales decretos, Instrucciones, Circulares y Reales ordines dictadas de conformidad con las mismas por el 5 Gobierno en uso de su potestad. The very first clause of Section I of Commonwealth Act 638 reads: "There shall be published in the Official Gazette ... ." The word "shall" used therein imposes upon respondent officials an imperative duty. That duty must be enforced if the Constitutional right of the people to be informed on matters of public concern is to be given substance and reality. The law itself makes a list of what should be published in the Official Gazette. Such listing, to our mind, leaves respondents with no discretion whatsoever as to what must be included or excluded from such publication. The publication of all presidential issuances "of a public nature" or "of general applicability" is mandated by law. Obviously, presidential decrees that provide for fines, forfeitures or penalties for their violation or otherwise impose a burden or. the people, such as tax and revenue measures, fall within this category. Other presidential issuances which apply only to particular persons or class of persons such as administrative and executive orders need not be published on the assumption that they have been 6 circularized to all concerned. It is needless to add that the publication of presidential issuances "of a public nature" or "of general applicability" is a requirement of due process. It is a rule of law that before a person may be bound by law, he must first be officially and specifically informed of its contents. As Justice Claudio 7 Teehankee said in Peralta vs. COMELEC : In a time of proliferating decrees, orders and letters of instructions which all form part of the law of the land, the requirement of due process and the Rule of Law demand that the Official Gazette as the official government repository promulgate and publish the texts of all such decrees, orders and instructions so that the people may know where to obtain their official and specific contents. The Court therefore declares that presidential issuances of general application, which have not been published, shall have no force and effect.

Some members of the Court, quite apprehensive about the possible unsettling effect this decision might have on acts done in reliance of the validity of those presidential decrees which were published only during the pendency of this petition, have put the question as to whether the Court's declaration of invalidity apply to P.D.s which had been enforced or implemented prior to their publication. The answer is all too familiar. In similar situations in the past this Court had taken the pragmatic and realistic course 8 set forth in Chicot County Drainage District vs. Baxter Bank to wit: The courts below have proceeded on the theory that the Act of Congress, having been found to be unconstitutional, was not a law; that it was inoperative, conferring no rights and imposing no duties, and hence affording no basis for the challenged decree. Norton v. Shelby County, 118 U.S. 425, 442; Chicago, 1. & L. Ry. Co. v. Hackett, 228 U.S. 559, 566. It is quite clear, however, that such broad statements as to the effect of a determination of unconstitutionality must be taken with qualifications. The actual existence of a statute, prior to such a determination, is an operative fact and may have consequences which cannot justly be ignored. The past cannot always be erased by a new judicial declaration. The effect of the subsequent ruling as to invalidity may have to be considered in various aspects-with respect to particular conduct, private and official. Questions of rights claimed to have become vested, of status, of prior determinations deemed to have finality and acted upon accordingly, of public policy in the light of the nature both of the statute and of its previous application, demand examination. These questions are among the most difficult of those which have engaged the attention of courts, state and federal and it is manifest from numerous decisions that an all-inclusive statement of a principle of absolute retroactive invalidity cannot be justified. Consistently with the above principle, this Court in Rutter vs. Esteban sustained the right of a party under the Moratorium Law, albeit said right had accrued in his favor before said law was declared unconstitutional by this Court. Similarly, the implementation/enforcement of presidential decrees prior to their publication in the Official Gazette is "an operative fact which may have consequences which cannot be justly ignored. The past cannot always be erased by a new judicial declaration ... that an all-inclusive statement of a principle of absolute retroactive invalidity cannot be justified."
9

From the report submitted to the Court by the Clerk of Court, it appears that of the presidential decrees sought by petitioners to be published in the Official Gazette, only Presidential Decrees Nos. 1019 to 1030, inclusive, 10 1278, and 1937 to 1939, inclusive, have not been so published. Neither the subject matters nor the texts of these PDs can be ascertained since no copies thereof are available. But whatever their subject matter may be, it is undisputed that none of these unpublished PDs has ever been implemented 11 or enforced by the government. In Pesigan vs. Angeles, the Court, through Justice Ramon Aquino, ruled that "publication is necessary to apprise the public of the contents of [penal] regulations and make the said penalties binding on the persons affected thereby. " The cogency of this holding is apparently recognized by respondent officials considering the manifestation in their comment that "the government, as a matter of policy, refrains from prosecuting violations of criminal laws until the same shall have been published in the Official Gazette or in some other publication, even though some criminal laws provide that they shall take effect immediately. WHEREFORE, the Court hereby orders respondents to publish in the Official Gazette all unpublished presidential issuances which are of general application, and unless so published, they shall have no binding force and effect. SO ORDERED.

G.R. No. L-44143 August 31, 1988 THE PEOPLE OF THE PHILIPPINES, plaintiff, vs. EUSEBIO NAZARIO, accused-appellant. The Solicitor General for plaintiff-appellee. Teofilo Ragodon for accused-appellant.

Contrary to law. For the prosecution the following witnesses testified in substance as follows; MIGUEL FRANCIA, 39 years of age, married, farmer and resident of Lopez, Quezon In 1962 to 1967, I resided at Pinagbayanan, Pagbilao, Quezon. I know the accused as I worked in his fishpond in 1962 to 1964. The fishpond of Nazario is at Pinagbayanan, Pagbilao, Quezon. I worked in the clearing of the fishpond, the construction of the dikes and the catching of fish. On cross-examination, this witness declared: I worked with the accused up to March 1964. NICOLAS MACAROLAY, 65 years of age, married, copra maker and resident of Pinagbayanan, Pagbilao, Quezon I resided at Pinagbayanan, Pagbilao, Quezon since 1959 up to the present. I know the accused since 1959 when he opened a fishpond at Pinagbayanan, Pagbilao, Quezon. He still operates the fishpond up to the present and I know this fact as I am the barrio captain of Pinagbayanan. On cross-examination, this witness declared: I came to know the accused when he first operated his fishpond since 1959. On re-direct examination, this witness declared: I was present during the catching of fish in 1967 and the accused was there. On re-cross examination, this witness declared: I do not remember the month in 1962 when the accused caught fish.

SARMIENTO, J.: The petitioner was charged with violation of certain municipal ordinances of the municipal council of Pagbilao, in Quezon province. By way of confession and avoidance, the petitioner would admit having committed the acts charged but would claim that the ordinances are unconstitutional, or, assuming their constitutionality, that they do not apply to him in any event. The facts are not disputed: This defendant is charged of the crime of Violation of Municipal Ordinance in an information filed by the provincial Fiscal, dated October 9, 1968, as follows: That in the years 1964, 1965 and 1966, in the Municipality of Pagbilao, Province of Quezon, Philippines, and within the jurisdiction of this Honorable Court, the above-named accused, being then the owner and operator of a fishpond situated in the barrio of Pinagbayanan, of said municipality, did then and there willfully, unlawfully and feloniously refuse and fail to pay the municipal taxes in the total amount of THREE HUNDRED SIXTY TWO PESOS AND SIXTY TWO CENTAVOS (P362.62), required of him as fishpond operator as provided for under Ordinance No. 4, series of 1955, as amended, inspite of repeated demands made upon him by the Municipal Treasurer of Pagbilao, Quezon, to pay the same.

RODOLFO R. ALVAREZ, 45 years old, municipal treasurer of Pagbilao, Quezon, married As Municipal Treasurer I am in charge of tax collection. I know the accused even before I was Municipal Treasurer of Pagbilao. I have written the accused a letter asking him to pay his taxes (Exhibit B). Said letter was received by the accused as per registry return receipt, Exhibit B-1. The letter demanded for payment of P362.00, more or less, by way of taxes which he did not pay up to the present. The former Treasurer, Ceferino Caparros, also wrote a letter of demand to the accused (Exhibit C). On June 28, 1967, I sent a letter to the Fishery Commission (Exhibit D), requesting information if accused paid taxes with that office. The Commission sent me a certificate (Exhibits D-1, D-2 & D-3). The accused had a fishpond lease agreement. The taxes unpaid were for the years 1964, 1965 and 1966. On cross-examination, this witness declared: I have demanded the taxes for 38.10 hectares. On question of the court, this witness declared: What I was collecting from the accused is the fee on fishpond operation, not rental. The prosecution presented as part of their evidence Exhibits A, A-1, A-2, B, B-2, C, D, D-1, D-2, D-3, E, F, F-1 and the same were admitted by the court, except Exhibits D, D-1, D2 and D-3 which were not admitted for being immaterial. For the defense the accused EUSEBIO NAZARIO, 48 years of age, married, owner and general manager of the ZIP Manufacturing Enterprises and resident of 4801 Old Sta. Mesa, Sampaloc, Manila, declared in substance as follows: I have lived in Sta. Mesa, Manila, since 1949. I buy my Residence Certificates at Manila or at San Juan. In 1964, 1965 and 1966, I was living in Manila and my business is in Manila and my family lives at Manila. I never resided at Pagbilao, Quezon. I do not own a house at Pagbilao. I am a lessee of a fishpond located at Pagbilao, Quezon, and I have a lease agreement to that effect with the Philippine Fisheries Commission marked as Exhibit 1. In 1964, 1965 and 1966,

the contract of lease, Exhibit 1, was still existing and enforceable. The Ordinances Nos. 4, 15 and 12, series of 1955, 1965 and 1966, were translated into English by the Institute of National Language to better understand the ordinances. There were exchange of letters between me and the Municipal Treasurer of Pagbilao regarding the payment of the taxes on my leased fishpond situated at Pagbilao. There was a letter of demand for the payment of the taxes by the treasurer (Exhibit 3) which I received by mail at my residence at Manila. I answered the letter of demand, Exhibit 3, with Exhibit 3-A. I requested an inspection of my fishpond to determine its condition as it was not then in operation. The Municipal Treasurer Alvarez went there once in 1967 and he found that it was destroyed by the typhoon and there were pictures taken marked as Exhibits 4, 4-A, 4-B and 4C. I received another letter of demand, Exhibit 5, and I answered the same (Exhibit 5-A). I copied my reference quoted in Exhibit 5-A from Administrative Order No. 6, Exhibit 6. I received another letter of demand from Tomas Ornedo, Acting Municipal Treasurer of Pagbilao, dated February 16, 1966, Exhibit 7, and I answered the same with the letter marked as Exhibit 7-A, dated February 26, 1966. I received another letter of demand from Treasurer Alvarez of Pagbilao, Exhibit 8, and I answered the same (Exhibit 8-A). In 1964, I went to Treasurer Caparros to ask for an application for license tax and he said none and he told me just to pay my taxes. I did not pay because up to now I do not know whether I am covered by the Ordinance or not. The letters of demand asked me to pay different amounts for taxes for the fishpond. Because under Sec. 2309 of the Revised Administrative Code, municipal taxes lapse if not paid and they are collecting on a lapsed ordinance. Because under the Tax Code, fishermen are exempted from percentage tax and privilege tax. There is no law empowering the municipality to pass ordinance taxing fishpond operators. The defense presented as part of their evidence Exhibits 1, 2, 3, 3-A, 4, 4-B, 4-B, 4-C, 5, 5-A, 6, 6-A, 6-B, 6-C, 7, 7-A, 8 and 8-A and the same were admitted by the court. From their evidence the prosecution would want to show to the court that the accused, as lessee or operator of a fishpond in the municipality of Pagbilao, refused, and still refuses, to pay the municipal taxes for the years 1964, 1965 and 1966, in violation of Municipal Ordinance No. 4, series of 1955, as amended by Municipal Ordinance No. 15, series of

1965, and finally amended by Municipal Ordinance No. 12, series of 1966. On the other hand, the accused, by his evidence, tends to show to the court that the taxes sought to be collected have already lapsed and that there is no law empowering municipalities to pass ordinances taxing fishpond operators. The defense, by their evidence, tried to show further that, as lessee of a forest land to be converted into a fishpond, he is not covered by said municipal ordinances; and finally that the accused should not be taxed as fishpond operator because there is no fishpond yet being operated by him, considering that the supposed fishpond was under construction during the period covered by the taxes sought to be collected. Finally, the defendant claims that the ordinance in question is ultra vires as it is outside of the power of the municipal council of Pagbilao, Quezon, to enact; and that the defendant claims that the ordinance in question is ambiguous and uncertain. There is no question from the evidences presented that the accused is a lessee of a parcel of forest land, with an area of 27.1998 hectares, for fishpond purposes, under Fishpond Lease Agreement No. 1066, entered into by the accused and the government, through the Secretary of Agriculture and Natural Resources on August 21, 1959. There is no question from the evidences presented that the 27.1998 hectares of land leased by the defendant from the government for fishpond purposes was actually converted into fishpond and used as such, and therefore defendant is an operator of a fishpond within the purview of the ordinance 1 in question. The trial Court returned a verdict of guilty and disposed as follows: VIEWED IN THE LIGHT OF ALL THE FOREGOING, the Court finds the accused guilty beyond reasonable doubt of the crime of violation of Municipal Ordinance No. 4, series of 1955, as amended by Ordinance No. 15, series of 1965 and further amended by Ordinance No. 12, series of 1966, of the Municipal Council of Pagbilao, Quezon; and hereby sentences him to pay a fine of P50.00, with subsidiary imprisonment in case of insolvency at the rate of P8.00 a day, and to pay the costs of this proceeding.
2

SO ORDERED.

In this appeal, certified to this Court by the Court of Appeals, the petitioner alleges that: I. THE LOWER COURT ERRED IN NOT DECLARING THAT ORDINANCE NO. 4, SERIES OF 1955, AS AMENDED BY ORDINANCE NO. 15, SERIES OF 1965, AND AS FURTHER AMENDED BY ORDINANCE NO. 12, SERIES OF 1966, OF THE MUNICIPALITY OF PAGBILAO, QUEZON, IS NULL AND VOID FOR BEING AMBIGUOUS AND UNCERTAIN. II. THE LOWER COURT ERRED IN NOT HOLDING THAT THE ORDINANCE IN QUESTION, AS AMENDED, IS UNCONSTITUTIONAL FOR BEING EX POST FACTO. III. THE LOWER COURT ERRED IN NOT HOLDING THAT THE ORDINANCE IN QUESTION COVERS ONLY OWNERS OR OVERSEER OF FISHPONDS OF PRIVATE OWNERSHIP AND NOT TO LESSEES OF PUBLIC LANDS. IV. THE LOWER COURT ERRED IN NOT FINDING THAT THE QUESTIONED ORDINANCE, EVEN IF VALID, CANNOT BE ENFORCED BEYOND THE TERRITORIAL LIMITS OF PAGBILAO AND DOES NOT COVER NON4 RESIDENTS. The ordinances in question are Ordinance No. 4, series of 1955, Ordinance No. 15, series of 1965, and Ordinance No. 12, series of 1966, of the Municipal Council of Pagbilao. Insofar as pertinent to this appeal, the salient portions thereof are hereinbelow quoted: Section 1. Any owner or manager of fishponds in places within the territorial limits of Pagbilao, Quezon, shall pay a municipal tax in the amount of P3.00 per hectare of fishpond 5 on part thereof per annum. xxx xxx xxx

Sec. l (a). For the convenience of those who have or owners or managers of fishponds within the territorial limits of this municipality, the date of payment of municipal tax relative thereto, shall begin after the lapse of three (3) years starting from the date said fishpond is approved by the Bureau of 6 Fisheries. xxx xxx xxx Section 1. Any owner or manager of fishponds in places within the territorial limits of Pagbilao shall pay a municipal tax in the amount of P3.00 per hectare or any fraction thereof per annum beginning and taking effect from the year 1964, if the fishpond started operating before the year 1964.
7

legislation couched in imprecise language but which nonetheless specifies a standard though defectively phrased in which case, it may be "saved" by proper construction. It must further be distinguished from statutes that are apparently ambiguous yet fairly applicable to certain types of activities. In that event, such statutes may not be challenged whenever directed against such activities. In Parker v. 16 Levy, a prosecution originally under the U.S. Uniform Code of Military Justice (prohibiting, specifically, "conduct unbecoming an officer and gentleman"), the defendant, an army officer who had urged his men not to go to Vietnam and called the Special Forces trained to fight there thieves and murderers, was not allowed to invoke the void for vagueness doctrine on the premise that accepted military interpretation and practice had provided enough standards, and consequently, a fair notice that his conduct was impermissible. It is interesting that in Gonzales v. Commission on Elections, a divided Court sustained an act of Congress (Republic Act No. 4880 penalizing "the 18 too early nomination of candidates" limiting the election campaign period, and prohibiting "partisan political activities"), amid challenges of vagueness and overbreadth on the ground that the law had included an "enumeration of the acts deemed included in the terms 'election campaign' or 'partisan 19 political activity" that would supply the standards. "As thus limited, the objection that may be raised as to vagueness has been minimized, if not 20 totally set at rest." In his opinion, however, Justice Sanchez would stress 21 that the conduct sought to be prohibited "is not clearly defined at all." "As worded in R.A 4880, prohibited discussion could cover the entire spectrum of 22 expression relating to candidates and political parties." He was unimpressed with the "restrictions" Fernando's opinion had relied on: " 'Simple expressions of opinions and thoughts concerning the election' and expression of 'views on current political problems or issues' leave the reader conjecture, to guesswork, upon the extent of protection offered, be it as to the nature of the utterance ('simple expressions of opinion and thoughts') or 23 the subject of the utterance ('current political problems or issues')." The Court likewise had occasion to apply the "balancing-of-interests" test, insofar as the statute's ban on early nomination of candidates was concerned: "The rational connection between the prohibition of Section 50-A and its object, the indirect and modest scope of its restriction on the rights of speech and assembly, and the embracing public interest which Congress has found in the moderation of partisan political activity, lead us to the conclusion that the statute may stand consistently with and does not offend 25 the Constitution." In that case, Castro would have the balance achieved in favor of State authority at the "expense" of individual liberties.
24 17

The first objection refers to the ordinances being allegedly "ambiguous and 8 uncertain." The petitioner contends that being a mere lessee of the fishpond, he is not covered since the said ordinances speak of "owner or manager." He likewise maintains that they are vague insofar as they reckon the date of payment: Whereas Ordinance No. 4 provides that parties shall commence payment "after the lapse of three (3) years starting from the date 9 said fishpond is approved by the Bureau of Fisheries." Ordinance No. 12 states that liability for the tax accrues "beginning and taking effect from the 10 year 1964 if the fishpond started operating before the year 1964." As a rule, a statute or act may be said to be vague when it lacks comprehensible standards that men "of common intelligence must 11 necessarily guess at its meaning and differ as to its application." It is repugnant to the Constitution in two respects: (1) it violates due process for failure to accord persons, especially the parties targetted by it, fair notice of the conduct to avoid; and (2) it leaves law enforcers unbridled discretion in carrying out its provisions and becomes an arbitrary flexing of the Government muscle. But the act must be utterly vague on its face, that is to say, it cannot be clarified by either a saving clause or by construction. Thus, in Coates v. City 12 of Cincinnati, the U.S. Supreme Court struck down an ordinance that had made it illegal for "three or more persons to assemble on any sidewalk and 13 there conduct themselves in a manner annoying to persons passing by." Clearly, the ordinance imposed no standard at all "because one may never 14 know in advance what 'annoys some people but does not annoy others.' " Coates highlights what has been referred to as a "perfectly vague" act whose obscurity is evident on its face. It is to be distinguished, however, from
15

In the United States, which had ample impact on Castro's separate opinion, the balancing test finds a close kin, referred to as the "less restrictive 26 alternative " doctrine, under which the court searches for alternatives available to the Government outside of statutory limits, or for "less drastic 27 means" open to the State, that would render the statute unnecessary. In 28 United States v. Robel, legislation was assailed, banning members of the (American) Communist Party from working in any defense facility. The U.S. Supreme Court, in nullifying the statute, held that it impaired the right of association, and that in any case, a screening process was available to the State that would have enabled it to Identify dangerous elements holding 29 defense positions. In that event, the balance would have been struck in favor of individual liberties. It should be noted that it is in free expression cases that the result is usually close. It is said, however, that the choice of the courts is usually narrowed 30 where the controversy involves say, economic rights, or as in the Levy case, military affairs, in which less precision in analysis is required and in which the competence of the legislature is presumed. In no way may the ordinances at bar be said to be tainted with the vice of vagueness. It is unmistakable from their very provisions that the appellant falls within its coverage. As the actual operator of the fishponds, he comes within the term " manager." He does not deny the fact that he financed the construction of the fishponds, introduced fish fries into the fishponds, and 31 had employed laborers to maintain them. While it appears that it is the 32 National Government which owns them, the Government never shared in the profits they had generated. It is therefore only logical that he shoulders the burden of tax under the said ordinances. We agree with the trial court that the ordinances are in the character of 33 revenue measures designed to assist the coffers of the municipality of Pagbilao. And obviously, it cannot be the owner, the Government, on whom liability should attach, for one thing, upon the ancient principle that the Government is immune from taxes and for another, since it is not the Government that had been making money from the venture. Suffice it to say that as the actual operator of the fishponds in question, and as the recipient of profits brought about by the business, the appellant is clearly liable for the municipal taxes in question. He cannot say that he did not have a fair notice of such a liability to make such ordinances vague. Neither are the said ordinances vague as to dates of payment. There is no merit to the claim that "the imposition of tax has to depend upon an uncertain date yet to be determined (three years after the 'approval of the fishpond' by the Bureau of Fisheries, and upon an uncertain event (if the fishpond started

operating before 1964), also to be determined by an uncertain individual or 34 individuals." Ordinance No. 15, in making the tax payable "after the lapse of three (3) years starting from the date said fishpond is approved by the 35 Bureau of Fisheries," is unequivocal about the date of payment, and its amendment by Ordinance No. 12, reckoning liability thereunder "beginning and taking effect from the year 1964 if the fishpond started operating before 36 the year 1964 ," does not give rise to any ambiguity. In either case, the dates of payment have been definitely established. The fact that the appellant has been allegedly uncertain about the reckoning dates as far as his liability for the years 1964, 1965, and 1966 is concerned presents a mere problem in computation, but it does not make the ordinances vague. In addition, the same would have been at most a difficult piece of legislation, which is not unfamiliar in this jurisdiction, but hardly a vague law. As it stands, then, liability for the tax accrues on January 1, 1964 for fishponds in operation prior thereto (Ordinance No. 12), and for new fishponds, three years after their approval by the Bureau of Fisheries (Ordinance No. 15). This is so since the amendatory act (Ordinance No. 12) merely granted amnesty unto old, delinquent fishpond operators. It did not repeal its mother ordinances (Nos. 4 and 15). With respect to new operators, Ordinance No. 15 should still prevail. To the Court, the ordinances in question set forth enough standards that clarify imagined ambiguities. While such standards are not apparent from the face thereof, they are visible from the intent of the said ordinances. The next inquiry is whether or not they can be said to be ex post facto measures. The appellant argues that they are: "Amendment No. 12 passed on September 19, 1966, clearly provides that the payment of the imposed tax shall "beginning and taking effect from the year 1964, if the fishpond started operating before the year 1964.' In other words, it penalizes acts or events 37 occurring before its passage, that is to say, 1964 and even prior thereto." The Court finds no merit in this contention. As the Solicitor General notes, 38 "Municipal Ordinance No. 4 was passed on May 14, 1955. Hence, it cannot be said that the amendment (under Ordinance No. 12) is being made to apply retroactively (to 1964) since the reckoning period is 1955 (date of enactment). Essentially, Ordinances Nos. 12 and 15 are in the nature of curative measures intended to facilitate and enhance the collection of 39 revenues the originally act, Ordinance No. 4, had prescribed. Moreover, the act (of non-payment of the tax), had been, since 1955, made punishable, and it cannot be said that Ordinance No. 12 imposes a retroactive penalty. As we have noted, it operates to grant amnesty to operators who had been delinquent between 1955 and 1964. It does not mete out a penalty, much less, a retrospective one.

The appellant assails, finally, the power of the municipal council of Pagbilao 40 to tax "public forest land." In Golden Ribbon Lumber Co., Inc. v. City of 41 Butuan we held that local governments' taxing power does not extend to forest products or concessions under Republic Act No. 2264, the Local Autonomy Act then in force. (Republic Act No. 2264 likewise prohibited municipalities from imposing percentage taxes on sales.) First of all, the tax in question is not a tax on property, although the rate 42 thereof is based on the area of fishponds ("P3.00 per hectare" ). Secondly, fishponds are not forest lands, although we have held them to the agricultural 43 lands. By definition, "forest" is "a large tract of land covered with a natural 44 growth of trees and underbush; a large wood." (Accordingly, even if the challenged taxes were directed on the fishponds, they would not have been taxes on forest products.) They are, more accurately, privilege taxes on the business of fishpond maintenance. They are not charged against sales, which would have 45 offended the doctrine enshrined by Golden Ribbon Lumber, but rather on 46 occupation, which is allowed under Republic Act No. 2264. They are what have been classified as fixed annual taxes and this is obvious from the ordinances themselves. There is, then, no merit in the last objection. WHEREFORE, the appeal is DISMISSED. Costs against the appellant.