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Agustin vs.

Edu
Agustin vs. Edu

February 2, 1979

[GRN L-49112 February 2, 1979.*]


LEOVILLO C. AGUSTIN, petitioner, vs. HON. ROMEO F. EDU, in his capacity as Land Transportation
commissioner, HON. JUAN PONCE ENRILE, in his capacity as Minister of National. Defense; HON.
ALFREDO L. JUINIO, in his capacity as Minister of Public Works, Transportation and Communications;
and HON: BALTAZAR AQUINO, in his capacity as Minister of Public Highways, respondents.
SEPARATE OPINION
ORIGINAL ACTION in the Supreme Court. Prohibition. The facts are stated in the opinion of the Court.
Leovillo C. Agustin Law Office for petitioner.
Solicitor General Estelito P. Mendoza, Assistant Solicitor General Ruben E. Agpalo and Solicitor Amado D.
Aquino for respondents.
FERNANDO, J.:
The validity of a Letter of Instruction1 providing for an early warning device for motor vehicles is assailed
in this prohibition proceeding as being violative of the constitutional guarantee of due process and,
insofar as the rules and regulations for its implementation are concerned, for transgressing the
fundamental principle of non-delegation of legislative power. The Letter of Instruction is stigmatized by
petitioner, who is possessed of the requisite standing, as being arbitrary and oppressive. A temporary
restraining order as issued and respondents Romeo F. Edu, Land Transportation Commissioner Juan
Ponce Enrile, Minister of National Defense; Alfredo L. Juinio, Minister of Public Works, Transportation
and Communications, and Baltazar Aquino, Minister of Public Highways; were required to answer. That
they did in a pleading submitted by Solicitor General Estelito P. Mendoza.2 Impressed with a highly
persuasive quality, it makes quite clear that the imputation of a constitutional infirmity is devoid of
justification. The challenged Letter of Instruction is a valid police power measure Nor could the
implementing rules and regulations issued by respondent Edu be considered as amounting to an
exercise of legislative power. Accordingly, the petition must be dismissed.
The facts are undisputed. The assailed Letter of Instruction No. 229 of President Marcos, issued on
December 2, 1974, reads in full: [Whereas], statistics show that one of the major causes of fatal or
serious accidents in land transportation is the presence of disabled, stalled, or parked motor vehicles
along streets or highways without any appropriate early warning device to signal approaching motorists
of their presence; [Whereas], the hazards posed by such obstructions to traffic have been recognized by
international bodies concerned with traffic safety, the 1968 Vienna Convention on Road Signs and
Signals and the United Nations Organization (U.N.); [Whereas], the said Vienna Convention which was
ratified by the Philippine Government under P.D. No. 207, recommended the enactment of local
legislation for the installation of road safety signs and devices; [Now, therefore, I, Ferdinand E. Marcos],

President of the Philippines, in the interest of safety on all streets and highways, including expressways
or limited access roads, do hereby direct: 1. That all owners, users or drivers of motor vehicles shall have
at all times in their motor vehicles at least one (1) pair of early warning device consisting of triangular,
collapsible reflectorized plates in red and yellow before at least 15 cms. at the base and 40 cms. at the
sides. 2. Whenever any motor vehicle is stalled or disabled or is parked for thirty (30) minutes or more
on any street or highway, including expressways or limited access roads, the owner, user or driver
thereof shall cause the warning device mentioned herein to be installed at least four meters away to the
front and rear of the motor vehicle stalled, disabled or parked. 3. The Land Commissioner shall cause
Reflectorized Triangular Early Warning Devices, as herein described, to be prepared and issued to
registered owners of motor vehicles, except motorcycles and trailers, charging for each piece not more
than 15% of the acquisition cost. He shall also promulgate such rules and regulations as are appropriate
to effectively implement this order. 4. All hereby concerned shall closely coordinate and take such
measures as are necessary or appropriate to carry into affect then instructions."3 Thereafter, on
November 15, 1976, it was amended by Letter of Instruction No. 479 in this wise: "Paragraph 3 of Letter
of Instructions No. 229 is hereby amended to read as follows: '3. The Land Transportation Commissioner
shall require every motor vehicle owner to procure from any source and present at the registration of
his vehicle, one pair of a reflectorized triangular early warning device, as described herein, of any brand
or make chosen by said motor vehicle owner The Land Transportation Commissioner shall also
promulgate such rules and regulations as are appropriate to effectively implement this order.' "4 There
was issued accordingly, by respondent Edu, the implementing rules mid regulations on December 10,
1976.5 They were not enforced as President Marcos, on January 25, 1977, ordered a six-month period of
suspension insofar as the installation of early warning device as a proregistration requirement for motor
vehicles was concerned.6 Then on June 30, 1978, another Letter of Instruction7 ordered the lifting of
such suspension and directed the immediate implementation of Letter of Instruction No. 229 as
amended.8 It was not until August 29, 1978 that respondent Edu issued Memorandum Circular No. 32,
worded thus: "In pursuance of Letter of Instructions No. 716, dated June 30, 1978, directing the
implementation of Letter of Instructions No. 229, as amended by Letter of Instructions No. 479,
requiring the use of Early Warning Devices (EWD) an motor vehicles, the following rules and regulations
are hereby issued: 1. LTC Administrative Order No. 1, dated December 10, 1976; shall now be
implemented provided that the device may come from whatever source and that it shall have
substantially complied with the EWD specifications contained in Section 2 of said administrative order;
2. In order to insure that every motor vehicle, except motorcycles, is equipped with the device, a pair of
serially numbered stickers, to be issued free of charge by this Commission. shall be attached to each
EWD. The EWD serial number shall be indicated on the registration certificate am official receipt of
payment of current registration few of the motor vehicle concerned. All Orders, Circulars, and
Memoranda in conflict herewith are hereby superseded, This Order shall take effect immediately."9 It
was for immediate implementation by respondent Alfredo L. Juinio, as Minister of Public Works,
Transportation, and Communications.10
Petitioner, after setting forth that he "is the owner of a Volkswagen Beetle Car, Model 13035, already
properly equip. ped when it came out from the assembly lines with blinking lights fore and aft, which
could very well serve as an early warning device in case of the emergencies mentioned in Letter of

Instructions No. 229, as amended, as wen as the implementing rules and regulations in Administrative
Oder No. I issued by the Land Transportation Commission,"11 alleged that said Letter of Instruction No.
229, as amended, "clearly violates the provisions and delegation of police power, [sic] * * *:" For him
they an "oppressive, unreasonable, arbitrary, confiscatory, nay unconstitutional and contrary to the
precepts of our compassionate New Society."12 He contended that they are "infected with arbitrariness
because it is harsh, cruel and unconscionable to the motoring public;"13 are "one-sided, onerous and
patently illegal and immoral because [they] will make manufacturers and dealers instant millionaires at
the expense of car owners who are compelled to buy a set of the so-called early warning device at the
rate of P56.00 to P72.00 per set,"14 are unlawful and unconstitutional and contrary to the Precepts of a
compassionate New Society [as being] compulsory and confiscatory on the part of the motorists who
could very well provide a practical alternative road safety device or a better substitute to the specified
set of EWDs."15 He therefore prayed for a judgment declaring both the assailed Letters of instructions
and Memorandum Circular void and unconstitutional and for a restraining order in the meanwhile.
A resolution to this effect was handed down by this Court on October 19, 1978: "L-49112 (Leovillo C.
Agustin v. Hon. Romeo P. Edu, etc., et al.) - Considering the allegations contained, the issues raised and
the arguments adduced in the petition for prohibition with writ of Preliminary prohibitory and/or
mandatory injunction, the Court Resolved to [require] the respondents to file an answer thereto within
ten (10) days from notice and not to move to dismiss the petition. The Court further Resolved to [issue]
a [temporary restraining order] effective as of this date and continuing until otherwise ordered by this
Court."16
Two motions for extension were filed by the Office of the Solicitor General and granted. Then on
November 15, 1978, he Answer for respondents was submitted. After admitting the factual allegations
and stating that they lacked knowledge or information sufficient to form a belief as to petitioner owning
a Volkswagen Beetle car,17 they "specifically deny the allegations in paragraphs X and XI (including its
subparagraphs 1, 2. 3, 4) of Petition to the effect that Letter of Instruction No. 229 as amended by
Letters of Instructions Nos. 479 and 716 as well as Land Transportation Commission Administrative
Order No. 1 and its Memorandum Circular No. 32 violates the constitutional provisions on due process
of law, equal protection of law and undue delegation of police power, and that the same are likewise
oppressive, arbitrary, confiscatory, one-sided, onerous, immoral, unreasonable and illegal, the truth
being that mid allegations are without legal and factual basis and for the reasons alleged in the Special
and Affirmative Defenses of this Answer."18 Unlike petitioner who contented himself with a rhetorical
recital of his litany of grievances and merely invoked the sacramental phrases of constitutional litigation.
the Answer, in demonstrating that the assailed Letter of instruction was a valid exercise of the police
power and implementing rules and regulations of respondent Edu not susceptible to the charge that
there was unlawful delegation of legislative power, there was in the portion captioned Special and
Affirmative Defenses, a citation of what respondents believed to be the authoritative decisions of this
Tribunal calling for application. They are Calalang v. Williams,19 Morfe v. Mutuc,20 and Edu v. Ericta.21
Reference was likewise made to the 1968 Vienna Conventions of the United Nations on road traffic,
road signs. and signals, of which the Philippines was a signatory and which was duly ratified.22 Solicitor
General Mendoza took pains to refute in detail, in language calm and dispassionate, the vigorous, at

times intemperate, accusation of petitioner that the assailed Letter of Instruction and the implementing
rules and regulations cannot survive the test of rigorous scrutiny. To repeat, its highly-persuasive quality
cannot be denied.
This Court thus considered the petition submitted for decision, the issues being clearly joined. As noted
at the outset, it is far from meritorious and must be dismissed.
1. The Letter of Instruction in question was issued in the exercise of the police power. That is conceded
by petitioner and is the main reliance of respondents. It is the submission of the former, however, that
while embraced in such a category, it has offended against the due process and equal protection
safeguards of the Constitution, although the latter point was mentioned only in pawing The broad and
expensive scope of the police power which was originally identified by Chief Justice Taney of the
American Supreme Court in an 1847
decision, as "nothing more or less than the powers of government inherent in every sovereignty"23 was
stressed in the aforemen. tioned case of Edu v. Ericta thus: "Justice Laurel, in the first leading decision
after the Constitution came into force, Calalang v. Williams, identified police power with state authority
to enact legislation that may interfere with personal liberty or property in order to promote the general
welfare. Persons and property could thus 'be subjected to all kinds of restraints and burdens in order to
secure the general comfort, health and prosperity of the state.' Shortly after in. dependence in 1948,
Primicias v. Fugoso reiterated the doctrine, such a competence being referred to as the power to
prescribe regulations to promote the health, morals, peace, education, good order or safety, and
general welfare of the people.' The concept was set forth in negative terms by Justice Malcolm in a preCommonwealth decision as 'that inherent and plenary power in the State which enables it to prohibit all
things hurtful to the comfort, safety and welfare of society.' In that sense it could be hardly
distinguishable as noted by this Court in Morfe v. Mutuc with the totality of legislative power. It is in the
above sense the greatest and most powerful attribute of government. It is, to quote Justice Malcolm
anew, 'the most essential, insistent, and at least illimitable powers,' extending as Justice Holmes aptly
pointed out 'to all the great public needs.' Its scope, ever-expanding to meet the exigencies of the times,
even to anticipate the future where it could be done, provides enough room for an efficient and flexible
response to conditions and circumstances thus assuring the greatest benefits. In the language of Justice
Cardozo: 'Needs that were narrow or parochial in the past may be interwoven in the present with the
well-being of the nation. What is critical or urgent changes with the time.' The police power is thus a
dynamic agency, suitably vague and far from precisely defined, rooted in the conception that men in
organizing the state and imposing upon its government limitations to safeguard constitutional rights did
not intend thereby to enable an individual citizen or a group of citizens to obstruct unreasonably the
enactment of such salutary measures calculated to insure communal peace, safety, good order, and
welfars."24
2. It was thus a heavy burden to be shouldered by petitioner, compounded by the fact that the
particular police power measure challenged was clearly intended to promote public safety. It would be a
rare occurrence indeed for this Court to invalidate a legislative or executive act of that character, None
has been called to our attention, an indication of its being non-existent. The latest decision in point, Edu

v. Ericta, sustained the validity of the Reflector Law,25 an enactment conceived with the same end in
view. Calalang v. Williams found nothing objectionable in a statute. the purpose of which was: "To
promote safe transit upon, and avoid obstruction on roads and streets designated as national roads * *
*."26 As a matter of fact the first law sought to be nullified after the effectivity of the 1935 Constitution,
the National Defense Act,27 with petitioner failing in his quest, was likewise prompted by the imperative
demands of public safety.
3. The futility of petitioner's effort to nullify both the Letter of Instruction and the implementing rules
and regulations becomes even more apparent considering his failure to lay the necessary factual
foundation to rebut the presumption of validity. So it was held in Ermita-Malate Hotel and Motel
Operators Association, Inc. v. City Mayor of Manila.28 The rationale was clearly set forth in an excerpt
from a decision of Justice Brandeis of the American Supreme Court, quoted in the opinion: "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 presumption of constitutionality must prevail in the
absence of some factual foundation of record in overthrowing the statute."29
4. Nor did the Solicitor General, as he very well could, rely solely on such rebutted presumption of
validity. As was pointed out in his Answer: "The President certainly had in his possession the necessary
statistical information and data at the time he issued said letter of instructions, and such factual
foundation cannot be defeated by petitioner's naked assertion that early warning devices 'are not too
vital to the prevention of nighttime vehicular accidents' because allegedly only 390 or 1.5 per cent of the
supposed 26,000 motor vehicle accidents that occurred in 1976 involved rear-end collisions (p. 12 of
petition). Petitioner's statistics is not backed up by demonstrable data on record. As aptly stated by this
Honorable Court: 'Further: "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" ' * * *. But even assuming the verity of petitioner's statistics, is that not
reason enough to require the installation of early warning devices to prevent another 390 rearend
collisions that could mean the death of 390 or more Filipinos and the deaths that could likewise result
from head-on or frontal collisions with stalled vehicles?"30 It is quite manifest then that the issuance of
such Letter of Instruction is encased in the armor of prior, careful study by the Executive Department. To
set it aside for alleged repugnancy to the due process clause is to give sanction to conjectural claims that
exceeded even the broadest permissible limits of a pleader's well-known penchant for exaggeration.
5. The rather wild and fantastic nature of the charge of oppressiveness of this Letter of Instruction was
exposed in the Answer of the Solicitor General thus: "Such early warning device requirement is not an
expensive redundancy, nor oppressive, for car owners whose cars are already equipped with 1) 'blinking
lights in the fore and aft of said motor vehicles,' 2) 'battery-powered blinking lights inside motor
vehicles,' 3) 'built-in reflectorized tapes on front and rear bumpers of motor vehicles,' or 4) 'well-lighted
two (2) petroleum lamps (the Kinke) * * * because: Being universal among the signatory countries to the
said 1968 Vienna Conventions, and visible even under adverse conditions at a distance of at least 400
meters, any motorist from this country or from any part of the world, who sees a reflectorized

rectangular early warning device installed on the roads, highways or expressways, will conclude, without
thinking that somewhere along the travelled portion of that road, highway, or expressway, there is a
motor vehicle which is stationary, stalled or disabled which obstructs or endangers passing traffic. On
the other hand, a motorist who sees any of the aforementioned other built-in warning devices or the
petroleum lamps will not immediately get adequate advance warning because he will still think what
that blinking light is all about. is it an emergency vehicle? Is it a law enforcement car? Is it an
ambulance? Such confusion or uncertainty in the mind of the motorist will thus increase, rather than
decrease, the danger of collision."31
6. Nor did the other extravagant assertions of constitutional deficiency go unrefuted in the Answer of
the Solicitor General: "There is nothing in the questioned Letter of Instruction No. 229, as amended, or
in Administrative Order No. 1, which requires or compels motor vehicle owners to purchase the early
warning device prescribed thereby. All that is required is for motor vehicle owners concerned like
petitioner, to equip their motor vehicles with a pair of this early warning device in question, procuring or
obtaining the same from whatever source. In fact, with a little of industry and practical ingenuity, motor
vehicle owners can even personally make or produce this early warning device so long as the same
substantially conforms with the specifications laid down in said letter of instruction and administrative
order. Accordingly, the early warning device requirement can neither be oppressive, onerous, immoral,
nor confiscatory, much less does it make manufacturers and dealers of said devices 'instant millionaires
at the expense of car owners' as petitioner so sweepingly concludes * * *. Petitioner's fear that with the
early warning device requirement 'a more subtle racket' may be committed by those called upon to
enforce it * * * is an unfounded speculation. Besides, that unscrupulous officials may try to enforce said
requirement in an unreasonable manner or to an unreasonable degree, does not render the same illegal
or immoral where, as in the instant case, the challenged Letter of Instruction No. 229 and implementing
order disclose none of the constitutional defects alleged against it."32
7. It does appear clearly that petitioner's objection to this Letter of Instruction is not premised on lack of
power, the justification for a finding of unconstitutionality, but on the pessimistic, not to say negative,
view he entertains as to its wisdom. That approach, it put it at its mildest, is distinguished, if that is the
appropriate word, by its unorthodoxy. It bears repeating "that this Court, in the language of Justice
Laurel, 'does not pass upon questions of wisdom, justice or expediency of legislation.' As expressed by
Justice Tuason: 'It is not the province of the courts to supervise legislation and keep it within the bounds
of propriety and common sense. That is primarily and exclusively a legislative concern.' There can be no
possible objection then to the observation of Justice Montemayor: 'As long as laws do not violate any
Con. stitutional provision, the Courts merely interpret and apply them regardless of whether or not they
are wise or salutary.'
For they, according to Justice Labrador, 'are not supposed to override legitimate policy and * * * never
inquire into the wisdom of the law.' It is thus settled, to paraphrase Chief Justice Concepcion in Gonzales
v. Commission on Elections, that only congressional power or competence, not the wisdom of the action
taken, may be the basis for declaring a statute invalid. This is as it ought to be. The principle of
separation of powers has in the main wisely allocated the respective authority of each department and
confined its jurisdiction to such a sphere. There would then be intrusion not allowable under the

Constitution if on a matter left to the discretion of a coordinate branch, the judiciary would substitute its
own. If there be adherence to the rule of law, as there ought to be, the last offender should be courts of
justice, to which rightly litigants submit their controversy precisely to maintain unimpaired the
supremacy of legal norms and prescriptions. The attack on the validity of the challenged provision
likewise insofar as there may be objections, even if valid and cogent, on is wisdom cannot be
sustained."33
8. The alleged infringement of the fundamental principle of nondelegation of legislative power is equally
without any support wellsettled legal doctrines. Had petitioner taken the trouble to acquaint himself
with authoritative pronouncements from this Tribunal, he would not have the temeri. ty to make such
an assertion. An exerpt from the aforecited decision of Edu v. Ericta sheds light on the matter: "To avoid
the taint of unlawful delegation, there must be a standard, which implies at the very least that the
legislature itself determines matters of principle and lays down fundamental policy.
Otherwise, the charge of complete abdication may be hard to repel. A standard thus defines legislative
policy, marks its limits, maps out its boundaries and specifies the public agency to apply it. It indicates
the circumstances under which the legislative command is to be effected. It is the criterion by which
legislative purpose may be carried out. Thereafter, the executive or administrative office designated
may in pursuance of the above guidelines promulgate supplemental rules and regulations. The standard
may be either express or implied. If the former, the non-delegation objection is easily met. The standard
though does not have to be spelled out specifical. ly. It could be implied from the policy and purpose of
the act considered as a whole. In the Reflector Law, clearly, the legislative objective is public safety.
What is sought to be attained as in Calalang v. Williams is "safe transit upon the roads.' This is to adhere
to the recognition given expression by Justice Laurel in a decision announced not too long after the
Constitution came into force and effect that the principle of non-delegation "has been made to adapt
itself to the complexities of modern governments, giving rise to the adoption. within certain limits, of
the principle of "subordinate legislation" not only in the United States and England but in practicaly all
modern governments.' He continued: 'Accordingly, with the growing complexity of modern life, the
multiplication of the subjects of governmental regulation, and the increased difficulty of administering
the laws, there is a constantly growing tendency toward the delegation of greater powers by the
legislature and toward the approval of the practice by the courts.' Consistency with the conceptual
approach requires the reminder that what is delegated is authority non-legislative in character, the
completeness of the statute when it leaves the hand of Congress being assumed."34
9. The conclusion reached by this Court that this petition must be dismissed is reinforced by this
consideration. The petition itself quoted these two whereas clauses of the assailed Letter of Instruction:
"[Whereas], the hazards posed by such obstructions to traffic have been recognized by International
bodies concerned with traffic safety, the 1968 Vienna Convention on Road Signs and Signals and the
United Nations Organization (U.N.); [Whereas], the said Vienna Convention, which was ratified by the
Philippine Government under P.D. No. 207, recommended the enacment of local legislation for the
installation of road safety signs and devices; * * *"35 It cannot be disputed then that this Declaration of
Principle found in the Constitution possesses relevance: "The Philippines * * * adopts the generally
accepted principles of international law as part of the law of the land, * * *. "36 The 1968 Vienna

Convention on Road Signs and Signals is impressed with such a character. It is not for this country to
repudiate a commitment to which it had pledged its word. The concept of Pacta sunt servanda stands in
the way of such an attitude, which is, moreover, at war with the principle of international morality.
10. That is about all that needs be said. The rather court reference to equal protection did not even elicit
any attempt on the part of petitioner to substantiate in a manner clear, positive, and categorical, why
such a casual observation should be taken seriously. In no case is them a more appropriate occasion for
insistence on what was referred to as "the general rule" in Santiago v. Far Eastern Broadcasting Co.,37
namely, "that the constitutionality of a law will not be considered unless the point is specially pleaded,
insisted upon. and adequately argued."38 "Equal protection" is not a talismanic formula at the mere
invocation of which a party to a lawsuit can rightfully expect that success will crown his efforts. The law
is anything but that.
WHEREFORE, this petition is dismissed. The restraining order is lifted. This decision is immediately
executory. No costs.
Castro, C.J., Barredo, Antonio, Santos, Fernandez, Guerrero, Abad Santos, De Castro and MelencioHerrera, concur.
Teehankee, J. dissents in a separate opinion.
Makasiar, J., reserves the right to file a separate opinion.
Aquino, J., did not take part.
Concepcion, J., is on leave. Castro, C.J., certifies that Justice Concepcion concurs in their decision.
Petition dismissed.
TEEHANKEE, J., dissenting.
I dissent from the majority's peremptory dismissal of the petition and lifting of the restraining order
issued on October 19, 1978 against the blanket enforcement of the requirement that all motor vehicles
be equipped with the so-called early warning device, without even hearing the parties in oral argument
as generally required by the Court in original cases of farreaching consequence such as the case at bar.
Lack of time presents my filing an extended dissent. I only wish to state that the petition advances grave
and serious grounds of assailing "the rules and regulations issued by the Land Transportation
Commission under Administrative Order No. 1 and Memorandum Circular No. 32 [which] do not reflect
the real intent, noble objectives and spirit of Letter of Instructions No. 229, as amended by Letter of
Instructions Nos. 479 and 716, because it is oppressive, unreasonable, arbitrary, confiscatory, nay
unconstitutional and contrary to the Precepts of our compassionate New Society," because of the
following considerations, inter alia:
1. It is oppressive, arbitrary and discriminatory to require owners Of Motor vehicles with built-in and
more effective and efficient E.W.D.'s such as "a) blinking lights in the fore and aft of said motor vehicles,

b) battery-powered blinking lights inside motor vehicles, c) built-in reflectorized tapes on front and rear
bumpers of motor vehicles ...... " to purchase the E.W.D. specified in the challenged administrative
order, whose effectivity and utility have yet to be demonstrated.
2. The public necessity for the challenged order has yet to be shown. No valid refutation has been made
of petitioner's assertion that the "E.W.D.'s are not too vital to the prevention of nighttime vehicular
accidents. Statistics shows that of the 26,000 motor vehicle accidents that occurred in 1976, only 390 or
1.5 per cent involved rearend collisions," as to require the purchase and installation of the questioned
E.W.D. for almost 900,000 vehicles throughout the country;
3. The big financial burden to be imposed on all motorists is staggering, and petitioner's assertion that
"as of 1975, there were at least 866,037 motor vehicles all over the country requiring E.W.D.'s and at
the minimum price of P56.00 per set, this would mean a consumer outlay of P48,451,872.00, or close to
P50 million for the questioned E.W.D.'s "stands unchallenged;
4. No real effort has been made to show that there can be practical and less burdensome alternative
road safety devices for stalled vehicles than the prescribed E.W.D., such as the common petroleum
lamps "kinke" which can be placed just as effectively in front of stalled vehicles on the highways; and
5. There is no imperative need for imposing such a blanket requirement on all vehicles. The respondents
have-not shown that they have availed of the powers and prerogaties vested in their offices such as
ridding the country of dilapidated trucks and vehicles which are the main cause of the deplorable
highway accidents due to stalled vehicles, establishing an honest and foolproof system of examination
and licensing of motor vehicle drivers so as to ban the reckless and irresponsible and a sustained
education campaign to instill safe driving habits and attitudes that can be carried out for much less than
the P50 million burden that would be imposed by the challenged order.
I do feel that a greater "degree of receptivity and sympathy" could be extended by the petitioner for his
civic-mindedness in having filed the present petition challenging as capricious and unreasonable the "allpervading police power" of the State instead of throwing the case out of court and leav. ing the wrong
impression that the exercise of police power insofar as it may affect the life, liberty and property of any
per, son is no longer subject to judicial inquiry.
1. Letter of Instruction No. 229 ( 1974) an amended by Letter of Instruction No. 479 (1976).
2. He was assisted by Assistant Solicitor General Ruben E. Agpalo and Solicitor Amado D. Aquino.
3. Petition, par. 111.
4. Ibid, par. IV.
5. Ibid, par. V.
6. Ibid, par. VIII.
7. No. 710.

8. Petition, par. VII.


9. Ibid, par. VIII.
10. Ibid.
11. Ibid, par. IX.
12. Ibid, par. X.
13. Ibid, par. XI.
14. Ibid, par. X.
15. Ibid, par. XI.
16. Resolution of the Court dated October 19, 1978.
17. Answer, pars. 1-6.
18. Ibid, par. 8.
19. 70 Phil. 726 (1940). The opinion was penned by Justice Laurel.
20. L-20387, January 31, 1968; 22 SCRA 424. The writer of this opinion is the ponente.
21. L-32096, October 24, 1970, 35 SCRA 481. The writer of this opinion was likewise the ponente.
22. Answer, par. 12 (a) and (b).
23. License Cases, 5 How. 504, 583.
24. 36 SCRA 481, 487-488. Then is no need to repeat where Calalang and Morfe are reported. Primicias
v. Fugoso is reported in 80 Phil. 71; Rubi v. Provincial Board, where the first quotation from Justice
Malcolm cam, in 39 Phil. 660, 708 (1919); and Smith Bell and Co. v. Natividad, his other decision cited, in
40 Phil. 136 (1919); Helvering v. Davis, with Justice Cardozo writing the opinion, in 301 US 619 (1937).
25. Republic Act No. 5715 (1969).
26. Commonwealth Act No. 54841940).
27. Cf. People v. Lagman, 66 Phil. 18 (1938). Even earlier in United States v. Pompeya, 31 Phil. 245
(1915), this Court, by virtue of the police power, hold valid a provision of the then Municipal Code
requiring "able-bodied males in the vicinity between certain nga to perform patrol duty riot exceeding
one day each week.
28. L-24693, July 31, 1967, 20 SCRA 849.

29. Ibid, 857. The excerpt came from O'Gorman and Young v. Hartford Fire Insurance Co., 282 US 261,
328 (1931).
30. Answer, par. 18 (a). The excerpt came from Samson v. Mayor of Bacolod City, L-28745; October 23,
1974; 60 SCRA 267; 270.
31. Ibid, par. 18 (c).
32. Ibid, par. 18 (d) and (e).
33. Morfe v. Mutuc, 22 SCRA 424, 450-451. The citation from Justice Laurel may be traced to Angara v.
Electoral Commission, 63 Phil. 139, 160 (1936); from Justice Tuason to People v. Carlos, 78 Phil. 636, 648
(1947); from Justice Montemayor to Quintos v. Lacson, 97 Phil. 290. 293 (1955); and from Justice
Labrador to Ichong v. Hernandez, 101 Phil. 1155, 1166 (1957). Chief Justice Concepcion's reiteration of
the doctrine, paraphrased in the quoted opinion, was made by him in Gonzales v. Commission on
Elections, L-28196, November 9, 1967, 21 SCRA 774. Cf. Province of Pangasinan v. Secretary of Public
Works, L-27861, October 31, 1969, 30 SCRA 134.
34. 35 SCRA 481, 497-498. The following cases were also cited People v. Exconde, 101 Phil. 1125 (1957),
and People v. Jolliffe, 105 Phil. 677 (1959).
35. Petition, par. III.
36. Article II, Section 3 of the Constitution reads in full: "The Philippines renounces war as an instrument
of national policy, adopts the generally accepted principles of international law as part of the law of the
land, and adheres to the policy of peace, equality, justice, freedom, cooperation, and amity with all
nations.
37. 73 Phil. 408 (1941).
38. Ibid, 412.

Ichong vs. Hernandez


EN BANC
G.R. No. L-7995

May 31, 1957

LAO H. ICHONG, in his own behalf and in behalf of other alien residents, corporations and
partnerships adversely affected. by Republic Act No. 1180, petitioner,
vs.
JAIME HERNANDEZ, Secretary of Finance, and MARCELINO SARMIENTO, City Treasurer of
Manila,respondents.
Ozaeta, Lichauco and Picazo and Sycip, Quisumbing, Salazar and Associates for petitioner.
Office of the Solicitor General Ambrosio Padilla and Solicitor Pacifico P. de Castro for respondent
Secretary of Finance.
City Fiscal Eugenio Angeles and Assistant City Fiscal Eulogio S. Serrano for respondent City Treasurer.
Dionisio Reyes as Amicus Curiae.
Marcial G. Mendiola as Amicus Curiae.
Emiliano R. Navarro as Amicus Curiae.
LABRADOR, J.:
I. The case and issue, in general
This Court has before it the delicate task of passing upon the validity and constitutionality of a legislative
enactment, fundamental and far-reaching in significance. The enactment poses questions of due
process, police power and equal protection of the laws. It also poses an important issue of fact, that is
whether the conditions which the disputed law purports to remedy really or actually exist. Admittedly
springing from a deep, militant, and positive nationalistic impulse, the law purports to protect citizen
and country from the alien retailer. Through it, and within the field of economy it regulates, Congress
attempts to translate national aspirations for economic independence and national security, rooted in
the drive and urge for national survival and welfare, into a concrete and tangible measures designed to
free the national retailer from the competing dominance of the alien, so that the country and the nation
may be free from a supposed economic dependence and bondage. Do the facts and circumstances
justify the enactment?
II. Pertinent provisions of Republic Act No. 1180
Republic Act No. 1180 is entitled "An Act to Regulate the Retail Business." In effect it nationalizes the
retail trade business. The main provisions of the Act are: (1) a prohibition against persons, not citizens of
the Philippines, and against associations, partnerships, or corporations the capital of which are not
wholly owned by citizens of the Philippines, from engaging directly or indirectly in the retail trade; (2) an
exception from the above prohibition in favor of aliens actually engaged in said business on May 15,
1954, who are allowed to continue to engaged therein, unless their licenses are forfeited in accordance

with the law, until their death or voluntary retirement in case of natural persons, and for ten years after
the approval of the Act or until the expiration of term in case of juridical persons; (3) an exception
therefrom in favor of citizens and juridical entities of the United States; (4) a provision for the forfeiture
of licenses (to engage in the retail business) for violation of the laws on nationalization, control weights
and measures and labor and other laws relating to trade, commerce and industry; (5) a prohibition
against the establishment or opening by aliens actually engaged in the retail business of additional
stores or branches of retail business, (6) a provision requiring aliens actually engaged in the retail
business to present for registration with the proper authorities a verified statement concerning their
businesses, giving, among other matters, the nature of the business, their assets and liabilities and their
offices and principal offices of judicial entities; and (7) a provision allowing the heirs of aliens now
engaged in the retail business who die, to continue such business for a period of six months for purposes
of liquidation.
III. Grounds upon which petition is based-Answer thereto
Petitioner, for and in his own behalf and on behalf of other alien residents corporations and
partnerships adversely affected by the provisions of Republic Act. No. 1180, brought this action to
obtain a judicial declaration that said Act is unconstitutional, and to enjoin the Secretary of Finance and
all other persons acting under him, particularly city and municipal treasurers, from enforcing its
provisions. Petitioner attacks the constitutionality of the Act, contending that: (1) it denies to alien
residents the equal protection of the laws and deprives of their liberty and property without due
process of law ; (2) the subject of the Act is not expressed or comprehended in the title thereof; (3) the
Act violates international and treaty obligations of the Republic of the Philippines; (4) the provisions of
the Act against the transmission by aliens of their retail business thru hereditary succession, and those
requiring 100% Filipino capitalization for a corporation or entity to entitle it to engage in the retail
business, violate the spirit of Sections 1 and 5, Article XIII and Section 8 of Article XIV of the Constitution.
In answer, the Solicitor-General and the Fiscal of the City of Manila contend that: (1) the Act was passed
in the valid exercise of the police power of the State, which exercise is authorized in the Constitution in
the interest of national economic survival; (2) the Act has only one subject embraced in the title; (3) no
treaty or international obligations are infringed; (4) as regards hereditary succession, only the form is
affected but the value of the property is not impaired, and the institution of inheritance is only of
statutory origin.
IV. Preliminary consideration of legal principles involved
a. The police power.
There is no question that the Act was approved in the exercise of the police power, but petitioner claims
that its exercise in this instance is attended by a violation of the constitutional requirements of due
process and equal protection of the laws. But before proceeding to the consideration and resolution of
the ultimate issue involved, it would be well to bear in mind certain basic and fundamental, albeit
preliminary, considerations in the determination of the ever recurrent conflict between police power
and the guarantees of due process and equal protection of the laws. What is the scope of police power,

and how are the due process and equal protection clauses related to it? What is the province and power
of the legislature, and what is the function and duty of the courts? These consideration must be clearly
and correctly understood that their application to the facts of the case may be brought forth with clarity
and the issue accordingly resolved.
It has been said the police power is so far - reaching in scope, that it has become almost impossible to
limit its sweep. As it derives its existence from the very existence of the State itself, it does not need to
be expressed or defined in its scope; it is said to be co-extensive with self-protection and survival, and as
such it is the most positive and active of all governmental processes, the most essential, insistent and
illimitable. Especially is it so under a modern democratic framework where the demands of society and
of nations have multiplied to almost unimaginable proportions; the field and scope of police power has
become almost boundless, just as the fields of public interest and public welfare have become almost
all-embracing and have transcended human foresight. Otherwise stated, as we cannot foresee the
needs and demands of public interest and welfare in this constantly changing and progressive world, so
we cannot delimit beforehand the extent or scope of police power by which and through which the
State seeks to attain or achieve interest or welfare. So it is that Constitutions do not define the scope or
extent of the police power of the State; what they do is to set forth the limitations thereof. The most
important of these are the due process clause and the equal protection clause.
b. Limitations on police power.
The basic limitations of due process and equal protection are found in the following provisions of our
Constitution:
SECTION 1.(1) No person shall be deprived of life, liberty or property without due process of law, nor any
person be denied the equal protection of the laws. (Article III, Phil. Constitution)
These constitutional guarantees which embody the essence of individual liberty and freedom in
democracies, are not limited to citizens alone but are admittedly universal in their application, without
regard to any differences of race, of color, or of nationality. (Yick Wo vs. Hopkins, 30, L. ed. 220, 226.)
c. The, equal protection clause.
The equal protection of the law clause is against undue favor and individual or class privilege, as well as
hostile discrimination or the oppression of inequality. It is not intended to prohibit legislation, which is
limited either in the object to which it is directed or by territory within which is to operate. It does not
demand absolute equality among residents; it merely requires that all persons shall be treated
alike, under like circumstances and conditions both as to privileges conferred and liabilities enforced.
The equal protection clause is not infringed by legislation which applies only to those persons falling
within a specified class, if it applies alike to all persons within such class, and reasonable grounds exists
for making a distinction between those who fall within such class and those who do not. (2 Cooley,
Constitutional Limitations, 824-825.)
d. The due process clause.

The due process clause has to do with the reasonableness of legislation enacted in pursuance of the
police power. Is there public interest, a public purpose; is public welfare involved? Is the Act reasonably
necessary for the accomplishment of the legislature's purpose; is it not unreasonable, arbitrary or
oppressive? Is there sufficient foundation or reason in connection with the matter involved; or has there
not been a capricious use of the legislative power? Can the aims conceived be achieved by the means
used, or is it not merely an unjustified interference with private interest? These are the questions that
we ask when the due process test is applied.
The conflict, therefore, between police power and the guarantees of due process and equal protection
of the laws is more apparent than real. Properly related, the power and the guarantees are supposed to
coexist. The balancing is the essence or, shall it be said, the indispensable means for the attainment of
legitimate aspirations of any democratic society. There can be no absolute power, whoever exercise it,
for that would be tyranny. Yet there can neither be absolute liberty, for that would mean license and
anarchy. So the State can deprive persons of life, liberty and property, provided there is due process of
law; and persons may be classified into classes and groups, provided everyone is given the equal
protection of the law. The test or standard, as always, is reason. The police power legislation must be
firmly grounded on public interest and welfare, and a reasonable relation must exist between purposes
and means. And if distinction and classification has been made, there must be a reasonable basis for
said distinction.
e. Legislative discretion not subject to judicial review.
Now, in this matter of equitable balancing, what is the proper place and role of the courts? It must not
be overlooked, in the first place, that the legislature, which is the constitutional repository of police
power and exercises the prerogative of determining the policy of the State, is by force of circumstances
primarily the judge of necessity, adequacy or reasonableness and wisdom, of any law promulgated in
the exercise of the police power, or of the measures adopted to implement the public policy or to
achieve public interest. On the other hand, courts, although zealous guardians of individual liberty and
right, have nevertheless evinced a reluctance to interfere with the exercise of the legislative prerogative.
They have done so early where there has been a clear, patent or palpable arbitrary and unreasonable
abuse of the legislative prerogative. Moreover, courts are not supposed to override legitimate policy,
and courts never inquire into the wisdom of the law.
V. Economic problems sought to be remedied
With the above considerations in mind, we will now proceed to delve directly into the issue involved. If
the disputed legislation were merely a regulation, as its title indicates, there would be no question that
it falls within the legitimate scope of legislative power. But it goes further and prohibits a group of
residents, the aliens, from engaging therein. The problem becomes more complex because its subject is
a common, trade or occupation, as old as society itself, which from the immemorial has always been
open to residents, irrespective of race, color or citizenship.
a. Importance of retail trade in the economy of the nation.

In a primitive economy where families produce all that they consume and consume all that they
produce, the dealer, of course, is unknown. But as group life develops and families begin to live in
communities producing more than what they consume and needing an infinite number of things they do
not produce, the dealer comes into existence. As villages develop into big communities and
specialization in production begins, the dealer's importance is enhanced. Under modern conditions and
standards of living, in which man's needs have multiplied and diversified to unlimited extents and
proportions, the retailer comes as essential as the producer, because thru him the infinite variety of
articles, goods and needed for daily life are placed within the easy reach of consumers. Retail dealers
perform the functions of capillaries in the human body, thru which all the needed food and supplies are
ministered to members of the communities comprising the nation.
There cannot be any question about the importance of the retailer in the life of the community. He
ministers to the resident's daily needs, food in all its increasing forms, and the various little gadgets and
things needed for home and daily life. He provides his customers around his store with the rice or corn,
the fish, the salt, the vinegar, the spices needed for the daily cooking. He has cloths to sell, even the
needle and the thread to sew them or darn the clothes that wear out. The retailer, therefore, from the
lowly peddler, the owner of a small sari-sari store, to the operator of a department store or, a
supermarket is so much a part of day-to-day existence.
b. The alien retailer's trait.
The alien retailer must have started plying his trades in this country in the bigger centers of population
(Time there was when he was unknown in provincial towns and villages). Slowly but gradually be
invaded towns and villages; now he predominates in the cities and big centers of population. He even
pioneers, in far away nooks where the beginnings of community life appear, ministering to the daily
needs of the residents and purchasing their agricultural produce for sale in the towns. It is an undeniable
fact that in many communities the alien has replaced the native retailer. He has shown in this trade,
industry without limit, and the patience and forbearance of a slave.
Derogatory epithets are hurled at him, but he laughs these off without murmur; insults of ill-bred and
insolent neighbors and customers are made in his face, but he heeds them not, and he forgets and
forgives. The community takes note of him, as he appears to be harmless and extremely useful.
c. Alleged alien control and dominance.
There is a general feeling on the part of the public, which appears to be true to fact, about the
controlling and dominant position that the alien retailer holds in the nation's economy. Food and other
essentials, clothing, almost all articles of daily life reach the residents mostly through him. In big cities
and centers of population he has acquired not only predominance, but apparent control over
distribution of almost all kinds of goods, such as lumber, hardware, textiles, groceries, drugs, sugar,
flour, garlic, and scores of other goods and articles. And were it not for some national corporations like
the Naric, the Namarco, the Facomas and the Acefa, his control over principal foods and products would
easily become full and complete.

Petitioner denies that there is alien predominance and control in the retail trade. In one breath it is said
that the fear is unfounded and the threat is imagined; in another, it is charged that the law is merely the
result of radicalism and pure and unabashed nationalism. Alienage, it is said, is not an element of
control; also so many unmanageable factors in the retail business make control virtually impossible. The
first argument which brings up an issue of fact merits serious consideration. The others are matters of
opinion within the exclusive competence of the legislature and beyond our prerogative to pass upon and
decide.
The best evidence are the statistics on the retail trade, which put down the figures in black and white.
Between the constitutional convention year (1935), when the fear of alien domination and control of
the retail trade already filled the minds of our leaders with fears and misgivings, and the year of the
enactment of the nationalization of the retail trade act (1954), official statistics unmistakably point out
to the ever-increasing dominance and control by the alien of the retail trade, as witness the following
tables:
Assets
Year and Retailers No.Pesos
Nationality
Establishments

Gross Sales
Per cent
Pesos
Distribution

Per cent
Distribution

1941:
Filipino
..........

106,671

200,323,138 55.82

174,181,924 51.74

Chinese
...........

15,356

118,348,692 32.98

148,813,239 44.21

Others
............

1,646

40,187,090 11.20

13,630,239 4.05

Filipino
..........

111,107

208,658,946 65.05

279,583,333 57.03

Chinese
...........

13,774

106,156,218 33.56

205,701,134 41.96

Others
...........

354

8,761,260

4,927,168

1947:

.49

1.01

1948: (Census)
Filipino
..........

113,631

213,342,264 67.30

467,161,667 60.51

Chinese
..........

12,087

93,155,459 29.38

294,894,227 38.20

Others
..........

422

10,514,675 3.32

9,995,402

Filipino
..........

113,659

213,451,602 60.89

462,532,901 53.47

Chinese
..........

16,248

125,223,336 35.72

392,414,875 45.36

Others
..........

486

12,056,365 3.39

10,078,364 1.17

Filipino
.........

119,352

224,053,620 61.09

466,058,052 53.07

Chinese
..........

17,429

134,325,303 36.60

404,481,384 46.06

Others
..........

347

8,614,025

7,645,327

1.29

1949:

1951:

2.31

AVERAGE
ASSETS AND GROSS SALES PER ESTABLISHMENT

Year and Retailer's


Nationality

Item
Assets
(Pesos)

Gross
Sales
(Pesos)

87

1941:
Filipino .............................................

1,878

1,633

Chinese ..............................................

7,707

9,691

Others ...............................................

24,415

8,281

Filipino .............................................

1,878

2,516

Chinese ...........................................

7,707

14,934

Others ..............................................

24,749

13,919

Filipino .............................................

1,878

4,111

Chinese .............................................

7,707

24,398

Others ..............................................

24,916

23,686

Filipino .............................................

1,878

4,069

Chinese ..............................................

7,707

24,152

Others ..............................................

24,807

20,737

Filipino .............................................

1,877

3,905

1947:

1948:

(Census)

1949:

1951:

Chinese .............................................

7,707

33,207

Others ...............................................

24,824

22,033

(Estimated Assets and Gross Sales of Retail Establishments, By Year and Nationality of Owners,
Benchmark: 1948 Census, issued by the Bureau of Census and Statistics, Department of Commerce and
Industry; pp. 18-19 of Answer.)
The above statistics do not include corporations and partnerships, while the figures on Filipino
establishments already include mere market vendors, whose capital is necessarily small..
The above figures reveal that in percentage distribution of assests and gross sales, alien participation
has steadily increased during the years. It is true, of course, that Filipinos have the edge in the number
of retailers, but aliens more than make up for the numerical gap through their assests and gross sales
which average between six and seven times those of the very many Filipino retailers. Numbers in
retailers, here, do not imply superiority; the alien invests more capital, buys and sells six to seven times
more, and gains much more. The same official report, pointing out to the known predominance of
foreign elements in the retail trade, remarks that the Filipino retailers were largely engaged in minor
retailer enterprises. As observed by respondents, the native investment is thinly spread, and the Filipino
retailer is practically helpless in matters of capital, credit, price and supply.
d. Alien control and threat, subject of apprehension in Constitutional convention.
It is this domination and control, which we believe has been sufficiently shown to exist, that is the
legislature's target in the enactment of the disputed nationalization would never have been adopted.
The framers of our Constitution also believed in the existence of this alien dominance and control when
they approved a resolution categorically declaring among other things, that "it is the sense of the
Convention that the public interest requires the nationalization of the retail trade; . . . ." (II Aruego, The
Framing of the Philippine Constitution, 662-663, quoted on page 67 of Petitioner.) That was twenty-two
years ago; and the events since then have not been either pleasant or comforting. Dean Sinco of the
University of the Philippines College of Law, commenting on the patrimony clause of the Preamble
opines that the fathers of our Constitution were merely translating the general preoccupation of
Filipinos "of the dangers from alien interests that had already brought under their control the
commercial and other economic activities of the country" (Sinco, Phil. Political Law, 10th ed., p. 114);
and analyzing the concern of the members of the constitutional convention for the economic life of the
citizens, in connection with the nationalistic provisions of the Constitution, he says:
But there has been a general feeling that alien dominance over the economic life of the country is not
desirable and that if such a situation should remain, political independence alone is no guarantee to
national stability and strength. Filipino private capital is not big enough to wrest from alien hands the
control of the national economy. Moreover, it is but of recent formation and hence, largely
inexperienced, timid and hesitant. Under such conditions, the government as the instrumentality of the
national will, has to step in and assume the initiative, if not the leadership, in the struggle for the

economic freedom of the nation in somewhat the same way that it did in the crusade for political
freedom. Thus . . . it (the Constitution) envisages an organized movement for the protection of the
nation not only against the possibilities of armed invasion but also against its economic subjugation by
alien interests in the economic field. (Phil. Political Law by Sinco, 10th ed., p. 476.)
Belief in the existence of alien control and predominance is felt in other quarters. Filipino businessmen,
manufacturers and producers believe so; they fear the dangers coming from alien control, and they
express sentiments of economic independence. Witness thereto is Resolution No. 1, approved on July
18, 1953, of the Fifth National convention of Filipino Businessmen, and a similar resolution, approved on
March 20, 1954, of the Second National Convention of Manufacturers and Producers. The man in the
street also believes, and fears, alien predominance and control; so our newspapers, which have
editorially pointed out not only to control but to alien stranglehold. We, therefore, find alien domination
and control to be a fact, a reality proved by official statistics, and felt by all the sections and groups that
compose the Filipino community.
e. Dangers of alien control and dominance in retail.
But the dangers arising from alien participation in the retail trade does not seem to lie in the
predominance alone; there is a prevailing feeling that such predominance may truly endanger the
national interest. With ample capital, unity of purpose and action and thorough organization, alien
retailers and merchants can act in such complete unison and concert on such vital matters as the fixing
of prices, the determination of the amount of goods or articles to be made available in the market, and
even the choice of the goods or articles they would or would not patronize or distribute, that fears of
dislocation of the national economy and of the complete subservience of national economy and of the
consuming public are not entirely unfounded. Nationals, producers and consumers alike can be placed
completely at their mercy. This is easily illustrated. Suppose an article of daily use is desired to be
prescribed by the aliens, because the producer or importer does not offer them sufficient profits, or
because a new competing article offers bigger profits for its introduction. All that aliens would do is to
agree to refuse to sell the first article, eliminating it from their stocks, offering the new one as a
substitute. Hence, the producers or importers of the prescribed article, or its consumers, find the article
suddenly out of the prescribed article, or its consumers, find the article suddenly out of circulation.
Freedom of trade is thus curtailed and free enterprise correspondingly suppressed.
We can even go farther than theoretical illustrations to show the pernicious influences of alien
domination. Grave abuses have characterized the exercise of the retail trade by aliens. It is a fact within
judicial notice, which courts of justice may not properly overlook or ignore in the interests of truth and
justice, that there exists a general feeling on the part of the public that alien participation in the retail
trade has been attended by a pernicious and intolerable practices, the mention of a few of which would
suffice for our purposes; that at some time or other they have cornered the market of essential
commodities, like corn and rice, creating artificial scarcities to justify and enhance profits to
unreasonable proportions; that they have hoarded essential foods to the inconvenience and prejudice
of the consuming public, so much so that the Government has had to establish the National Rice and
Corn Corporation to save the public from their continuous hoarding practices and tendencies; that they

have violated price control laws, especially on foods and essential commodities, such that the legislature
had to enact a law (Sec. 9, Republic Act No. 1168), authorizing their immediate and automatic
deportation for price control convictions; that they have secret combinations among themselves to
control prices, cheating the operation of the law of supply and demand; that they have connived to
boycott honest merchants and traders who would not cater or yield to their demands, in unlawful
restraint of freedom of trade and enterprise. They are believed by the public to have evaded tax laws,
smuggled goods and money into and out of the land, violated import and export prohibitions, control
laws and the like, in derision and contempt of lawful authority. It is also believed that they have engaged
in corrupting public officials with fabulous bribes, indirectly causing the prevalence of graft and
corruption in the Government. As a matter of fact appeals to unscrupulous aliens have been made both
by the Government and by their own lawful diplomatic representatives, action which impliedly admits a
prevailing feeling about the existence of many of the above practices.
The circumstances above set forth create well founded fears that worse things may come in the future.
The present dominance of the alien retailer, especially in the big centers of population, therefore,
becomes a potential source of danger on occasions of war or other calamity. We do not have here in this
country isolated groups of harmless aliens retailing goods among nationals; what we have are well
organized and powerful groups that dominate the distribution of goods and commodities in the
communities and big centers of population. They owe no allegiance or loyalty to the State, and the State
cannot rely upon them in times of crisis or emergency. While the national holds his life, his person and
his property subject to the needs of his country, the alien may even become the potential enemy of the
State.
f. Law enacted in interest of national economic survival and security.
We are fully satisfied upon a consideration of all the facts and circumstances that the disputed law is not
the product of racial hostility, prejudice or discrimination, but the expression of the legitimate desire
and determination of the people, thru their authorized representatives, to free the nation from the
economic situation that has unfortunately been saddled upon it rightly or wrongly, to its disadvantage.
The law is clearly in the interest of the public, nay of the national security itself, and indisputably falls
within the scope of police power, thru which and by which the State insures its existence and security
and the supreme welfare of its citizens.
VI. The Equal Protection Limitation
a. Objections to alien participation in retail trade. The next question that now poses solution is, Does
the law deny the equal protection of the laws? As pointed out above, the mere fact of alienage is the
root and cause of the distinction between the alien and the national as a trader. The alien resident owes
allegiance to the country of his birth or his adopted country; his stay here is for personal convenience;
he is attracted by the lure of gain and profit. His aim or purpose of stay, we admit, is neither illegitimate
nor immoral, but he is naturally lacking in that spirit of loyalty and enthusiasm for this country where he
temporarily stays and makes his living, or of that spirit of regard, sympathy and consideration for his
Filipino customers as would prevent him from taking advantage of their weakness and exploiting them.

The faster he makes his pile, the earlier can the alien go back to his beloved country and his beloved kin
and countrymen. The experience of the country is that the alien retailer has shown such utter disregard
for his customers and the people on whom he makes his profit, that it has been found necessary to
adopt the legislation, radical as it may seem.
Another objection to the alien retailer in this country is that he never really makes a genuine
contribution to national income and wealth. He undoubtedly contributes to general distribution, but the
gains and profits he makes are not invested in industries that would help the country's economy and
increase national wealth. The alien's interest in this country being merely transient and temporary, it
would indeed be ill-advised to continue entrusting the very important function of retail distribution to
his hands.
The practices resorted to by aliens in the control of distribution, as already pointed out above, their
secret manipulations of stocks of commodities and prices, their utter disregard of the welfare of their
customers and of the ultimate happiness of the people of the nation of which they are mere guests,
which practices, manipulations and disregard do not attend the exercise of the trade by the nationals,
show the existence of real and actual, positive and fundamental differences between an alien and a
national which fully justify the legislative classification adopted in the retail trade measure. These
differences are certainly a valid reason for the State to prefer the national over the alien in the retail
trade. We would be doing violence to fact and reality were we to hold that no reason or ground for a
legitimate distinction can be found between one and the other.
b. Difference in alien aims and purposes sufficient basis for distinction.
The above objectionable characteristics of the exercise of the retail trade by the aliens, which are actual
and real, furnish sufficient grounds for legislative classification of retail traders into nationals and aliens.
Some may disagree with the wisdom of the legislature's classification. To this we answer, that this is the
prerogative of the law-making power. Since the Court finds that the classification is actual, real and
reasonable, and all persons of one class are treated alike, and as it cannot be said that the classification
is patently unreasonable and unfounded, it is in duty bound to declare that the legislature acted within
its legitimate prerogative and it can not declare that the act transcends the limit of equal protection
established by the Constitution.
Broadly speaking, the power of the legislature to make distinctions and classifications among persons is
not curtailed or denied by the equal protection of the laws clause. The legislative power admits of a
wide scope of discretion, and a law can be violative of the constitutional limitation only when the
classification is without reasonable basis. In addition to the authorities we have earlier cited, we can also
refer to the case of Linsey vs. Natural Carbonic Fas Co. (1911), 55 L. ed., 369, which clearly and succinctly
defined the application of equal protection clause to a law sought to be voided as contrary thereto:
. . . . "1. The equal protection clause of the Fourteenth Amendment does not take from the state the
power to classify in the adoption of police laws, but admits of the exercise of the wide scope of
discretion in that regard, and avoids what is done only when it is without any reasonable basis, and
therefore is purely arbitrary. 2. A classification having some reasonable basis does not offend against

that clause merely because it is not made with mathematical nicety, or because in practice it results in
some inequality. 3. When the classification in such a law is called in question, if any state of facts
reasonably can be conceived that would sustain it, the existence of that state of facts at the time the law
was enacted must be assumed. 4. One who assails the classification in such a law must carry the burden
of showing that it does not rest upon any reasonable basis but is essentially arbitrary."
c. Authorities recognizing citizenship as basis for classification.
The question as to whether or not citizenship is a legal and valid ground for classification has already
been affirmatively decided in this jurisdiction as well as in various courts in the United States. In the case
of Smith Bell & Co. vs. Natividad, 40 Phil. 136, where the validity of Act No. 2761 of the Philippine
Legislature was in issue, because of a condition therein limiting the ownership of vessels engaged in
coastwise trade to corporations formed by citizens of the Philippine Islands or the United States, thus
denying the right to aliens, it was held that the Philippine Legislature did not violate the equal protection
clause of the Philippine Bill of Rights. The legislature in enacting the law had as ultimate purpose the
encouragement of Philippine shipbuilding and the safety for these Islands from foreign interlopers. We
held that this was a valid exercise of the police power, and all presumptions are in favor of its
constitutionality. In substance, we held that the limitation of domestic ownership of vessels engaged in
coastwise trade to citizens of the Philippines does not violate the equal protection of the law and due
process or law clauses of the Philippine Bill of Rights. In rendering said decision we quoted with approval
the concurring opinion of Justice Johnson in the case of Gibbons vs. Ogden, 9 Wheat., I, as follows:
"Licensing acts, in fact, in legislation, are universally restraining acts; as, for example, acts licensing
gaming houses, retailers of spirituous liquors, etc. The act, in this instance, is distinctly of that character,
and forms part of an extensive system, the object of which is to encourage American shipping, and place
them on an equal footing with the shipping of other nations. Almost every commercial nation reserves
to its own subjects a monopoly of its coasting trade; and a countervailing privilege in favor of American
shipping is contemplated, in the whole legislation of the United States on this subject. It is not to give
the vessel an American character, that the license is granted; that effect has been correctly attributed to
the act of her enrollment. But it is to confer on her American privileges, as contra distinguished from
foreign; and to preserve the Government from fraud by foreigners; in surreptitiously intruding
themselves into the American commercial marine, as well as frauds upon the revenue in the trade
coastwise, that this whole system is projected."
The rule in general is as follows:
Aliens are under no special constitutional protection which forbids a classification otherwise justified
simply because the limitation of the class falls along the lines of nationality. That would be requiring a
higher degree of protection for aliens as a class than for similar classes than for similar classes of
American citizens. Broadly speaking, the difference in status between citizens and aliens constitutes a
basis for reasonable classification in the exercise of police power. (2 Am., Jur. 468-469.)
In Commonwealth vs. Hana, 81 N. E. 149 (Massachusetts, 1907), a statute on the licensing of hawkers
and peddlers, which provided that no one can obtain a license unless he is, or has declared his intention,

to become a citizen of the United States, was held valid, for the following reason: It may seem wise to
the legislature to limit the business of those who are supposed to have regard for the welfare, good
order and happiness of the community, and the court cannot question this judgment and conclusion.
In Bloomfield vs. State, 99 N. E. 309 (Ohio, 1912), a statute which prevented certain persons, among
them aliens, from engaging in the traffic of liquors, was found not to be the result of race hatred, or in
hospitality, or a deliberate purpose to discriminate, but was based on the belief that an alien cannot be
sufficiently acquainted with "our institutions and our life as to enable him to appreciate the relation of
this particular business to our entire social fabric", and was not, therefore, invalid. In Ohio ex rel. Clarke
vs. Deckebach, 274 U. S. 392, 71 L. ed. 115 (1926), the U.S. Supreme Court had under consideration an
ordinance of the city of Cincinnati prohibiting the issuance of licenses (pools and billiard rooms) to
aliens. It held that plainly irrational discrimination against aliens is prohibited, but it does not follow that
alien race and allegiance may not bear in some instances such a relation to a legitimate object of
legislation as to be made the basis of permitted classification, and that it could not state that the
legislation is clearly wrong; and that latitude must be allowed for the legislative appraisement of local
conditions and for the legislative choice of methods for controlling an apprehended evil. The case
of State vs. Carrol, 124 N. E. 129 (Ohio, 1919) is a parallel case to the one at bar. In Asakura vs. City of
Seattle, 210 P. 30 (Washington, 1922), the business of pawn brooking was considered as having
tendencies injuring public interest, and limiting it to citizens is within the scope of police power. A
similar statute denying aliens the right to engage in auctioneering was also sustained in Wright vs. May,
L.R.A., 1915 P. 151 (Minnesota, 1914). So also in Anton vs. Van Winkle, 297 F. 340 (Oregon, 1924), the
court said that aliens are judicially known to have different interests, knowledge, attitude, psychology
and loyalty, hence the prohibitions of issuance of licenses to them for the business of pawnbroker, pool,
billiard, card room, dance hall, is not an infringement of constitutional rights. In Templar vs. Michigan
State Board of Examiners, 90 N.W. 1058 (Michigan, 1902), a law prohibiting the licensing of aliens as
barbers was held void, but the reason for the decision was the court's findings that the exercise of the
business by the aliens does not in any way affect the morals, the health, or even the convenience of the
community. In Takahashi vs. Fish and Game Commission, 92 L. ed. 1479 (1947), a California statute
banning the issuance of commercial fishing licenses to person ineligible to citizenship was held void,
because the law conflicts with Federal power over immigration, and because there is no public interest
in the mere claim of ownership of the waters and the fish in them, so there was no adequate
justification for the discrimination. It further added that the law was the outgrowth of antagonism
toward the persons of Japanese ancestry. However, two Justices dissented on the theory that fishing
rights have been treated traditionally as natural resources. In Fraser vs. McConway & Tarley Co., 82 Fed.
257 (Pennsylvania, 1897), a state law which imposed a tax on every employer of foreign-born
unnaturalized male persons over 21 years of age, was declared void because the court found that there
was no reason for the classification and the tax was an arbitrary deduction from the daily wage of an
employee.
d. Authorities contra explained.
It is true that some decisions of the Federal court and of the State courts in the United States hold that
the distinction between aliens and citizens is not a valid ground for classification. But in this decision the

laws declared invalid were found to be either arbitrary, unreasonable or capricious, or were the result or
product of racial antagonism and hostility, and there was no question of public interest involved or
pursued. In Yu Cong Eng vs. Trinidad, 70 L. ed. 1059 (1925), the United States Supreme Court declared
invalid a Philippine law making unlawful the keeping of books of account in any language other than
English, Spanish or any other local dialect, but the main reasons for the decisions are: (1) that if Chinese
were driven out of business there would be no other system of distribution, and (2) that the Chinese
would fall prey to all kinds of fraud, because they would be deprived of their right to be advised of their
business and to direct its conduct. The real reason for the decision, therefore, is the court's belief that
no public benefit would be derived from the operations of the law and on the other hand it would
deprive Chinese of something indispensable for carrying on their business. In Yick Wo vs. Hopkins, 30 L.
ed 220 (1885) an ordinance conferring powers on officials to withhold consent in the operation of
laundries both as to persons and place, was declared invalid, but the court said that the power granted
was arbitrary, that there was no reason for the discrimination which attended the administration and
implementation of the law, and that the motive thereof was mere racial hostility. In State vs.
Montgomery, 47 A. 165 (Maine, 1900), a law prohibiting aliens to engage as hawkers and peddlers was
declared void, because the discrimination bore no reasonable and just relation to the act in respect to
which the classification was proposed.
The case at bar is radically different, and the facts make them so. As we already have said, aliens do not
naturally possess the sympathetic consideration and regard for the customers with whom they come in
daily contact, nor the patriotic desire to help bolster the nation's economy, except in so far as it
enhances their profit, nor the loyalty and allegiance which the national owes to the land. These
limitations on the qualifications of the aliens have been shown on many occasions and instances,
especially in times of crisis and emergency. We can do no better than borrow the language of Anton vs.
Van Winkle, 297 F. 340, 342, to drive home the reality and significance of the distinction between the
alien and the national, thus:
. . . . It may be judicially known, however, that alien coming into this country are without the intimate
knowledge of our laws, customs, and usages that our own people have. So it is likewise known that
certain classes of aliens are of different psychology from our fellow countrymen. Furthermore, it is
natural and reasonable to suppose that the foreign born, whose allegiance is first to their own country,
and whose ideals of governmental environment and control have been engendered and formed under
entirely different regimes and political systems, have not the same inspiration for the public weal, nor
are they as well disposed toward the United States, as those who by citizenship, are a part of the
government itself. Further enlargement, is unnecessary. I have said enough so that obviously it cannot
be affirmed with absolute confidence that the Legislature was without plausible reason for making the
classification, and therefore appropriate discriminations against aliens as it relates to the subject of
legislation. . . . .
VII. The Due Process of Law Limitation.
a. Reasonability, the test of the limitation; determination by legislature decisive.

We now come to due process as a limitation on the exercise of the police power. It has been stated by
the highest authority in the United States that:
. . . . And the guaranty of due process, as has often been held, demands only that the law shall not be
unreasonable, arbitrary or capricious, and that the means selected shall have a real and substantial
relation to the subject sought to be attained. . . . .
xxx

xxx

xxx

So far as the requirement of due process is concerned and in the absence of other constitutional
restriction a state is free to adopt whatever economic policy may reasonably be deemed to promote
public welfare, and to enforce that policy by legislation adapted to its purpose. The courts are without
authority either to declare such policy, or, when it is declared by the legislature, to override it. If the
laws passed are seen to have a reasonable relation to a proper legislative purpose, and are neither
arbitrary nor discriminatory, the requirements of due process are satisfied, and judicial determination to
that effect renders a court functus officio. . . . (Nebbia vs. New York, 78 L. ed. 940, 950, 957.)
Another authority states the principle thus:
. . . . Too much significance cannot be given to the word "reasonable" in considering the scope of the
police power in a constitutional sense, for the test used to determine the constitutionality of the means
employed by the legislature is to inquire whether the restriction it imposes on rights secured to
individuals by the Bill of Rights are unreasonable, and not whether it imposes any restrictions on such
rights. . . .
xxx

xxx

xxx

. . . . A statute to be within this power must also be reasonable in its operation upon the persons whom
it affects, must not be for the annoyance of a particular class, and must not be unduly oppressive. (11
Am. Jur. Sec. 302., 1:1)- 1074-1075.)
In the case of Lawton vs. Steele, 38 L. ed. 385, 388. it was also held:
. . . . 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. . . .
Prata Undertaking Co. vs. State Board of Embalming, 104 ALR, 389, 395, fixes this test of
constitutionality:
In determining whether a given act of the Legislature, passed in the exercise of the police power to
regulate the operation of a business, is or is not constitutional, one of the first questions to be
considered by the court is whether the power as exercised has a sufficient foundation in reason in

connection with the matter involved, or is an arbitrary, oppressive, and capricious use of that power,
without substantial relation to the health, safety, morals, comfort, and general welfare of the public.
b. Petitioner's argument considered.
Petitioner's main argument is that retail is a common, ordinary occupation, one of those privileges long
ago recognized as essential to the orderly pursuant of happiness by free men; that it is a gainful and
honest occupation and therefore beyond the power of the legislature to prohibit and penalized. This
arguments overlooks fact and reality and rests on an incorrect assumption and premise, i.e., that in this
country where the occupation is engaged in by petitioner, it has been so engaged by him, by the alien in
an honest creditable and unimpeachable manner, without harm or injury to the citizens and without
ultimate danger to their economic peace, tranquility and welfare. But the Legislature has found, as we
have also found and indicated, that the privilege has been so grossly abused by the alien, thru the
illegitimate use of pernicious designs and practices, that he now enjoys a monopolistic control of the
occupation and threatens a deadly stranglehold on the nation's economy endangering the national
security in times of crisis and emergency.
The real question at issue, therefore, is not that posed by petitioner, which overlooks and ignores the
facts and circumstances, but this, Is the exclusion in the future of aliens from the retail trade
unreasonable. Arbitrary capricious, taking into account the illegitimate and pernicious form and manner
in which the aliens have heretofore engaged therein? As thus correctly stated the answer is clear. The
law in question is deemed absolutely necessary to bring about the desired legislative objective, i.e., to
free national economy from alien control and dominance. It is not necessarily unreasonable because it
affects private rights and privileges (11 Am. Jur. pp. 1080-1081.) The test of reasonableness of a law is
the appropriateness or adequacy under all circumstances of the means adopted to carry out its purpose
into effect (Id.) Judged by this test, disputed legislation, which is not merely reasonable but actually
necessary, must be considered not to have infringed the constitutional limitation of reasonableness.
The necessity of the law in question is explained in the explanatory note that accompanied the bill,
which later was enacted into law:
This bill proposes to regulate the retail business. Its purpose is to prevent persons who are not citizens
of the Philippines from having a strangle hold upon our economic life. If the persons who control this
vital artery of our economic life are the ones who owe no allegiance to this Republic, who have no
profound devotion to our free institutions, and who have no permanent stake in our people's welfare,
we are not really the masters of our destiny. All aspects of our life, even our national security, will be at
the mercy of other people.
In seeking to accomplish the foregoing purpose, we do not propose to deprive persons who are not
citizens of the Philippines of their means of livelihood. While this bill seeks to take away from the hands
of persons who are not citizens of the Philippines a power that can be wielded to paralyze all aspects of
our national life and endanger our national security it respects existing rights.
The approval of this bill is necessary for our national survival.

If political independence is a legitimate aspiration of a people, then economic independence is none the
less legitimate. Freedom and liberty are not real and positive if the people are subject to the economic
control and domination of others, especially if not of their own race or country. The removal and
eradication of the shackles of foreign economic control and domination, is one of the noblest motives
that a national legislature may pursue. It is impossible to conceive that legislation that seeks to bring it
about can infringe the constitutional limitation of due process. The attainment of a legitimate aspiration
of a people can never be beyond the limits of legislative authority.
c. Law expressly held by Constitutional Convention to be within the sphere of legislative action.
The framers of the Constitution could not have intended to impose the constitutional restrictions of due
process on the attainment of such a noble motive as freedom from economic control and domination,
thru the exercise of the police power. The fathers of the Constitution must have given to the legislature
full authority and power to enact legislation that would promote the supreme happiness of the people,
their freedom and liberty. On the precise issue now before us, they expressly made their voice clear;
they adopted a resolution expressing their belief that the legislation in question is within the scope of
the legislative power. Thus they declared the their Resolution:
That it is the sense of the Convention that the public interest requires the nationalization of retail trade;
but it abstain from approving the amendment introduced by the Delegate for Manila, Mr. Araneta, and
others on this matter because it is convinced that the National Assembly is authorized to promulgate a
law which limits to Filipino and American citizens the privilege to engage in the retail trade. (11 Aruego,
The Framing of the Philippine Constitution, quoted on pages 66 and 67 of the Memorandum for the
Petitioner.)
It would do well to refer to the nationalistic tendency manifested in various provisions of the
Constitution. Thus in the preamble, a principle objective is the conservation of the patrimony of the
nation and as corollary the provision limiting to citizens of the Philippines the exploitation, development
and utilization of its natural resources. And in Section 8 of Article XIV, it is provided that "no franchise,
certificate, or any other form of authorization for the operation of the public utility shall be granted
except to citizens of the Philippines." The nationalization of the retail trade is only a continuance of the
nationalistic protective policy laid down as a primary objective of the Constitution. Can it be said that a
law imbued with the same purpose and spirit underlying many of the provisions of the Constitution is
unreasonable, invalid and unconstitutional?
The seriousness of the Legislature's concern for the plight of the nationals as manifested in the approval
of the radical measures is, therefore, fully justified. It would have been recreant to its duties towards the
country and its people would it view the sorry plight of the nationals with the complacency and refuse
or neglect to adopt a remedy commensurate with the demands of public interest and national survival.
As the repository of the sovereign power of legislation, the Legislature was in duty bound to face the
problem and meet, through adequate measures, the danger and threat that alien domination of retail
trade poses to national economy.
d. Provisions of law not unreasonable.

A cursory study of the provisions of the law immediately reveals how tolerant, how reasonable the
Legislature has been. The law is made prospective and recognizes the right and privilege of those
already engaged in the occupation to continue therein during the rest of their lives; and similar
recognition of the right to continue is accorded associations of aliens. The right or privilege is denied to
those only upon conviction of certain offenses. In the deliberations of the Court on this case, attention
was called to the fact that the privilege should not have been denied to children and heirs of aliens now
engaged in the retail trade. Such provision would defeat the law itself, its aims and purposes. Beside, the
exercise of legislative discretion is not subject to judicial review. It is well settled that the Court will not
inquire into the motives of the Legislature, nor pass upon general matters of legislative judgment. The
Legislature is primarily the judge of the necessity of an enactment or of any of its provisions, and every
presumption is in favor of its validity, and though the Court may hold views inconsistent with the
wisdom of the law, it may not annul the legislation if not palpably in excess of the legislative power.
Furthermore, the test of the validity of a law attacked as a violation of due process, is not its
reasonableness, but its unreasonableness, and we find the provisions are not unreasonable. These
principles also answer various other arguments raised against the law, some of which are: that the law
does not promote general welfare; that thousands of aliens would be thrown out of employment; that
prices will increase because of the elimination of competition; that there is no need for the legislation;
that adequate replacement is problematical; that there may be general breakdown; that there would be
repercussions from foreigners; etc. Many of these arguments are directed against the supposed wisdom
of the law which lies solely within the legislative prerogative; they do not import invalidity.
VIII. Alleged defect in the title of the law
A subordinate ground or reason for the alleged invalidity of the law is the claim that the title thereof is
misleading or deceptive, as it conceals the real purpose of the bill which is to nationalize the retail
business and prohibit aliens from engaging therein. The constitutional provision which is claimed to be
violated in Section 21 (1) of Article VI, which reads:
No bill which may be enacted in the law shall embrace more than one subject which shall be expressed
in the title of the bill.
What the above provision prohibits is duplicity, that is, if its title completely fails to appraise the
legislators or the public of the nature, scope and consequences of the law or its operation (I Sutherland,
Statutory Construction, Sec. 1707, p. 297.) A cursory consideration of the title and the provisions of the
bill fails to show the presence of duplicity. It is true that the term "regulate" does not and may not
readily and at first glance convey the idea of "nationalization" and "prohibition", which terms express
the two main purposes and objectives of the law. But "regulate" is a broader term than either
prohibition or nationalization. Both of these have always been included within the term regulation.
Under the title of an act to "regulate", the sale of intoxicating liquors, the Legislature may prohibit the
sale of intoxicating liquors. (Sweet vs. City of Wabash, 41 Ind., 7; quoted in page 41 of Answer.)
Within the meaning of the Constitution requiring that the subject of every act of the Legislature shall be
stated in the tale, the title to regulate the sale of intoxicating liquors, etc." sufficiently expresses the

subject of an act prohibiting the sale of such liquors to minors and to persons in the habit of getting
intoxicated; such matters being properly included within the subject of regulating the sale. (Williams vs.
State, 48 Ind. 306, 308, quoted in p. 42 of Answer.)
The word "regulate" is of broad import, and necessarily implies some degree of restraint and prohibition
of acts usually done in connection with the thing to be regulated. While word regulate does not
ordinarily convey meaning of prohibit, there is no absolute reason why it should not have such meaning
when used in delegating police power in connection with a thing the best or only efficacious regulation
of which involves suppression. (State vs. Morton, 162 So. 718, 182 La. 887, quoted in p. 42 of Answer.)
The general rule is for the use of general terms in the title of a bill; it has also been said that the title
need not be an index to the entire contents of the law (I Sutherland, Statutory Construction, See. 4803,
p. 345.) The above rule was followed the title of the Act in question adopted the more general term
"regulate" instead of "nationalize" or "prohibit". Furthermore, the law also contains other rules for the
regulation of the retail trade which may not be included in the terms "nationalization" or "prohibition";
so were the title changed from "regulate" to "nationalize" or "prohibit", there would have been many
provisions not falling within the scope of the title which would have made the Act invalid. The use of the
term "regulate", therefore, is in accord with the principle governing the drafting of statutes, under
which a simple or general term should be adopted in the title, which would include all other provisions
found in the body of the Act.
One purpose of the constitutional directive that the subject of a bill should be embraced in its title is to
apprise the legislators of the purposes, the nature and scope of its provisions, and prevent the
enactment into law of matters which have received the notice, action and study of the legislators or of
the public. In the case at bar it cannot be claimed that the legislators have been appraised of the nature
of the law, especially the nationalization and the prohibition provisions. The legislators took active
interest in the discussion of the law, and a great many of the persons affected by the prohibitions in the
law conducted a campaign against its approval. It cannot be claimed, therefore, that the reasons for
declaring the law invalid ever existed. The objection must therefore, be overruled.
IX. Alleged violation of international treaties and obligations
Another subordinate argument against the validity of the law is the supposed violation thereby of the
Charter of the United Nations and of the Declaration of the Human Rights adopted by the United
Nations General Assembly. We find no merit in the Nations Charter imposes no strict or legal obligations
regarding the rights and freedom of their subjects (Hans Kelsen, The Law of the United Nations, 1951 ed.
pp. 29-32), and the Declaration of Human Rights contains nothing more than a mere recommendation
or a common standard of achievement for all peoples and all nations (Id. p. 39.) That such is the import
of the United Nations Charter aid of the Declaration of Human Rights can be inferred the fact that
members of the United Nations Organizations, such as Norway and Denmark, prohibit foreigners from
engaging in retail trade, and in most nations of the world laws against foreigners engaged in domestic
trade are adopted.

The Treaty of Amity between the Republic of the Philippines and the Republic of China of April 18, 1947
is also claimed to be violated by the law in question. All that the treaty guarantees is equality of
treatment to the Chinese nationals "upon the same terms as the nationals of any other country." But
the nationals of China are not discriminating against because nationals of all other countries, except
those of the United States, who are granted special rights by the Constitution, are all prohibited from
engaging in the retail trade. But even supposing that the law infringes upon the said treaty, the treaty is
always subject to qualification or amendment by a subsequent law (U. S. vs. Thompson, 258, Fed. 257,
260), and the same may never curtail or restrict the scope of the police power of the State (plaston vs.
Pennsylvania, 58 L. ed. 539.)
X. Conclusion
Resuming what we have set forth above we hold that the disputed law was enacted to remedy a real
actual threat and danger to national economy posed by alien dominance and control of the retail
business and free citizens and country from dominance and control; that the enactment clearly falls
within the scope of the police power of the State, thru which and by which it protects its own
personality and insures its security and future; that the law does not violate the equal protection clause
of the Constitution because sufficient grounds exist for the distinction between alien and citizen in the
exercise of the occupation regulated, nor the due process of law clause, because the law is prospective
in operation and recognizes the privilege of aliens already engaged in the occupation and reasonably
protects their privilege; that the wisdom and efficacy of the law to carry out its objectives appear to us
to be plainly evident as a matter of fact it seems not only appropriate but actually necessary and
that in any case such matter falls within the prerogative of the Legislature, with whose power and
discretion the Judicial department of the Government may not interfere; that the provisions of the law
are clearly embraced in the title, and this suffers from no duplicity and has not misled the legislators or
the segment of the population affected; and that it cannot be said to be void for supposed conflict with
treaty obligations because no treaty has actually been entered into on the subject and the police power
may not be curtailed or surrendered by any treaty or any other conventional agreement.
Some members of the Court are of the opinion that the radical effects of the law could have been made
less harsh in its impact on the aliens. Thus it is stated that the more time should have been given in the
law for the liquidation of existing businesses when the time comes for them to close. Our legal duty,
however, is merely to determine if the law falls within the scope of legislative authority and does not
transcend the limitations of due process and equal protection guaranteed in the Constitution. Remedies
against the harshness of the law should be addressed to the Legislature; they are beyond our power and
jurisdiction.
The petition is hereby denied, with costs against petitioner.
Paras, C.J., Bengzon, Reyes, A., Bautista Angelo, Concepcion, Reyes, J.B.L., Endencia and Felix, JJ., concur.

Separate Opinions
PADILLA, J., concurring and dissenting:
I agree to the proposition, principle or rule that courts may not inquire into the wisdom of an the Act
passed by the Congress and duly approved by the President of the Republic. But the rule does not
preclude courts from inquiring and determining whether the Act offends against a provision or
provisions of the Constitution. I am satisfied that the Act assailed as violative of the due process of law
and the equal protection of the laws clauses of the Constitution does not infringe upon them, insofar as
it affects associations, partnership or corporations, the capital of which is not wholly owned by the
citizens of the Philippines, and aliens, who are not and have not been engaged in the retail business. I
am, however, unable to persuade myself that it does not violate said clauses insofar as the Act applies to
associations and partnerships referred to in the Act and to aliens, who are and have heretofore been
engaged in said business. When they did engage in the retail business there was no prohibition on or
against them to engage in it. They assumed and believed in good faith they were entitled to engaged in
the business. The Act allows aliens to continue in business until their death or voluntary retirement from
the business or forfeiture of their license; and corporations, associations or partnership, the capital of
which is not wholly owned by the citizens of the Philippines to continue in the business for a period of
ten years from the date of the approval of the Act (19 June 1954) or until the expiry of term of the
existence of the association or partnership or corporation, whichever event comes first. The prohibition
on corporations, the capital of which is not wholly owned by citizens of the Philippines, to engage in the
retail business for a period of more than ten years from the date of the approval of the Act or beyond
the term of their corporate existence, whichever event comes first, is valid and lawful, because the
continuance of the existence of such corporations is subject to whatever the Congress may impose
reasonably upon them by subsequent legislation.1 But the prohibition to engage in the retail business by
associations and partnerships, the capital of which is not wholly owned by citizen of the Philippines,
after ten years from the date of the approval of the Act, even before the end of the term of their
existence as agreed upon by the associates and partners, and by alien heirs to whom the retail business
is transmitted by the death of an alien engaged in the business, or by his executor or administrator,
amounts to a deprivation of their property without due process of law. To my mind, the ten-year period
from the date of the approval of the Act or until the expiration of the term of the existence of the
association and partnership, whichever event comes first, and the six-month period granted to alien
heirs of a deceased alien, his executor or administrator, to liquidate the business, do not cure the defect
of the law, because the effect of the prohibition is to compel them to sell or dispose of their business.
The price obtainable at such forced sale of the business would be inadequate to reimburse and
compensate the associates or partners of the associations or partnership, and the alien heirs of a
deceased alien, engaged in the retail business for the capital invested in it. The stock of merchandise
bought and sold at retail does not alone constitute the business. The goodwill that the association,
partnership and the alien had built up during a long period of effort, patience and perseverance forms
part of such business. The constitutional provisions that no person shall be deprived of his property
without due process of law2 and that no person shall be denied the equal protection of the laws3 would
have no meaning as applied to associations or partnership and alien heirs of an alien engaged in the

retail business if they were to be compelled to sell or dispose of their business within ten years from the
date of the approval of the Act and before the end of the term of the existence of the associations and
partnership as agreed upon by the associations and partners and within six months after the death of
their predecessor-in-interest.
The authors of the Constitution were vigilant, careful and zealous in the safeguard of the ownership of
private agricultural lands which together with the lands of the public domain constitute the priceless
patrimony and mainstay of the nation; yet, they did not deem it wise and prudent to deprive aliens and
their heirs of such lands.4
For these reasons, I am of the opinion that section 1 of the Act, insofar as it compels associations and
partnership referred to therein to wind up their retail business within ten years from the date of the
approval of the Act even before the expiry of the term of their existence as agreed upon by the
associates and partners and section 3 of the Act, insofar as it compels the aliens engaged in the retail
business in his lifetime his executor or administrator, to liquidate the business, are invalid, for they
violate the due process of law and the equal protection of the laws clauses of the Constitution.

Footnotes
1

Section 76, Act No. 1459..

Section 1 (1), Article III, of the Constitution..

Ibid.

Section 5, Article XIII, of the Constitution.

Lutz vs. Araneta


EN BANC
G.R. No. L-7859

December 22, 1955

WALTER LUTZ, as Judicial Administrator of the Intestate Estate of the deceased Antonio Jayme
Ledesma, plaintiff-appellant,
vs.
J. ANTONIO ARANETA, as the Collector of Internal Revenue, defendant-appellee.
Ernesto J. Gonzaga for appellant.
Office of the Solicitor General Ambrosio Padilla, First Assistant Solicitor General Guillermo E. Torres and
Solicitor Felicisimo R. Rosete for appellee.

REYES, J.B L., J.:


This case was initiated in the Court of First Instance of Negros Occidental to test the legality of the taxes
imposed by Commonwealth Act No. 567, otherwise known as the Sugar Adjustment Act.
Promulgated in 1940, the law in question opens (section 1) with a declaration of emergency, due to the
threat to our industry by the imminent imposition of export taxes upon sugar as provided in the TydingsMcDuffe Act, and the "eventual loss of its preferential position in the United States market"; wherefore,
the national policy was expressed "to obtain a readjustment of the benefits derived from the sugar
industry by the component elements thereof" and "to stabilize the sugar industry so as to prepare it for
the eventuality of the loss of its preferential position in the United States market and the imposition of
the export taxes."
In section 2, Commonwealth Act 567 provides for an increase of the existing tax on the manufacture of
sugar, on a graduated basis, on each picul of sugar manufactured; while section 3 levies on owners or
persons in control of lands devoted to the cultivation of sugar cane and ceded to others for a
consideration, on lease or otherwise
a tax equivalent to the difference between the money value of the rental or consideration collected and
the amount representing 12 per centum of the assessed value of such land.
According to section 6 of the law
SEC. 6. All collections made under this Act shall accrue to a special fund in the Philippine Treasury, to be
known as the 'Sugar Adjustment and Stabilization Fund,' and shall be paid out only for any or all of the
following purposes or to attain any or all of the following objectives, as may be provided by law.
First, to place the sugar industry in a position to maintain itself, despite the gradual loss of the
preferntial position of the Philippine sugar in the United States market, and ultimately to insure its

continued existence notwithstanding the loss of that market and the consequent necessity of meeting
competition in the free markets of the world;
Second, to readjust the benefits derived from the sugar industry by all of the component elements
thereof the mill, the landowner, the planter of the sugar cane, and the laborers in the factory and in
the field so that all might continue profitably to engage therein;lawphi1.net
Third, to limit the production of sugar to areas more economically suited to the production thereof; and
Fourth, to afford labor employed in the industry a living wage and to improve their living and working
conditions: Provided, That the President of the Philippines may, until the adjourment of the next regular
session of the National Assembly, make the necessary disbursements from the fund herein created (1)
for the establishment and operation of sugar experiment station or stations and the undertaking of
researchers (a) to increase the recoveries of the centrifugal sugar factories with the view of reducing
manufacturing costs, (b) to produce and propagate higher yielding varieties of sugar cane more
adaptable to different district conditions in the Philippines, (c) to lower the costs of raising sugar cane,
(d) to improve the buying quality of denatured alcohol from molasses for motor fuel, (e) to determine
the possibility of utilizing the other by-products of the industry, (f) to determine what crop or crops are
suitable for rotation and for the utilization of excess cane lands, and (g) on other problems the solution
of which would help rehabilitate and stabilize the industry, and (2) for the improvement of living and
working conditions in sugar mills and sugar plantations, authorizing him to organize the necessary
agency or agencies to take charge of the expenditure and allocation of said funds to carry out the
purpose hereinbefore enumerated, and, likewise, authorizing the disbursement from the fund herein
created of the necessary amount or amounts needed for salaries, wages, travelling expenses,
equipment, and other sundry expenses of said agency or agencies.
Plaintiff, Walter Lutz, in his capacity as Judicial Administrator of the Intestate Estate of Antonio Jayme
Ledesma, seeks to recover from the Collector of Internal Revenue the sum of P14,666.40 paid by the
estate as taxes, under section 3 of the Act, for the crop years 1948-1949 and 1949-1950; alleging that
such tax is unconstitutional and void, being levied for the aid and support of the sugar industry
exclusively, which in plaintiff's opinion is not a public purpose for which a tax may be constitutioally
levied. The action having been dismissed by the Court of First Instance, the plaintifs appealed the case
directly to this Court (Judiciary Act, section 17).
The basic defect in the plaintiff's position is his assumption that the tax provided for in Commonwealth
Act No. 567 is a pure exercise of the taxing power. Analysis of the Act, and particularly of section 6
(heretofore quoted in full), will show that the tax is levied with a regulatory purpose, to provide means
for the rehabilitation and stabilization of the threatened sugar industry. In other words, the act is
primarily an exercise of the police power.
This Court can take judicial notice of the fact that sugar production is one of the great industries of our
nation, sugar occupying a leading position among its export products; that it gives employment to
thousands of laborers in fields and factories; that it is a great source of the state's wealth, is one of the
important sources of foreign exchange needed by our government, and is thus pivotal in the plans of a

regime committed to a policy of currency stability. Its promotion, protection and advancement,
therefore redounds greatly to the general welfare. Hence it was competent for the legislature to find
that the general welfare demanded that the sugar industry should be stabilized in turn; and in the wide
field of its police power, the lawmaking body could provide that the distribution of benefits therefrom
be readjusted among its components to enable it to resist the added strain of the increase in taxes that
it had to sustain (Sligh vs. Kirkwood, 237 U. S. 52, 59 L. Ed. 835; Johnson vs. State ex rel. Marey, 99 Fla.
1311, 128 So. 853; Maxcy Inc. vs. Mayo, 103 Fla. 552, 139 So. 121).
As stated in Johnson vs. State ex rel. Marey, with reference to the citrus industry in Florida
The protection of a large industry constituting one of the great sources of the state's wealth and
therefore directly or indirectly affecting the welfare of so great a portion of the population of the State
is affected to such an extent by public interests as to be within the police power of the sovereign. (128
Sp. 857).
Once it is conceded, as it must, that the protection and promotion of the sugar industry is a matter of
public concern, it follows that the Legislature may determine within reasonable bounds what is
necessary for its protection and expedient for its promotion. Here, the legislative discretion must be
allowed fully play, subject only to the test of reasonableness; and it is not contended that the means
provided in section 6 of the law (above quoted) bear no relation to the objective pursued or are
oppressive in character. If objective and methods are alike constitutionally valid, no reason is seen why
the state may not levy taxes to raise funds for their prosecution and attainment. Taxation may be made
the implement of the state's police power (Great Atl. & Pac. Tea Co. vs. Grosjean, 301 U. S. 412, 81 L. Ed.
1193; U. S. vs. Butler, 297 U. S. 1, 80 L. Ed. 477; M'Culloch vs. Maryland, 4 Wheat. 316, 4 L. Ed. 579).
That the tax to be levied should burden the sugar producers themselves can hardly be a ground of
complaint; indeed, it appears rational that the tax be obtained precisely from those who are to be
benefited from the expenditure of the funds derived from it. At any rate, it is inherent in the power to
tax that a state be free to select the subjects of taxation, and it has been repeatedly held that
"inequalities which result from a singling out of one particular class for taxation, or exemption infringe
no constitutional limitation" (Carmichael vs. Southern Coal & Coke Co., 301 U. S. 495, 81 L. Ed. 1245,
citing numerous authorities, at p. 1251).
From the point of view we have taken it appears of no moment that the funds raised under the Sugar
Stabilization Act, now in question, should be exclusively spent in aid of the sugar industry, since it is that
very enterprise that is being protected. It may be that other industries are also in need of similar
protection; that the legislature is not required by the Constitution to adhere to a policy of "all or none."
As ruled in Minnesota ex rel. Pearson vs. Probate Court, 309 U. S. 270, 84 L. Ed. 744, "if the law
presumably hits the evil where it is most felt, it is not to be overthrown because there are other
instances to which it might have been applied;" and that "the legislative authority, exerted within its
proper field, need not embrace all the evils within its reach" (N. L. R. B. vs. Jones & Laughlin Steel Corp.
301 U. S. 1, 81 L. Ed. 893).

Even from the standpoint that the Act is a pure tax measure, it cannot be said that the devotion of tax
money to experimental stations to seek increase of efficiency in sugar production, utilization of byproducts and solution of allied problems, as well as to the improvements of living and working
conditions in sugar mills or plantations, without any part of such money being channeled directly to
private persons, constitutes expenditure of tax money for private purposes, (compare Everson vs. Board
of Education, 91 L. Ed. 472, 168 ALR 1392, 1400).
The decision appealed from is affirmed, with costs against appellant. So ordered.
Paras, C. J., Bengzon, Padilla, Reyes, A., Jugo, Bautista Angelo, Labrador, and Concepcion, JJ., concur.

Tio vs. Videogram Regulatory Board


[GRN L-75697 June 18, 1987.*]
VALENTIN TIO doing business under the name and style of OMI ENTERPRISES, petitioner, vs.
VIDEOGRAM REGULATORY BOARD, MINISTER OF FINANCE, METRO MANILA COMMISSION, CITY MAYOR
and CITY TREASURER OF MANILA, respondents.
PETITION to review the decision of the Metro Manila Commission.
The facts are stated in the opinion of the Court.
Nelson Y. Ng for petitioner.
The City Legal Officer for respondents City Mayor and City Treasurer.
MELENCIO-HERRERA, J.:
This petition was filed on September 1, 1986 by petitioner on his own behalf and purportedly on behalf
of other videogram operators adversely affected. It assails the constitutionality of Presidential Decree
No. 1987 entitled "An Act Creating the Videogram Regulatory Board" with broad powers to regulate and
supervise the videogram industry (hereinafter briefly referred to as the BOARD). The Decree was
promulgated on October 5, 1985 and took effect on April 10, 1986, fifteen (15) days after completion of
its publication in the Official Gazette.
On November 5,1985, a month after the promulgation of the abovementioned decree, Presidential
Decree No. 1994 amended the National Internal Revenue Code providing, inter alia:
"SEC. 134. Video Tapes.-There shall be collected on each processed videotape cassette, ready for
playback, regardless of length, an annual tax of five pesos; Provided, That locally manufactured or
imported blank video tapes shall be subject to sales tax."
On October 23, 1986, the Greater Manila Theaters Association, Integrated Movie Producers, Importers
and Distributors Association of the Philippines, and Philippine Motion Pictures Producers Association,
hereinafter collectively referred to as the Intervenors, were permitted by the Court to intervene in the
case, over petitioner's opposition, upon the allegations that intervention was necessary for the
complete protection of their rights and that their "survival and very existence is threatened by the
unregulated proliferation of film piracy." The Intervenors were thereafter allowed to file their Comment
in Intervention.
The rationale behind the enactment of the DECREE, is set out in its preambular clauses as follows:
"1. WHEREAS, the proliferation and unregulated circulation of videograms including, among others,
videotapes, discs, cassettes or any technical improvement or variation thereof, have greatly prejudiced
the operations of moviehouses and theaters, and have caused a sharp decline in theatrical attendance
by at least forty percent (40%) and a tremendous drop in the collection of sales, contractor's specific,

amusement and other taxes, thereby resulting in substantial losses estimated at P450 Million annually in
government revenues;
"2. WHEREAS, videogram(s) establishments collectively earn around P600 Million per annum from
rentals, sales and disposition of videograms, and such earnings have not been subjected to tax, thereby
depriving the Government of approximately P180 Million in taxes each year;
"3. WHEREAS, the unregulated activities of videogram establishments have also affected the viability of
the movie industry, particularly the more than 1,200 movie houses and theaters throughout the
country, and occasioned industry-wide displacement and unemployment due to the shutdown of
numerous moviehouses and theaters;
"4. "WHEREAS, in order to ensure national economic recovery, it is imperative for the Government to
create an environment conducive to growth and development of all business industries, including the
movie industry which has an accumulated investment of about P3 Billion;
"5. WHEREAS, proper taxation of the activities of videogram. establishments will not only alleviate the
dire financial condition of the movie industry upon which more than 75,000 families and 500,000
workers depend for their livelihood, but also provide an additional source of revenue for the
Government, and at the same time rationalize the heretofore uncontrolled distribution of videograrms;
"6. WHEREAS, the rampant and unregulated showing of obscene videogram features constitutes a clear
and present danger to the moral and spiritual well-being of the youth, and impairs the mandate of the
Constitution for the State to support the rearing of the youth for civic efficiency and the development of
moral character and promote their physical, intellectual, and social well-being;
"7. WHEREAS, civic-minded citizens and groups have called for remedial measures to curb these blatant
malpractices which have flaunted our censorship and copyright laws;
"8. WHEREAS, in the face of these grave emergencies corroding the moral values of the people and
betraying the national economic recovery program, bold emergency measures must be adopted with
dispatch; x x x" (Numbering of paragraphs supplied).
Petitioner's attack on the constitutionality of the DECREE rests on the following grounds:
"1. Section 10 thereof, which imposes a tax of 30% on the gross receipts payable to the local
government is a RIDER and the same is not germane to the subject matter thereof;
"2. The tax imposed is harsh, confiscatory, oppressive and/or in unlawful restraint of trade in violation of
the due process clause of the Constitution;
"3. There is no factual nor legal basis for the exercise by the President of the vast powers conferred
upon him by Amendment No. 6;
"4. There is undue delegation of power and authority;

"5. The Decree is an ex-post facto law; and


"6. There is overregulation of the video industry as if it were a nuisance, which it is not."
We shall consider the foregoing objections in seriatim.
1. The Constitutional requirement that "every bill shall embrace only one subject which shall be
expressed in the title thereof"1 is sufficiently complied with if the title be comprehensive enough to
include the general purpose which a statute seeks to achieve. It is not necessary that the title express
each and every end that the statute wishes to accomplish. The requirement is satisfied if all the parts of
the statute are related, and are germane to the subject matter expressed in the title, or as long as they
are not inconsistent with or foreign to the general subject and title.2 An act having a single general
subject, indicated in the title, may contain any number of provisions, no matter how diverse they may
be, so long as they are not inconsistent with or foreign to the general subject, and may be considered in
furtherance of such subject by providing for the method and means of carrying out the general object."3
The rule also is that the constitutional requirement as to the title of a bill should not be so narrowly
construed as to cripple or impede the power of legislation.4 It should be given a-practical rather than
technical construction.5
Tested by the foregoing criteria, petitioner's contention that the tax provision of the DECREE is a rider is
without merit. That section reads, inter alia:
"Section 10. Tax on Sale, Lease or Disposition of Videograms. Notwithstanding any provision of law to
the contrary, the province shall collect a tax of thirty percent (30%) of the purchase price or rental rate,
as the case may be, for every sale, lease or disposition of a videogram containing a reproduction of any
motion picture or audiovisual program. Fifty percent (50%) of the proceeds of the tax collected shall
accrue to the province, and the other fifty percent (50%) shall acrrue to the municipality where the tax is
collected; PROVIDED, That in Metropolitan Manila, the tax shall be shared equally by the
City/Municipality and the Metropolitan Manila Commission.
xxx"
The foregoing provision is allied and germane to, and is reasonably necessary for the accomplishment
of, the general object of the DECREE, which is the regulation of the video industry through the
Videogram Regulatory Board as expressed in its title. The tax provision is not inconsistent with, nor
foreign to that general subject and title. As a tool for regulation 6 it is simply one of the regulatory and
control mechanisms scattered throughout the DECREE. The express purpose of the DECREE to include
taxation of the video industry in order to regulate and rationalize the heretofore uncontrolled
distribution of videograms is evident from Preambles 2 and 5, supra. Those preambles explain the
motives of the lawmaker in presenting the measure. The title of the DECREE, which is the creation of the
Videogram Regulatory Board, is comprehensive enough to include the purposes expressed in its
Preamble and reasonably covers all its provisions. It is unnecessary to express all those objectives in the
title or that the latter be an index to the body of the DECREE.7

2. Petitioner also submits that the thirty percent (30%) tax imposed is harsh and oppressive,
confiscatory, and in restraint of trade. However, it is beyond serious question that a tax does not cease
to be valid merely because it regulates, discourages, or even definitely deters the activities taxed.8The
power to impose taxes is one so unlimited in force and so searching in extent, that the courts scarcely
venture to declare that it is subject to any restrictions whatever, except such as rest in the discretion of
the authority which exercises it.9In imposing a tax, the legislature acts upon its constituents. This is, in
general, a sufficient security against erroneous and oppressive taxation.10
The tax imposed by the DECREE is not only a regulatory but also a revenue measure prompted by the
realization that earnings of videograrn establishments of around P600 million per annum have not been
subjected to tax, thereby depriving the Government of an additional source of revenue. It is an end-user
tax, imposed on retailers for every videogram. they make available for public viewing. It is similar to the
30% amusement tax imposed or borne by the movie industry which the theater-owners pay to the
government, but which is passed on to the entire cost of the admission ticket, thus shifting the tax
burden on the buying or the viewing public. It is a tax that is imposed uniformly on all videogram
operators.
The levy of the 30% tax is for a public purpose. It was imposed primarily to answer the need for
regulating the video industry, particularly because of the rampant film piracy, the flagrant violation of
intellectual property rights, and the proliferation of pornographic video tapes. And while it was also an
objective of the DECREE to protect the movie industry, the tax remains a valid imposition.
"The public purpose of a tax may legally exist even if the motive which impelled the legislature to
impose the tax was to favor one industry over another. 11
"It is inherent in the power to tax that a state be free to select the subjects of taxation, and it has been
repeatedly held that "inequities which result from a singling out of one particular class for taxation or
exemption infringe no constitutional limitation'."12Taxation has been made the implement of the
state's police power.13
At bottom, the rate of tax is a matter better addressed to the taxing legislature.
3. Petitioner argues that there was no legal nor factual basis for the promulgation of the DECREE by the
former President under Amendment No. 6 of the 1973 Constitution providing that "whenever in the
judgment of the President x x x, there exists a grave emergency or a threat or imminence thereof, or
whenever the interim Batasang Pambansa or the regular National Assembly fails or is unable to act
adequately on any matter for any reason that in his judgment requires immediate action, he may, in
order to meet the exigency, issue the necessary decrees, orders, or letters of instructions, which shall
form part of the law of the land."
In refutation, the Intervenors and the Solicitor General's Office aver that the 8th "whereas" clause
sufficiently summarizes the justification in that grave emergencies corroding the moral values of the
people and betraying the national economic recovery program necessitated bold emergency measures
to be adopted with dispatch. Whatever the reasons "in the judgment" of the then President, considering

that the issue of the validity of the exercise of legislative power under the said Amendment still pends
resolution in several other cases, we reserve resolution of the question raised at the proper time.
4. Neither can it be successfully argued that the DECREE contains an undue delegation of legislative
power. The grant in Section 11 of the DECREE of authority to the BOARD to "solicit the direct assistance
of other agencies and units of the government and deputize, for a fixed and limited period, the heads or
personnel of such agencies and units to perform enforcement functions for the Board" is not a
delegation of the power to legislate but merely a conferment of authority or discretion as to its
execution, enforcement, and implementation. "The true distinction is between the delegation of power
to make the law, which necessarily involves a discretion as to what it shall be, and conferring authority
or discretion as to its execution to be exercised under and in pursuance of the law. The first cannot be
done; to the latter, no valid objection can be made."14 Besides, in the very language of the decree, the
authority of the BOARD to solicit such assistance is for a "fixed and limited period" with the deputized
agencies concerned being "subject to the direction and control of the BOARD." That the grant of such
authority might be the source of graft and corruption would not stigmatize the DECREE as
unconstitutional. Should the eventuality occur, the aggrieved parties will not be without adequate
remedy in law.
5. The DECREE is not violative of the ex post facto principle. An ex post facto law is, among other
categories, one which "alters the legal rules of evidence, and authorizes conviction upon less or different
testimony than the law required at the time of the commission of the offense." It is petitioner's position
that Section 15 of the DECREE in providing that:
"All videogram establishments in the Philippines are hereby given a period of forty-five (45) days after
the effectivity of this Decree within which to register with and secure a permit from the BOARD to
engage in the videogram business and to register with the BOARD all their inventories of videograms,
including videotapes, discs, cassettes or other technical improvements or variations thereof, before they
could be sold, leased, or otherwise disposed of. Thereafter any videogram found in the possession of
any person engaged in the videogram business without the required proof of registration by the BOARD,
shall be prima facie evidence of violation of the Decree, whether the possession of such videogram be
for private showing and/or public exhibition."raises immediately a prima facie evidence of violation of
the DECREE when the required proof of registration of any videogram cannot be presented and thus
partakes of the nature of an ex post facto law.
The argument is untenable. As this Court held in the recent case of Vallarta vs. Court of Appeals, et al. 15
"x x x it is now well settled that 'there is no constitutional objection to the passage of a law providing
that the presumption of innocence may be overcome by a contrary presumption founded upon the
experience of human conduct, and enacting what evidence shall be sufficient to overcome such
presumption of innocence' (People vs. Mingoa, 92 Phil. 856 [1953] at 858-59, citing 1 COOLEY, A
TREATISE ON THE CONSTITUTIONAL LIMITATIONS, 639-641). And the 'legislature may enact that when
certain facts have been proved that they shall be prima facie evidence of the existence of the guilt of the
accused and shift the burden of proof provided there be a rational connection between the facts proved

and the ultimate facts presumed so that the inference of the one from proof of the others is not
unreasonable and arbitrary because of lack of connection between the two in common experience'.'16
Applied to the challenged provision, there is no question that there is a rational connection between the
fact proved, which is non-registration, and the ultimate fact presumed which is violation of the DECREE,
besides the fact that the prima facie presumption of violation of the DECREE attaches only after a fortyfive-day period counted from its effectivity and is, therefore, neither retrospective in character.
6. We do not share petitioner's fears that the video industry is being overregulated and being eased out
of existence as if it were a nuisance. Being a relatively new industry, the need for its regulation was
apparent. While the underlying objective of the DECREE is to protect the moribund movie industry,
there is no question that public welfare is at bottom of its enactment, considering "the unfair
competition posed by rampant film piracy; the erosion of the moral fiber of the viewing public brought
about by the availability of unclassified and unreviewed video tapes containing pornographic films and
films with brutally violent sequences; and losses in government revenues due to the drop in theatrical
attendance, not to mention the fact that the activities of video establishments are virtually untaxed
since mere payment of Mayor's permit and municipal license fees are required to engage in business."
17
The enactment of the Decree since April 10, 1986 has not brought about the "demise" of the video
industry. On the contrary, video establishments are seen to have proliferated in many places
notwithstanding the 30% tax imposed.
In the last analysis, what petitioner basically questions is the necessity, wisdom and expediency of the
DECREE. These considerations, however, are primarily and exclusively a matter of legislative concern.
"Only congressional power or competence, not the wisdom of the action taken, may be the basis for
declaring a statute invalid. This is as it ought to be. The principle of separation of powers has in the main
wisely allocated the respective authority of each department and confined its jurisdiction to such a
sphere. There would then be intrusion not allowable under the Constitution if on a matter left to the
discretion of a coordinate branch, the judiciary would substitute its own. If there be adherence to the
rule of law, as there ought to be, the last offender should be courts of justice, to which rightly litigants
submit their controversy precisely to maintain unimpaired the supremacy of legal norms and
prescriptions. The attack on the validity of the challenged provision likewise insofar as there may be
objections, even if valid and cogent, on its wisdom cannot be sustained."18
In fine, petitioner has not overcome the presumption of validity which attaches to a challenged statute.
We find no clear violation of the Constitution which would justify us in pronouncing Presidential Decree
No. 1987 as unconstitutional and void.
WHEREFORE, the instant Petition is hereby dismissed. No costs.
SO ORDERED.

Teehankee, (C.J.), Yap, Fernan, Narvasa, Gutierrez, Jr., Cruz, Paras, Feliciano, Gancayco, Padilla, Bidin,
Sarmiento and Cortes, JJ., concur.
Petition dismissed.
1. Section 19[1], Article VIII, 1973 Constitution; Section 26[1], Article VI, 1987 Constitution.
2. Sumulong vs. COMELEC, No. 48609, October 10, 1941, 73 Phil. 288; Cordero vs. Hon. Jose
Cabatuando, et al., L-14542, Oct. 31, 1962, 6 SCRA 418.
3. Public Service Co., Rerktenwald, 290 III. 314, 8 A.L.R 466, 470.
4. Government vs. Hongkong & Shanghai Banking Corporation, No. 44257, November 22,1938,66 Phil.
483; Cordero vs. Cabatuando, et al., supra.
5. Sumulong vs. Commission on Elections, supra.
6. United States vs. Sanchez, 340 U.S. 42, 44, 1950, cited in Bernas, Philippines Constitutional Law, p.
594.
7. People vs. Carlos, L-239, June 30,1947,78 Phil. 535.
8. U.S. vs. Sanchez, supra.
9. Cooley, A Treatise on the Constitutional Limitations, p. 986.
10. ibid., p. 987.
11. Magnano Co. vs. Hamilton, 292, U.S. 40.
12. Lutz vs. Araneta, L-7859, December 22, 1956, 98 Phil. 148, citing Carmichael vs. Southern Coal and
Coke Co., 301 U.S. 495, 81 L. Ed. 1246.
13. ibid., citing Great Ad. and Pacific Tea Co. vs. Grosjean, 301 U.S. 412, 81 L. Ed. 1193; U.S. vs. Butler,
297 U.S. 1, 80 L. Ed. 477; M'Culloch vs. Maryland, 4 Wheat, 316, 4 L. Ed. 579.
14. Cincinnati, W. & Z.R. Co. vs. Clinton County Comrs. (1852) 1 Ohio St. 88.
15. G.R. No. L-40195, May 29,1987.
16. Ibid., citing People vs. Mingoa, supra, See also U.S. vs. Luling, No. 11162, August 12,1916,34 Phil.
725.
17. Solicitor General's Comments, p. 102, Rollo.
18. Morfe vs. Mutuc, L-20387, January 31, 1968, 22 SCRA 424, 450-451.

ALSP vs. Sec of DAR


Asso. of Small LandOwners in the Phils.vs. Hon. Agrarian Reform July 13, 1989.
[GRN 78742 July 13, 1989.]
ASSOCIATION OF SMALL LANDOWNERS IN THE PHILIPPINES, INC., JUANITO D. GOMEZ, GERARDO B.
ALARCIO, FELIPE A. GUICO, JR., BERNARDO M. ALMONTE, CANUTO RAMIR B. CABRITO, ISIDRO T. GUICO,
FELISA I. LLAMIDO, FAUSTO J. SALVA, REYNALDO G. ESTRADA, FELISA C. BAUTISTA, ESMENIA J. CABE,
TEODORO B. MADRIAGA, AUREA J. PRESTOSA, EMERENCIANA J. ISLA, FELICISIMA C. APRESTO,
CONSUELO, M. MORALES, BENJAMIN R. SEGISMUNDO, CIRILA A. JOSE & NAPOLEON S. FERRER,
petitioners, vs. HONORABLE SECRETARY OF AGRARIAN REFORM, respondent.
Planters Committee vs. Arroyo

July 14, 1989.

[GRN 79310 July 14, 1989.*]


ARSENIO AL. ACUA, NEWTON JISON, VICTORINO FERRARIS, DENNIS JEREZA, HERMINIGILDO GUSTILO,
PAULINO D. TOLENTINO and PLANTERS' COMMITTEE, INC., Victories Mill District, Victorias, Negros
Occidental, petitioners, vs. JOKER ARROYO, PHILIP F. JUICO and PRESIDENTIAL AGRARIAN REFORM
COUNCIL,respondents.
[GRN 79744 July 14, 1989.*]
INOCENTES PABICO, petitioner, vs. HON. PHILIP E. JUICO, SECRETARY OF THE DEPARTMENT OF
AGRARIAN REFORM, HON. JOKER ARROYO, EXECUTIVE SECRETARY OF THE OFFICE OF THE PRESIDENT,
and Messrs. SALVADOR TALENTO, JAIME ABOGADO, CONRADO AVANCEA, and ROBERTO TAAY,
respondents.
[GRN 79777 July 14, 1989.*]
NICOLAS S. MANAAY and AGUSTIN HERMANO, JR., petitioners, vs. HON. PHILIP ELLA JUICO, as Secretary
of Agrarian Reform, and LAND BANK OF THE PHILIPPINES, respondents,
PETITIONS to review the decisions of the Secretary of Agrarian Reform.
The facts are stated in the opinion of the Court.
CRUZ, J.:
In ancient mythology, Antaeus was a terrible giant who blocked and challenged Hercules for his life on
his way to Mycenae after performing his eleventh labor. The two wrestled mightily and Hercules flung
his adversary to the ground thinking him dead, but Antaeus rose even stronger to resume their struggle.
This happened several times to Hercules' increasing amazement. Finally, as they continued grappling, it
dawned on Hercules that Antaeus was the son of Gaea and could never die as long as any part of his

body was touching his Mother Earth. Thus forewarned, Hercules then held Antaeus up in the air, beyond
the reach of the sustaining soil, and crushed him to death.
Mother Earth. The sustaining soil. The giver of life, without whose invigorating touch even the powerful
Antaeus weakened and died.
The cases before us are not as fanciful as the foregoing tale. But they also tell of the elemental forces of
life and death, of men and women who, like Antaeus, need the sustaining strength of the precious earth
to stay alive.
"Land for the Landless" is a slogan that underscores the acute imbalance in the distribution of this
precious resource among our people. But it is more than a slogan. Through the brooding centuries, it has
become a battlecry dramatizing the increasingly urgent demand of the dispossessed among us for a plot
of earth as their place in the sun.
Recognizing this need, the Constitution in 1935 mandated the policy of social justice to "insure the wellbeing and economic security of all the people,"1 especially the, less privileged. In 1973, the new
Constitution affirmed this goal addings pecifically that "the State shall regulate the acquisition,
ownership, use, enjoyment and disposition of private property and equitably diffuse property ownership
and profits."2 Significantly, there was also the specific injunction to "formulate and implement an
agrarian reform program aimed at emancipating the tenant from the bondage of the soil."3
The Constitution of 1987 was not to be outdone. Besides echoing these sentiments, it also adopted one
whole and separate Article XIII on Social Justice and Human Rights, containing grandiose but
undoubtedly sincere provisions for the uplift of the common people. These include a call in the following
words for the adoption by the State of an agrarian reform program:
SEC. 4. The State shall, by law, undertake an agrarian reform program founded on the right of farmers
and regular farmworkers, who are landless, to own directly or collectively the lands they till or, in the
case of other farmworkers, to receive a just share of the fruits thereof To this end, the State shall
encourage and undertake the just distribution of all agricultural lands, subject to such priorities and
reasonable retention limits as the Congress may prescribe, taking into account ecological,
developmental, or equity considerations and subject to the payment of just compensation. In
determining retention limits, the State shall respect the right of small landowners. The State shall
further provide incentives for voluntary landsharing.
Earlier, in fact, R.A, No. 3844, otherwise known as the Agricultural Land Reform Code, had already been
enacted by the Congress of the Philippines on August 8, 1963, in line with the above-stated principles.
This was substantially superseded almost a decade later by P.D. No. 27, which was promulgated on
October 21, 1972, along with martial law, to provide for the compulsory acquisition of private lands for
distribution among tenant-farmers and to specify maximum retention limits for landowners.
The people power revolution of 1986 did not change and indeed even energized the thrust for agrarian
reform. Thus, on July 17, 1987, President Corazon C. Aquino issued E.O. No. 228, declaring full land

ownership in favor of the beneficiaries of P.D. No. 27 and providing for the valuation of still unvalued
lands covered by the decree as well as the manner of their payment. This was followed on July 22, 1987
by Presidential Proclamation No. 131, instituting a comprehensive agrarian reform program (CARP), and
E.O. No. 229, providing the mechanics for its implementation.
Subsequently, with its formal organization, the revived Congress of the Philippines took over legislative
power from the President and started its own deliberations, including extensive public hearings, on the
improvement of the interests of farmers. The result, after almost a year of spirited debate, was the
enactment of R.A. No. 6657, otherwise known as the Comprehensive Agrarian Reform Law of 1988,
which President Aquino signed on June 10, 1988. This law, while considerably changing the earlier
mentioned enactments, nevertheless gives them suppletory effect insofar as they are not inconsistent
with its provisions.4
The above-captioned cases have been consolidated because they involve common legal questions,
including serious challenges to the constitutionality of the several measures mentioned above. They will
be the subject of one common discussion and resolution. The different antecedents of each case will
require separate treatment, however, and will first be explained hereunder.
G.R. No. 79777
Squarely raised in this petition is the constitutionality of P.D. No. 27, E.O. Nos. 228 and 229, and R.A. No.
6657.
Secretary of Agrarian Reform
The subjects of this petition are a 9-hectare riceland worked by four tenants and owned by petitioner
NIcolas Manaay and his wife and a 5-hectare riceland worked by four tenants and owned by petitioner
Augustin Hermano, Jr. The tenants were declared full owners of these lands by E.O. No. 228 as qualified
farmers under P.D. No. 27.
The petitioners are questioning P.D. No. 27 and E.O. Nos. 228 and 229 on grounds inter alia of
separation of powers, due process, equal protection and the constitutional limitation that no private
property shall be taken for public use without just compensation.
They contend that President Aquino usurped legislative power when she promulgated E.O. No. 228. The
said measure is invalid also for violation of Article XIII, Section 4, of the Constitution, for failure to
provide for retention limits for small landowners. Moreover, it does not conform to Article VI, Section
25(4) and the other requisites of a valid appropriation.
In connection with the determination of just compensation, the petitioners argue that the same may be
made only by a court of justice and not by the President of the Philippines. They invoke the recent cases
of EPZA v. Dulay5 and Manotok v. National Food Authority.6 Moreover, the just compensation
contemplated by the Bill of Rights is payable in money or in cash and not in the form of bonds or other
things of value.

In considering the rentals as advance payment on the land; the executive order also deprives the
petitioners of their property rights as protected by due process. The equal protection clause is also
violated because the order places the burden of solving the agrarian problems on the owners only of
agricultural lands. No similar obligation is imposed on the owners of other properties.
The petitioners also maintain that in declaring the beneficiaries under P.D. No. 27 to be the owners of
the lands occupied by them, E.O. No. 228 ignored judicial prerogatives and so violated due process.
Worse, the measure would not solve the agrarian problem because even the small farmers are deprived
of their lands and the retention rights guaranteed by the Constitution.
In his Comment, the Solicitor General stresses that P.D. No. 27 has already been upheld in the earlier
cases of Chavez v. Zobel,7 Gonzales v. Estrella,8 and Association of Rice and Corn Producers of the
Philippines, Inc. v. the National Land Reform council.9 The determination of just compensation by the
executive authorities conformably to the formula prescribed under the questioned order is at best initial
or preliminary only. It does not foreclose judicial intervention whenever sought or warranted. At any
rate, the challenge to the order is premature because no valuation of their property has as yet been
made by the Department of Agrarian Reform. The petitioners are also not proper parties because the
lands owned by them do not exceed the maximum retention limit of 7 hectares.
Replying, the petitioners insist they are proper parties because P.D. No. 27 does not provide for
retention limits on tenanted lands and that in any event their petition is a class suit brought in behalf of
landowners with landholdings below 24 hectares. They maintain that the determination of just
compensation by the administrative authorities is a final ascertainment. As for the cases invoked by the
public respondent, the constitutionality of P.D. No. 27 was merely assumed in Chavez, while what was
decided in Gonzales was the validity of the imposition of martial law.
In the amended petition dated November 22, 1988, it is contended that P.D. No. 27, E.O. Nos. 228 and
229 (except Sections 20 and 21) have been impliedly repealed by R.A. No. 6657. Nevertheless, this
statute should itself also be declared unconstitutional because it suffers from substantially the same
infirmities as the earlier measures.
A petition for intervention was filed with leave of court on June 1, 1988 by Vicente Cruz, owner of a
1.83-hectare land, who complained that the DAR was insisting on !he implementation of P.D. No. 27 and
E.O. No. 228 despite a compromise agreement he had reached with his tenant on the payment of
rentals. In a subsequent motion dated April 10, 1989, he adopted the allegations in the basic amended
petition that the abovementioned enactments have been impliedly repealed by R.A. No. 6657.
G.R. No. 79310
The petitioners herein are landowners and sugar planters in the Victorias Mill District, Victorias, Negros
Occidental. Copetitioner Planters' Committee, Inc. is an organization composed of 1,400 plantermembers. This petition seeks to prohibit the implementation of Proc. No. 131 and E.O. No. 229.

The petitioners claim that the power to provide for a Comprehensive Agrarian Reform Program as
decreed by the Constitution belongs to Congress and not the President. Although they agree that the
President could exercise legislative power until the Congress was convened, she could do so only to
enact emergency measures during the period. At that, even assuming that the interim legislative power
of the President was properly exercised, Proc. No. 131 and E.O. No. 229 would still have to be annulled
for violating the constitutional provisions on just compensation, due process,
and equal protection.
They also argue that under Section 2 of Proc. No. 131 which provides:
Agrarian Reform Fund.-There is hereby created a special fund, to be known as the Agrarian Reform
Fund, an initial amount of FIFTY BILLION PESOS (P50,000,000,000.00) to cover the estimated cost of the
Comprehensive Agrarian Reform Program from 1987 to 1992 which shall be sourced from the receipts
of the sale of the assets of the Asset Privatization Trust and Receipts of sale of ill-gotten wealth received
through the Presidential Commission on Good Government and such other sources as government may
deem appropriate. The amounts collected and accruing to this special fund shall be considered
automatically appropriated for the purpose authorized in this Proclamation the amount appropriated is
in futuro, not in esse. The money needed to cover the cost of the contemplated expropriation has yet to
be raised and cannot be appropriated at this time.
Furthermore, they contend that taking must be sumultaneous with payment of just compensation as it
is traditionally understood, i.e., with money and in full, but no such payment is contemplated in Section
5 of the E.O. No- 229. On the contrary, Section 6, thereof provides that the Land Bank of the Philippines
"shall compensate the landowner in an amount to be established by the government, which shall be
based on the owner's declaration of current fair market value as provided in Section 4 hereof, but
subject to certain controls to be defined and promulgated by the Presidential Agrarian Reform Council."
This compensation may not be paid fully in money but in any of several modes that may consist of part
cash and part bond, with interest, maturing periodically, or direct payment in cash or bond as may be
mutually agreed upon by the beneficiary and the landowner or as may be prescribed or approved by the
PARC.
The petitioners also argue that in the issuance of the two measures, no effort was made to make a
careful study of the sugar planters' situation. There is no tenancy problem in the sugar areas that can
justify the application of the CARP to them. To the extent that the sugar planters have been lumped in
the same legislation with other farmers, although they are a separate group with problems exclusively
their own, their right to equal protection has been violated.
A motion for intervention was filed on August 27,1987 by the National Federation of Sugarcane Planters
(NASP) which claims a membership of at least 20,000 individual sugar planters all over the country. On
September 10, 1987, another motion for intervention was filed, this time by Manuel Barcelona, et al.,
representing coconut and riceland owners. Both motions were granted by the Court.

NASP alleges that President Aquino had no authority to fund the Agrarian Reform Program and that, in
any event, the appropriation is invalid because of uncertainty in the amount appropriated. Section 2 of
Proc. No. 131 and Sections 20 and 21 of E.O. No. 229 provide for an initial appropriation of fifty billion
pesos and thus specifies the minimum rather than the maximum authorized amount. This is not allowed.
Furthermore, the stated initial amount has not been certified to by the National Treasurer as actually
available.
Two additional arguments are made by Barcelona, to wit, the failure to establish by clear and convincing
evidence the necessity for the exercise of the powers of eminent domain, and the violation of the
fundamental right to own property.
The petitioners also decry the penalty for non-registration of the lands, which is the expropriation of the
said land for an amount equal to the government assessor's valuation of the land for tax purposes. On
the other hand, if the landowner declares his own valuation, he is unjustly required to immediately pay
the corresponding taxes on the land, in violation of the uniformity rule.
In his consolidated Comment, the Solicitor General first invokes the presumption of constitutionality in
favor of Proc. No. 131 and E.O. No. 229. He also justifies the necessity for the expropriation as explained
in the "whereas" clauses of the Proclamation and submits that, contrary to the petitioner's contention, a
pilot project to determine the feasibility of CARP and a general survey oil the people's opinion thereon
are not indispensable prerequisites to its promulgation.
On the alleged violation of the equal protection clause, the sugar planters have failed to show that they
belong to a different class and should be differently treated. The Comment also suggests the possibility
of Congress first distributing public agricultural lands and scheduling the expropriation of private
agricultural lands later. From this viewpoint, the petition for prohibition would be premature.
The public respondent also points out that the constitutional prohibition is against the payment of
public money without the corresponding appropriation There is no rule that only money already in
existence can be the subject of an appropriation law.
Finally, the earmarking of fifty billion pesos as Agrarian Reform Fund, although denominated as an initial
amount, is actually the maximum sum appropriated. The word "initial" simply means that additional
amounts may be appropriated later when necessary.
On April 11, 1988, Prudencio Serrano, a coconut planter, filed a petition on his own behalf, assailing the
constitutionality of E.O. No, 229. In addition to the arguments already raised, Serrano contends that the
measure is unconstitutional because:
(1) Only public lands should be included in the CARP;
(2) E.O. No, 229 embraces more than one subject which is not expressed in the title;
(3) The power of the President to legislate was terminated on July 2,1987; and

(4) The appropriation of a P50 billion special fund from the National Treasury did not originate from the
House of Representatives.
G.R. No. 79744
The petitioner alleges that the then Secretary of Department of Agrarian Reform, in violation of due
process and the requirement for just compensation, placed his landholding under the coverage of
Operation Land Transfer. Certificates of Land Transfer were subsequently issued to the private
respondents, who then refused payment of lease rentals to him.
On September 3, 1986, the petitioner protested the erroneous inclusion of his small landholding under
Operation Land Transfer and asked for the recall and cancellation of the Certificates of Land Transfer in
the name of the private respondents. He claims that on December 24, 1986, his petition was denied
without hearing. On February 17, 1987, he filed a motion for reconsideration, which had not been acted
upon when E.O. Nos. 228 and 229 were issued. These orders rendered his motion moot and academic
because they directly effected the transfer of his land to the private respondents.
The petitioner now argues that:
(1) E.O. Nos. 228 and 229 were invalidly issued by the President of the Philippines.
(2) The said executive orders are violative of the constitutional provision that no private property shall
be taken without due process or just compensation.
(3) The petitioner is denied the right of maximum retention provided for under the 1987 Constitution.
The petitioner contends that the issuance of E.O Nos. 228 and 229 shortly before Congress convened is
anomalous and arbitrary, besides violating the doctrine of separation of powers. The legislative power
granted to the President under the Transitory Provisions refers only to emergency measures that may
be promulgated in the proper exercise of the police power.
The petitioner also invokes his rights not to be deprived of his property without due process of law and
to the retention of his small parcels of riceholding as guaranteed under Article XIII, Section 4 of the
Constitution. He likewise argues that, besides denying him just compensation for his land, the provisions
of E.O. No. 228 declaring that:
Lease rentals paid to the landowner by the farmer-beneficiary after October 21, 1972 shall be
considered as advance payment for the land.
is an unconstitutional taking of a vested property right. It is also his contention that the inclusion of even
small landowners in the program along with other landowners with lands consisting of seven hectares or
more is undemocratic.
In his Comment, the Solicitor General submits that the petition is premature because the motion for
reconsideration filed with the Minister of Agrarian Reform is still unresolved. As for the validity of the

issuance of E.O. Nos. 228 and 229, lie-argues that they were enacted pursuant to Section 6, Article XVIII
of the Transitory Provisions of the 1987 Constitution which reads:
The incumbent president shall continue to exercise legislative powers until the first Congress is
convened.
On the issue of just compensation, his position is that when P.D. No. 27 was promulgated on October
21, 1972, the tenant farmer of agricultural land was deemed the owner of the land he was tilling. The
leasehold rentals paid after that date should therefore be considered amortization payments.
In his Reply to the public respondents, the petitioner maintains that the motion he filed was resolved on
December 14, 1987. An appeal to the Office of the President would be useless with the promulgation of
E. 0. Nos. 228 and 229, which in effect sanctioned the validity of the public respondent's acts.
G.R. No. 78742
The petitioners in this case invoke the right of retention granted by P.D. No. 27 to owners of rice and
corn lands not exceeding seven hectares as long as they are cultivating or intend to cultivate the same.
Their respective lands do not exceed the statutory limit but are occupied by tenants who are actually
cultivating such lands.
According to P.D. No. 316, which was promulgated in implementation of P.D. No. 27:
No tenant-farmer in agricultural lands primarily devoted to rice and corn shall be ejected or removed
from his farmholding until such time as the respective rights of the tenant-farmers and the landowner
shall have been determined in accordance with the rules and regulations implementing P.D. No. 27.
The petitioners claim they cannot eject their tenants and so are unable to enjoy their right of retention
because the Department of Agrarian Reform has so far not issued the implementing rules required
under the above-quoted decree. They therefore ask the Court for a writ of mandamus to compel the
respondent to issue the said rules.
In his Comment, the public respondent argues that P.D. No. 27 has been amended by LOI 474 removing
any right of retention from persons who own other agricultural lands of more than 7 hectares in
aggregate area or lands used for residential, commercial, industrial or other purposes from which they
derive adequate income for their family. And even assuming that the petitioners do not fall under its
terms, the regulations implementing P.D. No. 27 have already been issued, to wit, the Memorandum
dated July 10, 1975 (Interim Guidelines on Retention by Small Landowners, with an accompanying
Retention Guide Table), Memorandum Circular No. 11 dated April 21, 1978, (Implementation Guidelines
of LOI No. 474), Memorandum Circular No. 18-81 dated December 29,1981 (Clarificatory Guidelines on
Coverage of P.D. No. 27 and Retention by Small Landowners), and DAR Administrative Order No. 1,
series of 1985 (Providing for a Cut-off Date for Landowners to Apply for Retention and/or to Protest the
Coverage of their Landholdings under Operation Land Transfer pursuant to P.D. No. 27). For failure to
file the corresponding applications for retention under these measures, the petitioners are now barred
from invoking this right.

The public respondent also stresses that the petitioners have prematurely initiated this case
notwithstanding the pendency of their appeal to the President of the Philippines. Moreover, the
issuance of the implementing rules, assuming this has not yet been done, involves the exercise of
discretion which cannot be controlled through the writ of mandamus. This is especially true if this
function is entrusted, as in this case, to a separate department of the government.
In their Reply, the petitioners insist that the above-cited measures are not applicable to them because
they do not own more than seven hectares of agricultural land. Moreover, assuming arguendo that the
rules were intended to cover them also, the said measures are nevertheless not in force because they
have not been published as required by law and the ruling of this Court in Taada v. Tuvera.10 As for LOI
474, the same is ineffective for the additional reason that a mere letter of instruction could not have
repealed the presidential decree.
I
Although holding neither purse nor sword and so regarded as the weakest of the three departments of
the government, the judiciary is nonetheless vested with the power to annul the acts of either the
legislative or the executive or of both when not conformable to the fundamental law. This is the reason
for what some quarters call the doctrine of judicial supremacy. Even so, this power is not lightly
assumed or readily exercised. The doctrine of separation of powers imposes upon the courts a proper
restraint, born of the nature of their functions and of their respect for the other departments, in striking
down the acts of the legislative and the executive as unconstitutional. The policy, indeed, is a blend of
courtesy and caution. To doubt is to sustain. The theory is that before the act was done or the law was
enacted, earnest studies were made by Congress or the President, or both, to insure that the
Constitution would not he breached.
In addition, the Constitution itself lays down stringent conditions for a declaration of unconstitutionality,
requiring therefor the concurrence of a majority of the members of the Supreme Court who took part in
the deliberations and voted on the issue during their session en banc." And as established by judgemade
doctrine, the Court will assume jurisdiction over a constitutional question only if it is shown that the
essential requisities of a judicial inquiry into such a question are first satisfied. Thus, there must be an
actual case or controversy involving a conflict of legal rights susceptible of judicial determination, the
constitutional question must have been opportunely raised by the proper party, and the resolution of
the question is unavoidably necessary to the decision of the case itself 12
With particular regard to the requirement of proper party as applied in the cases before us, we hold that
the same is satisfied by the petitioners and intervenors because each of them has sustained or is in
danger of sustaining an immediate injury as a result of the acts or measures complained of" And even
if,strictly speaking, they are not covered by the definition, it is still within the wide discretion of the
Court to waive the requirement and so remove the impediment to its addressing and resolving the
serious constitutional questions raised.
In the first Emergency Powers Cases,14 ordinary citizens and taxpayers were allowed to question the
constitutionality of several executive orders issued by President Quirino although they were invoking

only an indirect and general interest shared in common with the public. The Court dismissed the
objection that they were not proper parties and ruled that "the transcendental importance to the public
of these cases demands that they be settled promptly and definitely, brushing aside, if we must,
technicalities of procedure." We have since then applied this exception in many other cases.15
The other above-mentioned requisites have also been met in the present petitions.
In must be stressed that despite the inhibitions pressing upon the Court when confronted with
constitutional issues like the ones now before it, it will not hesitate to declare a law or act invalid when
it is convinced that this must be done. In arriving at this conclusion, its only criterion will be the
Constitution as God and its conscience give it the light to probe its meaning and discover its purpose.
Personal motives and political considerations are irrelevancies that cannot influence its decision.
Blandishment is as ineffectual as intimidation.
For all the awesome power of the Congress and the Executive, the Court will not hesitate to "make the
hammer fall, and heavily," to use Justice Laurel's pithy language, where the acts of these departments,
or of any public official, betray the people's will as expressed in the Constitution.
It need only be added, to borrow again the words of Justice Laurel, that 14 Araneta v. Dinglasan, 84 Phil.
368.
x x x when the judiciary mediates to allocate constitutional boundaries, it does not assert any superiority
over the other departments; it does not in reality nullify or invalidate an act of the Legislature, but only
asserts the solemn and sacred obligation assigned to it by the Constitution to determine conflicting
claims of authority under the Constitution and to establish for the parties in an actual controversy the
rights which that instrument secures and guarantees to them. This is in truth all that is involved in what
is termed "judicial supremacy" which properly is the power of judicial review under the Constitution.16
The cases before us categorically raise constitutional questions that this Court must categorically
resolve. And so we shall.
We proceed first to the examination of the preliminary issues before resolving the more serious
challenges to the constitutionality of the several measures involved in these petitions.
The promulgation of P.D. No. 27 by President Marcos in the exercise of his powers under martial law has
already been sustained in Gonzales v. Estrella and we find no reason to modify or reverse it on that
issue. As for the power of President Aquino to promulgate Proc. No. 131 and E.O. Nos. 228 and 229, the
same was authorized under Section 6 of the Transitory Provisions of the 1987 Constitution, quoted
above.
The said measures were issued by President Aquino before July 27, 1987, when the Congress of the
Philippines was formally convened and took over legislative power from her. They are not "midnight"
enactments intended to pre-empt the legislature because E.O. No. 228 was issued on July 17,1987, and
the other measures, i.e., Proc. No. 131 and E.O. No. 229, were both issued on July 22, 1987. Neither is it
correct to say that these measures ceased to be valid when she lost her legislative power for, like any

statute, they continue to be in force unless Modified or repealed by subsequent law or declared invalid
by the courts. A statute does not ipso facto become inoperative simply because of the dissolution of the
legislature that enacted it. By the same token, President Aquino's loss of legislative power did not have
the effect of invalidating all the measures enacted by her when and as long as she possessed it.
Significantly, the Congress she is alleged to have undercut has not rejected but in fact substantially
affirmed the challenged measures and has specifically provided that they shall be suppletory to R.A. No.
6657 whenever not inconsistent with its provisions.17 Indeed, some portions of the said measures, like
the creation of the P50 billion fund in Section 2 of Proc. No. 131, and Sections 20 and 21 of E.O. No. 229,
have been incorporated by reference in the CARP Law.18
That fund, as earlier noted, is itself being questioned on the ground that it does not conform to the
requirements of a valid appropriation as specified in the Constitution. Clearly, however, Proc. No. 131 is
not an appropriation measure even if it does provide for the creation of said fund, for that is not its
principal purpose. An appropriation law is one the primary and specific purpose of which is to authorize
the release of public funds from the treasury.19 The creation of the fund is only incidental to the main
objective of the proclamation, which is agrarian reform.
It should follow that the specific constitutional provisions invoked, to wit, Section 24 and Section 25(4)
of Article VI, are not applicable. With particular reference to Section 24, this obviously could not have
been complied with for the simple reason that the House of Representatives, which now has the
exclusive power to initiate appropriation measures, had not yet been convened when the proclamation
was issued. The legislative power was then solely vested in the President of the Philippines, who
embodied, as it were, both houses of Congress.
The argument of some of the petitioners that Proc. No. 131 and E.O. No. 229 should be invalidated
because they do not provide for retention limits as required by Article XIII, Section 4 of the Constitution
is no longer tenable. R.A. No. 6657 does provide for such limits now in Section 6 of the law, which in fact
is one of its most controversial provisions. This section declares:
Retention Limits.-Except as otherwise provided in this Act, no person may own or retain, directly or
indirectly, any public or private agricultural land, the size of which shall vary according to factors
governing a viable familysized farm, such as commodity produced, terrain, infrastructure, and soil
fertility as determined by the Presidential Agrarian Reform Council (PARC) created hereunder, but in no
case shall retention by the landowner exceed five (5) hectares. Three (3) hectares may be awarded to
each child of the landowner, subject to the following qualifications: (1) that he is at least fifteen (15)
years of age; and (2) that he is actually tilling the land or directly managing the farm; Provided, That
landowners whose lands have been covered by Presidential Decree No. 27 shall be allowed to keep the
area originally retained by them thereunder, further, That original homestead grantees or direct
compulsory heirs who still own the original homestead at the time of the approval of this Act shall retain
the same areas as long as they continue to cultivate said homestead.
The argument that E.O. No. 229 violates the constitutional requirement that a bill shall have only one
subject, to be expressed in its title, deserves only short attention. It is settled that the title of the bill

does not have to be a catalogue of its contents and will suffice if the matters embodied in the text aye
relevant to each other and may be inferred from the title.20
The Court wryly observes that during the past dictatorship, every presidential issuance, by whatever
name it was called, had the force and effect of law because it came from President Marcos. Such are the
ways of despots. Hence, it is futile to argue, as the petitioners do in G.R. No. 79744, that LOI 474 could
not have repealed F.D. No. 27 because the former was only a letter of instruction. The important thing is
that it was issued by President Marcos, whose word was law during that time.
But for all their peremptoriness, these issuances from the President Marcos still had to comply with the
requirement for publication as this Court held in Taada v. Tavera.21 Hence, unless published in the
Official Gazette in accordance with Article 2 of the Civil Code, they could not have any force and effect if
they were among those enactments successfully challenged in that case. (LOI 474 was published,
though, in the Official Gazette dated November 29, 1976.)
Finally, there is the contention of the public respondent in G.R. No. 78742 that the writ of mandamus
cannot issue to compel the performance of a discretionary act, especially by a specific department of
the government. That is true as a general proposition but is subject to one important qualification.
Correctly and categorically stated, the rule is that mandamus will lie to compel the discharge of the
discretionary duty itself but not to control the discretion to be exercised. In other words, mandamus can
issue to require action only but not specific action.
Whenever a duty is imposed upon a public official and an unnecessary and unreasonable delay in the
exercise of such duty occurs, if it is a clear duty imposed by law, the courts will intervene by the
extraordinary legal remedy of mandamus to compel action. If the duty is purely ministerial, the courts
will require specific action. If the duty is purely discretionary, the courts by mandamus will require
action only. For example, if an inferior court, public official, or board should, for an unreasonable length
of time, fail to decide a particular question to the great detriment of all parties concerned, or a court
should refuse to take jurisdiction of a cause when the law clearly gave it jurisdiction, mandamus will
issue, in the first case to require a decision, and in the second to require that jurisdiction be taken of the
cause.22
And while it is true that as a rule the writ will not be proper as long as there is still a plain, speedy and
adequate remedy available from the administrative authorities, resort to the courts may still be
permitted if the issue raised is a question of law.23
There are traditional distinctions between the police power and the power of eminent domain that
logically preclude the application of both powers at the same time on the same subject. In the case of
City of Baguio v. NAWASA,24 for example, where a law required the transfer of all municipal
waterworks systems to the NAWASA in exchange for its assets of equivalent value, the Court held that
the power being exercised was eminent domain because the property involved was wholesome and
intended for a public use. Property condemned under the police power is noxious or intended for a
noxious purpose, such as a building on the verge of collapse, which should be demolished for the public
safety, or obscene materials, which should be destroyed in the interest of public morals. The

confiscation of such property is not compensable, unlike the taking of property under the power of
expropriation, which requires the payment of just compensation to the owner.
In the case of Pennsylvania Coal Co. v. Mahon,25 Justice Holmes laid down the limits of the police power
in a famous aphorism: "The general rule at least is that while property may be regulated to a certain
extent, if regulation goes too far it will be recognized as a taking." The regulation that went "too far" was
a law prohibiting mining which might cause the subsidence of structures for human habitation
constructed on the land surface. This was resisted by a coal company which had earlier granted a deed
to the land over its mine but reserved all mining rights thereunder, with the grantee assuming all risks
and waiving any damage claim. The Court held the law could not be sustained without compensating the
grantor. Justice Brandeis filed a lone dissent in which he argued that there was a valid exercise of the
police power. He said:
Every restriction upon the use of property imposed in the exercise of the police power deprives the
owner of some right theretofore enjoyed, and is, in that sense, an abridgment by the State of rights in
property without making compensation. But restriction imposed to protect the public health, safety or
morals from dangers threatened is not a taking. The restriction here in question is merely the
prohibition of a noxious use. The property so restricted remains in the possession of its owner. The state
does not appropriate it or make any use of it. The state merely prevents the owner from making a use
which inter. feres with paramount rights of the public. Whenever the use prohibited ceases to be
noxious-as it may because of further changes in local or social conditions-the restriction will have to be
removed and the owner will again be free to enjoy his property as heretofore.
Recent trends, however, would indicate not a polarization but a mingling of the police power and the
power of eminent domain, with the latter being used as an implement of the former like the power of
taxation. The employment of the taxing power to achieve a police purpose has long been accepted.26 As
for the power of expropriation, Prof John J. Costonis of the University of Illinois College of Law (referring
to the earlier case of Euclid v. Ambler Realty Co., 272 US 366, which sustained a zoning law under the
police power) makes the following significant I remarks:
Euclid, moreover, was decided in an era when judges located the police and eminent domain powers on
different planets. Generally speaking, they viewed eminent domain as encompassing public acquisition
of private property for improvements that would be available for public use," literally construed. To the
police power, on the other hand, they assigned the less intrusive task of preventing harmful
externalities, a point reflected in the Euclid opinion's reliance on an analogy to nuisance law to bolster
its support of zoning. So long as suppression of a privately authored harm bore a plausible relation to
some legitimate "public purpose," the pertinent measure need have afforded no compensation
whatever. With the progressive growth of government's involvement in land use, the distance between
the two powers has contracted considerably. Today government often employs eminent domain
interchangeably with or as a useful complement to the police power-a trend expressly approved in the
Supreme Court's 1954 decision in Berman v. Parker, which broadened the reach of eminent domain's
"public use" test to match that of the police power's standard of "public purpose."27

The Berman case sustained a redevelopment project and the improvement of blighted areas in the
District of Columbia as a proper exercise of the police power. On the role of eminent domain in the
attainment of this purpose, Justice Douglas declared:
If those who govern the District of Columbia decide that the Nation's Capital should be beautiful as well
as sanitary, there is nothing in the Fifth Amendment that stands in the way.
Once the object is within the authority of Congress, the right to realize it through the exercise of
eminent domain is clear.
For the power of eminent domain is merely the means to the end.28
In Penn Central Transportation Co. v. New York City,29 decided by a 6-3 vote in 1978, the U.S Supreme
Court sustained the respondent's Landmarks Preservation Law under which the owners of the Grand
Central Terminal had not been allowed to construct a multi-story office building over the Terminal,which
had been designated a historic landmark. Preservation of the landmark was held to be a valid objective
of the police power. The problem, however, was that the owners of the Terminal would be deprived of
the right to use the airspace above it although other landowners in the area could do so over their
respective properties. While insisting that there was here no taking, the Court nonetheless recognized
certain compensatory rights accruing to Grand Central Terminal which it said would "undoubtedly
mitigate" the loss caused by the regulation. This "fair compensation," as he called it, was explained by
Prof. Costonis in this wise:
in return for retaining the Terminal site in its pristine landmark status, Penn Central was authorized to
transfer to neighboring properties the authorized but unused rights accruing to the site prior, to the
Terminal's designation as a landmark-the rights which would have been exhausted by the 59-story
building that the city refused to countenance atop the Terminal. Prevailing bulk restrictions on neigh.
boring sites were proportionately relaxed, theoretically enabling Penn Central to recoup its losses at the
Terminal site by constructing or selling to others the right to construct larger, hence more profitable
buildings on the transferee sites.30
The cases before us present no knotty complication insofar as the question of compensable taking is
concerned. To the extent that the measures under challenge merely prescribe retention limits for
landowners, there is an exercise of the police power for the regulation of private property in accordance
with the Constitution. But where, to carry out such regulation, it becomes necessary to deprive such
owners of whatever lands they may own in excess of the maximum area allowed; there is definitely a
taking under the power of eminent domain for which Payment of just compensation is imperative. The
taking contemplated is not a mere limitation of the use of the land. What is required is the surrender of
the title to and the physical possession of the said excess and all beneficial rights accruing to the owner
in favor of the farmer-beneficiary. This is definitely an exercise not of the police power but of the power
of eminent domain.
Whether as an exercise of the police power or of the power of eminent domain, the several measures
before us are challenged as violative of the due process and equal protection clauses.

The challenge to Proc. No. 131 and E.O. Nos. 228 and 299 on the ground that no retention limits are
prescribed has already been discussed and dismissed. It is noted that although they excited many bitter
exchanges during the deliberation of the CARP Law in Congress, the retention limits finally agreed upon
are, curiously enough, not being questioned in these petitions. We therefore do not discuss them here.
The Court will come to the other claimed violations of due process in connection with our examination
of the adequacy of just compensation as required under the power of expropriation.
The argument of the small farmers that they have been denied equal protection because of the absence
of retention limits has also become academic under Section 6 of R.A. No. 6657. Significantly, they too
have not questioned the area of such limits. There is also the complaint that they should not be made to
share the burden of agrarian reform, an objection also made by the sugar planters on the ground that
they belong to a particular class with particular interests of their own. However, no evidence has been
submitted to the Court that the requisites of a valid classification have been violated.
Classification has been defined as the grouping of persons or things similar to each other in certain
particulars and different from each other in these same particulars.31 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; and (4) it must apply
equally to all the members of the class.32 The Court finds that all these requisites have been met by the
measures here challenged as arbitrary and discriminatory.
Equal protection simply means that all persons or things similarly situated must be treated alike both as
to the rights conferred and the liabilities imposed.33 The petitioners have not shown that they belong to
a different class and entitled to a different treatment. The argument that not only landowners but also
owners of other properties must be made to share the burden of implementing land reform must be
rejected. There is a substantial distinction between these two classes of owners that is clearly visible
except to those who will not see. There is no need to elaborate on this matter. In any event, the
Congress is allowed a wide leeway in providing for a valid classification. Its decision is accorded
recognition and respect by the courts of justice except only where its discretion is abused to the
detriment of the Bill of Rights.
It is worth remarking at this juncture that a statute may be sustained under the police power only if
there is a concurrence of the lawful subject and the lawful method. Put otherwise, the interests of the
public generally as distinguished from those of a particular class require the interference of the State
and, no less important, the means employed are reasonbly necessary for the attainment of the purpose
sought to be achieved and not unduly oppressive upon individuals.34 As the subject and purpose of
agrarian reform have been laid down by the Constitution itself, we may say that the first requirement
has been satisfied. What remains to be examined is the validity of the methodemployed to achieve the
constitutional goal.
One of the basic principles of the democratic system is that where the rights of the individual are
concerned, the end does not justify the means. It is not enough that there be a valid objective; it is also
necessary that the means employed to Pursue it be in keeping with the Constitution. Mere expediency

will not excuse constitutional shortcuts. There is no question that not even the strongest moral
conviction or the most urgent Public need, subject only to a few notable exceptions, will excuse the
bypassing of an individual's rights. It is no exaggeration to say that a, person invoking a right guaranteed
under Article III of the Constitution is a majority of one even as against the rest of the nation who would
deny him that right.
That right covers the person's life, his liberty and his property under Section I of Article III of the
Constitution. With regard to his property, the owner enjoys the added protection of Section 9, which
reaffirms the familiar rule that private property shall not be taken for public use without just
compensation.
This brings us now to the power of eminent domain.
IV
Eminent domain is an inherent power of the State that enables it to forcibly acquire private lands
intended for public use upon payment of just compensation to the owner. Obviously, there is no need to
expropriate where the owner is wining to sell under terms also acceptable to the purchaser, in which
case an ordinary deed of sale may be agreed upon by the parties.35 It is only where the owner is
unwilling to sell, or cannot accept the price or other conditions offered by the vendee, that the power of
eminent domain will come into play to assert the paramount authority of the State over the interests of
the property owner. Private rights must then yield to the irresistible demands of the public interest on
the timehonored justification, as in the case of the police power, that the welfare of the people is the
supreme law.
But for all its primacy and urgency, the power of expropriation is by no means absolute (as indeed no
power is absolute). The limitation is found in the constitutional injunction that "private property shall
not be taken for public use without just compensation" and in the abundant jurisprudence that has
evolved from the interpretation of this principle. Basically, the requirements for a proper exercise of the
power are: (1) public use and (2) just compensation.
Let us dispose first of the argument raised by the petitioners in G.R. No. 79310 that the State should first
distribute public agricultural lands in the pursuit of agrarian reform instead of immediately disturbing
property rights by forcibly acquiring private agricultural lands. Parenthetically, it is not correct to say
that only public agricultural lands may be covered by the CARP as the Constitution calls for "the just
distribution of all agricultural lands." In any event, the decision to redistribute private agricultural lands
in the manner prescribed by the CARP was made by the legislative and executive departments
ntheexercise of their discretion. We are not justified in reviewing that discretion in the absence of a
clear showing that it has been abused.
A becoming courtesy admonishes us to respect the decisions of the political departments when they
decide what is known as the political question, As explained by Chief Justice Concepcion in the case of
Taada v. Cuenco:36

The term "political question" connotes what it means in ordinary parlance, namely, a question of policy.
It refers to "those questions which, under the Constitution, are to be decided by the people in their
sovereign capacity; or in regard to which full discretionary authority has been delegated to the
legislative or executive branch of the government." It is concerned with issues dependent upon the
wisdom, not legality, of a particular measure It is true that the concept of the political question has been
constricted with the enlargement of judicial power, which now includes the authority of the courts "to
determine whether or not there has been a grave abuse of discretion amounting to lack or excess of
jurisdiction on the part of any bcanch or instrumentality of the Government."37 Even so, this should not
be construed as a license for us to reverse the other departments simply because their views may not
coincide with ours.
The legislature and the executive have been seen fit, in their wisdom, to include in the CARP the
redistribution of private landholdings (even as the distribution of public agricultural lands is first
provided for, while also continuing apace under the Public Land Act and other cognate laws). The Court'
sees no justification to interpose its authority, which we may assert only if we believe that the political
decision is not unwise, but illegal. We do not find it to be so.
In U.S. v. Chandler-Dunbar Water Power Company,38 it was held:
Congress having determined, as it did by the Act of March 3,1909 that the entire St. Mary's river
between the American bank and the international line, as well as all of the upland north of the present
ship canal, throughout its entire length, was "necessary for the purpose of navigation of said waters, and
the waters connected therewith," that determination is conclusive in condemnation proceedings
instituted by the United States under that Act, and there is no room for judicial review of the judgment
of Congress x x x.
As earlier observed, the requirement for public use has already been settled for us by the Constitution
itself No less than the 1987 Charter calls for agrarian reform, which is the reason why private
agricultural lands are to be taken from their owners, subject to the prescribed maximum retention
limits. The purposes specified in P.D. No. 27, Proc. No. 131 and R.A. No. 6657 are only an elaboration of
the constitutional injuction that the State adopt the necessary measures "to encourage and undertake
the just distribution of all agricultural lands to enable farmers who are landless to own directly or
collectively the lands they till." That public use, as pronounced by the fundamental law itself, must be
binding on us.
The second requirement, i.e., the payment of just compensation, needs a longer and more thoughtful
examination.
Just compensation is defined as the full and fair equivalent of the property taken from its owner by the
expropriator.39 It has been repeatedly stressed by this Court that the measure is not the taker's gain but
the owner's loss.40 The word "just" is used to intensify the meaning of the word "compensation" to
convey the idea that the equivalent to be rendered for the property to be taken shall be real,
substantial, full, ample.41

It bears repeating that the measures challenged in these petitions contemplate more than a mere
regulation of the use of private lands under the police power. We deal here with an actual taking of
private agricultural lands that has dispossessed the owners of their property and deprived them of all its
beneficial use and enjoyment, to entitle them to the just compensation mandated by the Constitution.
As held in Republic of the Philippines v. Castellvi,42 there is compensable taking when the following
conditions concur: (1) the expropriator must enter a private property; (2) the entry must be for more
than a momentary period; (3) the entry must be under warrant or color of legal authority; (4) the
property must be devoted to public use or otherwise informally appropriated or injuriously affected;
and (5) the utilization of the property for public use must be in such a way as to oust the owner and
deprive him of beneficial enjoyment of the property. All these requisites are envisioned in the measures
before us.
Where the State itself is the expropriator, it is not necessary for it to make a deposit upon its taking
possession of the condemned property, as "the compensation is a public charge, the good faith of the
public is pledged for its payment, and an the resources of taxation may be employed in raising the
amount."43 Nevertheless, Section 16(e) of the CARP Law provides that:
Upon receipt by the landowner of the corresponding payment or, in case of rejection or no response
from the landowner, upon the deposit with an accessible bank designated by the DAR of the
compensation in cash or in LBP bonds in accordance with this Act, the DAR shall take immediate
possession of the land and shall request the proper Register of Deeds to issue a Transfer Certificate of
Title (TCT) in the name of the Republic of the Philippines. The DAR shall thereaf. ter proceed with the
redistribution of the land to the qualified beneficiaries.
Objection is raised, however, to the manner of fixing the just compensation, which it is claimed is
entrusted to the administrative authorities in violation of judicial prerogatives. Specific reference is
made to Section 16(d), which provides that in case of the rejection or disregard by the owner of the
offer of the government to buy his land
x x x the DAR shall conduct summary administrative proceedings to determine the compensation for the
land by requiring the landowner, the LBP and other interested parties to submit evidence as to the just
compensation for the land, within fifteen Q 5) days from the receipt of the notice. After the expiration
of the above period, the matter is deemed submitted for decision. The DAR shall decide the case within
thirty (30) days after it is submitted for decision.
To be sure, the determination of just compensation is a function addressed to the courts of justice and
may not be usurped by any other branch or official of the government. EPZA v. Dulay" resolved a
challenge to several decrees promulgated by President Marcos providing that the just compensation for
property under expropriation should be either the assessment of the property by the government or the
sworn valuation thereof by the owner, whichever was lower. In declaring these decrees
unconstitutional, the Court held through Mr. Justice Hugo E. Gutierrez, Jr.:

The method of ascertaining just compensation under the aforecited decrees constitutes impermissible
encroachment on judicial prerogatives. It tends to render this Court inutile in a matter which under this
Constitution is reserved to it for final determination.
Thus, although in an expropriation proceeding the court technically would still have the power to
determine the just compensation for the property, following the applicable decrees, its task would be
relegated to simply stating the lower value of the property as declared either by the owner or the
assessor. As a necessary consequence, it would be useless for the court to appoint commissioners under
Rule 67 of the Rules of Court. Moreover, the need to satisfy the due process clause in the taking of
private property is seemingly fulfilled since it cannot be said that a judicial proceeding was not had
before the actual taking. However, the strict application of the decrees during the proceedings would be
nothing short of a mere formality or charade as the court has only to choose between the valuation of
the owner and that of the assessor, and its choice is always limited to the lower of the two. The court
cannot exercise its discretion or independence in determining what is just or fair. Even a grade school
pupil could substitute for the judge insofar as the determination of constitutional just compensation is
concerned.
xxx
In the present petition, we are once again confronted with the same question of whether the courts
under P.D. No. 1533, which contains the same provision on just compensation as its predecessor
decrees, still have the power and authority to determine just compensation, independent of what is
stated by the decree and to this effect, to appoint commissioners for such purpose.
This time, we answer in the affirmative.
xxx
It is violative of due process to deny the owner the opportunity to Prove that the valuation in the tax
documents is unfair or wrong. And it is repulsive to the basic concepts ofjustice and fairness to allow the
haphazard work of a minor bureaucrat or clerk to absolutely prevail over the judgment of a court
promulgated only after expert commissioners have actually viewed the property, after evidence and
arguments pro and con have been presented, and after all factors and considerations essential to a fair
and just determination have been judiciously evaluated.
A reading of the aforecited Section 16(d) will readily show that it does not suffer from the arbitrariness
that rendered the challenged decrees constitutionally objectionable.
Although the,Proceedings are described as summary, the landowner and other interested parties are
nevertheless allowed an opportunity to submit evidence on the real value of the property. But more
importantly, the determination of the just compensation by the DAR is not by any means final and
conclusive upon the landowner or any other interested party, for Section 16(f) clearly provides:
Any party who disagrees with the decision may bring the matter to the court of proper jurisdiction for
final determination of just compensation.

The determination made by the DAR is only preliminary unless accepted by all parties concerned.
Otherwise, the courts of justice will still have the right to review with finality the said determination in
the exercise of what is admittedly a judicial function.
The second and more serious objection to the provisions on just compensation is not as easily resolved.
This refers to Section 18 of the CARP Law providing in full as follows:
SEC. 18. Valuation and Mode of Compensation.-The LBP shall compensate the landowner in such
amount as may be agreed upon by the landowner and the DAR and the LBP, in accordance with the
criteria provided for in Sections 16 and 17, and other pertinent provisions hereof, or as may be finally
determined by the court, as the just compensation for the land.
The compensation shall be paid in one of the following modes, at the option of the landowner:
(1) Cash payment, under the following terms and conditions:
(a) For lands above fifty (50) hectares, insofar as the excase hectarage is concerned-Twenty-five percent
(25%) cash, the balance to be paid in government financial instruments negotiable at any time.
(b) For lands above twenty-four (24) hectares and up to fifty (50) hectarsThirty percent (30%) cash, the
balance to be paid in government financial instruments negotiable at any time.
(c) For lands twenty-four (24) hectares and below-Thirty-five percent (35%) cash, the balance to be paid
in government financial instruments negotiable at any time.
(2) Shares of stock in government-owned or controlled corporations, LBP preferred shares, physical
assets or other qualified investments in accordance with guidelines set by the PARC;
(3) Tax credits which can be used against any tax liability; (4) LBP bonds, which shall have the following
features:
(a) Market interest rates aligned with 91 -day treasury bill rates. Ten percent (10%) of the face value of
the bonds shall mature every year from the date of issuance until the tenth (10th) year: Provided, That
should the landowner choose to forego the cash portion, whether in full or in part, he shall be paid
correspondingly in LBP bonds;
(b) Transferability and negotiability. Such LBP bonds may be used by the landowner, his successors-ininterest or his assigns, up to the amount of their face value, for any of the following:
(1) Acquisition of land or other real properties of the government, including assets under the Asset
Privatization Program and other assets foreclosed by government financial institutions in the same
province or region where the lands for which the bonds were paid are situated;
(ii) Acquisition of shares of stock of governmentowned or controlled corporations or shares of stock
owned by the government in private corporations;

(iii) Substitution for surety or bail bonds for the provisional release of accused persons, or for
performance bonds;
(iv) Security for loans with any government financial institution, provided the proceeds of the loans shall
be invested in an economic enterprise, preferably in a small and medium-scale industry, in the same
province or region as the land for which the bonds are paid;
(v) Payment for various taxes and fees to government: Provided, That the use of these bonds for these
purposes will be limited to a certain percentage of the outstanding balance of the financial instruments;
Provided, further, That the PARC shall determine the percentages mentioned above;
(vi), Payment for tuition fees of the immediate family of the original bondholder in government
universities, colleges, trade schools, and other institutions;
(vii) Payment for fees of the immediate family of the original bondholder in government hospitals; and
(viii) Such other uses as the PARC may from time to time allow
The contention of the petitioners in G.R. No. 79777 is that the above provision is unconstitutional
insofar as it requires the owners of the expropriated properties to accept just compensation therefor in
less than money, which is the only medium of payment allowed. In support of this contention, they cite
jurisprudence holding that:
The fundamental rule in expropriation matters is that the owner of the property expropriated is entitled
to a just compensation, which should be neither more nor less, whenever it is possible to make the
assessment, than the money equivalent of said property. Just compensation has always been
understood to be the just and complete equivalent of the loss which the owner of the thing
expropriated has to suffer by reason of the expropriation.45 (Emphasis supplied.)
In J.M. Tuazon Co. v. Land Tenure Administration,46 this Court held:
It is well-settled that just compensation means the equivalent for the value of the property at the time
of its taking. Anything beyond that is more, and anything short of that is less, than just compensation. It
means a fair and full equivalent for the loss sustained, which is the measure of the indemnity, not
whatever gain would accrue to the expropriating entity. The market value of the land taken is the just
compensation to which the owner of condemned property is entitled, the market value being that sum
of money which a person desirous, but not compelled to buy, and an owner, willing, but not compelled
to sell, would agree on as a price to be given and received for such property. (Emphasis supplied.)
In the United States, where much of our jurispradence on the subject has been derived, the weight of
authority is also to the effect that just compensation for property expropriated is payable only in money
and not otherwise. Thus ,
The medium of payment of compensation is ready money or cash. The condemnor cannot compel the
owner to accept anything but money, nor can the owner compel or require the condemnor to pay him

on any other basis than the value of the property in money at the time and in the manner prescribed by
the Constitution and the statutes. When the power of eminent domain is resorted to, there must be a
standard medium of payment, binding upon both parties, and the law has fixed that standard as money
in cash.47 (Emphasis supplied.)
Part cash and deferred payments are not and cannot, in the nature of things, be regarded as a reliable
and constant standard of compensation.48
"Just compensation" for property taken by condemnation means a fair equivalent in money which must
be paid at least within a reasonable time after the taking, and it is not within the power of the
Legislature to substitute for such payment future obligations, bonds, or other valuable advantage.49
(Emphasis supplied.)
It cannot be denied from these cases that the traditional medium for the payment of just compensation
is money and no other. And so, conformably, has just compensation been paid in the past solely in that
medium. However, we do not deal here with the traditional excercise of the power of eminent domain.
This is not an ordinary expropriation where only a specific property of relatively limited area is sought to
be taken by the State from its owner for a specific and perhaps local purpose.
47 Mandl v. City of Phoenix, 18 p 2d 273.F
48 Sacramento Southern R. Co. v. Heilbron, 156 Cal. 408,104 pp.979,980.
49 City of Waterbury v. Platt Bros. & Co., 56 A 856, 76 Conn, 435citing Butler v. Ravine Road Sewer
Com!rs, 39 NJ.L. 665; Bloodgood v. Mohawk v. H.R.R. Co., N.Y. 18 Wend. 9 36, 31 Am. Dec. 313;Sanborn
v. Helden, 51 Cal 266; Burlington & C.R. Co. v. Schweikart
What we deal with here is a revolutionary kind of expropriation. The expropriation before us affects all
private agricultural lands whenever found and of whatever kind as long as they are in excess of the
maximum retention limits allowed their owners. This kind of expropriation is intended for the benefit
not only of a particular community or of a small segment of the population but of the entire Filipino
nation, from all levels of our society, from the impoverished farmer to the land-glutted owner. Its
purpose does not cover only the whole territory of this country but goes beyond in time to the
foreseeable future, which it hopes to secure and edify with the vision and the sacrifice of the present
generation of Filipinos. Generations yet to come are as involved in this program as we are today,
although hopefully only as beneficiaries of a richer and more fulfilling life we will guarantee to them
tomorrow through our thoughtfulness today. And, finally, let it not be forgotten that it is no less than
the Constitution itself that has ordained this revolution in the farms, calling for "a just distribution"
among the farmers of lands that have heretofore been the prison of their dreams but can now become
the key at least to their deliverance.
Such a program will involve not mere millions of pesos. The cost will be tremendous. Considering the
vast areas of land subject to expropriation under the laws before us, we estimate that hundreds of
billions of pesos will be needed, far more indeed than the amount of P50 billion initially appropriated,

which is already staggering as it is by our present standards. Such amount is in fact not even fully
available at this time.
We assume that the framers of the Constitution were aware of this difficulty when they called for
agrarian reform as a top priority project of the government. It is a part of this assumption that when
they envisioned the expropriation that would be needed, they also intended that the just compensation
would have to be paid not in the orthodox way but a less conventional if more practical method. There
can be no doubt that they were aware of the financial limitations of the government and had no
illusions that there would be enough money to pay in cash and in full for the lands they wanted to be
distributed among the farmers we may therefore assume that their intention was to allow such manner
of payment as is now provided for by the CARP Law, particularly the payment of the balance (if the
owner cannot be paid fully with money), or indeed of the entire amount of the just compensation, with
other things of value. We may also suppose that what they had in mind was a similar scheme of
payment as that prescribed in P.D. No. 27, which was the law in force at the time they deliberated on
the new Charter and with which they presumably agreed in principle.
The Court has not found in the records of the Constitutional Commission any categorial agreement
among the members regarding the meaning to be given the concept of just compensation as applied to
the comprehensive agrarian reform program being contemplated. There was the suggestion to "fine
tune" the requirement to suit the demands of the project even as it was also felt that they should "leave
it to Congress" to determine how payment should be made to the landowner and reimbursement
required from the farmerbeneficiaries. Such innovations as "progressive compensation" and "Statesubsidized compensation" were also proposed. In the end, however, no special definition of the just
compensation for the lands to be expropriated was reached by the Commission.50
On the other hand, there is nothing in the records either that militates against the assumptions we are
making of the general sentiments and intention of the members on the content and manner of the
payment to be made to the landowner in the light of the magnitude of the expenditure and the
limitations of the expropriator.
With these assumptions, the Court hereby declares that the content and manner of the just
compensation provided for in the afore-quoted Section 18 of the CARP Law is not violative of the
Constitution. We do not mind admitting that a certain degree of pragmatism has influenced our decision
on this issue, but after all this Court is not a cloistered institution removed from the realities and
demands of society or oblivious to the need for its enhancement. The Court is as acutely anxious as the
rest of our people to see the goal of agrarian reform achieved at last after the frustrations and
deprivations of our peasant masses during all these disappointing decades. We are aware that
invalidation of the said section will result in the nullification of the entire program, killing the farmer's
hopes even as they approach realization and resurrecting the spectre of discontent and dissent in the
restless countryside. That is not in our view the intention of the Constitution, and that is not what we
shall decree today.

Accepting the theory that payment of the just compensation is not always required to be made fully in
money, we find further that the proportion of cash payment to the other things of value constituting the
total payment, as determined on the basis of the areas of the lands expropriated, is not unduly
oppressive upon the landowner. It is noted that the smaller the land, the bigger the payment in money,
primarily because the small landowner will be needing it more than the big landowners, who can afford
a bigger balance in bonds and other things of value. No less importantly, the government financial
instruments making up the balance of the payment are "negotiable at any time." The other modes,
which are likewise available to the landowner at his option, are also not unreasonable because payment
is made in shares of stock, LBP bonds, other properties or assets, tax credits, and other things of value
equivalent to the amount of just compensation.
Admittedly, the compensation contemplated in the law will cause the landowners, big and small, not a
little inconvenience. As already remarked, this cannot be avoided. Nevertheless, it is devoutly hoped
that these countrymen of ours, conscious as we know they are of the need for their forebearance and
even sacrifice, will not begrudge us their indispensable share in the attainment of the ideal of agrarian
reform. Otherwise, our pursuit of this elusive goal will be like the quest for the Holy Grail.
The complaint against the effects of non-registration of the land under E.O. No. 229 does not seem to be
viable any more as it appears that Section 4 of the said Order has been superseded by Section 14 of the
CARP Law. This repeats the requisites of registration as embodied in the earlier measure but does not
provide, as the latter did, that in case of failure or refusal to register the land, the valuation thereof shall
be that given by the provincial or city assessor for tax purposes. On the contrary, the CARP Law says that
the just compensation shall be ascerained on the basis of the factors mentioned in its Section 17 and in
the manner provided for in Section 16.
The last major challenge to CARP is that the landowner is divested of his property even before actual
payment to him in full of just compensation, in contravention of a well-accepted principle of eminent
domain.
The recognized rule, indeed, is that title to the property expropriated shall pass from the owner to the
expropriator only upon full payment of the just compensation. Jurisprudence on this settled principle is
consistent both here and in other democratic jurisdictions. Thus:
Title to property which is the subject of condemnation proceedings does not vest the condemnor until
the judgment fixing just compensation is entered and paid, but the condemnor's title relates back to the
date on which the petition under the Eminent Domain Act, or the commissioner's report under the Local
Improvement Act, is filed."
x x x although the right to appropriate and use land taken for a canal is complete at the time of entry,
title to the property taken remains in the owner until payment is actually made.52 (Emphasis supplied.)
In Kennedy v. Indianapolis,53 the US Supreme Court cited several cases holding that title to property
does not pass to the condemnor until just compensation had actually been made. In fact, the decisions
appear to be uniformly to this effect. As early as 1838, in Rubottom. v. McLure,54 it was held that

"actual payment to the owner of the condemned property was a condition precedent to the investment
of the title to the property in the State" albeit "not to the appropriation of it to public use." In Rexford v.
Knight,55 the Court of Appeals of New York said that the construction upon the statutes was that the
fee did not vest in the State until the payment of the compensation although the authority to enter
upon and appropriate the land was complete prior to the payment. Kennedy further said that "both on
principle and authority the rule is it x x that the right to enter on and use the property is complete, as
soon as the property is actually appropriated under the authority of law for a public use, but that the
title does not pass from the owner without his consent, until just compensation has been made to him."
Our own Supreme Court has held in Visayan Refining Co. v. Camus and Paredes,56 that:
If the laws which we have exhibited or cited in the preceding discussion are attentively examined it will
be apparent that the method of expropriation adopted in this jurisdiction is such as to afford absolute
reassurance that no piece of land can be finally and irrevocably taken from an unwilling owner until
compensation is paid xxx. (Italics supplied.)
It is true that P.D. No. 27 expressly ordered the emancipation of tenant-farmer as October 21, 1972 and
declared that he &hall "be deemed the owner" of a portion of land consisting of a family-sized farm
except that "no title to the land owned by him was to be actually issued to him unless and until he had
become a full-fledged member of a duly recognized farmers' cooperative." It was understood, however,
that full payment of the just compensation also had to be made first, conformably to the constitutional
requirement.
When E.O. No. 228, categorically stated in its Section 1 that:
All qualified farmer-beneficiaries are now deemed full owners as of October 21, 1972 of the land they
acquired by virtue of Presidential Decree No. 27. (Emphasis supplied.)
it was obviously referring to lands already validly acquired under the said decree, after proof of fullfledged membership in the farmers' cooperatives and full payment of just compensation. Hence, it was
also perfectly proper for the Order to also provide in its Section 2 that the "lease rentals paid to the
landowner by the farmerbeneficiary after October 21, 1972 (pending transfer of ownership after full
payment of just compensation), shall be considered as advance payment for the land."
The CARP Law, for its part, conditions the transfer of possession and ownership of the land to the
government on receipt by the landowner of the corresponding payment or the deposit by the DAR of
the compensation in cash or LBP bonds with an accessible bank. Until then, title also remains with the
landowner." No outright change of ownership is contemplated either.
Hence, the argument that the assailed measures violate due process by arbitrarily transferring title
before the land is fully paid for must also be rejected.
It is worth stressing at this point that all rights acquired by the tenantfarmer under P.D. No. 27, as
recognized under E.O. No. 228, are retained by him even now under R.A. No. 6657. This should
counterbalance the express provision in Section 6 of the said law that "the landowners whose lands

have been covered by Presidential Decree No. 27 shall be allowed to keep the area originally retained by
them thereunder, further, That original homestead grantees or direct compulsory heirs who still own
the original homestead at the time of the approval of this Act shall retain the same areas as long as they
continue to cultivate said homestead."
In connection with these retained rights, it does not appear in G.R. No. 78742 that the appeal filed by
the petitioners with the Office of the President has already been resolved. Although we have said that
the doctrine of exhaustion of administrative remedies need not preclude immediate resort to judicial
action, there are factual issues that have yet to be examined on the administrative level, especially the
claim that the petitioners are not covered by LOI 474 because they do not own other agricultural lands
than the subjects of their petition.
Obviously, the Court cannot resolve these issues. In any event, assuming that the petitioners have not
yet exercised their retention rights, if any, under P.D. No. 27, the Court holds that they are entitled to
the new retention rights provided for by R.A. No. 6657, which in fact are on the whole more liberal than
those granted by the decree.
V
The CARP Law and the other enactments also involved in these cases have been the subject of bitter
attack from those who point to the shortcomings of these measures and ask that they be scrapped
entirely. To be sure, these enactments are less than perfect; indeed, they should be continuously reexamined and rehoned, that they may be sharper instruments for the better protection of the farmer's
rights. But we have to start somewhere. In the pursuit of agrarian reform, we do not tread on familiar
ground but grope on terrain fraught with pitfalls and expected difficulties. This is inevitable. The CARP
Law is not a tried and tested project. On the contrary, to. use Justice Holmes's words, "it is an
experiment, as all life is an experiment," and so we learn as we venture forward, and, if necessary, by
our own mistakes. We cannot expect perfection although we should strive for it by all means.
Meantime, we struggle as best we can in freeing the farmer from the iron shackles that have
unconscionably, and for so long, fettered his soul to the soil.
By the decision we reach today, all major legal obstacles to the comprehensive agrarian reform program
are removed, to clear the way for the true freedom of the farmer. We may now glimpse the day he will
be released not only from want but also from the exploitation and disdain of the past and from his own
feelings of inadequacy and helplessness. At last his servitude will be ended forever. At last the farm on
which he toils will be his farm. It will be his portion of the Mother Earth that will give him not only the
staff of life but also the joy of living. And where once it bred for him only deep despair, now can he see
in it the fruition of his hopes for a more fulfilling future. Now at last can he banish from his small plot of
earth his insecurities and dark resentments and "rebuild in it the music and the dream."
WHEREFORE, the Court holds as follows:
1. R.A. No. 6657, P.D. No. 27, Proc. No. 131, and E.O. Nos. 228 and 229 are SUSTAINED against all the
constitutional objections raised in the herein petitions.

2. Title to all expropriated properties shall be transferred to the State only upon full payment of
compensation to their respective owners.
3. All rights previously acquired by the tenant-farmers under P.D. No. 27 are retained and recognized.
4. Landowners who were unable to exercise their rights of retention under P.D. No. 27 shall enjoy the
retention rights granted by R.A. No. 6657 under the conditions therein prescribed.
5. Subject to the above-mentioned rulings, all the petitions are DISMISSED, without pronouncement as
to costs.
SO ORDERED.
Fernan, (C.J.), Narvasa, Melencio-Herrera, Gutierrez, Jr., Paras, Feliciano, Gancayco, Padilla, Bidin,
Sarmiento, Corts, Grio-Aquino, Medialdea and Regalado, JJ., concur.
Petitions dismissed.
1. Art. 11, Sec. 5.
2. 1973 Constitution, Art. 11, Sec. 6.
3. Ibid., Art. XIV, Sec. 12.
4. R.A. No. 6657, Sec. 15.
5. 149 SCRA 305.
6. 150 SCRA 89.
7. 55 SCRA 26.
8. 91 SCRA 294.
9. 113 SCRA 798.
10. 136 SCRA 27; 146 SCRA 446.
11. Art. VIII, See. 4(2).
12. Dumlao v. COMELEC, 95 SCRA 392.
13. Ex Parte Levitt, 303 US 633.
15. Pascual v. Secretary of Public Works, 110 Phil. 331; PHILCONSA v. Gimenez, 15 SCRA 479; Sanidad v.
COMELEC, 73 SCRA 333.
16. Angara v. Electoral Commission, 63 Phil. 139.

17. R.A. No. 6657, Sec. 75.


18. Ibid., See. 63.
19. Bengzon v. Secretary of Justice, 299 US 410.
20. Alalayan v. NPC, 24 SCRA 172; Sumulong v. COMELEC, 73 Phil. 288; no v. Videogram Regulatory
Board, 151 SCRA 208.
21. Supra.
22. Lamb v. Phipps, 22 Phil. 456.
23. Malabanan v. Ramento, 129 SCRA 359; Espaol v. Chairman, Philippine Veterans Administration,
137 SCRA 314.
24. 106 Phil. 144.
25. 260 US 393.
26. Powell v. Pennsylvania, 12 1 US 678; Lutz v. Araneta, 98 Phil. 148; Tio v. Videogram Regulatory
Board, supra.
27. John J. Costonis, "The Disparity Issue: A Context for the Grand Central Terminal Decision," Harvard
Law Review, Vol. 91:40,1977, p. 404.
28. 348 US 1954.
29. 438 US 104.
30. See note 27.
31. International Harvester Co. v. Missouri, 234 US 199. 32 People v. Cayat, 68 Phil. 12.
33. Ichong v. Hernandez, 101 Phil. 1155.
34. US v. Toribio, 15 Phil. 85; Fabie v. City of Manila, 21 Phil. 486; Case v. Board of Health, 24 Phil. 256.
35. Noble v. City of Manila, 67 Phil. 1.
36. 100 phil. 1101.
37. 1987 Constitution, Art, VIII, See. 1.
38. 57 Led. 1063.
39. Manila Railroad Co. v. Velasquez, 32 Phil. 286.

40. Province of Tayabas v. Perez, 66 Phil. 467; J.M. Tuazon & Co., Inc. v. Land Tenure Administration, 31
SCRA 413; Municipality of Daet v. Court of Appeals, 93 SCRA 503; Manotok v. National Housing
Authority, 150 SCRA 89,
41. City of Manila v. Estrada, 25 Phil. 208.
42. 58 SCRA 336.
43. Lewis, Law of Eminent Domain, 3rd Edition, pp. 1166-1167.
44. 149 SCRA 305,
45. Manila Railroad Go. v. Velesquez, 32 Phil. 286; Province of TaYabas v. Perez, supra, at note 40.
46. 31 SCRA 413.
14. p. 329, 10 Colo, 178; 23 Words and Phrases, pl. 460.
50. Record of the Cosntitutional Commission, Vol. 2, pp. 647, 704; Vol. 3, pp. 16-20,243-247.
51. Chicago Park Dist. v. Downey Coal Co., I Ill. 2d 54.
52. Kennedy v. Indianapolis, 103 US 599, 26 L ed 550.
53. Ibid.
54. 4 Blkf, 508.
55. 11 NY 314.
56. 40 Phil. 560.
57. Sec. 16(d).

Lozano vs. Martinez


Lozano vs. Martinez

December 18, 1986

EN BANC
[GRN L-63419. December 18, 1986.*]
FLORENTINA A. LOZANO, petitioner, vs. THE HONORABLE ANTONIO M. MARTINEZ, in his capacity as
Presiding Judge, Regional Trial Court, National Capital Judicial Region, Branch XX, Manila, and the
HONORABLE JOSE B. FLAMINIANO, in his capacity as City Fiscal of Manila, respondents.
[GRN L-66839-42. December 18, 1986.*]
LUZVIMINDA F. LOBATON, petitioner, vs. HONORABLE GLICERIO L. CRUZ, in his capacity as Presiding
Executive Judge, Branch V, Region IV, Regional Trial Court, sitting at Lemery, Batangas, THE PROVINCIAL
FISCAL OF BATANGAS, and MARIA LUISA TORDECILLA, respondents.
[GRN 71654. December 18, 1986.*]
ANTONIO DATUIN and SUSAN DATUIN, petitioners, vs. HONORABLE JUDGE ERNANI C. PANO, Regional
Trial Court, Quezon City, Branch LXXXVIII, HONORABLE CITY FISCAL OF QUEZON CITY, respondents.
[GRN 74524-25. December 18, 1986.*]
OSCAR VIOLAGO, petitioner, vs. HONORABLE JUDGE ERNANI C. PAO, Regional Trial Court, Quezon City,
Branch LXXXVIII, HONORABLE CITY FISCAL OF QUEZON CITY, respondents.
[GRN 75122-49. December 18, 1986.*]
ELINOR ABAD, petitioner, vs. THE HONORABLE NICOLAS A. GEROCHI, JR., in his capacity as Presiding
Judge, Regional Trial Court, National Capital Judicial Region, Branch 139, Makati and FEDERICO L.
MELOCOTTON, JR., in his capacity as Trial Fiscal Regional Trial Court, Branch 139, Makati, respondents.
[GRN 75812-13. December 18, 1986.*]
AMABLE R. AGUILUZ VII and SYLVIA V. AGUILUZ, spouses, petitioners, vs. HONORABLE PRESIDING JUDGE
OF BRANCH 154, now vacant but temporarily presided by HONORABLE ASAALI S. ISNANI, Branch 153,
Court of First Instance of Pasig, Metro Manila, respondent.
[GRN 725765-67. December 18, 1986.*]
LUIS M. HOJAS, petitioner, vs. HON. JUDGE SENEN PENARANDA, Presiding Judge, Regional Trial Court of
Cagayan de Oro City, Branch XX, HONORABLE JUDGE ALFREDO LAGAMON, Presiding Judge, Regional
Trial Court of Cagayan de Oro City, Branch XXII, HONORABLE CITY FISCAL NOLI T. CATHI, City Fiscal of
Cagayan de Oro City, respondents.

[GRN 75789. December 18, 1986.*]


THE PEOPLE OF THE PHILIPPINES, petitioner, vs. HON. DAVID G. NITAFAN, Presiding Judge, Regional Trial
Court, National Capital Judicial Region, Branch 52, Manila and THELMA SARMIENTO, respondents.
R.R. Nogales Law Office for petitioner in G.R. No. 63419, G.R. Nos. 74524-25, G.R. Nos. 75812-13, G.R.
Nos. 75765-67 and counsel for respondent in G.R. No. 75789.
Pio S. Canta for petitioner in G.R. Nos. 66839-42.
Hermogenes Datuin, Jr. for petitioner in G.R. No. 71654.
Abinoja, Tabalingcos, Villalon & Associates for petitioner in G.R. Nos. 75122-49.
The Solicitor General for respondent in G.R. No. 63419, G.R. Nos. 66839-42, G.R. No. 71654, G.R. Nos.
74524-25, G.R. Nos. 75122-49, G.R. Nos. 75812-13, G.R. Nos. 75765-67 and counsel for petitioner in G.R.
No. 75789.
DECISION
YAP, C.J :
The constitutionality of Batas Pambansa Bilang 22 (BP 22 for short), popularly known as the Bouncing
Check Law, which was approved on April 3, 1979, is the sole issue presented by these petitions for
decision. The question is definitely one of first impression in our jurisdiction.
These petitions arose from cases involving prosecution of offenses under the statute. The defendants in
those cases moved seasonably to quash the informations on the ground that the acts charged did not
constitute an offense, the statute being unconstitutional. The motions were denied by the respondent
trial courts, except in one case, which is the subject of G.R. No. 75789, wherein the trial court declared
the law unconstitutional and dismissed the case. The parties adversely affected have come to us for
relief.
As a threshold issue the former Solicitor General, in his comment on the petitions, maintained the
posture that it was premature for the accused to elevate to this Court the orders denying their motions
to quash, these orders being interlocutory. While this is correct as a general rule, we have in justifiable
cases intervened to review the lower court's denial of a motion to quash. 1 In view of the importance of
the issue involved here, there is no doubt in our mind that the instant petitions should be entertained
and the constitutional challenge to BP 22 resolved promptly, one way or the other, in order to put to
rest the doubts and uncertainty that exist in legal and judicial circles and the general public which have
unnecessarily caused a delay in the disposition of cases involving the enforcement of the statute.
For the purpose of resolving the constitutional issue presented here, we do not find it necessary to delve
into the specifics of the informations involved in the cases which are the subject of the petitions before
us. 2 The language of BP 22 is broad enough to cover all kinds of checks, whether present dated or

postdated, or whether issued in payment of pre-existing obligations or given in mutual or simultaneous


exchange for something of value.
I
BP 22 punishes a person "who makes or draws and issues any check on account or for value, knowing at
the time of issue that he does not have sufficient funds in or credit with the drawee bank for the
payment of said check in full upon presentment, which check is subsequently dishonored by the drawee
bank for insufficiency of funds or credit or would have been dishonored for the same reason had not the
drawer, without any valid reason, ordered the bank to stop payment." The penalty prescribed for the
offense is imprisonment of not less than 30 days nor more than one year or a fine or not less than the
amount of the check nor more than double said amount, but in no case to exceed P200,000.00, or both
such fine and imprisonment at the discretion of the court. 3
The statute likewise imposes the same penalty on "any person who, having sufficient funds in or credit
with the drawee bank when he makes or draws and issues a check, shall fail to keep sufficient funds or
to maintain a credit to cover the full amount of the check if presented within a period of ninety (90) days
from the date appearing thereon, for which reason it is dishonored by the drawee bank. 4
An essential element of the offense is "knowledge" on the part of the maker or drawer of the check of
the insufficiency of his funds in or credit with the bank to cover the check upon its presentment. Since
this involves a state of mind difficult to establish, the statute itself creates a prima facie presumption of
such knowledge where payment of the check "is refused by the drawee because of insufficient funds in
or credit with such bank when presented within ninety (90) days from the date of the check. 5 To
mitigate the harshness of the law in its application, the statute provides that such presumption shall not
arise if within five (5) banking days from receipt of the notice of dishonor, the maker or drawer makes
arrangements for payment of the check by the bank or pays the holder the amount of the check.
Another provision of the statute, also in the nature of a rule of evidence, provides that the introduction
in evidence of the unpaid and dishonored check with the drawee bank's refusal to pay "stamped or
written thereon or attached thereto, giving the reason therefor," shall constitute prima facie proof of
"the making or issuance of said check, and the due presentment to the drawee for payment and the
dishonor thereof . . . for the reason written, stamped or attached by the drawee on such dishonored
check." 6
The presumptions being merely prima facie, it is open to the accused of course to present proof to the
contrary to overcome the said presumptions.
II
BP 22 is aimed at putting a stop to or curbing the practice of issuing checks that are worthless, i.e.
checks that end up being rejected or dishonored for payment. The practice, as discussed later, is
proscribed by the state because of the injury it causes to the public interests.

Before the enactment of BP 22, provisions already existed in our statute books which penalize the
issuance of bouncing or rubber checks. Criminal law has dealth with the problem within the context of
crimes against property punished as "estafa" or crimes involving fraud and deceit. The focus of these
penal provisions is on the damage caused to the property rights of the victim.
The Penal Code of Spain, which was in force in the Philippines from 1887 until it was replaced by the
Revised Penal Code in 1932, contained provisions penalizing, among others, the act of defrauding
another through false pretenses. Art. 335 punished a person who defrauded another "by falsely
pretending to possess any power, influence, qualification, property, credit, agency or business, or by
means of similar deceit." Although no explicit mention was made therein regarding checks, this
provision was deemed to cover within its ambit the issuance of worthless or bogus checks in exchange
for money. 7
In 1926, an amendment was introduced by the Philippine Legislature, which added a new clause
(paragraph 10) to Article 335 of the old Penal Code, this time referring in explicit terms to the issuance
of worthless checks. The amendment penalized any person who: 1) issues a check in payment of a debt
or for other valuable consideration, knowing at the time of its issuance that he does not have sufficient
funds in the bank to cover its amount, or 2) maliciously signs the check differently from his authentic
signature as registered at the bank in order that the latter would refuse to honor it; or 3) issues a
postdated check and, at the date set for its payment, does not have sufficient deposit to cover the same.
8
In 1932, as already adverted to, the old Penal Code was superseded by the Revised Penal Code. 9 The
above provisions, in amended form, were incorporated in Article 315 of the Revised Penal Code defining
the crime of estafa. The revised text of the provision read as follows:
"Art. 315.
Swindling (estafa). - Any person who shall defraud another by any of the means
mentioned hereinbelow shall be punished by:
xxx

xxx

xxx

2.
By means of any of the following false pretenses or fraudulent acts executed prior to or
simultaneously with the commission of the fraud:
(a)
By using fictitious name, or falsely pretending to possess power, influence, qualifications,
property, credit, agency, business or imaginary transactions, or by means of other similar deceits;
xxx

xxx

xxx

(d)
By postdating a check, or issuing a check in payment of an obligation the offender knowing that
at the time he had no funds in the bank, or the funds deposited by him were not sufficient to cover the
amount of the check without informing the payee of such circumstances."
The scope of paragraph 2 (d), however, was deemed to exclude checks issued in payment of pre-existing
obligations. 10 The rationale of this interpretation is that in estafa, the deceit causing the defraudation

must be prior to or simultaneous with the commission of the fraud. In issuing a check as payment for a
pre-existing debt, the drawer does not derive any material benefit in return or as consideration for its
issuance. On the part of the payee, he had already parted with his money or property before the check
is issued to him, hence, he is not defrauded by means of any "prior" or "simultaneous" deceit
perpetrated on him by the drawer of the check.
With the intention of remedying the situation and solving the problem of how to bring checks issued in
payment of pre-existing debts within the ambit of Art. 315, an amendment was introduced by the
Congress of the Philippines in 1967, 11 which was enacted into law as Republic Act No. 4885, revising
the aforesaid proviso to read as follows:
"(d)
By postdating a check, or issuing a check in payment of an obligation when the offender had no
funds in the bank, or his funds deposited therein were not sufficient to cover the amount of the check.
The failure of the drawer of the check to deposit the amount necessary to cover his check within three
(3) days from receipt of notice from the bank and/or the payee or holder that said check has been
dishonored for lack or insufficiency of funds shall be prima facie evidence of deceit constituting false
pretense or fraudulent act."
However, the adoption of the amendment did not alter the situation materially. A divided Court held in
People vs. Sabio, Jr. 12 that Article 315, as amended by Republic Act 4885, does not cover checks issued
in payment of pre-existing obligations, again relying on the concept underlying the crime of estafa
through false pretenses or deceit - which is, that the deceit or false pretense must be prior to or
simultaneous with the commission of the fraud.
Since statistically it had been shown that the greater bulk of dishonored checks consisted of those issued
in payment of pre-existing debts, 13 the amended provision evidently failed to cope with the real
problem and to deal effectively with the evil that it was intended to eliminate or minimize.
With the foregoing factual and legal antecedents as a backdrop, the then Interim Batasan confronted
the problem squarely. It opted to take a bold step and decided to enact a law dealing with the problem
of bouncing or worthless checks, without attaching the law's umbilical cord to the existing penal
provisions on estafa. BP 22 addresses the problem directly and frontally and makes the act of issuing a
worthless check malum prohibitum. 14
The question now arises: Is BP 22 a valid law?
Previous efforts to deal with the problem of bouncing checks within the ambit of the law on estafa did
not evoke any constitutional challenge. In contrast, BP 22 was challenged promptly.
Those who question the constitutionality of BP 22 insist that: (1) it offends the constitutional provision
forbidding imprisonment for debt; (2) it impairs freedom of contract; (3) it contravenes the equal
protection clause; (4) it unduly delegates legislative and executive powers; and (5) its enactment is
flawed in that during its passage the Interim Batasan violated the constitutional provision prohibiting
amendments to a bill on Third Reading.

The constitutional challenge to BP 22 posed by petitioners deserves a searching and thorough scrutiny
and the most deliberate consideration by the Court, involving as it does the exercise of what has been
described as "the highest and most delicate function which belongs to the judicial department of the
government." 15
As we enter upon the task of passing on the validity of an act of a co-equal and coordinate branch of the
government, we need not be reminded of the time-honored principle, deeply ingrained in our
jurisprudence, that a statute is presumed to be valid. Every presumption must be indulged in favor of its
constitutionality. This is not to say that we approach our task with diffidence or timidity. Where it is
clear that the legislature has overstepped the limits of its authority under the constitution, we should
not hesitate to wield the axe and let it fall heavily, as fall it must, on the offending statute.
III
Among the constitutional objections raised against BP 22, the most serious is the alleged conflict
between the statute and the constitutional provision forbidding imprisonment for debt. It is contended
that the statute runs counter to the inhibition in the Bill of Rights which states, "No person shall be
imprisoned for debt or non-payment of a poll tax." 16 Petitioners insist that, since the offense under BP
22 is consummated only upon the dishonor or non-payment of the check when it is presented to the
drawee bank, the statute is really a "bad debt law" rather than a "bad check law." What it punishes is
the non-payment of the check, not the act of issuing it. The statute, it is claimed, is nothing more than a
veiled device to coerce payment of a debt under the threat of penal sanction.
First of all, it is essential to grasp the essence and scope of the constitutional inhibition invoked by
petitioners. Viewed in its historical context, the constitutional prohibition against imprisonment for debt
is a safeguard that evolved gradually during the early part of the nineteenth century in the various states
of the American Union as a result of the people's revulsion at the cruel and inhumane practice,
sanctioned by common law, which permitted creditors to cause the incarceration of debtors who could
not pay their debts. At common law, money judgments arising from actions for the recovery of a debt or
for damages from breach of a contract could be enforced against the person or body of the debtor by
writ of capias ad satisfaciendum. By means of this writ, a debtor could be seized and imprisoned at the
instance of the creditor until he makes the satisfaction awarded. As a consequence of the popular
ground swell against such a barbarous practice, provisions forbidding imprisonment for debt came to
begenerally enshrined in the constitutions of various states of the Union. 17
This humanitarian provision was transported to our shores by the Americans at the turn of the century
and embodied in our organic laws. 18 Later, our fundamental law outlawed not only imprisonment for
debt, but also the infamous practice, native to our shore, of throwing people in jail for non-payment of
the cedula or poll tax. 19
The reach and scope of this constitutional safeguard have been the subject of judicial definition, both by
our Supreme Court 20 and by American state courts. 21 Mr. Justice Malcolm, speaking for the Supreme
Court in Ganaway vs. Quillen, 22 stated: "The 'debt' intended to be covered by the constitutional
guaranty has a well-defined meaning. Organic provisions relieving from imprisonment for debt, were

intended to prevent commitment of debtors to prison for liabilities arising from actions ex contractu.
The inhibition was never meant to include damages arising in actions ex delicto, for the reason that
damages recoverable therein do not arise from any contract entered into between the parties but are
imposed upon the defendant for the wrong he has done and are considered as punishment, nor to fines
and penalties imposed by the courts in criminal proceedings as punishments for crime."
The law involved in Ganaway was not a criminal statute but the Code of Procedure in Civil Actions (1909)
which authorized the arrest of the defendant in a civil case on grounds akin to those which justify the
issuance of a writ of attachment under our present Rules of Court, such as imminent departure of the
defendant from the Philippines with intent to defraud his creditors, or concealment, removal or
disposition of properties in fraud of creditors, etc. The Court, in that case, declared the detention of the
defendant unlawful, being violative of the constitutional inhibition against imprisonment for debt, and
ordered his release. The Court, however, refrained from declaring the statutory provision in question
unconstitutional.
Closer to the case at bar is People v. Vera Reyes, 23 wherein a statutory provision which made illegal
and punishable the refusal of an employer to pay, when he can do so, the salaries of his employees or
laborers on the fifteenth or last day of every month or on Saturday every week, was challenged for
being violative of the constitutional prohibition against imprisonment for debt. The constitutionality of
the law in question was upheld by the Court, it being within the authority of the legislature to enact
such a law in the exercise of the police power. It was held that "one of the purposes of the law is to
suppress possible abuses on the part of the employers who hire laborers or employees without paying
them the salaries agreed upon for their services, thus causing them financial difficulties." The law was
viewed not as a measure to coerce payment of an obligation, although obviously such could be its
effect, but to banish a practice considered harmful to public welfare.
IV
Has BP 22 transgressed the constitutional inhibition against imprisonment for debt? To answer the
question, it is necessary to examine what the statute prohibits and punishes as an offense. Is it the
failure of the maker of the check to pay a debt? Or is it the making and issuance of a worthless check in
payment of a debt? What is the gravamen of the offense? This question lies at the heart of the issue
before us.
The gravamen of the offense punished by BP 22 is the act of making and issuing a worthless check or a
check that is dishonored upon its presentation for payment. It is not the non-payment of an obligation
which the law punishes. The law is not intended or designed to coerce a debtor to pay his debt. The
thrust of the law is to prohibit, under pain of penal sanctions, the making of worthless checks and
putting them in circulation. Because of its deleterious effects on the public interest, the practice is
proscribed by the law. The law punishes the act not as an offense against property, but an offense
against public order.

Admittedly, the distinction may seem at first blush to appear elusive and difficult to conceptualize. But
precisely in the failure to perceive the vital distinction lies the error of those who challenge the validity
of BP 22.
It may be constitutionally impermissible for the legislature to penalize a person for non-payment of a
debt ex contractu. But certainly it is within the prerogative of the lawmaking body to proscribe certain
acts deemed pernicious and inimical to public welfare. Acts mala in se are not the only acts which the
law can punish. An act may not be considered by society as inherently wrong, hence, not malum in se,
but because of the harm that it inflicts on the community, it can be outlawed and criminally punished as
malum prohibitum. The state can do this in the exercise of its police power.
The police power of the state has been described as "the most essential, insistent and illimitable of
powers" which enables it to prohibit all things hurtful to the comfort, safety and welfare of society. 24 It
is a power not emanating from or conferred by the constitution, but inherent in the state, plenary,
suitably vague and far from precisely defined, rooted in the conception that man in organizing the state
and imposing upon the government limitations to safeguard constitutional rights did not intend thereby
to enable individual citizens or group of citizens to obstruct unreasonably the enactment of such
salutary measures to ensure communal peace, safety, good order and welfare." 25
The enactment of BP 22 is a declaration by the legislature that, as a matter of public policy, the making
and issuance of a worthless check is deemed a public nuisance to be abated by the imposition of penal
sanctions.
It is not for us to question the wisdom or impolicy of the statute. It is sufficient that a reasonable nexus
exists between means and end. Considering the factual and legal antecedents that led to the adoption
of the statute, it is not difficult to understand the public concern which prompted its enactment. It had
been reported that the approximate value of bouncing checks per day was close to 200 million pesos,
and thereafter when overdrafts were banned by the Central Bank, it averaged between 50 million to 80
million pesos a day. 26
By definition, a check is a bill of exchange drawn on a bank and payable on demand. 27 It is a written
order on a bank, purporting to be drawn against a deposit of funds for the payment of all events, of a
sum of money to a certain person therein named or to his order or to cash, and payable on demand. 28
Unlike a promissory note, a check is not a mere undertaking to pay an amount of money. It is an order
addressed to a bank and partakes of a representation that the drawer has funds on deposit against
which the check is drawn, sufficient to ensure payment upon its presentation to the bank. There is
therefore an element of certainty or assurance that the instrument will be paid upon presentation. For
this reason, checks have become widely accepted as a medium of payment in trade and commerce.
Although not legal tender, checks have come to be perceived as convenient substitutes for currency in
commercial and financial transactions. The basis or foundation of such perception is confidence. If such
confidence is haken, the usefulness of checks as currency substitutes would be greatly diminished or
may become nil. Any practice therefore tending to destroy that confidence should be deterred, for the
proliferation of worthless checks can only create havoc in trade circles and the banking community.

Recent statistics of the Central Bank show that one-third of the entire money supply of the country,
roughly totalling P32.3 billion, consists of peso demand deposits; the remaining two-thirds consists of
currency in circulation. 29 These demand deposits in the banks constitute the funds against which,
among others, commercial papers like checks, are drawn. The magnitude of the amount involved amply
justifies the legitimate concern of the state in preserving the integrity of the banking system. Flooding
the system with worthless checks is like pouring garbage into the bloodstream of the nation's economy.
The effects of the issuance of a worthless check transcends the private interests of the parties directly
involved in the transaction and touches the interests of the community at large. The mischief it creates
is not only a wrong to the payee or holder, but also an injury to the public. The harmful practice of
putting valueless commercial papers in circulation, multiplied a thousandfold, can very well pollute the
channels of trade and commerce, injure the banking system and eventually hurt the welfare of society
and the public interest. As aptly stated - 30
"The 'check flasher' does a great deal more than contract a debt; he shakes the pillars of business; and
to my mind, it is a mistaken charity of judgment to place him in the same category with the honest man
who is unable to pay his debts, and for whom the constitutional inhibition against `imprisonment for
debt, except in cases of fraud' was intended as a shield and not a sword."
In sum, we find the enactment of BP 22 a valid exercise of the police power and is not repugnant to the
constitutional inhibition against imprisonment for debt.
This Court is not unaware of the conflicting jurisprudence obtaining in the various states of the United
States on the constitutionality of the "worthless check" acts. 31 It is needless to warn that foreign
jurisprudence must be taken with abundant caution. A caveat to be observed is that substantial
differences exist between our statute and the worthless check acts of those states where the
jurisprudence have evolved. One thing to remember is that BP 22 was not lifted bodily from any existing
statute. Furthermore, we have to consider that judicial decisions must be read in the context of the facts
and the law involved and, in a broader sense, of the social, economic and political environment - in
short, the milieu - under which they were made. We recognize the wisdom of the old saying that what is
sauce for the goose may not be sauce for the gander.
As stated elsewhere, police power is a dynamic force that enables the state to meet the exigencies of
changing times. There are occasions when the police power of the state may even override a
constitutional guaranty. For example, there have been cases wherein we held that the constitutional
provision on non-impairment of contracts must yield to the police power of the state. 32 Whether the
police power may override the constitutional inhibition against imprisonment for debt is an issue we do
not have to address. This bridge has not been reached, so there is no occasion to cross it.
We hold that BP 22 does not conflict with the constitutional inhibition against imprisonment for debt.
V

We need not detain ourselves lengthily in the examination of the other constitutional objections raised
by petitioners, some of which are rather flimsy.
We find no valid ground to sustain the contention that BP 22 impairs freedom of contract. The freedom
of contract which is constitutionally protected is freedom to enter into "lawful" contracts. Contracts
which contravene public policy are not lawful. 33 Besides, we must bear in mind that checks can not be
categorized as mere contracts. It is a commercial instrument which, in this modern day and age, has
become a convenient substitute for money; it forms part of the banking system and therefore not
entirely free from the regulatory power of the state.
Neither do we find substance in the claim that the statute in question denies equal protection of the
laws or is discriminatory, since it penalizes the drawer of the check, but not the payee. It is contended
that the payee is just as responsible for the crime as the drawer of the check, since without the
indispensable participation of the payee by his acceptance of the check there would be no crime. This
argument is tantamount to saying that, to give equal protection, the law should punish both the
swindler and the swindled. The petitioners' posture ignores the well-accepted meaning of the clause
"equal protection of the laws." The clause does not preclude classification of individuals, who may be
accorded different treatment under the law as long as the classification is not unreasonable or arbitrary.
34
It is also suggested that BP 22 constitutes undue or improper delegation of legislative powers, on the
theory that the offense is not completed by the sole act of the maker or drawer but is made to depend
on the will of the payee. If the payee does not present the check to the bank for payment but instead
keeps it, there would be no crime. The logic of the argument stretches to absurdity the meaning of
"delegation of legislative power." What cannot be delegated is the power to legislate, or the power to
make laws, 35 which means, as applied to the present case, the power to define the offense sought to
be punished and to prescribe the penalty. By no stretch of logic or imagination can it be said that the
power to define the crime and prescribe the penalty therefor has been in any manner delegated to the
payee. Neither is there any provision in the statute that can be construed, no matter how remotely, as
undue delegation of executive power. The suggestion that the statute unlawfully delegates its
enforcement o the offended party is farfetched.
Lastly, the objection has been raised that Section 9 (2) of Article VII of the 1973 Constitution was
violated by the legislative body when it enacted BP 22 into law. This constitutional provision prohibits
the introduction of amendments to a bill during the Third Reading. It is claimed that during its Third
Reading, the bill which eventually became BP 22 was amended in that the text of the second paragraph
of Section 1 of the bill as adopted on Second Reading was altered or changed in the printed text of the
bill submitted for approval on Third Reading.
A careful review of the record of the proceedings of the Interim Batasan on this matter shows that,
indeed, there was some confusion among Batasan Members on what was the exact text of the
paragraph in question which the body approved on Second Reading. 36 Part of the confusion was due
apparently to the fact that during the deliberations on Second Reading (the amendment period),

amendments were proposed orally and approved by the body or accepted by the sponsor, hence, some
members might not have gotten the complete text of the provisions of the bill as amended and
approved on Second Reading. However, it is clear from the records that the text of the second
paragraph of Section 1 of BP 22 is the text which was actually approved by the body on Second Reading
on February 7, 1979, as reflected in the approved Minutes for that day. In any event, before the bill was
submitted for final approval on Third Reading, the Interim Batasan created a Special Committee to
investigate the matter, and the Committee in its reprt, which was approved by the entire body on March
22, 1979, stated that "the clause in question was . . . an authorized amendment of the bill and the
printed copy thereof reflects accurately the provision in question as approved on Second Reading. 37
We therefore, find no merit in the petitioners' claim that in the enactment of BP 22 the provisions of
Section 9 (2) of Article VIII of the 1973 Constitution were violated.
WHEREFORE, judgment is rendered granting the petition in G.R. No. 75789 and setting aside the order
of the respondent Judge dated August 19, 1986. The petitions in G.R. Nos. 63419, 66839-42, 71654,
74524-25, 75122-49, 75812-13 and 75765-67 are hereby dismissed and the temporary restraining order
issued in G.R. Nos. 74524-25 is lifted. With costs against private petitioners.
SO ORDERED.
Teehankee, C.J., Feria, Fernan, Narvasa, Melencio-Herrera, Alampay, Gutierrez, Jr., Cruz, Paras and
Feliciano, JJ., concur.
1.
Salonga v. Cruz Pano, 134 SCRA 438; Mean v. Argel, 115 SCRA 256: Yap v. Lutero, 105 Phil. 3007;
Pineda and Ampil Manufacturing Co. v. Bartolome, 95 Phil. 930; People v. Zulueta, 89 Phil. 880;
Newsweek, Inc. v. Intermediate Appellate Court, G.R. No. 63559, May 30, 1986, 142 SCRA 171.
2.
Postdated checks are involved in G.R. Nos. 66839-42, G.R. No. 71654 and G.R. No. 75789,
present dated checks in G.R. No. 63419 and G.R. Nos. 75812-13, and a mix of present dated and
postdated checks in G.R. Nos. 74524-25 and G.R. Nos. 7576567.
3.

Section 1, first paragraph.

4.

Id., second paragraph.

5.

Section 2.

6.

Section 3.

7.

U.S. v. Mendezona, 12 Phil. 72; U.S. v. Lee, 39 Phil. 466.

8.

Act No. 3313, approved on December 3, 1926.

9.

Act No. 3815, which was approved on December 8, 1930, but took effect on January 1, 1932.

10.

People v. Lilius, 59 Phil. 339; People v. Quesada, 60 Phil. 515; People v. Fortuno, 73 Phil. 407.

11.

Senate Bill No. 413, sponsored by Sen. Ambrosio Padilla.

12.

86 SCRA 568.

13.

Cited in Dissenting Opinion, Antonio, J. in People v. Sabio, Jr., supra, p. 600.

14.
The offense is punished not as a crime against property, but against public interest. See Record
of Batasan, Vol. 3, P.B. No. 70.
15.

State v. Manuel, 20 N.C. 144.

16.

Section 13, Article IV, 1973 Constitution.

17.
For a survey of the constitutional provisions of various American States, see Tan Cong v. N.L.
Stewart, 42 Phil. 809.
18.

Philippine Bill of 1902; Jones Law (1916).

19.

1935 Constitution, Art. III, Sec. 1 (12); 1973 Constitution, Art. IV, Sec. 13.

20.

Tan Cong vs. N.L. Stewart (1907) 42 Phil. 809; Ganaway v. Quillen (1922), 42 Phil. 815.

21.

16-A Am. Jur. 2d, 566-574.

22.

42 Phil. 805, 807-808.

23.

67 Phil. 187, 190.

24.

Smith, Bell & Co. v. National (1919), 40 Phil. 136; Rubi v. Prov. Bd. of Mindoro (1919).

25.

Fernando, J. in Edu v. Ericta, 35 SCRA 481.

26.

Dissenting Opinion, Antonio, J. in People v. Sabio, Jr., supra, p. 600.

27.

Section 185, Negotiable Instruments Law.

28.

Black's Law Dictionary (5th Ed.) p. 215.

29.
CB Review, August, 1986, p. 6. For example, for the month of August, 1986, the total money
supply was P32.326 billion, of which P21.640 billion represented currency in circulation and P10,677
billion, peso demand deposits.
30.

Stacy, C.J., concurring in State v. Yarboro (1927) 194 N.C. 498 140 S.E. 216, 220.

31.
For a survey of decisions on the subject, see Annotations, 23 A.L.R. 459 and 76 A.L.R. 1229,
Constitutionality upheld: Frazier v. State (1931) 135 So. 280; Ex parte Rosencratz (1931) 299 Pac. 15;
Carter v. Lowry (1929) 167 Ga. 151 S.E. 23; Caughlan v. State (1927) 22 Ala. 220, 114 So. 280; State v.
Yarboro (1927) 194 N.C. 498, 140, S.E. 216; State v. Avery (1922) 207 Pac. 838, 23 A.L.R. 453; Hollis v.
State (1921) 152 Ga. 192, 108 S.E. 783; McQuagge v. State (1920) 80 Fla. 768, 87 So. 60, State v. Pilling
(1909) 53 Wash. 464; 132 Am. St. Contra: State v. Nelson (1931) 237 N.W. 766, 76 A.L.R. 1226; Burnham

v. Com. (1929) 228 Ky. 410, 15 S.W. (2d) 256; Ward v. Com. (1929) 228 Ky 468, 15 S.W. (2d) 276;
Neidlinger v. State (1916) 17 Ga. App. 811, 88 S.E. 687; Carr v. State (1895) 106 Ala. 35, 34 L.R.A. 634.
32.

Phil. American Life Insurance Co. v. Auditor General, 22 SCRA 135.

33.
Article 1409, Civil Code.34 Taada and Fernando, Constitution of the Phil. (1949 ed.) p. 534;
Chong v. Hernandez, 101 Phil. 1155 (1952); Co Chiong v. Cuaderno, 83 Phil. 242 (1949).
35.

People v. Vera, 65 Phil. 56.

36.

Record of the Batasan, Vol. 3, R.B. No. 91 and No. 92.

37.

Ibid., Vol. 4, R.B. No. 120, page 185.

Kwong Sing vs. City of Manila


G.R. No. L-15972

October 11, 1920

KWONG SING, in his own behalf and in behalf of all others having a common or general interest in the
subject-matter of this action, plaintiff-appellant,
vs.
THE CITY OF MANILA, defendant-appellant.
G. E. Campbell for appellant.
City Fiscal Diaz for appellee.

MALCOLM, J.:
The validity of Ordinance No. 532 of the city of Manila requiring receipts in duplicate in English and
Spanish duly signed showing the kind and number of articles delivered by laundries and dyeing and
cleaning establishments, must be decided on this appeal. The ordinance in question reads as follows:
[ORDINANCE No. 532.]
AN ORDINANCE REGULATING THE DELIVERY AND RETURN OF CLOTHES OR CLOTHS DELIVERED TO BE
WASHED IN LAUNDRIES, DYEING AND CLEANING ESTABLISHMENTS.
Be it ordained by the Municipal Board of the city of Manila, that:
SECTION. 1. Every person, firm or corporation in the city of Manila engaged in laundering, dyeing, or
cleaning by any process, cloths or clothes for compensation, shall issue dyed, or cleaned are received a
receipt in duplicate, in English and Spanish, duly signed, showing the kind and number of articles
delivered, and the duplicate copy of the receipt shall be kept by the owner of the establishment or
person issuing same. This receipt shall be substantially of the following form:
No. ______________

MANILA, _______________________________________________, 19________


Received of Mr.__________________________________________
(Name)
_______________________________________ the following articles delivered
(Residence.)
to me to be _______________________________________
(Washed, cleaned or dyed.)

"__________________________________________________
"__________________________________________________
"__________________________________________________
"__________________________________________________
This articles will have been ___________________________________________
(Cleaned, washed or dyed.)
may be taken at ___________m. on the ________ day of ______________, 19 _____ upon payment of
P________ the amount of compensation for the work done.
_________________________________________
(Owner or person in charge.)
Provided, however, That in case the articles to be delivered are so many that it will take much time to
classify them, the owner of the establishment, through the consent of the person delivering them, may
be excused from specifying in the receipt the kinds of such articles, but he shall state therein only the
total number of the articles so received.
SEC. 2. No person shall take away any cloths or clothes delivered to a person, firm, or corporation,
mentioned in the preceding section, to be washed, dyed or cleaned, unless he returns the receipt issued
by such person, firm, or corporation.
SEC. 3. Violation of any of the provisions of this ordinance shall be punished by a fine of not exceeding
twenty pesos.
SEC. 4. This Ordinance shall take effect on its approval.
Approved February 25, 1919.
In the lower court, the prayer of the complaint was for a preliminary injunction, afterwards to be made
permanent, prohibiting the city of Manila from enforcing Ordinance No. 532, and for a declaration by
the court that the said ordinance was null and void. The preliminary injunction was granted. But the
permanent injunction was not granted for, after the trial, judgment was, that the petitioner take nothing
by his action, without special finding as to costs. From this judgment plaintiff has appealed, assigning
two errors as having been committed by the trial court, both intended to demonstrate that Ordinance
No. 532 is invalid.
The government of the city of Manila possesses the power to enact Ordinance No. 532. Section 2444,
paragraphs (l) and (ee) of the Administrative Code, as amended by Act No. 2744, section 8, authorizes
the municipal board of the city of Manila, with the approval of the mayor of the city:
(l) To regulate and fix the amount of the license fees for the
following: . . . laundries . . .

(ee) 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. . . .
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 "supress" or "prohibit." Consequently, under the power to regulate laundries, the
municipal authorities could make proper police regulations as to the mode in which the employment or
business shall be exercised. And, under the general welfare clause (subsection [ee], section 2444 of the
Manila Charter), the business of laundries and dyeing and cleaning establishments could be regulated,
as this term is above construed, by an ordinance in the interest of the public health, safety, morals,
peace good order, comfort, convenience, prosperity, and the general welfare.
The purpose of the municipal authorities in adopting the ordinance is fairly evident. Ordinance No. 532
was enacted, it is said, to avoid disputes between laundrymen and their patrons and to protect
customers of laundries who are not able to decipher Chinese characters from being defrauded. The
object of the ordinance was, accordingly, the promotion of peace and good order and the prevention of
fraud, deceit, cheating, and imposition. The convenience of the public would also presumably be served
in a community where there is a Babel of tongues by having receipts made out in the two official
languages. Reasonable restraints of a lawful business for such purposes are permissible under the police
power. The legislative body is the best judge of whether or not the means adopted are adequate to
accomplish the ends in view.
Chinese laundrymen are here the protestants. Their rights, however, are not less because they may be
Chinese aliens. The life, liberty, or property of these persons cannot be taken without due process of
law; they are entitled to the equal protection of the laws without regard to their race; and treaty rights,
as effectuated between the United States and China, must be accorded them. 1awph!l.net
With these premises conceded, appellant's claim is, that Ordinance No. 532 savors of class legislation;
that it unjustly discriminates between persons in similar circumstances; and that it constitutes an
arbitrary infringement of property rights. To an extent, the evidence for the plaintiffs substantial their
claims. There are, in the city of Manila, more than forty Chinese laundries (fifty-two, according to the
Collector of Internal Revenue.) The laundrymen and employees in Chinese laundries do not, as a rule,
speak, read, and write English or Spanish. Some of them are, however, able to write and read numbers.
Plaintiff's contention is also that the ordinance is invalid, because it is arbitrary, unreasonable, and not
justified under the police power of the city. It is, of course, a familiar legal principle that an ordinance
must be reasonable. Not only must it appear that the interest of the public generally require an
interference with private rights, but the means adopted must be reasonably necessary for the
accomplishment of the purpose and not unduly oppressive upon individuals. If the ordinance appears to
the judicial mind to be partial or oppressive, it must be declared invalid. The presumption is, however,

that the municipal authorities, in enacting the ordinance, did so with a rational and conscientious regard
for the rights of the individual and of the community.
Up to this point, propositions and facts have been stated which are hardly debatable. The trouble comes
in the application of well-known legal rules to individual cases.
Our view, after most thoughtful consideration, is, that the ordinance invades no fundamental right, and
impairs no personal privilege. Under the guise of police regulation, an attempt is not made to violate
personal property rights. The ordinance is neither discriminatory nor unreasonable in its operation. It
applies to all public laundries without distinction, whether they belong to Americans, Filipinos, Chinese,
or any other nationality. All, without exception, and each everyone of them without distinction, must
comply with the ordinance. There is no privilege, no discrimination, no distinction. Equally and uniformly
the ordinance applies to all engaged in the laundry business, and, as nearly as may be, the same burdens
are cast upon them.
The oppressiveness of the ordinance may have been somewhat exaggerated. The printing of the laundry
receipts need not be expensive. The names of the several kinds of clothing may be printed in English and
Spanish with the equivalent in Chinese below. With such knowledge of English and Spanish as
laundrymen and their employees now possess, and, certainly, at least one person in every Chinese
laundry must have a vocabulary of a few words, and with ability to read and write arabic numbers, no
great difficulty should be experienced, especially after some practice, in preparing the receipts required
by Ordinance No. 532. It may be conceded that an additional burden will be imposed on the business
and occupation affected by the ordinance. Yet, even if private rights of person or property are subjected
to restraint, and even if loss will result to individuals from the enforcement of the ordinance, this is not
sufficient ground for failing to uphold the hands of the legislative body. The very foundation of the
police power is the control of private interests for the public welfare.
Numerous authorities are brought to our attention. Many of these cases concern laundries and find
their origin in the State of California. We have examined them all and find none which impel us to hold
Ordinance No. 532 invalid. Not here, as in the leading decision of the United States Supreme Court,
which had the effect of nullifying an ordinance of the City and Country of San Francisco, California, can
there be any expectation that the ordinance will be administered by public authority "with an evil eye
and an unequal hand." (Yick Wo vs. Hopkins [1886], 118 U. S., 356, which compare with Barbier vs.
Connolly [1884], 113 U. S., 27.)
There is no analogy between the instant case and the former one of Young vs. Rafferty [1916], 33 Phil.,
556). The holding there was that the Internal Revenue Law did not empower the Collector of Internal
Revenue to designate the language in which the entries in books shall be made by merchants, subject to
the percentage tax. In the course of the decision, the following remark was interpolated: "In reaching
this conclusion, we have carefully avoided using any language which would indicate our views upon the
plaintiffs' second proposition to the effect that if the regulation were an Act of the Legislature itself, it
would be invalid as being in conflict with the paramount law of the land and treaties regulating certain
relations with foreigners." There, the action was taken by means of administrative regulation; here, by

legislative enactment. There, governmental convenience was the aim; here, the public welfare. We are
convinced that the same justices who participated in the decision in Young vs. Rafferty [supra] would
now agree with the conclusion toward which we are tending.
Our holding is, that the government of the city of Manila had the power to enact Ordinance No. 532 and
that as said ordinance is found not to be oppressive, nor unequal, nor unjust, it is valid. This statement
disposes of both assignments of error, for the improprietry of the question answered by a witness for
the defense over the objection of plaintiff's attorney can be conceded without affecting the result.
After the case was submitted to this court, counsel for appellants asked that a preliminary injunction
issue, restraining the defendant or any of its officers from enforcing Ordinance No. 532, pending
decisions. It was perfectly proper for the trial and appellate courts to determine the validity of the
municipal ordinance on a complaint for an injunction, since it was very apparent that irreparable injury
was impending, that a municipality of suits was threatened, and that complainants had no other plain,
speedy, and adequate remedy. But finding that the ordinance is valid, the general rule to the effect that
an injunction will not be granted to restrain a criminal prosecution should be followed.
Judgment is affirmed, and the petition for a preliminary injunction is denied, with costs against the
appellants. So ordered.
Mapa, C.J., Johnson, Araullo, Avancea and Villamor, JJ., concur.

Tablarin vs. Gutierrez


Tablarin vs. Gutierrez

July 31, 1987.

[GRN L-78164 July 31, 1987.*]


TERESITA TABLARIN, MA. LUZ CIRIACO, MA NIMFA B. ROVIRA, EVANGELINA S. LABAO, in their behalf and
in behalf of applicants for admission into the Medical Colleges during the school year 1987-88 and
future years who have not taken or successfully hurdled the National Medical Admission Test (NMAT).
petitioners, vs. THE HONORABLE JUDGE ANGELINA S. GUTIERREZ, Presiding Judge of Branch XXXVII of
the Regional Trial Court of the National Capital Judicial Region with seat at Manila, THE HONORABLE
SECRETARY LOURDES QUISUMBING, in her capacity as Chairman of the BOARD OF MEDICAL
EDUCATION, and THE CENTER FOR EDUCATIONAL MEASUREMENT (CEM), respondents.
PETITION for certiorari to review the decision of the Regional Trial Court of Manila, Br. 37.
The facts are stated in the opinion of the Court.
FELICIANO, J.:
The petitioners sought admission into colleges or schools of medicine for the school year 1987-1988.
However, the petitioners either did not take or did not successfully take the National Medical Admission
Test (NMAT) required by the Board of Medical Education, one of the public respondents, and
administered by the private respondent, the Center for Educational Measurement (CEM).
On 5 March 1987, the petitioners filed with the Regional Trial Court, National Capital Judicial Region, a
Petition for Declaratory Judgment and Prohibition with a prayer for Temporary Restraining Order and
Preliminary Injunction. The petitioners sought to enjoin the Secretary of Education, Culture and Sports,
the Board of Medical Education and the Center for Educational Measurement from enforcing Section 5
(a) and (f) of Republic Act No. 2382, as amended, and MECS Order No. 52, series of 1985, dated 23
August 1985 and from requiring the taking and passing of the NMAT as a condition for securing
certificates of eligibility for admission, from proceeding with accepting applications for taking the NMAT
and from administering the NMAT as scheduled on 26 April 1987 and in the future. After hearing on the
petition for issuance of preliminary injunction, the trial court denied said petition on 20 April 1987. The
NMAT was conducted and administered as previously scheduled.
Petitioners accordingly filed this Special Civil Action for Certiorari with this Court to set aside the Order
of the respondent judge denying the petition for issuance of a writ of preliminary injunction.
Republic Act 2392, as amended by Republic Acts Nos. 4224 and 5946, known as the "Medical Act of
1959" defines its basic objectives in the following manner:
"Section 1. Objectives. -This Act provides for and shall govern (a) the standardization and regulation of
medical education; (b) the examination for registration of physicians; and (c) the supervision, control
and regulation of the practice of medicine in the Philippines." (Underscoring supplied)

The statute, among other things, created a Board of Medical Education which is composed of (a) the
Secretary of Education, Culture and Sports or his duly authorized representative, as Chairman; (b) the
Secretary of Health or his duly authorized representative; (c) the Director of Higher Education or his duly
authorized representative; (d) the Chairman of the Medical Board or his duly authorized representative;
(e) a representative of the Philippine Medical Association; (f) the Dean of the College of Medicine,
University of the Philippines; (g) a representative of the Council of Deans of Philippine Medical Schools;
and (h) a representative of the Association of Philippine Medical Colleges, as members. The functions of
the Board of Medical Education specified in Section 5 of the statute include the following:
"(a) To determine and prescribe requirements for admission into a recognized college of medicine;
(b) To determine and prescribe requirements for minimum physical facilities of colleges of medicine, to
wit: buildings, including hospitals, equipment and supplies, apparatus, instruments, appliances,
laboratories, bed capacity for instruction purposes, operating and delivery rooms, facilities for
outpatient services, and others, used for didactic and practical instruction in accordance with modern
trends;
(c) To determine and prescribe the minimum number and minimum qualifications of teaching personnel,
including studentteachers ratio;
(d) To determine and prescribe the minimum required curiculum leading to the degree of Doctor of
Medicine;
(e) To authorize the implementation of experimental medical curriculum in a medical school that has
exceptional faculty and instrumental facilities. Such an experimental curriculum may prescribe
admission and graduation requirements other than those prescribed in this Act; Provided, That only
exceptional students shall be anrolled in the experimental curriculum;
(f) To accept applications for certification for admission to a medical school and keep a register of those
issued said certificate; and to collect from said applicants the amount of twenty-five pesos each which
shall accrue to the operating fund of the Board of Medical Education;
(g) To select, determine and approve hospitals or some departments of the hospitals for training which
comply with the minimum specific physical facilities as provided in subparagraph (b) hereof; and
(h) To promulgate and prescribe and enforce the necessary rules and regulations for the proper
implementation of the foregoing functions." (Italics supplied)
Section 7 prescribes certain minimum requirements for applicants to medical schools:
"Admission requirements.-The medical college may admit any student who has not been convicted by
any court of competent jurisdiction of any offense involving moral turpitude and who presents (a) a
record of completion of a bachelor's degree in science or arts; (b) a certificate of eligibility for entrance
to a medical school from the Board of Medical Education; (c) a certificate of good moral character issued
by two former professors in the college of liberal arts; and (d) birth certificate. Nothing in this act shall

be construed to inhibit any college of medicine from establishing, in addition to the preceding, other
entrance requirements that may be deemed admissible.
x x x x x x x x x" (Italics supplied)
MECS Order No. 52, s. 1985, issued by the then Minister of Education, Culture and Sports and dated 23
August 1985, established a uniform admission test called the National Medical Admission Test (NMAT)
as an additional requirement for issuance of a certificate of eligibility for admission into medical schools
of the Philippines, beginning with the school year 1986-1987. This Order goes on to state that:
"2. The NMAT, an aptitude test, is considered as an instrument toward upgrading the selection of
applicants for admission into the medical schools and its calculated to improve the quality of medical
education in the country. The cutoff score for the successful applicants, based on the scores on the
NMAT, shall be determined every year by the Board of Medical Education after consultation with the
Association of Philippine Medical Colleges. The NMAT rating of each applicant, together with the other
admission requirements as presently called for under existing rules, shall serve as a basis for the
issuance of the prescribed certificate of elegibility for admission into the medical colleges.
3. Subject to the prior approval of the Board of Medical Education, each medical college may give other
tests for applicants who have been issued a corresponding certificate of eligibility for admission that will
yield information on other aspects of the applicant's personality to complement the information derived
from the NMAT.
xxxxxxxxx
8. No applicant shall be issued the requisite Certificate of Eligibility for Admission (CEA), or admitted for
enrollment as first year student in any medical college, beginning the school year, 1986- 87, without the
required NMAT qualification as called for under this Order." (Underscoring supplied)
Pursuant to MECS Order No. 52, s. 1985, the private respondent Center conducted NMATs for entrance
to medical colleges during the school year 1986-1987. In December 1986 and in April 1987, respondent
Center conducted the NMATs for admission to medical colleges during the school year 1987-1988.
Petitioners raise the question of whether or not a writ of preliminary injunction may be issued to enjoin
the enforcement of Section 5 (a) and (f) of Republic Act No. 2382, as amended, and MECS Order No. 52,
s. 1985, pending resolution of the issue of constitutionality of the assailed statute and administrative
order. We regard this issue as entirely peripheral in nature. It scarcely needs documentation that a court
would issue a writ of preliminary injunction only when the petitioner assailing a statute or
administrative order has made out a case of unconstitutionality strong enough to overcome, in the mind
of the judge, the presumption of constitutionality, aside from showing a clear legal right to the remedy
sought. The fundamental issue is of course the constitutionality of the statute or order assailed.
1. The petitioners invoke a number of provisions of the 1987 Constitution which are, in their assertion,
violated by the continued implementation of Section 5 (a) and (f) of Republic Act 2391, as amended, and
MECS Order No. 52, a. 1985. The provisions invoked read as follows:

(a) Article II, Section 11: "The state values the dignity of every human person and guarantees full respect
of human rights."
(b) Article II, Section 13: "The State recognizes the vital role of the youth in nation building and shall
promote and protect their physical, moral, spiritual, intellectual and social well being. It shall inculcate in
the youth patriotism and nationalism, and encourage their involvement in public and civic affairs."
(c) Article II, Section 17: "The State shall give priority to education, science and technology, arts, culture
and sports to foster patriotism and nationalism, accelerate social progress and to promote total human
liberation and development."
(d) Article XIV, Section 1: "The State shall protect and promote the right of all citizens to quality
education at all levels and take appropriate steps to make such education accessible to all."
(e) Article XIV, Section 5 (3): "Every citizen has a right to select a profession or course of study, subject to
fair, reasonable and equitable admission and academic requirements."
Article II of the 1987 Constitution sets forth in its second half certain "State policies" which the
government is enjoined to pursue and promote. The petitioners here have not seriously undertaken to
demonstrate to what extent or in what manner the statute and the administrative order they assail
collide with the State policies embodied in Sections 11, 13 and 17.
They have not, in other words, discharged the burden of proof which lies upon them. This burden is
heavy enough where the constitutional provision invoked is relatively specific, rather than abstract, in
character and cast in behavioral or operational terms. That burden of proof becomes of necessity
heavier where the constitutional provision invoked is cast, as the second portion of Article II is cast, in
language descriptive of basic policies, Dy more precisely, of basic objectives of State policy and therefore
highly generalized in tenor. The petitioners have not made their case, even a prima facie case, and we
are not compelled to speculate and to imagine how the legislation and regulation impugned as
unconstitutional could possibly offend the constitutional provisions pointed to by the petitioners.
Turning to Article XIV, Section 1, of the 1987 Constitution, we note that once more petitioners have
failed to demonstrate that the statute and regulation they assail in fact clash with that provision. On the
contrary we may note-in anticipation of discussion infra-that the statute and the regulation which
petitioners attack are in fact designed to promote "quality education" at the level of professional
schools. When one reads Section 1 in relation to Section 5 (3) of Article XIV as one must one cannot but
note that the latter phrase of Section I is not to be read with absolute literalness. The State is not really
enjoined to take appropriate steps to make quality education "accessible to all who might for any
number of reasons wish to enroll in a professional school but rather merely to make such education
accessible to all who qualify under "fair, reasonable and equitable admission and academic
requirements."
2. In the trial court, petitioners had made the argument that Section 5 (a) and (f) of Republic Act No.
2382, as amended, offend against the constitutional principle which forbids the undue delegation of

legislative power, by failing to establish the necessary standard to be followed by the delegate, the
Board of Medical Education. The general principle of nondelegation of legislative power, which both
flows from the reinforces the more fundamental rule of the separation and allocation of powers among
the three great departments of government,1 must be applied with circumspection in respect of
statutes which like the Medical Act of 1959, deal with subjects as obviously complex and technical as
medical education and the practice of medicine in our present day world. Mr. Justice Laurel stressed this
point 47 years ago in Pangasinan Transportation Co., Inc. vs. The Public Service Commission:2
"One thing, however, is apparent in the development of the principle of separation of powers and that is
that the maxim of delegatus non potest delegare or delegati potestas non potest delegare, adopted this
practice (Delegibus et Consuetudiniis Anglia edited by G.E. Woodbine, Yale University Press, 1922, Vol.
2. p. 167) but which is also recognized in principle in the Roman Law (d. 17.18.3) has been made to
adapt itself to the complexities of modem government,
giving rise to the adoption, within certain limits, of the principle of 'subordinate legislation,' not only in
the United States and England but in practically all modern governments. (People vs. Rosenthal and
Osmena 168 Phil. 318, 1939]. Accordingly, with the growing complexity of modem life, the multiplication
of the subjects of governmental regulation, and the increased difficulty of administering the laws, there
is a constantly growing tendency toward the delegation of greater power by the legislature, and toward
the approval of the practice by the courts."3
The standards set for subordinate legislation in the exercise of rule making authority by an
administrative agency like the Board of Medical Education are necessarily broad and highly abstract. As
explained by then Mr. Justice Fernando in Edu v. Ericta4
"The standard may be either expressed or implied. If the former, the nondelegation objection is easily
met. The standard though does not have to be spelled out specifically, It could be implied from the
policy end purpose of the act considered as a whole. In the Reflector Law, clearly the legislative
objective is public safety. What is sought to be attained as in Calalang v. Williams is 'safe transit upon
the roads. ' "5
We believe and so hold that the necessary standards are set forth in Section 1 of the 1959 Medical Act:
"the standardization and regulation of medical education" and in Section 5 (a) and 7 of the same Act,
the body of the statute itself, and that these considered together are sufficient compliance with the
requirements of the nondelegation principle.
3. The petitioners also urge that the NMAT prescribed in MECS Order No. 52, s. 1985, is an "unfair,
unreasonable and inequitable requirement," which results in a denial of due process. Again, petitioners
have failed to specify just what factors or features of the NMAT render it "unfair" and "unreasonable" or
"inequitable." They appear to suggest that passing the NMAT is an unnecessary requirement when
added on top of the admission requirements set out in Section 7 of the Medical Act of 1959, and other
admission requirements established by internal regulations of the various medical schools, public or
private. Petitioners arguments thus appear to relate to utility and wisdom or desirability of the NMAT
requirement. But constitutionality is essentially a question of power or authority-, this Court has neither

commission or competence to pass upon questions of the desirability or wisdom or utility of legislation
or administrative regulation. Those questions must be addressed to the political departments of the
government not to the courts.
There is another reason why the petitioners' arguments must fail: the legislative and administrative
provisions impugned by them constitute, to the mind of the Court, a valid exercise of the police power
of the state. The police power, it is commonplace learning, is the pervasive and non-waivable power and
authority of the sovereign to secure and promote all the important interests and needs-in a word, the
public order-of the general community.6 An important component of that public order is the health and
physical safety and well being of the population, the securing of which no one can deny is a legitimate
objective of governmental effort and regulation.7
Perhaps the only issue that needs some consideration is whether there is some reasonable relation
between the prescribing of passing the NMAT as a condition for admission to medical school on the one
hand, and the securing of the health and safety of the general community, on the other hand. This
question is perhaps most usefully approached by recalling that the regulation of the practice of
medicine in all its branches has long been recognized as a reasonable method of protecting the health
and safety of the public.8 That the power to regulate and control the practice of medicine includes the
power to regulate admission to the ranks of those authorized to practice medicine, is also well
recognized. Thus, legislation and administrative regulations requiring those who wish to practice
medicine first to take and pass medical board examinations have long ago been recognized as valid
exercises of governmental power.9 Similarly, the establishment of minimum medical educational
requirements-i.e., the completion of prescribed courses in a recognized medical school-for admission to
the medical profession, has also been sustained as a legitimate exercise of the regulatory authority of
the state.10 What we have before us in the instant case is closely related:
the regulation of access to medical schools. MECS Order No. 52, s. 1985, as noted earlier, articulates the
rationale of regulation of this type: the improvement of the professional and technical quality of the
graduates of medical schools, by upgrading the quality of those admitted to the student body of the
medical schools. That upgrading is sought by selectivity in the process of admission, selectivity
consisting, among other things, of limiting admission to those who exhibit in the required degree the
aptitude for medical studies and eventually for medical practice. The need to maintain, and the
difficulties of maintaining, high standards in our professional schools in general, and medical schools in
particular, in the current stage of our social and economic development, are widely known.
We believe that the government is entitled to prescribe an admission test like the NMAT as a means for
achieving its stated objective of "upgrading the selection of applicants into [our] medical schools" and of
"improv[ing) the quality of medical education in the country." Given the widespread use today of such
admission tests in, for instance, medical schools in the United States of America (the Medical College
Admission Test (MCAT])11 and quite probably in other countries with far more developed educational
resources than our own, and taking into account the failure or inability of the petitioners to even
attempt to prove otherwise, we are entitled to hold that the NMAT is reasonably related to the securing
of the ultimate end of legislation and regulation in this area. That end, it is useful to recall, is the

protection of the public from the potentially deadly effects of incompetence and ignorance in those who
would undertake to treat our bodies and minds for disease or trauma.
4. Petitioners have contended, finally, that MECS Order No. 52, s. 1985, is in conflict with the equal
protection clause of the Constitution. More specifically, petitioners assert that that portion of the MECS
Order which provides that "the cutoff score for the successful applicants, based on the scores on the
NMAT, shall be determined every year by the Board of Medical Education after consultation with the
Association of Philippine Medical Colleges." (Italics supplied)
infringes the requirements of equal protection. They assert, in other words, that students seeking
admission during a given school year, e.g., 1987-1988, when subjected to a different cutoff score than
that established for an, e.g., earlier school year, are discriminated against and that this renders the
MECS Order "arbitrary and capricious." The force of this argument is more apparent than real. Different
cutoff scores for different school years may be dictated by differing conditions obtaining during those
years. Thus, the appropriate cutoff score for a given year may be a function of such factors as the
number of students who have reached the cutoff score established the preceding year; the number of
places available in medical schools during the current year; the average score attained during the
current year; the level of difficulty of the test given during the current year, and so forth. To establish a
permanent and immutable cutoff score regardless of changes in circumstances from year to year, may
well result in an unreasonable rigidity. The above language in MECS Order No. 52, far from being
arbitrary or capricious, leaves the Board of Medical Education with the measure of flexibility needed to
meet circumstances as they change.
We conclude that prescribing the NMAT and requiring certain minimum scores therein as a condition for
admission to medical schools in the Philippines, do not constitute an unconstitutional imposition.
WHEREFORE, the Petition for Certiorari is DISMISSED and the Order of the respondent trial court
denying the petition for a writ of preliminary injunction is AFFIRMED. Costs against petitioners.
SO ORDERED.
Teehankee, C.J., Yap, Fernan, Narvasa, Melencio-Herrera, Gutierrez, Jr., Cruz, Paras, Gancayco, Padilla,
Bidin, Sarmiento and Cortes, JJ., concur.
Petition dismissed Order affirmed
1. See People v. Vera, 65 Phil. 56 (1937) and Pelaez v. Auditor General, 15 SCRA 569 (1965).
2. 70 Phil. 221 (1940).
3. 70 Phil., at 229: underscoring supplied.
4. 35 SCRA 481 (1970).
5. 35 SCRA, at 497; underscoring supplied. At this point, Mr. Justice Fernando dropped a useful footnote
of the following tenor:

"This Court has considered as sufficient standards, 'public welfare,' Municipality of Cardona v.
Binangonan, 36 Phil. 547 (1917); 'necessary in the interest of law and order,' Rubi v. Provincial Board, 39
Phil. 660 (1919); 'public interest,' People v. Rosenthal, 68 Phil. 328 (1939); and 'justice and equity and
substantial merits of the case,' International Hardwood v. Pangil Federation of Labor, 70 Phil. 602
(1940)."
In People v. Exconde, 101 Phil. 1125 (1957), Mr. Justice J.B.L. Reyes said:
"It is well established in this jurisdiction that, while the making of laws is a non-delegable activity that
corresponds exclusively to Congress, nevertheless, the latter may constitutionally delegate authority and
promulgate rules and regulations to implement a given legislation and effectuate its policies, for the
reason that the legislature often finds it impracticable (if not impossible) to anticipate and provide for
the multifarious and complex situations that may be met in carrying the law into effect. All that is
required is that the regulation should be germane to the objects and purposes of the law; that the
regulation be not in contradiction with it, but conform to the standards that the law prescribes -." (101
Phil. at 1129; emphasis supplied).
6. E.G., U.S. v. Toribio, 15 Phil. 86 11910); Ermita-Malate Hotel and Motel Operators Association, Inc. v.
Mayor of Manila, 20 SCRA 849 (1967) and Morfe v. Mutuc, 22 SCRA 424 (1968).
7. E.G., Case v. Board of Health, 24 Phil. 256 (1913); People vs. Witte, 146 NE 178 (1925) and Lorenzo v.
Director of Health, 50 Phil. 595 (1927).
8. Barsky v. Board of Regents, 347 US 442, 98 L.Ed. 829, 74 SCT. 650 (1954); Louisiana State Board of
Medical Examiners v. Beatty, 220 La. 1, 55 So2d. 761 (1951) and Reisinger v. Com., State Board of
Medical Education and Licensure, et al., 399 A2d 1160 (1979).
9. Dent v. West Virginia, 129 US 114, 32 L.Ed. 623, 9 SCt. 231 (1889); State v. Bair, 112 Jowa 466, 84 NW
532 (1900).
10. People v. Love, 298 111304, 131 NE 809, 16 ALR 703 (1921); Collins v. Texas, 223 US 288,56 L.Ed.
439,32 SCt. 286 (1912).
11. See, e.g., McDonald v. Hogness, et al., 92 Wash. 431, 598 P. 2d. 707 (1979).

Government of QC vs. Ericta


City Gov. of Quezon City, et al. vs. Hon. Judge Ericta, et al.

June 24, 1983

[GRN L-34915 June 24, 1983]


CITY GOVERNMENT OF QUEZON CITY and C11 Y COUNCIL OF QUEZON CITY, petitioners, vs. HON. JUDGE
VICENTE G. ERICTA as Judge of the Court of First Instance of Rizal, Quezon City, Branch XVIII;
HIMLAYANG PILIPINO, INC., respondents.
FIRST DIVISION
APPEARANCES OF COUNSEL
City Fiscal of Quezon City for petitioners.
Manuel Villareal, Jr. and Feliciano Tumale for private respondent.
DECISION
GUTIERREZ, JR., J.:
Yhis is a petition for review which seeks the reversal of the decision of the Court of' First Instance of
Rizal, Branch XVIII declaring Section 9 of Ordinance No. 6118, S-64, of the Quezon City Council null and
void.
Section 9 of Ordinance No. 61 18, S-64, entitled "ORDINANCE REGULATING THE ESTABLISHMENT,
MAINTENANCE AND OPERATION OF PRIVATE MEMORIAL TYPE CEMETERY OR BURIAL GROUND WITHIN
THE JURISDICTION OF QUEZON CITY AND PROVIDING PENALTIES FOR THE VIOLATION THEREOF"
provides:
"Sec. 9. At least six (6) percent of the total area of the memorial park cemetery shall be set aside for
charity burial of deceased persons who are paupers and have been residents of Quezon City for at least
5 years prior to their death, to be determined by competent City Authorities. The area so designated
shall immediately be developed and should be open for operation not later than six months from the
date of approval of the application. "
For several years, the aforequoted section of the Ordinance was not enforced by city authorities but
seven years after the enactment of the ordinance, the Quezon City Council passed the following
resolution:
"RESOLVED by the council of Quezon assembled, to request, as it does hereby request the City Engineer,
Quezon City, to stop any further selling and/or transaction of memorial park lots in Quezon City where
the owners thereof have tailed to donate the required 6% space intended for paupers burial.
Pursuant to this resolution, the Quezon City Engineer notified respondent Himlayang Pilipino, Inc. in
writing that Section 9 of Ordinance No. 6118, S-64 would be enforced.

Respondent Himlayang Pilipino reacted by filing with the Court of First Instance of Rizal, Branch XVIII at
Quezon City, a petition for declaratory relief', prohibition and mandamus with preliminary injunction
(Sp. Proc. No. Q-16002) seeking to annul Section 9 of the Ordinance in question. The respondent alleged
that the same is contrary to the Constitution, the Quezon City Charter, the Local Autonomy Act, and the
Revised Administrative Code.
There being no issue of fact and the questions raised being purely legal, both petitioners and
respondent agreed to the rendition of a judgment on the pleadings. The respondent court, therefore,
rendered the decision declaring Section 9 of Ordinance No. 6118, S-64 null and void.
A motion for reconsideration having been denied, the City Government and City Council filed the instant
petition.
Petitioners argue that the taking of the respondent's property is a valid and reasonable exercise of
police power and that the land is taken for a public use as it is intended for the burial ground of paupers.
They further argue that the Quezon City Council is authorized under its charter, in the exercise of local
police power, "to make such further ordinances and resolutions not repugnant to law as may be
necessary to carry into effect and discharge the powers and duties conferred by this Act and such as it
shall deem necessary and proper to provide for the health and safety, promote the prosperity, improve
the morals, peace, good order, comfort and convenience of the city and the inhabitants thereof, and for
the protection of property therein. "
On the other hand, respondent Himlayang Pilipino, Inc. contends that the taking or confiscation of
property is obvious because the questioned ordinance permanently restricts the use of the property
such that it cannot be used for any reasonable purpose and deprives the owner of all beneficial use of
his property.
The respondent also stresses that the general welfare clause is not available as a source of power for the
taking of the property in this case because it refers to "the power of promoting the public welfare by
restraining and regulating the use of liberty and property." The respondent points out that if an owner is
deprived of his property outright under the State's police power, the property is generally not taken for
public use but is urgently and summarily destroyed in order to promote the general welfare. The
respondent cites the case of a nuisance per se or the destruction of a house to prevent the spread of a
conflagration.
We find the stand of the private respondent as well as the decision of the respondent Judge to be wellfounded. We quote with approval the lower court's ruling which declared null and void Section 9 of the
questioned city ordinance:
"The issue is: is Section 9 of the ordinance in question a valid exercise of the police power?
"An examination of the Charter of Quezon City (Rep. Act. No. 537), does not reveal any provision that
would justify the ordinance in question except the provision granting police power to the City. Section 9
cannot be justified under the power granted to Quezon City to tax, fix the license fee, and regulate such

other business, trades, and occupation as may be established or practised in the City (Sub-sections 'C,'
Sec. 12, R.A. 537).
"The power to regulate does not include the power to prohibit (People vs. Esguerra, 81 Phil. 33 Vega vs.
Municipal Board of Iloilo, L-6765, May 12, 1954; 39 N.J. Law, 70, Mich. 396). A fortiori, the power to
regulate does not include the power to confiscate. The ordinance in question not only confiscates but
also prohibits the operation of a memorial park cemetery, because under Section 13 of said ordinance,
'Violation of the .provision thereof is punishable with a fine and/or imprisonment and that upon
conviction thereof the permit to operate and maintain a private cemetery shall be revoked or cancelled.'
The confiscatory clause and the penal provision in effect deter one from operating a memorial park
cemetery. Neither can the ordinance in question be justified under sub-section 't,' Section 12 of Republic
Act 537 which authorizes the City Council to "'prohibit the burial of the dead within the center of
population of the city and provide for their burial in such proper place and in such manner as the council
may determine, subject to the provisions of the general law regulating burial grounds and cemeteries
and governing funerals and disposal of the dead.' (Sub-sec. (t), Sec. 12, Rep. Act. No. 537)
There is nothing in the above provision which authorizes confiscation or as euphemistically termed by
the respondents, 'donation.'
We now come to the question whether or not Section 9 of the ordinance in question is a valid exercise
of police power. The police power of Quezon City is defined in sub-section 00, Sec. 12, Rep. Act 537
which reads as follows:
" '(00) To make such further ordinance and regulations not repugnant to law as may be necessary to
carry into effect and discharge the powers and duties conferred by this act and such as it shall deem
necessary and proper to provide for the health and safety, promote, the prosperity, improve the morals,
peace, good order, comfort and convenience of' the city and the inhabitants thereof, and for the
protection of property therein; and enforce obedience thereto with such lawful fines or penalties as the
City Council may prescribe under the provisions of subsection (jj) of this section.'
"We start the discussion with a restatement of certain basic principles. Occupying the forefront in the
bill of' rights is the provision which states that 'no person shall be deprived of life, liberty or property
without due process of law' (Art. 111, Section 1 subparagraph 1, Constitution).
"On the other hand, there are three inherent powers of government by which the state interferes with
the property rights, namely: (1) police power, (2) eminent domain, (3) taxation. These are said to exist
independently of' the Constitution as necessary attributes of sovereignty.
"Police power is defined by Freund as 'the power of promoting the public welfare by restraining and
regulating the use of liberty and property' (Quoted in Political Law by Taada and Carreon V-II, p. 50). It
is usually exerted in order to merely regulate the use and enjoyment of property of the owner. It' he is
deprived of his property outright, it is not taken for public use but rather to destroy in order to promote
the general welfare. In police power, the owner does not recover from the government for injury
sustained in consequence thereof (12 C.J. 623). It has been said that police power is the most essential

of' government powers, at times the most insistent, and always one of the least limitable of the powers
of government (Ruby vs. Provincial Board, 39 Phil. 660; Ichong vs. Hernandez, L-7995, May 31, 1957).
This power embraces the whole system of public regulation (U.S. vs. Linsuya Fan, 10 Phil. 104). The
Supreme Court has said that police power is so far-reaching in scope that it has almost become
impossible to limit its sweep. As it derives its existence from the very existence of the state itself, it does
not need to be expressed or defined in its scope. Being coextensive with self-preservation and survival
itself, it is the most positive and active of all governmental processes, the most essential, insistent and
illimitable. Especially it is so under the modern democratic framework where the demands of society
and nations have multiplied to almost unimaginable proportions. The field and scope of police power
have become almost boundless, just as the fields of public interest and public welfare have become
almost all embracing and have transcended human foresight. Since the Court cannot foresee the needs
and demands of public interest and welfare, they cannot delimit beforehand the extent or scope of the
police power by which and through which the state seeks to attain or achieve public interest and
welfare. (Ichong vs. Hernandez, L-7995, May 31, 1957)
"The police power being the most active power of the government and the due process clause being;
the broadest limitation on governmental power, the conflict between this power of government and the
due process clause of the Constitution is oftentimes inevitable.
"it will be seen from the foregoing authorities that police power is usually exercised in the form of mere
regulation or restriction in the use of liberty or property for the promotion of the general welfare. It
does not involve the taking or confiscation of property with the exception of a few cases where there is
a necessity to confiscate private property in order to destroy it for the purpose of protecting the peace
and order and of promoting the general welfare as for instance, the confiscation of an illegally possessed
article, such as opium and firearms.
"It seems to the court that Section 9 of Ordinance No. 6118, Series of 1964 of Quezon City is not a mere
police regulation but an outright confiscation. It deprives a person of his private property without due
process of law, nay, even without compensation."
In sustaining the decision of the respondent court, we are not unmindful of the heavy burden
shouldered by whoever challenges the validity of duly enacted legislation, whether national or local. As
early as 1913, this Court ruled in Case v. Board of Health (24 Phil. 250) that the courts resolve every
presumption in favor of validity and, more so, where the municipal corporation asserts that the
ordinance was enacted to promote the common good and general welfare.
In the leading case of Ermita-Malate Hotel and Motel Operators Association Inc. v. City Mayor of Manila
(20 SCRA 849) the Court speaking through the then Associate Justice and now Chief Justice Enrique M.
Fernando stated:
"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.... 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 necessitates 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. . . . The Judiciary should not lightly set aside legislative action when there is not a clear
invasion of personal or property rights under the guise of police regulation.' (U.S. v. Salaveria [1918], 39
Phil. 102, at p. 11). There was an affirmation of the presumption of validity of municipal ordinance as
announced in the leading Salaveria decision in Eboa v. Daet, [1950] 85 Phil. 369.)
We have likewise considered the principles earlier stated in Case v. Board of Health, supra:
. . . . . Under the provisions of municipal charters which are known as the general welfare clauses. a city,
by virtue of its police power, may adopt ordinances to secure the peace, safety, health, morals and the
best and highest interests of the municipality. It is a well-settled principle, growing out of the nature of
well-ordered and civilized 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 shall not be injurious to the equal
enjoyment of others having an equal fight to the enjoyment of their property, nor injurious to the rights
of the community. All property in the state is held subject to its general regulations, which are necessary
to the common good and general welfare. 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 restraints and regulations, established by law, as the legislature, under
the governing and controlling power vested in them by the constitution, may think necessary and
expedient. The state, under police power is possessed with plenary power to deal with all matter
relating to the general health, morals, and safety of the people, so long as it does not contravene any
positive inhibition of the organic law and providing that such power is not exercised in such a manner as
to justify the interference of the courts to prevent positive wrong and oppression."
but find them not applicable to the facts of' this case.
There is no reasonable relation between the setting aside of at least six (6) percent of the total area of
all private cemeteries for charity burial grounds of deceased paupers and the promotion of' health,
morals, good order, safety, or the general welfare of the people. The ordinance is actually a taking
without compensation of a certain area from a private cemetery to benefit paupers who are charges of
the municipal corporation. Instead of' building or maintaining a public cemetery for this purpose, the
city passes the burden to private cemeteries.
'The expropriation without compensation of a portion of private cemeteries is not covered by Section
12(t) of Republic Act 537, the Revised Charter of Quezon City which empowers the city council to
prohibit the burial of the dead within the center of population of the city and to provide for their burial
in a proper place subject to the provisions of general law regulating burial grounds and cemeteries.
When the Local Government Code, Batas Pambansa Blg. 337 provides in Section 177(q) that a
sangguniang panlungsod may "provide for the burial of the dead in such place and in such manner as
prescribed by law or ordinance" it simply authorizes the city to provide its own city owned land or to buy
or expropriate private properties to construct public cemeteries. I his has been the law, and practise in

the past. It continues to the present. Expropriation, however, requires payment of just compensation.
"The questioned ordinance is different from laws and regulations requiring owners of subdivisions to set
aside certain areas for streets, parks, playgrounds, and other public facilities from the land they sell to
buyers of subdivision lots. The necessities of public safety, health, and convenience are very clear from
said requirements which are intended to insure the development of communities with salubrious and
wholesome environments. The beneficiaries of the regulation, in turn, are made to pay by the
subdivision developer when individual lots are sold to homeowners.
As a matter of fact, the petitioners rely solely on the general welfare clause or on implied powers of the
municipal corporation, not on any express provision of law as statutory basis of their exercise of power.
The clause has always received broad and liberal interpretation but we cannot stretch it to cover this
particular taking. Moreover, the questioned ordinance was passed after Himlayang Pilipino, Inc. had
incorporated, received necessary licenses and permits, and commenced operating. The sequestration of
six percent of the cemetery cannot even be considered as having been impliedly acknowledged by the
private respondent A hen it accepted the permits to commence operations.
WHEREFORE, the petition for review is hereby DISMISSED.
The decision of' the respondent court is affirmed.
SO ORDERED.
Teehankee (Chairman), Melencio-Herrera, Plana, Vasquez and Relova, JJ., concur.

MMDA vs. Bel-Air


Metropolitan Manila Development Authority vs. Bel-Air Village Association, Inc., G.R. No. 135962., 27
March 2000
FIRST DIVISION
[G.R. No. 135962. March 27, 2000]
METROPOLITAN MANILA DEVELOPMENT AUTHORITY, petitioner, vs. BEL-AIR VILLAGE ASSOCIATION,
INC., respondent.
DECISION
PUNO, J.:
Not infrequently, the government is tempted to take legal shortcuts to solve urgent problems of the
people. But even when government is armed with the best of intention, we cannot allow it to run
roughshod over the rule of law. Again, we let the hammer fall and fall hard on the illegal attempt of the
MMDA to open for public use a private road in a private subdivision. While we hold that the general
welfare should be promoted, we stress that it should not be achieved at the expense of the rule of law.
hY
Petitioner MMDA is a government agency tasked with the delivery of basic services in Metro Manila.
Respondent Bel-Air Village Association, Inc. (BAVA) is a non-stock, non-profit corporation whose
members are homeowners in Bel-Air Village, a private subdivision in Makati City. Respondent BAVA is
the registered owner of Neptune Street, a road inside Bel-Air Village.
On December 30, 1995, respondent received from petitioner, through its Chairman, a notice dated
December 22, 1995 requesting respondent to open Neptune Street to public vehicular traffic starting
January 2, 1996. The notice reads: Court
"SUBJECT: NOTICE of the Opening of Neptune Street to Traffic
"Dear President Lindo,
"Please be informed that pursuant to the mandate of the MMDA law or Republic Act No. 7924 which
requires the Authority to rationalize the use of roads and/or thoroughfares for the safe and convenient
movement of persons, Neptune Street shall be opened to vehicular traffic effective January 2, 1996.
"In view whereof, the undersigned requests you to voluntarily open the points of entry and exit on said
street.
"Thank you for your cooperation and whatever assistance that may be extended by your association to
the MMDA personnel who will be directing traffic in the area.

"Finally, we are furnishing you with a copy of the handwritten instruction of the President on the
matter.
"Very truly yours,
PROSPERO I. ORETA
Chairman"1
On the same day, respondent was apprised that the perimeter wall separating the subdivision from the
adjacent Kalayaan Avenue would be demolished. Sppedsc
On January 2, 1996, respondent instituted against petitioner before the Regional Trial Court, Branch
136, Makati City, Civil Case No. 96-001 for injunction. Respondent prayed for the issuance of a
temporary restraining order and preliminary injunction enjoining the opening of Neptune Street and
prohibiting the demolition of the perimeter wall. The trial court issued a temporary restraining order the
following day.
On January 23, 1996, after due hearing, the trial court denied issuance of a preliminary injunction.2
Respondent questioned the denial before the Court of Appeals in CA-G.R. SP No. 39549. The appellate
court conducted an ocular inspection of Neptune Street3 and on February 13, 1996, it issued a writ of
preliminary injunction enjoining the implementation of the MMDAs proposed action.4
On January 28, 1997, the appellate court rendered a Decision on the merits of the case finding that the
MMDA has no authority to order the opening of Neptune Street, a private subdivision road and cause
the demolition of its perimeter walls. It held that the authority is lodged in the City Council of Makati by
ordinance. The decision disposed of as follows: Jurissc
"WHEREFORE, the Petition is GRANTED; the challenged Order dated January 23, 1995, in Civil Case No.
96-001, is SET ASIDE and the Writ of Preliminary Injunction issued on February 13, 1996 is hereby made
permanent.
"For want of sustainable substantiation, the Motion to Cite Roberto L. del Rosario in contempt is
denied.5
"No pronouncement as to costs.
"SO ORDERED."6
The Motion for Reconsideration of the decision was denied on September 28, 1998. Hence, this
recourse. Jksm
Petitioner MMDA raises the following questions:
"I

HAS THE METROPOLITAN MANILA DEVELOPMENT AUTHORITY (MMDA) THE MANDATE TO OPEN
NEPTUNE STREET TO PUBLIC TRAFFIC PURSUANT TO ITS REGULATORY AND POLICE POWERS?
II
IS THE PASSAGE OF AN ORDINANCE A CONDITION PRECEDENT BEFORE THE MMDA MAY ORDER THE
OPENING OF SUBDIVISION ROADS TO PUBLIC TRAFFIC?
III
IS RESPONDENT BEL-AIR VILLAGE ASSOCIATION, INC. ESTOPPED FROM DENYING OR ASSAILING THE
AUTHORITY OF THE MMDA TO OPEN THE SUBJECT STREET? Jlexj
V
WAS RESPONDENT DEPRIVED OF DUE PROCESS DESPITE THE SEVERAL MEETINGS HELD BETWEEN
MMDA AND THE AFFECTED BEL-AIR RESIDENTS AND BAVA OFFICERS?
V
HAS RESPONDENT COME TO COURT WITH UNCLEAN HANDS?"7
Neptune Street is owned by respondent BAVA. It is a private road inside Bel-Air Village, a private
residential subdivision in the heart of the financial and commercial district of Makati City. It runs parallel
to Kalayaan Avenue, a national road open to the general public. Dividing the two (2) streets is a concrete
perimeter wall approximately fifteen (15) feet high. The western end of Neptune Street intersects
Nicanor Garcia, formerly Reposo Street, a subdivision road open to public vehicular traffic, while its
eastern end intersects Makati Avenue, a national road. Both ends of Neptune Street are guarded by iron
gates. Edp mis
Petitioner MMDA claims that it has the authority to open Neptune Street to public traffic because it is
an agent of the state endowed with police power in the delivery of basic services in Metro Manila. One
of these basic services is traffic management which involves the regulation of the use of thoroughfares
to insure the safety, convenience and welfare of the general public. It is alleged that the police power of
MMDA was affirmed by this Court in the consolidated cases of Sangalang v. Intermediate Appellate
Court.8 From the premise that it has police power, it is now urged that there is no need for the City of
Makati to enact an ordinance opening Neptune street to the public.9
Police power is an inherent attribute of sovereignty. It has been defined as the power vested by the
Constitution in the legislature to make, ordain, and establish all manner of wholesome and reasonable
laws, statutes and ordinances, either with penalties or without, not repugnant to the Constitution, as
they shall judge to be for the good and welfare of the commonwealth, and for the subjects of the
same.10 The power is plenary and its scope is vast and pervasive, reaching and justifying measures for
public health, public safety, public morals, and the general welfare.11

It bears stressing that police power is lodged primarily in the National Legislature.12 It cannot be
exercised by any group or body of individuals not possessing legislative power.13 The National
Legislature, however, may delegate this power to the President and administrative boards as well as the
lawmaking bodies of municipal corporations or local government units.14 Once delegated, the agents
can exercise only such legislative powers as are conferred on them by the national lawmaking body.15
A local government is a "political subdivision of a nation or state which is constituted by law and has
substantial control of local affairs."16 The Local Government Code of 1991 defines a local government
unit as a "body politic and corporate"17-- one endowed with powers as a political subdivision of the
National Government and as a corporate entity representing the inhabitants of its territory.18 Local
government units are the provinces, cities, municipalities and barangays.19 They are also the territorial
and political subdivisions of the state.20
Our Congress delegated police power to the local government units in the Local Government Code of
1991. This delegation is found in Section 16 of the same Code, known as the general welfare clause, viz:
Chief
"Sec. 16. General Welfare.Every local government unit shall exercise the powers expressly granted,
those necessarily implied therefrom, as well as powers necessary, appropriate, or incidental for its
efficient and effective governance, and those which are essential to the promotion of the general
welfare. Within their respective territorial jurisdictions, local government units shall ensure and support,
among other things, the preservation and enrichment of culture, promote health and safety, enhance
the right of the people to a balanced ecology, encourage and support the development of appropriate
and self-reliant scientific and technological capabilities, improve public morals, enhance economic
prosperity and social justice, promote full employment among their residents, maintain peace and
order, and preserve the comfort and convenience of their inhabitants."21
Local government units exercise police power through their respective legislative bodies. The legislative
body of the provincial government is the sangguniang panlalawigan, that of the city government is the
sangguniang panlungsod, that of the municipal government is the sangguniang bayan, and that of the
barangay is the sangguniang barangay. The Local Government Code of 1991 empowers the sangguniang
panlalawigan, sangguniang panlungsod and sangguniang bayan to "enact ordinances, approve
resolutions and appropriate funds for the general welfare of the [province, city or municipality, as the
case may be], and its inhabitants pursuant to Section 16 of the Code and in the proper exercise of the
corporate powers of the [province, city municipality] provided under the Code x x x."22 The same Code
gives the sangguniang barangay the power to "enact ordinances as may be necessary to discharge the
responsibilities conferred upon it by law or ordinance and to promote the general welfare of the
inhabitants thereon."23
Metropolitan or Metro Manila is a body composed of several local government units - i.e., twelve (12)
cities and five (5) municipalities, namely, the cities of Caloocan, Manila, Mandaluyong, Makati, Pasay,
Pasig, Quezon, Muntinlupa, Las Pinas, Marikina, Paranaque and Valenzuela, and the municipalities of
Malabon, , Navotas, , Pateros, San Juan and Taguig. With the passage of Republic Act (R. A.) No. 792424

in 1995, Metropolitan Manila was declared as a "special development and administrative region" and
the Administration of "metro-wide" basic services affecting the region placed under "a development
authority" referred to as the MMDA.25
"Metro-wide services" are those "services which have metro-wide impact and transcend local political
boundaries or entail huge expenditures such that it would not be viable for said services to be provided
by the individual local government units comprising Metro Manila."26 There are seven (7) basic metrowide services and the scope of these services cover the following: (1) development planning; (2)
transport and traffic management; (3) solid waste disposal and management; (4) flood control and
sewerage management; (5) urban renewal, zoning and land use planning, and shelter services; (6) health
and sanitation, urban protection and pollution control; and (7) public safety. The basic service of
transport and traffic management includes the following: Lexjuris
"(b) Transport and traffic management which include the formulation, coordination, and monitoring of
policies, standards, programs and projects to rationalize the existing transport operations, infrastructure
requirements, the use of thoroughfares, and promotion of safe and convenient movement of persons
and goods; provision for the mass transport system and the institution of a system to regulate road
users; administration and implementation of all traffic enforcement operations, traffic engineering
services and traffic education programs, including the institution of a single ticketing system in
Metropolitan Manila;"27
In the delivery of the seven (7) basic services, the MMDA has the following powers and functions: Esm
"Sec. 5. Functions and powers of the Metro Manila Development Authority.The MMDA shall:
(a) Formulate, coordinate and regulate the implementation of medium and long-term plans and
programs for the delivery of metro-wide services, land use and physical development within
Metropolitan Manila, consistent with national development objectives and priorities;
(b) Prepare, coordinate and regulate the implementation of medium-term investment programs for
metro-wide services which shall indicate sources and uses of funds for priority programs and projects,
and which shall include the packaging of projects and presentation to funding institutions; Esmsc
(c) Undertake and manage on its own metro-wide programs and projects for the delivery of specific
services under its jurisdiction, subject to the approval of the Council. For this purpose, MMDA can create
appropriate project management offices;
(d) Coordinate and monitor the implementation of such plans, programs and projects in Metro Manila;
identify bottlenecks and adopt solutions to problems of implementation;
(e) The MMDA shall set the policies concerning traffic in Metro Manila, and shall coordinate and
regulate the implementation of all programs and projects concerning traffic management, specifically
pertaining to enforcement, engineering and education. Upon request, it shall be extended assistance
and cooperation, including but not limited to, assignment of personnel, by all other government
agencies and offices concerned;

(f) Install and administer a single ticketing system, fix, impose and collect fines and penalties for all kinds
of violations of traffic rules and regulations, whether moving or non-moving in nature, and confiscate
and suspend or revoke drivers licenses in the enforcement of such traffic laws and regulations, the
provisions of RA 4136 and PD 1605 to the contrary notwithstanding. For this purpose, the Authority shall
impose all traffic laws and regulations in Metro Manila, through its traffic operation center, and may
deputize members of the PNP, traffic enforcers of local government units, duly licensed security guards,
or members of non-governmental organizations to whom may be delegated certain authority, subject to
such conditions and requirements as the Authority may impose; and
(g) Perform other related functions required to achieve the objectives of the MMDA, including the
undertaking of delivery of basic services to the local government units, when deemed necessary subject
to prior coordination with and consent of the local government unit concerned." Jurismis
The implementation of the MMDAs plans, programs and projects is undertaken by the local
government units, national government agencies, accredited peoples organizations, non-governmental
organizations, and the private sector as well as by the MMDA itself. For this purpose, the MMDA has the
power to enter into contracts, memoranda of agreement and other cooperative arrangements with
these bodies for the delivery of the required services within Metro Manila.28
The governing board of the MMDA is the Metro Manila Council. The Council is composed of the mayors
of the component 12 cities and 5 municipalities, the president of the Metro Manila Vice-Mayors League
and the president of the Metro Manila Councilors League.29 The Council is headed by a Chairman who
is appointed by the President and vested with the rank of cabinet member. As the policy-making body of
the MMDA, the Metro Manila Council approves metro-wide plans, programs and projects, and issues
the necessary rules and regulations for the implementation of said plans; it approves the annual budget
of the MMDA and promulgates the rules and regulations for the delivery of basic services, collection of
service and regulatory fees, fines and penalties. These functions are particularly enumerated as follows:
LEX
"Sec. 6. Functions of the Metro Manila Council. (a) The Council shall be the policy-making body of the MMDA;
(b) It shall approve metro-wide plans, programs and projects and issue rules and regulations deemed
necessary by the MMDA to carry out the purposes of this Act;
(c) It may increase the rate of allowances and per diems of the members of the Council to be effective
during the term of the succeeding Council. It shall fix the compensation of the officers and personnel of
the MMDA, and approve the annual budget thereof for submission to the Department of Budget and
Management (DBM);
(d) It shall promulgate rules and regulations and set policies and standards for metro-wide application
governing the delivery of basic services, prescribe and collect service and regulatory fees, and impose
and collect fines and penalties." Jj sc

Clearly, the scope of the MMDAs function is limited to the delivery of the seven (7) basic services. One
of these is transport and traffic management which includes the formulation and monitoring of policies,
standards and projects to rationalize the existing transport operations, infrastructure requirements, the
use of thoroughfares and promotion of the safe movement of persons and goods. It also covers the
mass transport system and the institution of a system of road regulation, the administration of all traffic
enforcement operations, traffic engineering services and traffic education programs, including the
institution of a single ticketing system in Metro Manila for traffic violations. Under this service, the
MMDA is expressly authorized "to set the policies concerning traffic" and "coordinate and regulate the
implementation of all traffic management programs." In addition, the MMDA may "install and
administer a single ticketing system," fix, impose and collect fines and penalties for all traffic violations.
Ca-lrsc
It will be noted that the powers of the MMDA are limited to the following acts: formulation,
coordination, regulation, implementation, preparation, management, monitoring, setting of policies,
installation of a system and administration. There is no syllable in R. A. No. 7924 that grants the MMDA
police power, let alone legislative power. Even the Metro Manila Council has not been delegated any
legislative power. Unlike the legislative bodies of the local government units, there is no provision in R.
A. No. 7924 that empowers the MMDA or its Council to "enact ordinances, approve resolutions and
appropriate funds for the general welfare" of the inhabitants of Metro Manila. The MMDA is, as termed
in the charter itself, a "development authority."30 It is an agency created for the purpose of laying down
policies and coordinating with the various national government agencies, peoples organizations, nongovernmental organizations and the private sector for the efficient and expeditious delivery of basic
services in the vast metropolitan area. All its functions are administrative in nature and these are
actually summed up in the charter itself, viz:
"Sec. 2. Creation of the Metropolitan Manila Development Authority. -- x x x.
The MMDA shall perform planning, monitoring and coordinative functions, and in the process exercise
regulatory and supervisory authority over the delivery of metro-wide services within Metro Manila,
without diminution of the autonomy of the local government units concerning purely local matters."31
Petitioner cannot seek refuge in the cases of Sangalang v. Intermediate Appellate Court32 where we
upheld a zoning ordinance issued by the Metro Manila Commission (MMC), the predecessor of the
MMDA, as an exercise of police power. The first Sangalang decision was on the merits of the petition,33
while the second decision denied reconsideration of the first case and in addition discussed the case of
Yabut v. Court of Appeals.34
Sangalang v. IAC involved five (5) consolidated petitions filed by respondent BAVA and three residents of
Bel-Air Village against other residents of the Village and the Ayala Corporation, formerly the Makati
Development Corporation, as the developer of the subdivision. The petitioners sought to enforce certain
restrictive easements in the deeds of sale over their respective lots in the subdivision. These were the
prohibition on the setting up of commercial and advertising signs on the lots, and the condition that the
lots be used only for residential purposes. Petitioners alleged that respondents, who were residents

along Jupiter Street of the subdivision, converted their residences into commercial establishments in
violation of the "deed restrictions," and that respondent Ayala Corporation ushered in the full
commercialization" of Jupiter Street by tearing down the perimeter wall that separated the commercial
from the residential section of the village.35
The petitions were dismissed based on Ordinance No. 81 of the Municipal Council of Makati and
Ordinance No. 81-01 of the Metro Manila Commission (MMC). Municipal Ordinance No. 81 classified
Bel-Air Village as a Class A Residential Zone, with its boundary in the south extending to the center line
of Jupiter Street. The Municipal Ordinance was adopted by the MMC under the Comprehensive Zoning
Ordinance for the National Capital Region and promulgated as MMC Ordinance No. 81-01. Bel-Air Village
was indicated therein as bounded by Jupiter Street and the block adjacent thereto was classified as a
High Intensity Commercial Zone.36
We ruled that since both Ordinances recognized Jupiter Street as the boundary between Bel-Air Village
and the commercial district, Jupiter Street was not for the exclusive benefit of Bel-Air residents. We also
held that the perimeter wall on said street was constructed not to separate the residential from the
commercial blocks but simply for security reasons, hence, in tearing down said wall, Ayala Corporation
did not violate the "deed restrictions" in the deeds of sale. Scc-alr
We upheld the ordinances, specifically MMC Ordinance No. 81-01, as a legitimate exercise of police
power.37 The power of the MMC and the Makati Municipal Council to enact zoning ordinances for the
general welfare prevailed over the "deed restrictions".
In the second Sangalang/Yabut decision, we held that the opening of Jupiter Street was warranted by
the demands of the common good in terms of "traffic decongestion and public convenience." Jupiter
was opened by the Municipal Mayor to alleviate traffic congestion along the public streets adjacent to
the Village.38 The same reason was given for the opening to public vehicular traffic of Orbit Street, a
road inside the same village. The destruction of the gate in Orbit Street was also made under the police
power of the municipal government. The gate, like the perimeter wall along Jupiter, was a public
nuisance because it hindered and impaired the use of property, hence, its summary abatement by the
mayor was proper and legal.39
Contrary to petitioners claim, the two Sangalang cases do not apply to the case at bar. Firstly, both
involved zoning ordinances passed by the municipal council of Makati and the MMC. In the instant case,
the basis for the proposed opening of Neptune Street is contained in the notice of December 22, 1995
sent by petitioner to respondent BAVA, through its president. The notice does not cite any ordinance or
law, either by the Sangguniang Panlungsod of Makati City or by the MMDA, as the legal basis for the
proposed opening of Neptune Street. Petitioner MMDA simply relied on its authority under its charter
"to rationalize the use of roads and/or thoroughfares for the safe and convenient movement of
persons." Rationalizing the use of roads and thoroughfares is one of the acts that fall within the scope of
transport and traffic management. By no stretch of the imagination, however, can this be interpreted as
an express or implied grant of ordinance-making power, much less police power. Misjuris

Secondly, the MMDA is not the same entity as the MMC in Sangalang. Although the MMC is the
forerunner of the present MMDA, an examination of Presidential Decree (P. D.) No. 824, the charter of
the MMC, shows that the latter possessed greater powers which were not bestowed on the present
MMDA. Jjlex
Metropolitan Manila was first created in 1975 by Presidential Decree (P.D.) No. 824. It comprised the
Greater Manila Area composed of the contiguous four (4) cities of Manila, Quezon, Pasay and Caloocan,
and the thirteen (13) municipalities of Makati, Mandaluyong, San Juan, Las Pinas, Malabon, Navotas,
Pasig, Pateros, Paranaque, Marikina, Muntinlupa and Taguig in the province of Rizal, and Valenzuela in
the province of Bulacan.40 Metropolitan Manila was created as a response to the finding that the rapid
growth of population and the increase of social and economic requirements in these areas demand a
call for simultaneous and unified development; that the public services rendered by the respective local
governments could be administered more efficiently and economically if integrated under a system of
central planning; and this coordination, "especially in the maintenance of peace and order and the
eradication of social and economic ills that fanned the flames of rebellion and discontent [were] part of
reform measures under Martial Law essential to the safety and security of the State."41
Metropolitan Manila was established as a "public corporation" with the following powers: Calrs-pped
"Section 1. Creation of the Metropolitan Manila.There is hereby created a public corporation, to be
known as the Metropolitan Manila, vested with powers and attributes of a corporation including the
power to make contracts, sue and be sued, acquire, purchase, expropriate, hold, transfer and dispose of
property and such other powers as are necessary to carry out its purposes. The Corporation shall be
administered by a Commission created under this Decree."42
The administration of Metropolitan Manila was placed under the Metro Manila Commission (MMC)
vested with the following powers:
"Sec. 4. Powers and Functions of the Commission. - The Commission shall have the following powers and
functions:
1. To act as a central government to establish and administer programs and provide services common to
the area;
2. To levy and collect taxes and special assessments, borrow and expend money and issue bonds,
revenue certificates, and other obligations of indebtedness. Existing tax measures should, however,
continue to be operative until otherwise modified or repealed by the Commission;
3. To charge and collect fees for the use of public service facilities;
4. To appropriate money for the operation of the metropolitan government and review appropriations
for the city and municipal units within its jurisdiction with authority to disapprove the same if found to
be not in accordance with the established policies of the Commission, without prejudice to any
contractual obligation of the local government units involved existing at the time of approval of this
Decree;

5. To review, amend, revise or repeal all ordinances, resolutions and acts of cities and municipalities
within Metropolitan Manila;
6. To enact or approve ordinances, resolutions and to fix penalties for any violation thereof which shall
not exceed a fine of P10,000.00 or imprisonment of six years or both such fine and imprisonment for a
single offense;
7. To perform general administrative, executive and policy-making functions;
8. To establish a fire control operation center, which shall direct the fire services of the city and
municipal governments in the metropolitan area;
9. To establish a garbage disposal operation center, which shall direct garbage collection and disposal in
the metropolitan area;
10. To establish and operate a transport and traffic center, which shall direct traffic activities; Jjjuris
11. To coordinate and monitor governmental and private activities pertaining to essential services such
as transportation, flood control and drainage, water supply and sewerage, social, health and
environmental services, housing, park development, and others;
12. To insure and monitor the undertaking of a comprehensive social, economic and physical planning
and development of the area;
13. To study the feasibility of increasing barangay participation in the affairs of their respective local
governments and to propose to the President of the Philippines definite programs and policies for
implementation;
14. To submit within thirty (30) days after the close of each fiscal year an annual report to the President
of the Philippines and to submit a periodic report whenever deemed necessary; and
15. To perform such other tasks as may be assigned or directed by the President of the Philippines." Sc
jj
The MMC was the "central government" of Metro Manila for the purpose of establishing and
administering programs providing services common to the area. As a "central government" it had the
power to levy and collect taxes and special assessments, the power to charge and collect fees; the
power to appropriate money for its operation, and at the same time, review appropriations for the city
and municipal units within its jurisdiction. It was bestowed the power to enact or approve ordinances,
resolutions and fix penalties for violation of such ordinances and resolutions. It also had the power to
review, amend, revise or repeal all ordinances, resolutions and acts of any of the four (4) cities and
thirteen (13) municipalities comprising Metro Manila.
P. D. No. 824 further provided:

"Sec. 9. Until otherwise provided, the governments of the four cities and thirteen municipalities in the
Metropolitan Manila shall continue to exist in their present form except as may be inconsistent with this
Decree. The members of the existing city and municipal councils in Metropolitan Manila shall, upon
promulgation of this Decree, and until December 31, 1975, become members of the Sangguniang Bayan
which is hereby created for every city and municipality of Metropolitan Manila.
In addition, the Sangguniang Bayan shall be composed of as many barangay captains as may be
determined and chosen by the Commission, and such number of representatives from other sectors of
the society as may be appointed by the President upon recommendation of the Commission.
x x x.
The Sangguniang Bayan may recommend to the Commission ordinances, resolutions or such measures
as it may adopt; Provided, that no such ordinance, resolution or measure shall become effective, until
after its approval by the Commission; and Provided further, that the power to impose taxes and other
levies, the power to appropriate money and the power to pass ordinances or resolutions with penal
sanctions shall be vested exclusively in the Commission."
The creation of the MMC also carried with it the creation of the Sangguniang Bayan. This was composed
of the members of the component city and municipal councils, barangay captains chosen by the MMC
and sectoral representatives appointed by the President. The Sangguniang Bayan had the power to
recommend to the MMC the adoption of ordinances, resolutions or measures. It was the MMC itself,
however, that possessed legislative powers. All ordinances, resolutions and measures recommended by
the Sangguniang Bayan were subject to the MMCs approval. Moreover, the power to impose taxes and
other levies, the power to appropriate money, and the power to pass ordinances or resolutions with
penal sanctions were vested exclusively in the MMC. Sce-dp
Thus, Metropolitan Manila had a "central government," i.e., the MMC which fully possessed legislative
and police powers. Whatever legislative powers the component cities and municipalities had were all
subject to review and approval by the MMC.
After President Corazon Aquino assumed power, there was a clamor to restore the autonomy of the
local government units in Metro Manila. Hence, Sections 1 and 2 of Article X of the 1987 Constitution
provided: Sj cj
"Section 1. The territorial and political subdivisions of the Republic of the Philippines are the provinces,
cities, municipalities and barangays. There shall be autonomous regions in Muslim Mindanao and the
Cordilleras as herein provided.
Section 2. The territorial and political subdivisions shall enjoy local autonomy."
The Constitution, however, recognized the necessity of creating metropolitan regions not only in the
existing National Capital Region but also in potential equivalents in the Visayas and Mindanao.43 Section
11 of the same Article X thus provided:

"Section 11. The Congress may, by law, create special metropolitan political subdivisions, subject to a
plebiscite as set forth in Section 10 hereof. The component cities and municipalities shall retain their
basic autonomy and shall be entitled to their own local executives and legislative assemblies. The
jurisdiction of the metropolitan authority that will thereby be created shall be limited to basic services
requiring coordination."
The Constitution itself expressly provides that Congress may, by law, create "special metropolitan
political subdivisions" which shall be subject to approval by a majority of the votes cast in a plebiscite in
the political units directly affected; the jurisdiction of this subdivision shall be limited to basic services
requiring coordination; and the cities and municipalities comprising this subdivision shall retain their
basic autonomy and their own local executive and legislative assemblies.44 Pending enactment of this
law, the Transitory Provisions of the Constitution gave the President of the Philippines the power to
constitute the Metropolitan Authority, viz:
"Section 8. Until otherwise provided by Congress, the President may constitute the Metropolitan
Authority to be composed of the heads of all local government units comprising the Metropolitan
Manila area."45
In 1990, President Aquino issued Executive Order (E. O.) No. 392 and constituted the Metropolitan
Manila Authority (MMA). The powers and functions of the MMC were devolved to the MMA.46 It ought
to be stressed, however, that not all powers and functions of the MMC were passed to the MMA. The
MMAs power was limited to the "delivery of basic urban services requiring coordination in
Metropolitan Manila."47 The MMAs governing body, the Metropolitan Manila Council, although
composed of the mayors of the component cities and municipalities, was merely given the power of: (1)
formulation of policies on the delivery of basic services requiring coordination and consolidation; and (2)
promulgation of resolutions and other issuances, approval of a code of basic services and the exercise of
its rule-making power.48
Under the 1987 Constitution, the local government units became primarily responsible for the
governance of their respective political subdivisions. The MMAs jurisdiction was limited to addressing
common problems involving basic services that transcended local boundaries. It did not have legislative
power. Its power was merely to provide the local government units technical assistance in the
preparation of local development plans. Any semblance of legislative power it had was confined to a
"review [of] legislation proposed by the local legislative assemblies to ensure consistency among local
governments and with the comprehensive development plan of Metro Manila," and to "advise the local
governments accordingly."49
When R.A. No. 7924 took effect, Metropolitan Manila became a "special development and
administrative region" and the MMDA a "special development authority" whose functions were
"without prejudice to the autonomy of the affected local government units." The character of the
MMDA was clearly defined in the legislative debates enacting its charter.
R. A. No. 7924 originated as House Bill No. 14170/ 11116 and was introduced by several legislators led
by Dante Tinga, Roilo Golez and Feliciano Belmonte. It was presented to the House of Representatives

by the Committee on Local Governments chaired by Congressman Ciriaco R. Alfelor. The bill was a
product of Committee consultations with the local government units in the National Capital Region
(NCR), with former Chairmen of the MMC and MMA,50 and career officials of said agencies. When the
bill was first taken up by the Committee on Local Governments, the following debate took place:
"THE CHAIRMAN [Hon. Ciriaco Alfelor]: Okay, Let me explain. This has been debated a long time ago,
you know. Its a special we can create a special metropolitan political subdivision. Supreme
Actually, there are only six (6) political subdivisions provided for in the Constitution: barangay,
municipality, city, province, and we have the Autonomous Region of Mindanao and we have the
Cordillera. So we have 6. Now.
HON. [Elias] LOPEZ: May I interrupt, Mr. Chairman. In the case of the Autonomous Region, that is also
specifically mandated by the Constitution.
THE CHAIRMAN: Thats correct. But it is considered to be a political subdivision. What is the meaning of
a political subdivision? Meaning to say, that it has its own government, it has its own political
personality, it has the power to tax, and all governmental powers: police power and everything. All right.
Authority is different; because it does not have its own government. It is only a council, it is an
organization of political subdivision, powers, no, which is not imbued with any political power. Esmmis
If you go over Section 6, where the powers and functions of the Metro Manila Development Authority, it
is purely coordinative. And it provides here that the council is policy-making. All right.
Under the Constitution is a Metropolitan Authority with coordinative power. Meaning to say, it
coordinates all of the different basic services which have to be delivered to the constituency. All right.
There is now a problem. Each local government unit is given its respective as a political subdivision.
Kalookan has its powers, as provided for and protected and guaranteed by the Constitution. All right,
the exercise. However, in the exercise of that power, it might be deleterious and disadvantageous to
other local government units. So, we are forming an authority where all of these will be members and
then set up a policy in order that the basic services can be effectively coordinated. All right. justice
Of course, we cannot deny that the MMDA has to survive. We have to provide some funds, resources.
But it does not possess any political power. We do not elect the Governor. We do not have the power to
tax. As a matter of fact, I was trying to intimate to the author that it must have the power to sue and be
sued because it coordinates. All right. It coordinates practically all these basic services so that the flow
and the distribution of the basic services will be continuous. Like traffic, we cannot deny that. Its before
our eyes. Sewerage, flood control, water system, peace and order, we cannot deny these. Its right on
our face. We have to look for a solution. What would be the right solution? All right, we envision that
there should be a coordinating agency and it is called an authority. All right, if you do not want to call it
an authority, its alright. We may call it a council or maybe a management agency.
x x x."51

Clearly, the MMDA is not a political unit of government. The power delegated to the MMDA is that given
to the Metro Manila Council to promulgate administrative rules and regulations in the implementation
of the MMDAs functions. There is no grant of authority to enact ordinances and regulations for the
general welfare of the inhabitants of the metropolis. This was explicitly stated in the last Committee
deliberations prior to the bills presentation to Congress. Thus: Ed-p
"THE CHAIRMAN: Yeah, but we have to go over the suggested revision. I think this was already approved
before, but it was reconsidered in view of the proposals, set-up, to make the MMDA stronger. Okay, so
if there is no objection to paragraph "f" And then next is paragraph "b," under Section 6. "It shall
approve metro-wide plans, programs and projects and issue ordinances or resolutions deemed
necessary by the MMDA to carry out the purposes of this Act." Do you have the powers? Does the
MMDA because that takes the form of a local government unit, a political subdivision.
HON. *Feliciano+ BELMONTE: Yes, I believe so, your Honor. When we say that it has the policies, its very
clear that those policies must be followed. Otherwise, whats the use of empowering it to come out with
policies. Now, the policies may be in the form of a resolution or it may be in the form of a ordinance.
The term "ordinance" in this case really gives it more teeth, your honor. Otherwise, we are going to see
a situation where you have the power to adopt the policy but you cannot really make it stick as in the
case now, and I think here is Chairman Bunye. I think he will agree that that is the case now. Youve got
the power to set a policy, the body wants to follow your policy, then we say lets call it an ordinance and
see if they will not follow it.
THE CHAIRMAN: Thats very nice. I like that. However, there is a constitutional impediment. You are
making this MMDA a political subdivision. The creation of the MMDA would be subject to a plebiscite.
That is what Im trying to avoid. Ive been trying to avoid this kind of predicament. Under the
Constitution it states: if it is a political subdivision, once it is created it has to be subject to a plebiscite.
Im trying to make this as administrative. Thats why we place the Chairman as a cabinet rank.
HON. BELMONTE: All right, Mr. Chairman, okay, what you are saying there is .
THE CHAIRMAN: In setting up ordinances, it is a political exercise. Believe me.
HON. [Elias] LOPEZ: Mr. Chairman, it can be changed into issuances of rules and regulations. That would
be it shall also be enforced. Jksm
HON. BELMONTE: Okay, I will .
HON. LOPEZ: And you can also say that violation of such rule, you impose a sanction. But you know,
ordinance has a different legal connotation.
HON. BELMONTE: All right. I defer to that opinion, your Honor. sc
THE CHAIRMAN: So instead of ordinances, say rules and regulations.
HON. BELMONTE: Or resolutions. Actually, they are actually considering resolutions now.

THE CHAIRMAN: Rules and resolutions.


HON. BELMONTE: Rules, regulations and resolutions."52
The draft of H. B. No. 14170/ 11116 was presented by the Committee to the House of Representatives.
The explanatory note to the bill stated that the proposed MMDA is a "development authority" which is a
"national agency, not a political government unit."53 The explanatory note was adopted as the
sponsorship speech of the Committee on Local Governments. No interpellations or debates were made
on the floor and no amendments introduced. The bill was approved on second reading on the same day
it was presented.54
When the bill was forwarded to the Senate, several amendments were made. These amendments,
however, did not affect the nature of the MMDA as originally conceived in the House of
Representatives.55
It is thus beyond doubt that the MMDA is not a local government unit or a public corporation endowed
with legislative power. It is not even a "special metropolitan political subdivision" as contemplated in
Section 11, Article X of the Constitution. The creation of a "special metropolitan political subdivision"
requires the approval by a majority of the votes cast in a plebiscite in the political units directly
affected.56 R. A. No. 7924 was not submitted to the inhabitants of Metro Manila in a plebiscite. The
Chairman of the MMDA is not an official elected by the people, but appointed by the President with the
rank and privileges of a cabinet member. In fact, part of his function is to perform such other duties as
may be assigned to him by the President,57 whereas in local government units, the President merely
exercises supervisory authority. This emphasizes the administrative character of the MMDA. Newmiso
Clearly then, the MMC under P. D. No. 824 is not the same entity as the MMDA under R. A. No. 7924.
Unlike the MMC, the MMDA has no power to enact ordinances for the welfare of the community. It is
the local government units, acting through their respective legislative councils, that possess legislative
power and police power. In the case at bar, the Sangguniang Panlungsod of Makati City did not pass any
ordinance or resolution ordering the opening of Neptune Street, hence, its proposed opening by
petitioner MMDA is illegal and the respondent Court of Appeals did not err in so ruling. We desist from
ruling on the other issues as they are unnecessary. Esmso
We stress that this decision does not make light of the MMDAs noble efforts to solve the chaotic traffic
condition in Metro Manila. Everyday, traffic jams and traffic bottlenecks plague the metropolis. Even our
once sprawling boulevards and avenues are now crammed with cars while city streets are clogged with
motorists and pedestrians. Traffic has become a social malaise affecting our peoples productivity and
the efficient delivery of goods and services in the country. The MMDA was created to put some order in
the metropolitan transportation system but unfortunately the powers granted by its charter are limited.
Its good intentions cannot justify the opening for public use of a private street in a private subdivision
without any legal warrant. The promotion of the general welfare is not antithetical to the preservation
of the rule of law. Sdjad

IN VIEW WHEREOF, the petition is denied. The Decision and Resolution of the Court of Appeals in CAG.R. SP No. 39549 are affirmed. Sppedsc
SO ORDERED.
Davide, Jr., C.J., (Chairman), Kapunan, Pardo, and Ynares-Santiago, JJ., concur.

Tatel vs. Municipality of Virac


Tatel vs. Municipality of Virac

November 24, 1972

[GRN L-29159 November 24, 1972]


CELESTINO TATEL, et al., plaintiffs-appellees, vs. THE MUNICIPALITY OF VIRAC, et al., defendantsappellants.
[GRN L-29160 November 24, 1972]
GULF FIBERS CORPORATION, et al.,plaintiffs-appellees, vs. THE MUNICIPALITY OF VIRAC, et al.,
defendantsappellants.
DECISION
SYLLABUS
1. POLITICAL LAW; MUNICIPAL CORPORATIONS; LOCAL AUTONOMY ACT; LOCAL TAX ORDINANCES;
AUTHORITY OF SECRETARY REGARDING SAID ORDINANCES.- The provision of C.A. No. 472 requiring the
prior approval of the Secretary of Finance, when an ordinance increases by more than 50% municipal
taxes prescribed in previous ordinances, has been impliedly repealed by R.A. No. 2264, which vests in
municipal, city and municipal district councils ample discretion to impose taxes and even municipal
license taxes, and instead of demanding the prior approval of the Secretary of Finance to ordinances
increasing taxes by more than 50% of the previous rates, R.A. 2264 vests in said official no more than
the authority to suspend the effectivity of any ordinance, within 120 days after its passage, when, in his
opinion, the taxes imposed are "unjust, excessive, oppressive or confiscatory."
2. ID.; ID.; ID.; ID.; ID.; ACTIONS OF SAID SECRETARY APPEALABLE TO COURTS.- The suspension by the
Secretary of Finance of ordinances imposing taxes which he may consider "unjust, excessive, oppressive
or confiscatory" may be appealed to the courts of justice, unlike the power of approval or disapproval
given to him under Sec. 4 of C. A. No. 472.
3. ID.; ID.; ID.; ID.; ORDINANCES INVOLVED DO NOT TAX SPECIFIC GOODS.- Where the ordinances do not
tax specific goods but impose license taxes, or regulate and tax those engaging in the business or
occupations, or exercising the privileges, therein enumerated, categorizing said businesses, occupations
or privileges on the basis of the nature thereof or of the products they handle, and the license tax
prescribed in each category is graduated, the amount thereof being dependent upon the "capital
investment of purchases for the previous year, whichever is higher," the legality of said ordinances
cannot be questioned on the ground that they impose taxes on articles subject to specific tax. The
power to impose such taxes is explicitly authorized in Section 2 of Republic Act No. 2264. Moreover, the
nature of the business or occupations taxed, and the amount invested therein, which is also reflected in
the "purchases" not the "sales" made "for the previous year" are reasonable grounds for the
classification made in said ordinances.

TEEHANKEE, J., concurring and dissenting:


POLITICAL LAW; MUNICIPAL CORPORATIONS; LOCAL AUTONOMY ACT; LOCAL TAX ORDINANCE;
QUESTIONED ORDINANCES IMPOSE A TAX CONTRARY TO THE PROHIBITION OF SEC. 2 OF C.A. NO. 2264.The progressive taxes imposed by municipal ordinances 6 and 5 on all persons engaged in any business,
occupation or in the exercise of privilege within the municipality of Virac, Catanduanes, fall within the
express prohibition of Section 2 of R.A. No. 2264 that "municipalities ... shall, in no case, impose any
percentage tax on sales or other taxes in any form based thereon x x x" and the use of purchases rather
than sales as the basis for the tax should be taken as a transparent device to go around the statute's
limitations, since the purchases made by merchants are obviously for sales purposes in the ordinary
course of business.
APPEARANCES OF COUNSEL
Juanito M Romano for plaintiffs-appellees.
Rey A. Tejada for defendants-appellants.
CONCEPCION, C.J.:
These two (2) cases were jointly tried before and decided by the Court of First Instance of Catanduanes,
owing to the identical issues raised therein, namely, the validity of two ordinances of the Municipality of
Virac, the herein defendant-appellant.
In Case No. L-29159 - Civil Case No. 581 of the Court of First Instance of Catanduanes - Celestino Tatel, et
al., question the legality of Ordinance No. 6, series of 1965, of said municipality, reading as follows:
"ORDINANCE NO. 6
"AN ORDINANCE IMPOSING MUNICIPAL LICENSE TAXES FOR THE EXERCISE OF ALL BUSINESS,
OCCUPATIONS AND PRIVILEGES WITHIN THE MUNICIPALITY OF VIRAC AND FOR OTHER PURPOSES.
"Be it ordained by the Municipal Council assembled in session; That "SECTION I - Purpose and Scope The purpose of this ordinance is to raise revenue in the municipality of Virac, Catanduanes by imposing
municipal license taxes on all persons engaged in any business, occupation or in the exercise of privilege.
"SECTION 2 - License Tax - A municipal license tax shall be imposed upon persons engaged in businesses,
occupations or privileges as hereinafter provided.
"SECTION 3 - Amount of taxes on business - Municipal license taxes on business shall be collected as
follows:
(a) Merchants, Sari-Sari Store Owners, Wholesale or Retail Dealers of general merchandise,
pharmaceutical products, rice and corn, except gasoline, etc. as provided under Republic Act 1435
With Capital investment or purchases for the previous year, whichever is higher, amounting to Not
ExceedingP 1000 -P20.00 per annum 1001-2000-40.00 per annum 2001 -3000-60.00 per annum 3001-

4000-80.00 per annum 4001 -5000-100.00per annum 5001-6000-120.00 per annum 6001-7000-140.00
per annum 7001-8000-160.00 per annum 8001 -9000-180.00per annum 9001-10,000-200.00 per annum
10,001 - 11,000-220.00 per annum 11,001 - 15,000-240.00 per annum
For every P1000 in excess of P15,000 (sic)
Payable quarterly or before the 20th day of the month, January, April, July and October of the year with
a penalty of 20% for late payment. (b) Merchants (buyers and sellers) of Abaca and Copra; With Capital
Investment or purchases for the previous year, whichever is higher, amounting to Not ExceedingP 500-P
20.00 per annum 501 -1000-40.00per annum 1001 -2000-60.00 per annum 2001-3000-80.00 per annum
3001-4000-100.00 per annum 4001-5000-120.00 per annum 5001 -6000-140.00 per annum 6001-7000160.00 per annum 7001-8000-180.00 per annum 8001-9000-200.00 per annum
9001-10,000 -220.00 per annum.
For every P1000 in excess of P10,000 (sic)
Payable quarterly on or before the 20th of the month, January, April, July and October of the year with a
penalty of 20% for late payment.
(c) Proprietors or Operators of bakery and other food products:
With Capital Investment or purchases for the previous year, whichever is higher, amounting to Not
ExceedingP 5000 -- P200.00 per annum 5001 - 10,001-240.00 per annum 10,001 - 15,000-300.00
per annum 15,001 - 20,000-360.00 per annum.
For every P1000 in excess of P20,000 - P10.00 per annum Payable quarterly on or before the 20th day of
the month, January, April, July and October of the year with a penalty of 20% for late payment.
(d) Proprietors or Operators or manufacturers of hollowblocks or similar products;
With machinery-P100.00 per annum Without machinery- 50.00 per annum
Payable quarterly on or before the 20th day of the month, January, April, July and October of the year
with a penalty of 20% for late payment.
(e) Operator of Lumber Yard:
Class A - Lumber yard without machinery for deposit of more than 200 sq.m. P400.00 per annum Class B
- 1501-2000 sq.m. P350.00 per annum Class C - 1001 -1500 sq.m. P300.00 per annum Class D - 501-1000
sq.m. P250.00 per annum Class E - Less than 500 sq.m. P200.00 per annum
Class F - Without a yard but with space to keep already sawed lumber and with office to accept orders
for lumber P100.00 per annum, Payable quarterly on or before the 20th day of the month, January,
April, July and October of the year with a penalty of 20% for late payment.
(f) Lumberyard with machinery shall pay in addition to the fees prescribed above Over 200
H.P.P300.00per annum 151-200 H.P.250.00per annum 101-150 H.P.200.00per annum 51-100

H.P.150.00per annum 26-50 H.P.100.00per annum -25 H.P.below 50.00 per annum Payable quarterly on
or before the 20th day of the month, January, April, July and October of the year with a penalty of P20%
for late payment.
(g) Merchants, wholesale or retail dealers of lumber materials with capital investment or purchases for
the previous year, whichever is higher Not ExceedingP 1000P40.00per annum 1001 -200080.00per
annum 2001 -3000120.00per annum.
3001-4000160.00per annum 4001-5000200.00per annum 5001-6000240.00per annum 6001 7000280.00per annum 7001 -8000320.00per annum 8001 -9000360.00per annum 9001 - 10,000
400.00 per annum For every P1000 in excess of P10,000 - P10.00 p.a.
Payable quarterly on or before the 20th day of the month, January, April, July and October of the year
with penalty of 20% for late payment.
(h) Proprietors or Operators of furniture, windows and doors Sash FactoryWith machineryP80.00 per annum Without machineryP40.00 per annum.
Payable quarterly on or before the 20th day of the month, January, April, July and October of the year
with a penalty of 20% for late payment.
(i) Merchants, wholesale or retail dealers of rattan and nipa shingles with a capital investment or
purchases for the previous year, whichever is higher Not ExceedingP 500P20.00per annum 501100040.00per annum 1001-200060.00per annum 2001-300080.00per annum 3001-4000100.00per
annum 4001-5000120.00per annum 5001-6000140.00per annum 6001-7000160.00per annum 70018000180.00per annum 8001-9000200.00per annum 9001- 10,000 220.00 per annum
For every P1000 in excess of P10,000 - P10.00 p.a.
Payable quarterly on or before the 20th day of the month, January, April, July and October of the year
with a penalty of 20% for late payment.
PROVIDED FURTHER, that the proprietors or corporators mentioned under a, b, c, g and i under Sec. 3 of
this ordinance are required to submit a statement of their purchases from January to June, 1965 on or
before July 10, 1965 and to submit their monthly purchases on or before the 10th day of the subsequent
months which should be under oath in a prescribed form from the Office of the Municipal Treasurer,
where the report shall be submitted.
"SECTION 4 - Violation of any of the provisions of this Ordinance shall be punished by a fine of P200.00
or imprisonment of six months or both penalties at the discretion of the Court.
"SECTION 5 - All ordinances the provisions of which are inconsistent with the provisions of this
ordinance are hereby repealed.
"SECTION 6 - This ordinance shall take effect immediately upon approval.

"Approved unanimously, June 28, 1965."


In Case No. L-29160 - Civil Case No. 588 of the Court of First Instance of Catanduanc.s - Gulf Fibers
Corporation, et al.,
impugn the validity of Ordinance No. 5, series of 1966, of the same municipality, which is of the
following tenor:
"ORDINANCE NO. 5
"AN ORDINANCE AMENDING SECTION 3(A) OF THE AMENDED ORDINANCE NO. 12 SERIES OF 1965
IMPOSING MUNICIPAL LICENSE TAXES FOR THE EXERCISE OF ALL BUSINESS, OCCUPATIONS AND
PRIVILEGES WITHIN THE MUNICIPALITY OF VIRAC AND FOR OTHER PURPOSES.
"Be it ordained by the Municipal Council assembled in session, That "SECTION 1 - Amending Section 3(a)
of amended ordinance No. 12 series 1965 to read as follows:
"SECTION 3(a) of amended ordinance No. 12 series 1965 as further amended.
"Amount of Taxes on business - Municipal license taxes on business shall be collected as follows:
(a) Merchant, Sari-Sari store owners, wholesale or retail dealers of merchandise, pharmaceutical
products, rice and corn, abaca, copra, operators of bakery and other food products. Merchants on
wholesale or retail dealers of lumber materials, rattan and nipa shingles, wholesale and retail dealers of
liquor or fermented liquor, wholesale and retail dealer of tobacco.
With capital investment or purchases for the previous year, whichever is higher, amounting to (a) Not exceeding:
P1000.00P 20.00
per annum 1001.00-2000.0040.00per annum 2001.003000.0060.00per annum 3001.00-4000.0080.00per annum 4001.00-5000.00100.00per annum 5001.006000.00120.00per annum 6001.00-7000.00140.00per annum 7001.00-8000.00160.00per annum
9001.00-9000.00180.00per annum 9001.00101,000.00 220.00 per annum
and there shall be collected:
P9.00 p.a. in excess of P10,000 for every P1,000 or fraction thereof up to P300.000.00;
P8.00 p.a. in excess of P300,000 for every P1,000 or fraction thereof up to P500,000.00;
P7.00 p.a. in excess of P500,000 for every P1,000 or fraction thereof, which amount shall not exceed the
total of P6,000.00 per annum on the business. Provided, further that these shall be the basis of the
licenses effective October 1,1966 based on the investment or purchases last calendar year whichever is
higher and the licenses for the succeeding years shall be based from the investment or purchases for the
previous year Ahichever is higher.

Payable quarterly on or before the 20th day of the month of January, April, July and October of the year
with a penalty of 20% for late payment.
(b) Proprietors or Operators or Manufacturers of Hollow-block or similar products:
With Machinery P100.00 per annum Without Machinery 50.00 per annum
Payable quarterly on or before the 20th day of the month of January, April, July and October of the year
with a penalty of 20% for late payment.
(c) Operator of Lumber Yard:
Class A - Lumber yard without machinery for deposit of more than 2000 sq.m.P400.00 per annum Class
B - 1501 - 2000 sq.m.350.00 per annum Class C - 1001 - 1500 sq.m.300.00 per annum Class D - 501 1000 sq.m.250.00 per annum Class E - Less than 500 sq.m.200.00 per annum Class F - Without a yard but
with a space to keep already sawed lumber and with office to accept order for lumber100.00 per
annum.
Payable quarterly on or before the 20th day of the month of January, April, July and October of the year
with a penalty of 20% for late payment.
(d) Lumber yard with machinery shall pay in addition to the fees prescribed above Over
200H.P.P300.00per annum 151-200H.P.250.00per annum 101-150H.P.200.00per annum 51100H.P.150.00per annum 26- 50H.P.100.00per annum Below -25H.P.50.00 per annum
Payable quarterly on or before the 20th day of the month of January, April, July and October of the year
with a penalty of P20% for late payment.
(e) Proprietors or Operators of furniture, windows and doors Sash Factory -With Machinery P80.00 p.a.
Without Machinery 40.00 p.a.
Payable quarterly on or before the 20th day of the month of January, April, July and October of the year
with a penalty of P20% for late payment.
"SECTION 2 - Provided further that proprietors or operators under (a) Section I hereof shall submit their
monthly purchases under oath on or before the 10th day of the following month to the Municipal
Treasurer in a prescribed form from the Office of the Municipal Treasurer which purchases or capital
invested for the whole year whichever is higher shall be the basis of amount to be collected as provided
under (a) of Section I of this ordinance.
"SECTION 3 - Violation of any of the provisions of this ordinance shall suffer a fine of not less than
P50.00 nor more than P200.00 or imprisonment of not less than 30 days nor more than 6 months or
both fine and imprisonment at the discretion of the court.
"SECTION 4 - Should any section or part of this ordinance be declared unconstitutional, such declaration
shall not invalidate the other provisions thereof.

"SECTION 5 - All ordinances the provisions of which are inconsistent with the provisions of this
ordinance are hereby repealed.
"SECTION 6 - This amendment shall take effect immediately upon its approval.
"Approved, September 30, 1966."
Both ordinances were assailed upon the ground that they partake of the nature of a tax on imports or
exports and a tax on purchases, as well as double taxation; that they effect an increase in taxes by more
than 50% "without the requisite approval of the Secretary of Finance"; that the taxes imposed are
unjust, excessive and confiscatory; and that the imposition thereof is ultra vires. Shortly after the filing
of the complaints in Case No. 588 of the lower court - L-29160 of this Court the trial court, on motion of
the plaintiffs, ordered the issuance of a writ of preliminary injunction restraining the defendants from
enforcing Ordinance No. 5, series of 1966, pending the resolution of said case on the merits.
In due course, thereafter, said court rendered a decision, the dispositive part of which We quote:
"Wherefore, in view of the foregoing considerations, the Court hereby finds Sections 3(a), 3(b) and 3(i)
of Ordinance No. 6, Series of 1965 under question in Civil Case No. 581 and Section I of Ordinance No. 5,
Series of 1966 under question in Civil Case No. 588, null and void, as contrary to the provisions of
subsection 3 of Section 4 of Commonwealth Act No. 472 and Section 2 of Republic Act No. 2264. Unless
purged of their infirmity, the provisions are unenforceable.
"In Civil Case No. 581, the defendants are hereby ordered to reimburse to the plaintiffs the taxes paid by
them under protest, as follows:
(1) Celestino Tatel P3,659.50
(2) Juan Molina 3,330.00
(3) Ang Kee Hian 3,432.00
(4) Ang Ban Giok ............................................5,464.00
(5) Tio Son Kuan 834.00
(6) Bennie Co 1,604.00
"In Civil Case No. 588, the defendants are ordered to reimburse the taxes paid by the plaintiffs also
under protest, as follows:
(1) Gulf Fibers Corporation P2,845.00
(2) Juan Molina .....................................................3,142.50
(3) Celestino Tatel 3,000.00
(4) Ang Ban Giok . 2,952.00

(5) Ang Kee Hian .............................................2,346.00


(6) Bennie Co 1,201.00
(7) Liu Lim 435.00
with interest at the legal rate from the time of the filing of the complaint up to final judgment.
"The preliminary injunction is hereby made permanent.
"With costs against the defendants.
"SO ORDERED."
Hence, this appeal by the Municipality of Virac.
The decision appealed from declared said ordinances illegal upon the ground that they provide for an
increase in taxes by more than 50% without the approval of the Secretary of Finance and that they
impose taxes on articles subject to specific tax, as well as over forest products.
We are unable to share this view. To begin with, the provision of Commonwealth Act No. 472 requiring
the prior approval of the Secretary of Finance, when an ordinance increases by more than 50%
municipal taxes prescribed in previous ordinances, has been impliedly repealed by Republic Act No.
2264, which vests in municipal, city and municipal district councils ample discretion to impose taxes and
even municipal license taxes, and, instead of demanding said prior approval of the Secretary of Finance
to ordinances increasing taxes by more than 50% of the previous rates, vests in said official no more
than the authority to suspend the effectivity of any ordinance, within 120 days after its passage, when,
in his opinion, the taxes imposed are "unjust, excessive, oppressive or confiscatory."
Moreover, the ordinances in question do not tax specific goods. They impose license taxes, or regulate
and tax those engaging in the businesses or occupations, or exercising the privileges, therein
enumerated. They categorize said businesses, occupations or privileges on the basis of the nature
thereof such as "merchants, sari-sari store owners, wholesale and retail dealers of general
merchandise," manufacturers of hollow-blocks or similar products, lumber yards, etc. -- or of the
products they handle - such as pharmaceutical products, rice and corn, abaca and copra, furniture,
rattan and nipa shingles, liquor or tobacco. Some of these categories are subclassified, depending upon
whether the business or occupation being taxed is undertaken with or without machineries, or whether
the lumber yard is merely for deposit, or without a "yard" properly, "but with space to keep already
sawed lumber and with office to accept orders for lumber."
Secondly, the license tax prescribed in each category is graduated, the amount thereof being dependent
upon the "capital investment or purchases for the previous year, whichever is higher. "
The power to impose such license taxes is explicitly authorized in Section 2 of Rep. Act No. 2264, which
provides that:

"SEC. 2.Taxation.- Any provision of law to the contrary notwithstanding, all chartered cities,
municipalities and municipal districts shall have authority to impose municipal license taxes or fees upon
persons engaged in any occupation or business or exercising privileges in chartered cities, municipalities
or municipal districts by requiring them to secure licenses at rates fixed by the municipal board or city
council of the city, the municipal council of the municipality, or the municipal district council of the
municipal district; to collect fees and charges for service rendered by the city, municipality or municipal
district; to regulate and impose reasonable fees for services rendered in connection with any business,
profession or occupation being conducted within the city, municipality or municipal district and
otherwise to levy for public purposes, just and uniform taxes, licenses or fees: Provided, That
municipalities and municipal districts shall, in no case, impose any percentage tax on sales or other taxes
in any form based thereon nor impose taxes on articles subject to specific tax, except gasoline, under
the provisions of the National Internal Revenue Code: Provided, however, That no city, municipality or
municipal district may levy or impose any of the following:
(a) Residence tax;
b) Documentary stamp tax;
(c) Taxes on the business of persons engaged in the printing and publication of any newspaper,
magazine, review or bulletin appearing at regular intervals and having fixed prices for subscription and
sale,
and which is not published primarily for the purpose of publishing advertisements;
(d) Taxes on persons operating waterworks, irrigation and other public utilities except electric light, heat
and power;
(e) Taxes on forest products and forest concessions;
(f) Taxes on estates, inheritances, gifts, legacies, and other acquisitions mortis causa;
(g) Taxes on income of any kind whatsoever;
(h) Taxes or fees for the registration of motor vehicles and for the issuance of all kinds of licenses or
permits for the driving thereof;
(i) Customs duties registration, wharfage on wharves owned by the national government, tonnage, and
all other kinds of customs fees, charges and dues;
(j) Taxes of any kind on banks, insurance companies, and persons paying franchise tax;
(k) Taxes on premiums paid by owners of property who obtain insurance directly with foreign insurance
companies; and (1) Taxes, fees or levies, of any kind, which in effect impose a burden on exports of
Philippine finished, manufactured or processed products and products of Philippine cottage industries.

"A tax ordinance shall go into effect on the fifteenth day after its passage, unless the ordinance shall
provide otherwise: Provided, however, That the Secretary of Finance shall have authority to suspend the
effectivity of any ordinance within one hundred and twenty days after its passage, if, in his opinion, the
tax or fee therein levied or imposed is unjust, excessive, oppressive, or confiscatory, and when the said
secretary exercises this authority the effectivity of such ordinance shall be suspended.
"In such event the municipal board or city council in the case of cities and the municipal council or
municipal district council in the case of municipalities and municipal districts may appeal the decision of
the Secretary of Finance to the court during the pendency of which case the tax levied shall be
considered as paid under protest. "
It should be noted that, under the penultimate paragraph of the foregoing section, the power of the
Secretary of Finance is limited to suspending ordinances imposing taxes that he considers" unjust,
excessive, oppressive or confiscatory," and that the only qualification of that power is that it be
exercised within 120 days after the passage of the ordinance. What is more, his action may be appealed
to the courts of justice, unlike the power of approval or disapproval given to said official under Section 4
of Com. Act No. 472, reading:
"SEC. 4, The approval of the Secretary of Finance shall be secured:
(1) Whenever the rates of municipal license taxes fixed or imposed by ordinance of the municipal
council or municipal district council by virtue of the provisions of this Act exceed the rates of fixed
internal revenue privilege taxes regularly imposed by the National Government upon the same
businesses or occupation, except on hotels, restaurants , cafes, refreshment parlors, race tracks, and
retail dealers in vino liquors arid fermented liquors, and any tax or fee on livery stables, garages, and
other places or establishments where public vehicles and other conveyances are kept for hire;
(2) Whenever the rate of fixed municipal license taxes on businesses not excepted in this Act or
otherwise covered by the preceding paragraph and subject to the fixed annual tax imposed in section
one hundred eighty two of the National Internal Revenue Law, is in excess of fifty pesos per annum; and
"(3) Whenever the municipal license tax on any business, occupation, or privilege the rate of which is
not limited above is increased by more than fifty per centum.
"XxXXXX xxx."
Considering that the purpose of Rep. Act No. 2264 is to grant more autonomy to our local governments1
and that the object of Section 2 thereof is identical to that of Com. Act No. 472, We are satisfied that the
provisions of the latter- relied upon by plaintiffs-appellees herein and applied by the lower court-have
been repealed by the Local Autonomy Act (Rep.
Act No. 2264). And this is borne out by the statements made on the floor of the House of
Representatives, during the consideration of the Bill which later became R.A. No. 2264. Thus.
"MR. YANCHA: But is not the gentleman aware of the fact that the taxes being imposed under this
proposed measure are practically the same taxes that are now being imposed by the municipal council?

"MR. ZOSA: Now, gentleman from Samar, they are not. Under Commonwealth Act 472, these are not
the same taxes. The power of the municipality to tax under the present law is limited, but this bill
removes the limitation, so that under this amendment of the Committee the power to tax has become
very broad "MR. YANCHA: If the gentleman from Cebu reads Section 3, he will find that there is a
limitation to the taxing power of the Municipal Council being proposed in the amendment.
"MR. ZOSA: Yes, but if the gentleman reads Commonwealth Act 472, together with that amendment, he
will realize that the power of taxation given under this amendment has become very broad.
"MR. YANCHA: Precisely, because the purpose of this law is to give more local autonomy if he will not
increase their finances, and the only way to increase the finances of municipalities is to broaden a little
bit their power of taxation so that they will not be burdening the national government by asking certain
things that they cannot do themselves."2
Further confirmation of Our view on this point is supplied by Provincial Circular No. 24, of the Secretary
of Finance - the officer principally charged with the duty to enforce tax measures, and whose views
thereon, although mainly persuasive, carry much weight - dated March 31, 1960, in which, referring to
the effect of said R. A. No. 2264 upon his power of approval (or disapproval) under C. A, No. 472, said
official said:
"In lieu of the power of approval of the rates of municipal taxes in certain instances granted the
Secretary of Finance under Sec. 4
of Commonwealth Act No. 472, said official is now authorized to suspend the effectivity of any
ordinance within one hundred and twenty days after its passage, if, in his opinion, the tax or fees therein
levied or imposed is unjust, excessive, oppressive or confiscatory."
Neither is there any merit in the theory that the contested ordinances impose taxes on specific goods, or
on forest products, which are excluded by Section 2 of R. A. No. 2264 from the general power of
taxation therein granted, inasmuch as the rate of taxation imposed in said ordinances is dependent
upon the " capital investment or purchases for the previous year" - which, likewise, reflects the "capital
investment" - "whichever is higher." It is Our considered view that the nature of the business or
occupation taxed, and the amount invested therein, which is, also, reflected in the "purchases" not the
"sales" - made "for the previous year" are reasonable grounds for the classification made in said
ordinances and the graduated taxes imposed therein.
WHEREFORE, the decision appealed from should be, as it is hereby reversed, with costs against
plaintiffs-appellees herein.
IT IS SO ORDERED.
Zaldivar, Ruiz Castro, Fernando, Barredo, Makasiar, Antonio, and Esguerra, JJ., concur.
Teehankee, J., concurs and dissents in a separate opinion.

Makalintal, J., is on leave.


TEEHANKEE, J., concuring and dissenting:
I concur in the main opinion of the Chief Justice insofar as it upholds the validity of the questioned
municipal ordinances imposing municipal license taxes on all persons engaged in any business,
occupation or in the exercise of privilege within the municipality of Virac, Catanduanes, on a progressive
scale based on the capital investment of the business, which, as therein stated, is a reasonable ground
for the classification made in the said ordinances and for the graduated taxes imposed therein.
The graduated taxes so imposed, based on the monthly purchases of the merchants and required to be
reported within the 10th day of the following month to the municipal treasurer for the imposition of the
tax should be held to violate the prohibition against municipalities imposing any percentage tax or any
other form of tax based on sales. This would be inconsonance with the Court's ruling in Marinduque 4
that "the ordinance in question, while not providing for a percentage tax, but a graduated tax (the
progressive tax therein imposed not being calculated on a percentage of the sales made by the
taxpayer), nevertheless, (it) prescribes a tax based on sales, contrary to the statute (R.A. 2264). It is true
that the ordinance purports to base the tax on either 'gross output or sales'; but the only standard
provided for measuring the gross output is its peso value, as determined from 'true copies of receipts
and/or invoices (which are precisely the evidence of sales) that the taxpayer is required to submit to the
municipal treasurer (;Section 3), without deduction being provided for freight insurance, or incidental
costs. Directly or indirectly, the amount of payable tax under this ordinance is determined by the gross
sajes of the taxpayer, and violates the explicit prohibition that the municipality must not levy, or impose,
'taxes in any form based on sales."'
I vote, therefore, in partial affirmance of the appealed decision, for declaring the questioned ordinances
invalid insofar as they would impose the taxes hereinabove referred to on the basis of the plaintiffsappellees' "purchases for the previous year" rather than simply on the basis of their capital investment.

1. Paragraph g of Section 3 of Ordinance No. 6, Series of 1965.


2. See Marinduque Iron Mines Agents, Inc. vs. Municipality of Hinabangan, Samar, I I SCRA 416, 421
(1964), infra.
3. Paragraphs a, b, c and i of Section 3 of Ordinance No. 6, series of 1965 and Section 3 (a) of Ordinance
No. 5, series of 1966.
4. See fn. 2; italics supplied.