Republic of the Philippines

SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 61516 March 21, 1989
FLORENTINA A. GUILATCO, petitioner,
vs.
CITY OF DAGUPAN, and the HONORABLE COURT OF APPEALS, respondents.
Nolan R. Evangelista for petitioner.
The City Legal Officer for respondents.
SARMIENTO, J.:
In a civil action 1 for recovery of damages filed by the petitioner Florentina A. Guilatco, the
following judgment was rendered against the respondent City of Dagupan:
xxx
(1) Ordering defendant City of Dagupan to pay plaintiff actual damages in the
amount of P 15,924 (namely P8,054.00 as hospital, medical and other expenses
[Exhs. H to H-60], P 7,420.00 as lost income for one (1) year [Exh. F] and P
450.00 as bonus). P 150,000.00 as moral damages, P 50,000.00 as exemplary
damages, and P 3,000.00 as attorney's fees, and litigation expenses, plus costs
and to appropriate through its Sangguniang Panglunsod (City Council) said
amounts for said purpose;
(2) Dismissing plaintiffs complaint as against defendant City Engr. Alfredo G.
Tangco; and
(3) Dismissing the counterclaims of defendant City of Dagupan and defendant
City Engr. Alfredo G. Tangco, for lack of merit. 2
The facts found by the trial court are as follows: 3
It would appear from the evidences that on July 25, 1978, herein plaintiff, a
Court Interpreter of Branch III, CFI--Dagupan City, while she was about to
board a motorized tricycle at a sidewalk located at Perez Blvd. (a National Road,
under the control and supervision of the City of Dagupan) accidentally fell into a
manhole located on said sidewalk, thereby causing her right leg to be fractured.
As a result thereof, she had to be hospitalized, operated on, confined, at first at
the Pangasinan Provincial Hospital, from July 25 to August 3, 1978 (or for a
period of 16 days). She also incurred hospitalization, medication and other
expenses to the tune of P 8,053.65 (Exh. H to H-60) or a total of P 10,000.00 in
all, as other receipts were either lost or misplaced; during the period of her
confinement in said two hospitals, plaintiff suffered severe or excruciating pain
not only on her right leg which was fractured but also on all parts of her body;
the pain has persisted even after her discharge from the Medical City General
Hospital on October 9, 1978, to the present. Despite her discharge from the
Hospital plaintiff is presently still wearing crutches and the Court has actually
observed that she has difficulty in locomotion. From the time of the mishap on

July 25, 1978 up to the present, plaintiff has not yet reported for duty as court
interpreter, as she has difficulty of locomotion in going up the stairs of her office,
located near the city hall in Dagupan City. She earns at least P 720.00 a month
consisting of her monthly salary and other means of income, but since July 25,
1978 up to the present she has been deprived of said income as she has already
consumed her accrued leaves in the government service. She has lost several
pounds as a result of the accident and she is no longer her former jovial self, she
has been unable to perform her religious, social, and other activities which she
used to do prior to the incident.
Dr. Norberto Felix and Dr. Dominado Manzano of the Provincial Hospital, as
well as Dr. Antonio Sison of the Medical City General Hospital in Mandaluyong
Rizal (Exh. I; see also Exhs. F, G, G-1 to G-19) have confirmed beyond shadow of
any doubt the extent of the fracture and injuries sustained by the plaintiff as a
result of the mishap. On the other hand, Patrolman Claveria, De Asis and Cerezo
corroborated the testimony of the plaintiff regarding the mishap and they have
confirmed the existence of the manhole (Exhs. A, B, C and sub-exhibits) on the
sidewalk along Perez Blvd., at the time of the incident on July 25, 1978 which
was partially covered by a concrete flower pot by leaving gaping hole about 2 ft.
long by 1 1/2 feet wide or 42 cms. wide by 75 cms. long by 150 cms. deep (see
Exhs. D and D-1).
Defendant Alfredo Tangco, City Engineer of Dagupan City and admittedly exofficio Highway Engineer, City Engineer of the Public Works and Building
Official for Dagupan City, admitted the existence of said manhole along the
sidewalk in Perez Blvd., admittedly a National Road in front of the Luzon
Colleges. He also admitted that said manhole (there are at least 11 in all in Perez
Blvd.) is owned by the National Government and the sidewalk on which they are
found along Perez Blvd. are also owned by the National Government. But as City
Engineer of Dagupan City, he supervises the maintenance of said manholes or
drainage system and sees to it that they are properly covered, and the job is
specifically done by his subordinates, Mr. Santiago de Vera (Maintenance
Foreman) and Engr. Ernesto Solermo also a maintenance Engineer. In his
answer defendant Tangco expressly admitted in par. 7-1 thereof, that in his
capacity as ex-officio Highway Engineer for Dagupan City he exercises
supervision and control over National roads, including the Perez Blvd. where the
incident happened.
On appeal by the respondent City of Dagupan, the appellate court 4 reversed the lower court
findings on the ground that no evidence was presented by the plaintiff- appellee to prove that
the City of Dagupan had "control or supervision" over Perez Boulevard. 5
The city contends that Perez Boulevard, where the fatal drainage hole is located, is a national
road that is not under the control or supervision of the City of Dagupan. Hence, no liability
should attach to the city. It submits that it is actually the Ministry of Public Highways that has
control or supervision through the Highway Engineer which, by mere coincidence, is held
concurrently by the same person who is also the City Engineer of Dagupan.
After examination of the findings and conclusions of the trial court and those of the appellate
court, as well as the arguments presented by the parties, we agree with those of the trial court
and of the petitioner. Hence, we grant the petition.
In this review on certiorari, we have simplified the errors assigned by the petitioner to a single

issue: whether or not control or supervision over a national road by the City of Dagupan
exists, in effect binding the city to answer for damages in accordance with article 2189 of the
Civil Code.
The liability of public corporations for damages arising from injuries suffered by pedestrians
from the defective condition of roads is expressed in the Civil Code as follows:
Article 2189. Provinces, cities and municipalities shall be liable for damages for
the death of, or injuries suffered by, any person by reason of the defective
condition of roads, streets, bridges, public buildings, and other public works
under their control or supervision.
It is not even necessary for the defective road or street to belong to the province, city or
municipality for liability to attach. The article only requires that either control or supervision
is exercised over the defective road or street. 6
In the case at bar, this control or supervision is provided for in the charter of Dagupan and is
exercised through the City Engineer who has the following duties:
Sec. 22. The City Engineer--His powers, duties and compensation-There shall be
a city engineer, who shall be in charge of the department of Engineering and
Public Works. He shall receive a salary of not exceeding three thousand pesos
per annum. He shall have the following duties:
xxx
(j) He shall have the care and custody of the public system of waterworks and
sewers, and all sources of water supply, and shall control, maintain and regulate
the use of the same, in accordance with the ordinance relating thereto; shall
inspect and regulate the use of all private systems for supplying water to the city
and its inhabitants, and all private sewers, and their connection with the public
sewer system.
xxx
The same charter of Dagupan also provides that the laying out, construction and improvement
of streets, avenues and alleys and sidewalks, and regulation of the use thereof, may be
legislated by the Municipal Board . 7Thus the charter clearly indicates that the city indeed has
supervision and control over the sidewalk where the open drainage hole is located.
The express provision in the charter holding the city not liable for damages or injuries
sustained by persons or property due to the failure of any city officer to enforce the provisions
of the charter, can not be used to exempt the city, as in the case at bar.8
The charter only lays down general rules regulating the liability of the city. On the other hand
article 2189 appliesin particular to the liability arising from "defective streets, public
buildings and other public works." 9
The City Engineer, Mr. Alfredo G. Tangco, admits that he exercises control or supervision over
the said road. But the city can not be excused from liability by the argument that the duty of
the City Engineer to supervise or control the said provincial road belongs more to his
functions as an ex-officio Highway Engineer of the Ministry of Public Highway than as a city
officer. This is because while he is entitled to an honorarium from the Ministry of Public
Highways, his salary from the city government substantially exceeds the honorarium.
We do not agree.

Alfredo G. Tangco "(i)n his official capacity as City Engineer of Dagupan, as Ex- Officio
Highway Engineer, as Ex-Officio City Engineer of the Bureau of Public Works, and, last but
not the least, as Building Official for Dagupan City, receives the following monthly
compensation: P 1,810.66 from Dagupan City; P 200.00 from the Ministry of Public
Highways; P 100.00 from the Bureau of Public Works and P 500.00 by virtue of P.D. 1096,
respectively." 10This function of supervision over streets, public buildings, and other public
works pertaining to the City Engineer is coursed through a Maintenance Foreman and a
Maintenance Engineer.11 Although these last two officials are employees of the National
Government, they are detailed with the City of Dagupan and hence receive instruction and
supervision from the city through the City Engineer.
There is, therefore, no doubt that the City Engineer exercises control or supervision over the
public works in question. Hence, the liability of the city to the petitioner under article 2198 of
the Civil Code is clear.
Be all that as it may, the actual damages awarded to the petitioner in the amount of P
10,000.00 should be reduced to the proven expenses of P 8,053.65 only. The trial court
should not have rounded off the amount. In determining actual damages, the court can not
rely on "speculation, conjecture or guess work" as to the amount. Without the actual proof of
loss, the award of actual damages becomes erroneous. 12
On the other hand, moral damages may be awarded even without proof of pecuniary loss,
inasmuch as the determination of the amount is discretionary on the court.13 Though
incapable of pecuniary estimation, moral damages are in the nature of an award to
compensate the claimant for actual injury suffered but which for some reason can not be
proven. However, in awarding moral damages, the following should be taken into
consideration:
(1) First, the proximate cause of the injury must be the claimee's acts.14
(2) Second, there must be compensatory or actual damages as satisfactory proof
of the factual basis for damages.15
(3) Third, the award of moral damages must be predicated on any of the cases
enumerated in the Civil Code. 16
In the case at bar, the physical suffering and mental anguish suffered by the petitioner were
proven. Witnesses from the petitioner's place of work testified to the degeneration in her
disposition-from being jovial to depressed. She refrained from attending social and civic
activities.17
Nevertheless the award of moral damages at P 150,000.00 is excessive. Her handicap was not
permanent and disabled her only during her treatment which lasted for one year. Though
evidence of moral loss and anguish existed to warrant the award of damages,18 the
moderating hand of the law is called for. The Court has time and again called attention to the
reprehensible propensity of trial judges to award damages without basis,19 resulting in
exhorbitant amounts.20
Although the assessment of the amount is better left to the discretion of the trial
court 21 under preceding jurisprudence, the amount of moral damages should be reduced to P
20,000.00.
As for the award of exemplary damages, the trial court correctly pointed out the basis:
To serve as an example for the public good, it is high time that the Court,

through this case, should serve warning to the city or cities concerned to be more
conscious of their duty and responsibility to their constituents, especially when
they are engaged in construction work or when there are manholes on their
sidewalks or streets which are uncovered, to immediately cover the same, in
order to minimize or prevent accidents to the poor pedestrians.22
Too often in the zeal to put up "public impact" projects such as beautification drives, the end
is more important than the manner in which the work is carried out. Because of this obsession
for showing off, such trivial details as misplaced flower pots betray the careless execution of
the projects, causing public inconvenience and inviting accidents.
Pending appeal by the respondent City of Dagupan from the trial court to the appellate court,
the petitioner was able to secure an order for garnishment of the funds of the City deposited
with the Philippine National Bank, from the then presiding judge, Hon. Willelmo Fortun. This
order for garnishment was revoked subsequently by the succeeding presiding judge, Hon.
Romeo D. Magat, and became the basis for the petitioner's motion for reconsideration which
was also denied. 23
We rule that the execution of the judgment of the trial court pending appeal was premature.
We do not find any good reason to justify the issuance of an order of execution even before the
expiration of the time to appeal .24
WHEREFORE, the petition is GRANTED. The assailed decision and resolution of the
respondent Court of Appeals are hereby REVERSED and SET ASIDE and the decision of the
trial court, dated March 12, 1979 and amended on March 13, 1979, is hereby REINSTATED
with the indicated modifications as regards the amounts awarded:
(1) Ordering the defendant City of Dagupan to pay the plaintiff actual damages
in the amount of P 15,924 (namely P 8,054.00 as hospital, medical and other
expenses; P 7,420.00 as lost income for one (1) year and P 450.00 as bonus); P
20,000.00 as moral damages and P 10,000.00 as exemplary damages.
The attorney's fees of P 3,000.00 remain the same.
SO ORDERED.
Melencio-Herrera, (Chaiperson), Paras, Padilla and Regalado, JJ., concur.

Republic of the Philippines

SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 40243 March 11, 1992
CELESTINO TATEL, petitioner,
vs.
MUNICIPALITY OF VIRAC, SALVADOR A. SURTIDA, in his capacity as Mayor of
Virac, Catanduanes; GAVINO V. GUERRERO, in his capacity as Vice-Mayor of
Virac, Catanduanes; JOSE T. BUEBOS, in his capacity as Councilor of Virac,
Catanduanes; ANGELES TABLIZO, in his capacity as Councilor of Virac,
Catanduanes; ELPIDIO T. ZAFE, in his capacity as Councilor of Virac,
Catanduanes; MARIANO ALBERTO, in his capacity as Councilor of Virac,
Catanduanes; JULIA A. GARCIA, in her capacity as Councilor of Virac,
Catanduanes; and PEDRO A. GUERRERO, in his capacity as Councilor of Virac,
Catanduanes,respondents.
NOCON, J.:
This is a Petition for Prohibition with Preliminary Injunction with the Court of First Instance
of Catanduanes filed by appellant, Celestino Tatel, a businessman engaged in the import and
export of abaca and other products against the Municipal Council of Virac, Catanduanes and
its municipal officials enjoining them from enforcing Resolution No 29 1 of the Council,
declaring the warehouse of petitioner in barrio Sta. Elena of the said municipality a public
nuisance within the purview of Article 694 of the Civil Code of the Philippines and directing
the petitioner to remove and transfer said warehouse to a more suitable place within two (2)
months from receipt of the said resolution.
It appears from the records that on the basis of complaints received from the residents of
barrio Sta. Elena on March 18, 1966 against the disturbance caused by the operation of the
abaca bailing machine inside the warehouse of petitioner which affected the peace and
tranquility of the neighborhood due to the smoke, obnoxious odor and dust emitted by the
machine, a committee was appointed by the municipal council of Virac to investigate the
matter. The committee noted the crowded nature of the neighborhood with narrow roads and
the surrounding residential houses, so much so that an accidental fire within the warehouse of
the petitioner occasioned by the continuance of the activity inside the warehouse and the
storing of inflammable materials created a danger to the lives and properties of the people
within the neighborhood.
Resultantly, Resolution No. 29 was passed by the Municipal Council of Virac on April 22, 1966
declaring the warehouse owned and operated by petitioner a public nuisance within the
purview of Article 694 of the New Civil Code. 2
His motion for reconsideration having been denied by the Municipal Council of Virac,
petitioner instituted the present petition for prohibition with preliminary injunction.
Respondent municipal officials contend that petitioner's warehouse was constructed in
violation of Ordinance No. 13, series of 1952, prohibiting the construction of warehouses near
a block of houses either in the poblacion or barrios without maintaining the necessary

distance of 200 meters from said block of houses to avoid loss of lives and properties by
accidental fire.
On the other hand, petitioner contends that said ordinance is unconstitutional, contrary to the
due process and equal protection clause of the Constitution and null and void for not having
been passed in accordance with law.
The issue then boils down on whether petitioner's warehouse is a nuisance within the
meaning of Article 694 of the Civil Code and whether Ordinance No. 13, S. 1952 of the
Municipality of Virac is unconstitutional and void.
In a decision dated September 18, 1969, the court a quo ruled as follows:
1. The warehouse in question was legally constructed under a valid permit issued
by the municipality of Virac in accordance with existing regulations and may not
be destroyed or removed from its present location;
2. Ordinance No. 13, series of 1952, is a legitimate and valid exercise of police
power by the Municipal Council of Virac is not (sic) unconstitutional and void as
claimed by the petitioner;
3. The storage by the petitioner of abaca and copra in the warehouse is not only
in violation of the provisions of the ordinance but poses a grave danger to the
safety of the lives and properties of the residents of the neighborhood due to
accidental fire and constitutes a public nuisance under the provisions of Article
694 of the New Civil code of the Philippines and may be abated;
4. Accordingly, the petitioner is hereby directed to remove from the said
warehouse all abaca and copra and other inflammable articles stored therein
which are prohibited under the provisions of Ordinance No. 13, within a period
of two (2) months from the time this decision becomes final and that henceforth,
the petitioner is enjoined from storing such prohibited articles in the warehouse.
With costs against petitioner.
Seeking appellate review, petitioner raised as errors of the court a quo:
1. In holding that Ordinance No. 13, series of 1952, of the Municipality of Virac,
Catanduanes, is a legitimate and valid exercise of police power of the Municipal
Council, and therefore, constitutional;
2. In giving the ordinance a meaning other than and different from what
it provided by declaring that petitioner violated the same by using the
warehouse for storage of abaca and copra when what is prohibited and penalized
by the ordinance is the construction of warehouses.
3. In refusing to take judicial notice of the fact that in the municipality, there are
numerous establishments similarly situated as appellants' warehouses but which
are not prosecuted.
We find no merit in the Petition.
Ordinance No. 13, series of 1952, was passed by the Municipal Council of Virac in the exercise
of its police power. It is a settled principle of law that municipal corporations are agencies of
the State for the promotion and maintenance of local self-government and as such are
endowed with the police powers in order to effectively accomplish and carry out the declared
objects of their creation. 3 Its authority emanates from the general welfare clause under the
Administrative Code, which reads:

The municipal council shall enact such ordinances and make such regulations,
not repugnant to law, as may be necessary to carry into effect and discharge the
powers and duties conferred upon it by law and such as shall seem necessary and
proper to provide for the health and safety, promote the prosperity, improve the
morals, peace, good order, comfort and convenience of the municipality and the
inhabitants thereof, and for the protection of property therein. 4
For an ordinance to be valid, it must not only be within the corporate powers of the
municipality to enact but must also be passed according to the procedure prescribed by law,
and must be in consonance with certain well established and basic principles of a substantive
nature. These principles require that a municipal ordinance (1) must not contravene the
Constitution or any statute (2) must not be unfair or oppressive (3) must not be partial or
discriminatory (4) must not prohibit but may regulate trade (5) must be general and
consistent with public policy, and (6) must not be unreasonable. 5 Ordinance No. 13, Series of
1952, meets these criteria.
As to the petitioner's second assignment of error, the trial court did not give the ordinance in
question a meaning other than what it says. Ordinance No. 13 passed by the Municipal
Council of Virac on December 29, 1952, 6reads:
AN ORDINANCE STRICTLY PROHIBITING THE CONSTRUCTION OF
WAREHOUSE IN ANY FORM NEAR A BLOCK OF HOUSES EITHER IN
POBLACION OR BARRIO WITH NECESSARY DISTANCE TO AVOID GREAT
LOSSES OF PROPERTY AND LIVES BY FIRE ACCIDENT.
Section 1 provides:
It is strictly prohibited to construct warehouses in any form to any person,
persons, entity, corporation or merchants, wherein to keep or store copra, hemp,
gasoline, petroleum, alcohol, crude oil, oil of turpentine and the like products or
materials if not within the distance of 200 meters from a block of houses either
in the poblacion or barrios to avoid great losses of properties inclusive lives by
fire accident.
Section 2 provides: 7
Owners of warehouses in any form, are hereby given advice to remove their said
warehouses this ordinance by the Municipal Council, provided however, that if
those warehouses now in existence should no longer be utilized as such
warehouse for the above-described products in Section 1 of this ordinance after a
lapse of the time given for the removal of the said warehouses now in existence,
same warehouses shall be exempted from the spirit of the provision of section 1
of this ordinance,provided further, that these warehouses now in existence, shall
in the future be converted into non-inflammable products and materials
warehouses.
In spite of its fractured syntax, basically, what is regulated by the ordinance is the
construction of warehouses wherein inflammable materials are stored where such warehouses
are located at a distance of 200 meters from a block of houses and not the construction per
se of a warehouse. The purpose is to avoid the loss of life and property in case of fire which is
one of the primordial obligation of the government.
This was also the observation of the trial court:
A casual glance of the ordinance at once reveals a manifest disregard of the

elemental rules of syntax. Experience, however, will show that this is not
uncommon in law making bodies in small towns where local authorities and in
particular the persons charged with the drafting and preparation of municipal
resolutions and ordinances lack sufficient education and training and are not
well grounded even on the basic and fundamental elements of the English
language commonly used throughout the country in such matters. Nevertheless,
if one scrutinizes the terms of the ordinance, it is clear that what is prohibited is
the construction of warehouses by any person, entity or corporation wherein
copra, hemp, gasoline and other inflammable products mentioned in Section 1
may be stored unless at a distance of not less than 200 meters from a block of
houses either in the poblacion or barrios in order to avoid loss of property and
life due to fire. Under Section 2, existing warehouses for the storage of the
prohibited articles were given one year after the approval of the ordinance within
which to remove them but were allowed to remain in operation if they had
ceased to store such prohibited articles.
The ambiguity therefore is more apparent than real and springs from simple
error in grammatical construction but otherwise, the meaning and intent is clear
that what is prohibited is the construction or maintenance of warehouses for the
storage of inflammable articles at a distance within 200 meters from a block of
houses either in the poblacion or in the barrios. And the purpose of the
ordinance is to avoid loss of life and property in case of accidental fire which is
one of the primordial and basic obligation of any government. 8
Clearly, the lower court did NOT add meaning other than or differrent from what
was provided in the ordinance in question. It merely stated the purpose of the ordinance and
what it intends to prohibit to accomplish its purpose.
As to the third assignment of error, that warehouses similarly situated as that of the petitioner
were not prosecuted, suffice it to say that the mere fact that the municipal authorities of Virac
have not proceeded against other warehouses in the municipality allegedly violating
Ordinance No. 13 is no reason to claim that the ordinance is discriminatory. A distinction
must be made between the law itself and the manner in which said law is implemented by the
agencies in charge with its administration and enforcement. There is no valid reason for the
petitioner to complain, in the absence of proof that the other bodegas mentioned by him are
operating in violation of the ordinance and that the complaints have been lodged against the
bodegas concerned without the municipal authorities doing anything about it.
The objections interposed by the petitioner to the validity of the ordinance have not been
substantiated. Its purpose is well within the objectives of sound government. No undue
restraint is placed upon the petitioner or for anybody to engage in trade but merely a
prohibition from storing inflammable products in the warehouse because of the danger of fire
to the lives and properties of the people residing in the vicinity. As far as public policy is
concerned, there can be no better policy than what has been conceived by the municipal
government.
As to petitioner's contention of want of jurisdiction by the lower court we find no merit in the
same. The case is a simple civil suit for abatement of a nuisance, the original jurisdiction of
which falls under the then Court of First Instance.
WHEREFORE, for lack of merit, the petition is hereby DISMISSED. Costs against petitioner.
SO ORDERED.

Melencio-Herrera, Paras, Padilla and Regalado, JJ., concur.

Republic of the Philippines

SUPREME COURT
Manila
FIRST DIVISION
G.R. No. L-31249 August 19, 1986
SALVADOR VILLACORTA as City Engineer of Dagupan City, and JUAN S.
CAGUIOA as Register of Deeds of Dagupan City, petitioners,
vs.
GREGORIO BERNARDO and HON. MACARIO OFILADA as Judge of the Court of
First Instance of Pangasinan respondents.
Victor T. Llamas, Jr. for respondents.
CRUZ, J.:
This is a petition for certiorari against a decision of the Court of First Instance of Pangasinan
annulling an ordinance adopted by the municipal board of Dagupan City.
The ordinance reads in full as follows:
ORDINANCE 22
AN ORDINANCE REGULATING SUBDIVISION PLANS OVER PARCELS OF
LAND IN THE CITY OF DAGUPAN.
Be it ordained by the Municipal Board of Dagupan City in session assembled:
Section 1. Every proposed subdivision plan over any lot in the City of Dagupan,
shalt before the same is submitted for approval and/or verification by the
Bureau of Lands and/or the Land Registration Commission, be previously
submitted to the City Engineer of the City who shall see to it that no
encroachment is made on any portion of the public domain, that the zoning
ordinance and all other pertinent rules and regulations are observed.
Section 2. As service fee thereof, an amount equivalent to P0.30 per square
meter of every lot resulting or win result from such subdivision shall be charged
by the City Engineer's Office.
Section 3. It shall be unlawful for the Register of Deeds of Dagupan City to allow
the registration of a subdivision plan unless there is prior written certification
issued by the City Engineer that such plan has already been submitted to his
office and that the same is in order.
Section 4. Any violation of this ordinance shall be punished by a fine not
exceeding two hundred (P200.00) pesos or imprisonment not exceeding six (6)
months or both in the discretion of the judge.
Section 5. This ordinance shall take effect immediately upon approval.
In declaring the said ordinance null and void, the court a quo declared:
From the above-recited requirements, there is no showing that would justify the
enactment of the questioned ordinance. Section 1 of said ordinance clearly
conflicts with Section 44 of Act 496, because the latter law does not require

subdivision plans to be submitted to the City Engineer before the same is

submitted for approval to and verification by the General Land Registration
Office or by the Director of Lands as provided for in Section 58 of said Act.
Section 2 of the same ordinance also contravenes the provisions of Section 44 of
Act 496, the latter being silent on a service fee of PO.03 per square meter of
every lot subject of such subdivision application; Section 3 of the ordinance in
question also conflicts with Section 44 of Act 496, because the latter law does not
mention of a certification to be made by the City Engineer before the Register of
Deeds allows registration of the subdivision plan; and the last section of said
ordinance imposes a penalty for its violation, which Section 44 of Act 496 does
not impose. In other words, Ordinance 22 of the City of Dagupan imposes upon
a subdivision owner additional conditions.
xxx xxx xxx
The Court takes note of the laudable purpose of the ordinance in bringing to a
halt the surreptitious registration of lands belonging to the government. But as
already intimidated above, the powers of the board in enacting such a laudable
ordinance cannot be held valid when it shall impede the exercise of rights
granted in a general law and/or make a general law subordinated to a local
ordinance.
We affirm.
To sustain the ordinance would be to open the floodgates to other ordinances amending and
so violating national laws in the guise of implementing them. Thus, ordinances could be
passed imposing additional requirements for the issuance of marriage licenses, to prevent
bigamy; the registration of vehicles, to minimize carnaping; the execution of contracts, to
forestall fraud; the validation of passports, to deter imposture; the exercise of freedom of
speech, to reduce disorder; and so on. The list is endless, but the means, even if the end be
valid, would beultra vires.
So many excesses are attempted in the name of the police power that it is time, we feel, for a
brief admonition.
Regulation is a fact of life in any well-ordered community. As society becomes more and more
complex, the police power becomes correspondingly ubiquitous. This has to be so for the
individual must subordinate his interests to the common good, on the time honored
justification of Salus populi est suprema lex.
In this prolix age, practically everything a person does and owns affects the public interest
directly or at least vicariously, unavoidably drawing him within the embrace of the police
power. Increasingly, he is hemmed in by all manner of statutory, administrative and
municipal requirements and restrictions that he may find officious and even oppressive.
It is necessary to stress that unless the creeping interference of the government in essentially
private matters is moderated, it is likely to destroy that prized and peculiar virtue of the free
society: individualism.
Every member of society, while paying proper deference to the general welfare, must not be
deprived of the right to be left alone or, in the Idiom of the day, "to do his thing." As long as he
does not prejudice others, his freedom as an individual must not be unduly curtailed.
We therefore urge that proper care attend the exercise of the police power lest it deteriorate
into an unreasonable intrusion into the purely private affairs of the individual. The so-called

"general welfare" is too amorphous and convenient an excuse for official arbitrariness.
Let it always be remembered that in the truly democratic state, protecting the rights of the
individual is as important as, if not more so than, protecting the rights of the public.
This advice is especially addressed to the local governments which exercise the police power
only by virtue of a valid delegation from the national legislature under the general welfare
clause. In the instant case, Ordinance No. 22 suffers from the additional defect of violating
this authority for legislation in contravention of the national law by adding to its
requirements.
WHEREFORE, the decision of the lower court annulling the challenged ordinance is
AFFIRMED, without any pronouncement as to costs.
SO ORDERED.
Yap (Chairman), Narvasa, Melencio-Herrera and Paras, JJ., concur.

Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. L-42571-72 July 25, 1983
VICENTE DE LA CRUZ, RENATO ALIPIO, JOSE TORRES III, LEONCIO CORPUZ,
TERESITA CALOT, ROSALIA FERNANDEZ, ELIZABETH VELASCO, NANETTE
VILLANUEVA, HONORATO BUENAVENTURA, RUBEN DE CASTRO, VICENTE
ROXAS, RICARDO DAMIAN, DOMDINO ROMDINA, ANGELINA OBLIGACION,
CONRADO GREGORIO, TEODORO REYES, LYDIA ATRACTIVO, NAPOLEON
MENDOZA, PERFECTO GUMATAY, ANDRES SABANGAN, ROSITA DURAN,
SOCORRO BERNARDEZ, and PEDRO GABRIEL,petitioners,
vs.
THE HONORABLE EDGARDO L. PARAS, MATIAS RAMIREZ as the Municipal
Mayor, MARIO MENDOZA as the Municipal Vice-Mayor, and THE MUNICIPAL
COUNCIL OF BOCAUE, BULACAN, respondents.
Federico N. Alday for petitioners.
Dakila F. Castro for respondents.
FERNANDO, C.J.:
The crucial question posed by this certiorari proceeding is whether or not a municipal
corporation, Bocaue, Bulacan, represented by respondents, 1 can, prohibit the exercise of a
lawful trade, the operation of night clubs, and the pursuit of a lawful occupation, such clubs
employing hostesses. It is contended that the ordinance assailed as invalid is tainted with
nullity, the municipality being devoid of power to prohibit a lawful business, occupation or
calling, petitioners at the same time alleging that their rights to due process and equal
protection of the laws were violated as the licenses previously given to them was in effect
withdrawn without judicial hearing. 2
The assailed ordinance 3 is worded as follows: "Section 1. Title of Ordinance. This
Ordinance shall be known and may be cited as the [Prohibition and Closure Ordinance] of
Bocaue, Bulacan. Section 2. Definitions of Terms (a) 'Night Club' shall include any place
or establishment selling to the public food or drinks where customers are allowed to dance.
(b) 'Cabaret' or 'Dance Hall' shall include any place or establishment where dancing is
permitted to the public and where professional hostesses or hospitality girls and professional
dancers are employed. (c) 'Professional hostesses' or 'hospitality girls' shall include any
woman employed by any of the establishments herein defined to entertain guests and
customers at their table or to dance with them. (d) 'Professional dancer' shall include any
woman who dances at any of the establishments herein defined for a fee or remuneration paid
directly or indirectly by the operator or by the persons she dances with. (e) 'Operator' shall
include the owner, manager, administrator or any person who operates and is responsible for
the operation of any night club, cabaret or dance hall. Section 3. Prohibition in the Issuance
and Renewal of Licenses, Permits. Being the principal cause in the decadence of morality
and because of their other adverse effects on this community as explained above, no operator
of night clubs, cabarets or dance halls shall henceforth be issued permits/licenses to operate
within the jurisdiction of the municipality and no license/permit shall be issued to any

professional hostess, hospitality girls and professional dancer for employment in any of the
aforementioned establishments. The prohibition in the issuance of licenses/permits to said
persons and operators of said establishments shall include prohibition in the renewal thereof.
Section 4. Revocation of Permits and Licenses. The licenses and permits issued to
operators of night clubs, cabarets or dance halls which are now in operation including permits
issued to professional hostesses, hospitality girls and professional dancers are hereby revoked
upon the expiration of the thirty-day period given them as provided in Section 8 hereof and
thenceforth, the operation of these establishments within the jurisdiction of the municipality
shall be illegal. Section 5. Penalty in case of violation. Violation of any of the provisions
of this Ordinance shall be punishable by imprisonment not exceeding three (3) months or a
fine not exceeding P200.00 or both at the discretion of the Court. If the offense is committed
by a juridical entity, the person charged with the management and/or operation thereof shall
be liable for the penalty provided herein. Section 6. Separability Clause. If, for any
reason, any section or provision of this Ordinance is held unconstitutional or invalid, no other
section or provision hereof shall be affected thereby. Section 7.Repealing Clause. All
ordinance, resolutions, circulars, memoranda or parts thereof that are inconsistent with the
provisions of this Ordinance are hereby repealed. Section 8. Effectivity. This Ordinance
shall take effect immediately upon its approval; provided, however, that operators of night
clubs, cabarets and dance halls now in operation including professional hostesses, hospitality
girls and professional dancers are given a period of thirty days from the approval hereof
within which to wind up their businesses and comply with the provisions of this Ordinance." 4
On November 5, 1975, two cases for prohibition with preliminary injunction were filed with
the Court of First Instance of Bulacan. 5 The grounds alleged follow:
1. Ordinance No. 84 is null and void as a municipality has no authority to prohibit a lawful
business, occupation or calling.
2. Ordinance No. 84 is violative of the petitioners' right to due process and the equal
protection of the law, as the license previously given to petitioners was in effect withdrawn
without judicial hearing. 3. That under Presidential Decree No. 189, as amended, by
Presidential Decree No. 259, the power to license and regulate tourist-oriented businesses
including night clubs, has been transferred to the Department of Tourism." 6 The cases were
assigned to respondent Judge, now Associate Justice Paras of the Intermediate Appellate
Court, who issued a restraining order on November 7, 1975. The answers were thereafter filed.
It was therein alleged: " 1. That the Municipal Council is authorized by law not only to regulate
but to prohibit the establishment, maintenance and operation of night clubs invoking Section
2243 of the RAC, CA 601, Republic Acts Nos. 938, 978 and 1224. 2. The Ordinance No. 84 is
not violative of petitioners' right to due process and the equal protection of the law, since
property rights are subordinate to public interests. 3. That Presidential Decree No. 189, as
amended, did not deprive Municipal Councils of their jurisdiction to regulate or prohibit night
clubs." 7There was the admission of the following facts as having been established: "l. That
petitioners Vicente de la Cruz, et al. in Civil Case No. 4755-M had been previously issued
licenses by the Municipal Mayor of Bocaue-petitioner Jose Torres III, since 1958; petitioner
Vicente de la Cruz, since 1960; petitioner Renato Alipio, since 1961 and petitioner Leoncio
Corpuz, since 1972; 2. That petitioners had invested large sums of money in their businesses;
3. That the night clubs are well-lighted and have no partitions, the tables being near each
other; 4. That the petitioners owners/operators of these clubs do not allow the hospitality girls
therein to engage in immoral acts and to go out with customers; 5. That these hospitality girls
are made to go through periodic medical check-ups and not one of them is suffering from any
venereal disease and that those who fail to submit to a medical check-up or those who are

found to be infected with venereal disease are not allowed to work; 6. That the crime rate
there is better than in other parts of Bocaue or in other towns of Bulacan." 8 Then came on
January 15, 1976 the decision upholding the constitutionality and validity of Ordinance No. 84
and dismissing the cases. Hence this petition for certiorari by way of appeal.
In an exhaustive as well as scholarly opinion, the lower court dismissed the petitions. Its
rationale is set forth in the opening paragraph thus: "Those who lust cannot last. This in
essence is why the Municipality of Bocaue, Province of Bulacan, stigmatized as it has been by
innuendos of sexual titillation and fearful of what the awesome future holds for it, had no
alternative except to order thru its legislative machinery, and even at the risk of partial
economic dislocation, the closure of its night clubs and/or cabarets. This in essence is also
why this Court, obedient to the mandates of good government, and cognizant of the
categorical imperatives of the current legal and social revolution, hereby [upholds] in the
name of police power the validity and constitutionality of Ordinance No. 84, Series of 1975, of
the Municipal Council of Bocaue, Bulacan. The restraining orders heretofore issued in these
two cases are therefore hereby rifted, effective the first day of February, 1976, the purpose of
the grace period being to enable the petitioners herein to apply to the proper appellate
tribunals for any contemplated redress." 9 This Court is, however, unable to agree with such a
conclusion and for reasons herein set forth, holds that reliance on the police power is
insufficient to justify the enactment of the assailed ordinance. It must be declared null and
void.
1. Police power is granted to municipal corporations in general terms as follows: "General
power of council to enact ordinances and make regulations. - The municipal council shall
enact such ordinances and make such regulations, not repugnant to law, as may be necessary
to carry into effect and discharge the powers and duties conferred upon it by law and such as
shall seem necessary and proper to provide for the health and safety, promote the prosperity,
improve the morals, peace, good order, comfort, and convenience of the municipality and the
inhabitants thereof, and for the protection of property therein." 10 It is practically a
reproduction of the former Section 39 of Municipal Code. 11 An ordinance enacted by virtue
thereof, according to Justice Moreland, speaking for the Court in the leading case of United
States v. Abendan 12 "is valid, unless it contravenes the fundamental law of the Philippine
Islands, or an Act of the Philippine Legislature, or unless it is against public policy, or is
unreasonable, oppressive, partial, discriminating, or in derogation of common right. Where
the power to legislate upon a given subject, and the mode of its exercise and the details of such
legislation are not prescribed, the ordinance passed pursuant thereto must be a reasonable
exercise of the power, or it will be pronounced invalid." 13 In another leading case, United
States v. Salaveria, 14 the ponente this time being Justice Malcolm, where the present
Administrative Code provision was applied, it was stated by this Court: "The general welfare
clause has two branches: One branch attaches itself to the main trunk of municipal authority,
and relates to such ordinances and regulations as may be necessary to carry into effect and
discharge the powers and duties conferred upon the municipal council by law. With this class
we are not here directly concerned. The second branch of the clause is much more
independent of the specific functions of the council which are enumerated by law. It
authorizes such ordinances as shall seem necessary and proper to provide for the health and
safety, promote the prosperity, improve the morals, peace, good order, comfort, and
convenience of the municipality and the inhabitants thereof, and for the protection of
property therein.' It is a general rule that ordinances passed by virtue of the implied power
found in the general welfare clause must be reasonable, consonant with the general
powersand purposes of the corporation, and not inconsistent with the laws or policy of the

State." 15 If night clubs were merely then regulated and not prohibited, certainly the assailed
ordinance would pass the test of validity. In the two leading cases above set forth, this Court
had stressed reasonableness, consonant with the general powers and purposes of municipal
corporations, as well as consistency with the laws or policy of the State. It cannot be said that
such a sweeping exercise of a lawmaking power by Bocaue could qualify under the term
reasonable. The objective of fostering public morals, a worthy and desirable end can be
attained by a measure that does not encompass too wide a field. Certainly the ordinance on its
face is characterized by overbreadth. The purpose sought to be achieved could have been
attained by reasonable restrictions rather than by an absolute prohibition. The admonition in
Salaveria should be heeded: "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." 16 It is clear that in the guise of a police regulation, there was in this instance a
clear invasion of personal or property rights, personal in the case of those individuals desirous
of patronizing those night clubs and property in terms of the investments made and salaries to
be earned by those therein employed.
2. The decision now under review refers to Republic Act No. 938 as amended. 17 It was
originally enacted on June 20, 1953. It is entitled: "AN ACT GRANTING MUNICIPAL OR
CITY BOARDS AND COUNCILS THE POWER TO REGULATE THE ESTABLISHMENT,
MAINTENANCE AND OPERATION OF CERTAIN PLACES OF AMUSEMENT WITHIN
THEIR RESPECTIVE TERRITORIAL JURISDICTIONS.' 18 Its first section insofar as
pertinent reads: "The municipal or city board or council of each chartered city shall have the
power to regulate by ordinance the establishment, maintenance and operation of night clubs,
cabarets, dancing schools, pavilions, cockpits, bars, saloons, bowling alleys, billiard pools, and
other similar places of amusement within its territorial jurisdiction: ... " 19 Then on May 21,
1954, the first section was amended to include not merely "the power to regulate, but likewise
"Prohibit ... " 20 The title, however, remained the same. It is worded exactly as Republic Act
No. 938. It is to be admitted that as thus amended, if only the above portion of the Act were
considered, a municipal council may go as far as to prohibit the operation of night clubs. If
that were all, then the appealed decision is not devoid of support in law. That is not all,
however. The title was not in any way altered. It was not changed one whit. The exact wording
was followed. The power granted remains that of regulation, notprohibition. There is thus
support for the view advanced by petitioners that to construe Republic Act No. 938 as
allowing the prohibition of the operation of night clubs would give rise to a constitutional
question. The Constitution mandates: "Every bill shall embrace only one subject which shall
be expressed in the title thereof. " 21 Since there is no dispute as the title limits the power to
regulating, not prohibiting, it would result in the statute being invalid if, as was done by the
Municipality of Bocaue, the operation of a night club was prohibited. There is a wide gap
between the exercise of a regulatory power "to provide for the health and safety, promote the
prosperity, improve the morals, 22 in the language of the Administrative Code, such
competence extending to all "the great public needs, 23 to quote from Holmes, and to
interdict any calling, occupation, or enterprise. In accordance with the well-settled principle
of constitutional construction that between two possible interpretations by one of which it will
be free from constitutional infirmity and by the other tainted by such grave defect, the former
is to be preferred. A construction that would save rather than one that would affix the seal of
doom certainly commends itself. We have done so before We do so again. 24
3. There is reinforcement to the conclusion reached by virtue of a specific provision of the
recently-enacted Local Government Code. 25 The general welfare clause, a reiteration of the
Administrative Code provision, is set forth in the first paragraph of Section 149 defining the

powers and duties of the sangguniang bayan. It read as follows: "(a) Enact such ordinances
and issue such regulations as may be necessary to carry out and discharge the responsibilities
conferred upon it by law, and such as shall be necessary and proper to provide for the health,
safety, comfort and convenience, maintain peace and order, improve public morals, promote
the prosperity and general welfare of the municipality and the inhabitants thereof, and insure
the protection of property therein; ..." 26 There are in addition provisions that may have a
bearing on the question now before this Court. Thus the sangguniang bayan shall "(rr)
Regulate cafes, restaurants, beer-houses, hotels, motels, inns, pension houses and lodging
houses, except travel agencies, tourist guides, tourist transports, hotels, resorts, de luxe
restaurants, and tourist inns of international standards which shall remain under the
licensing and regulatory power of the Ministry of Tourism which shall exercise such authority
without infringing on the taxing or regulatory powers of the municipality; (ss) Regulate public
dancing schools, public dance halls, and sauna baths or massage parlors; (tt) Regulate the
establishment and operation of billiard pools, theatrical performances, circuses and other
forms of entertainment; ..." 27It is clear that municipal corporations cannot prohibit the
operation of night clubs. They may be regulated, but not prevented from carrying on their
business. It would be, therefore, an exercise in futility if the decision under review were
sustained. All that petitioners would have to do is to apply once more for licenses to operate
night clubs. A refusal to grant licenses, because no such businesses could legally open, would
be subject to judicial correction. That is to comply with the legislative will to allow the
operation and continued existence of night clubs subject to appropriate regulations. In the
meanwhile, to compel petitioners to close their establishments, the necessary result of an
affirmance, would amount to no more than a temporary termination of their business. During
such time, their employees would undergo a period of deprivation. Certainly, if such an
undesirable outcome can be avoided, it should be. The law should not be susceptible to the
reproach that it displays less than sympathetic concern for the plight of those who, under a
mistaken appreciation of a municipal power, were thus left without employment. Such a
deplorable consequence is to be avoided. If it were not thus, then the element of arbitrariness
enters the picture. That is to pay less, very much less, than full deference to the due process
clause with its mandate of fairness and reasonableness.
4. The conclusion reached by this Court is not to be interpreted as a retreat from its resolute
stand sustaining police power legislation to promote public morals. The commitment to such
an Ideal forbids such a backward step. Legislation of that character is deserving of the fullest
sympathy from the judiciary. Accordingly, the judiciary has not been hesitant to lend the
weight of its support to measures that can be characterized as falling within that aspect of the
police power. Reference is made by respondents to Ermita-Malate Hotel and Motel
Operators Association, Inc. v. City Mayor of Manila. 28 There is a misapprehension as to
what was decided by this Court. That was a regulatory measure. Necessarily, there was no
valid objection on due process or equal protection grounds. It did not prohibit motels. It
merely regulated the mode in which it may conduct business in order precisely to put an end
to practices which could encourage vice and immorality. This is an entirely different case.
What was involved is a measure not embraced within the regulatory power but an exercise of
an assumed power to prohibit. Moreover, while it was pointed out in the aforesaid ErmitaMalate Hotel and Motel Operators Association, Inc. decision that there must be a factual
foundation of invalidity, it was likewise made clear that there is no need to satisfy such a
requirement if a statute were void on its face. That it certainly is if the power to enact such
ordinance is at the most dubious and under the present Local Government Code non-existent.
WHEREFORE, the writ of certiorari is granted and the decision of the lower court dated

January 15, 1976 reversed, set aside, and nullied. Ordinance No. 84, Series of 1975 of the
Municipality of Bocaue is declared void and unconstitutional. The temporary restraining
order issued by this Court is hereby made permanent. No costs.
Teehankee, Aquino, Concepcion Jr., Guerrero, Abad Santos, Plana, Escolin Relova and
Gutierrez, Jr., JJ., concur.
Makasiar, J, reserves his right to file a dissent.
De Castro, Melencio-Herrera and Vasquez, JJ., are on leave.

Republic of the Philippines

SUPREME COURT
Manila
FIRST DIVISION
G.R. No. L-34915 June 24, 1983
CITY GOVERNMENT OF QUEZON CITY and CITY 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.
City Fiscal for petitioners.
Manuel Villaruel, Jr. and Feliciano Tumale for respondents.
GUTIERREZ, JR., J.:
This 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. 6118, 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 failed to donate the
required 6% space intended for paupers burial.
Pursuant to this petition, 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 regulatesuch other business, trades, and
occupation as may be established or practised in the City.' (Subsections '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 subsection 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. Ill, 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
Tanada and Carreon, V-11, p. 50). It is usually exerted in order to merely regulate the use
and enjoyment of property of the owner. If 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, 1,7995, 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 Courts 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 station 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 ma 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 a of any evidence to offset
the presumption of validity that attaches to a 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 lances which surround the subject
and necessitate action. The local legislative body, by enacting the ordinance, has in effect
given notice that the regulations are essential to the well-being of the people. ... 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. 111. There was an affirmation of the presumption of validity
of municipal ordinance as announced in the leading Salaveria decision in Ebona 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 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 society, that every holder of
property, however absolute and may be his title, holds it under the implied liability that
his use of it shall not be injurious to the equal enjoyment of others having an equal right
to the enjoyment of their property, nor injurious to the rights of the community. An
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 the
police power, is possessed with plenary power to deal with all matters 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 an
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. This 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 home-owners.
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 when 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.

Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. L-38429 June 30, 1988
CARLOS BALACUIT, LAMBERTO TAN and SERGIO YU CARCEL, petitioners-appellants,
vs.
COURT OF FIRST INSTANCE OF AGUSAN DEL NORTE AND BUTUAN CITY, Branch 11,
and the CITY OF BUTUAN, respondents-appellees.

Romeo B. Sanchez, Eduardo Deza Mercado and Wilfred D. Asis for petitioners.
The City Legal Officer for respondents-appeliees.
GANCAYCO, J.:
At issue in the petition for review before Us is the validity and constitutionality of Ordinance No. 640
passed by the Municipal Board of the City of Butuan on April 21, 1969, the title and text of which are
reproduced below:
ORDINANCE--640
ORDINANCE PENALIZING ANY PERSON, GROUP OF PERSONS, ENTITY OR
CORPORATION ENGAGED IN THE BUSINESS OF SELLING ADMISSION
TICKETS TO ANY MOVIE OR OTHER PUBLIC EXHIBITIONS, GAMES,
CONTESTS OR OTHER PERFORMANCES TO REQUIRE CHILDREN BETWEEN
SEVEN (7) AND TWELVE (12) YEARS OF AGE TO PAY FULL PAYMENT FOR
TICKETS INTENDED FOR ADULTS BUT SHOULD CHARGE ONLY ONE-HALF
OF THE SAID TICKET
xxx xxx xxx
Be it ordained by the Municipal Board of the City of Butuan in session assembled, that:
SECTION 1It shall be unlawful for any person, group of persons, entity, or
corporation engaged in the business of selling admission tickets to any movie or other
public exhibitions, games, contests, or other performances to require children between
seven (7) and twelve (12) years of age to pay full payment for admission tickets intended
for adults but should charge only one-half of the value of the said tickets.
SECTION 2Any person violating the provisions of this Ordinance shall upon
conviction be punished by a fine of not less than TWO HUNDRED PESOS (P200.00)
but not more than SIX HUNDRED PESOS (P600.00) or an imprisonment of not less
than TWO (2) MONTHS or not more than SIX (6) MONTHS or both such firm and
imprisonment in the discretion of the Court.
If the violator be a firm or corporation the penalty shall be imposed upon the Manager,
Agent or Representative of such firm or corporation.
SECTION 3This ordinance shall take effect upon its approval.
Petitioners are Carlos Balacuit Lamberto Tan, and Sergio Yu Carcel managers of the Maya and Dalisay
Theaters, the Crown Theater, and the Diamond Theater, respectively. Aggrieved by the effect of
Ordinance No. 640, they filed a complaint before the Court of First Instance of Agusan del Norte and
Butuan City docketed as Special Civil Case No. 237 on June 30, 1969 praying, inter alia, that the
subject ordinance be declared unconstitutional and, therefore, void and unenforceable. 1
Upon motion of the petitioners, 2 a temporary restraining order was issued on July 14, 1969 by the
court a quo enjoining the respondent City of Butuan and its officials from enforcing Ordinance No.
640. 3 On July 29, 1969, respondents filed their answer sustaining the validity of the ordinance. 4
On January 30, 1973, the litigants filed their stipulation of facts. 5 On June 4, 1973, the respondent
court rendered its decision, 6 the dispositive part of which reads:
IN THE LIGHT OF ALL THE FOREGOING, the Court hereby adjudges in favor of the
respondents and against the petitioners, as follows:

1. Declaring Ordinance No. 640 of the City of Butuan constitutional and valid: Provided,
however, that the fine for a single offense shall not exceed TWO HUNDRED PESOS, as
prescribed in the aforequoted Section 15 (nn) of Rep. Act No. 523;
2. Dissolving the restraining order issued by this Court; and;
3. Dismissing the complaint, with costs against the petitioners.
4. SO ORDERED. 7
Petitioners filed their motion for reconsideration 8 of the decision of the court a quo which was denied
in a resolution of the said court dated November 10, 1973. 9
Hence, this petition.
Petitioners attack the validity and constitutionality of Ordinance No. 640 on the grounds that it is ultra
vires and an invalid exercise of police power.
Petitioners contend that Ordinance No. 640 is not within the power of' the Municipal Board to enact as
provided for in Section 15(n) of Republic Act No. 523, the Charter of the City of Butuan, which states:
Sec. 15. General powers and duties of the Board Except as otherwise provided by
law, and subject to the conditions and limitations thereof, the Municipal Board shall
have the following legislative powers:
xxx xxx xxx
(n) To regulate and fix the amount of the license fees for the following; . . . theaters,
theatrical performances, cinematographs, public exhibitions and all other performances
and places of amusements ...
xxx xxx xxx
Respondent City of Butuan, on the other hand, attempts to justify the enactment of the ordinance by
invoking the general welfare clause embodied in Section 15 (nn) of the cited law, which provides:
(nn) 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 Act, and to fix the penalties for the violation of the ordinances, which
shall not exceed a two hundred peso fine or six months imprisonment, or both such fine
and imprisonment, for a single offense.
We can see from the aforecited Section 15(n) that the power to regulate and fix the amount of license
fees for theaters, theatrical performances, cinematographs, public exhibitions and other places of
amusement has been expressly granted to the City of Butuan under its charter. But the question which
needs to be resolved is this: does this power to regulate include the authority to interfere in the fixing of
prices of admission to these places of exhibition and amusement whether under its general grant of
power or under the general welfare clause as invoked by the City?
This is the first time this Court is confronted with the question of direct interference by the local
government with the operation of theaters, cinematographs and the like to the extent of fixing the prices
of admission to these places. Previous decisions of this Court involved the power to impose license fees
upon businesses of this nature as a corollary to the power of the local government to regulate them.
Ordinances which required moviehouses or theaters to increase the price of their admission tickets
supposedly to cover the license fees have been held to be invalid for these impositions were considered

as not merely license fees but taxes for purposes of revenue and not regulation which the cities have no
power to exact, 10 unless expressly granted by its charter. 11
Applying the ruling in Kwong Sing v. City of Manila, 12 where the word "regulate" was interpreted to
include the power to control, to govern and to restrain, it would seem that under its power to regulate
places of exhibitions and amusement, the Municipal Board of the City of Butuan could make proper
police regulations as to the mode in which the business shall be exercised.
While in a New York case, 13 an ordinance which regulates the business of selling admission tickets to
public exhibitions or performances by virtue of the power of cities under the General City Law "to
maintain order, enforce the laws, protect property and preserve and care for the safety, health, comfort
and general welfare of the inhabitants of the city and visitors thereto; and for any of said purposes, to
regulate and license occupations" was considered not to be within the scope of any duty or power
implied in the charter. It was held therein that the power of regulation of public exhibitions and places
of amusement within the city granted by the charter does not carry with it any authority to interfere
with the price of admission to such places or the resale of tickets or tokens of admission.
In this jurisdiction, it is already settled that the operation of theaters, cinematographs and other places
of public exhibition are subject to regulation by the municipal council in the exercise of delegated
police power by the local government. 14 Thus, in People v. Chan, 15 an ordinance of the City of
Manila prohibiting first run cinematographs from selling tickets beyond their seating capacity was
upheld as constitutional for being a valid exercise of police power. Still in another case, 16 the validity
of an ordinance of the City of Bacolod prohibiting admission of two or more persons in moviehouses
and other amusement places with the use of only one ticket was sustained as a valid regulatory police
measure not only in the interest of preventing fraud in so far as municipal taxes are concerned but also
in accordance with public health, public safety, and the general welfare.
The City of Butuan, apparently realizing that it has no authority to enact the ordinance in question
under its power to regulate embodied in Section 15(n), now invokes the police power as delegated to it
under the general welfare clause to justify the enactment of said ordinance.
To invoke the exercise of police power, not only must it appear that the interest of the public generally
requires 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. 17 The legislature may
not, under the guise of protecting the public interest, arbitrarily interfere with private business, or
impose unusual and unnecessary restrictions upon lawful occupations. In other words, the
determination as to what is a proper exercise of its police power is not final or conclusive, but is subject
to the supervision of the courts. 18
Petitioners maintain that Ordinance No. 640 violates the due process clause of the Constitution for
being oppressive, unfair, unjust, confiscatory, and an undue restraint of trade, and violative of the right
of persons to enter into contracts, considering that the theater owners are bound under a contract with
the film owners for just admission prices for general admission, balcony and lodge.
In Homeowners' Association of the Philippines, Inc. v. Municipal Board of the City of Manila, 19 this
Court held:
The authority of municipal corporations to regulate is essentially police power,
Inasmuch as the same generally entails a curtailment of the liberty, the rights and/or the
property of persons, which are protected and even guaranteed by the Constitution, the
exercise of police power is necessarily subject to a qualification, limitation or restriction
demanded by the regard, the respect and the obedience due to the prescriptions of the
fundamental law, particularly those forming part of the Constitution of Liberty,

otherwise known as the Bill of Rights the police power measure must be reasonable.
In other words, individual rights may be adversely affected by the exercise of police
power to the extent only and only to the extent--that may be fairly required by the
legitimate demands of public interest or public welfare.
What is the reason behind the enactment of Ordinance No. 640?
A reading of the minutes of the regular session of the Municipal Board when the ordinance in question
was passed shows that a certain Councilor Calo, the proponent of the measure, had taken into account
the complaints of parents that for them to pay the full price of admission for their children is too
financially burdensome.
The trial court advances the view that "even if the subject ordinance does not spell out its raison
d'etre in all probability the respondents were impelled by the awareness that children are entitled to
share in the joys of their elders, but that considering that, apart from size, children between the ages of
seven and twelve cannot fully grasp the nuance of movies or other public exhibitions, games, contests
or other performances, the admission prices with respect to them ought to be reduced. 19a
We must bear in mind that there must be public necessity which demands the adoption of proper
measures to secure the ends sought to be attained by the enactment of the ordinance, and the large
discretion is necessarily vested in the legislative authority to determine not only what the interests of
the public require, but what measures are necessary for the protection of such interests. 20 The methods
or means used to protect the public health, morals, safety or welfare, must have some relation to the
end in view, for under the guise of the police power, personal rights and those pertaining to private
property will not be permitted to be arbitralily invaded by the legislative department. 21
We agree with petitioners that the ordinance is not justified by any necessity for the public interest. The
police power legislation must be firmly grounded on public interest and welfare, and a reasonable
relation must exist between purposes and means. 22 The evident purpose of the ordinance is to help
ease the burden of cost on the part of parents who have to shell out the same amount of money for the
admission of their children, as they would for themselves, A reduction in the price of admission would
mean corresponding savings for the parents; however, the petitioners are the ones made to bear the cost
of these savings. The ordinance does not only make the petitioners suffer the loss of earnings but it
likewise penalizes them for failure to comply with it. Furthermore, as petitioners point out, there will
be difficulty in its implementation because as already experienced by petitioners since the effectivity of
the ordinance, children over 12 years of age tried to pass off their age as below 12 years in order to
avail of the benefit of the ordinance. The ordinance does not provide a safeguard against this
undesirable practice and as such, the respondent City of Butuan now suggests that birth certificates be
exhibited by movie house patrons to prove the age of children. This is, however, not at all practicable.
We can see that the ordinance is clearly unreasonable if not unduly oppressive upon the business of
petitioners. Moreover, there is no discernible relation between the ordinance and the promotion of
public health, safety, morals and the general welfare.
Respondent City of Butuan claims that it was impelled to protect the youth from the pernicious practice
of movie operators and other public exhibitions promoters or the like of demanding equal price for their
admission tickets along with the adults. This practice is allegedly repugnant and unconscionable to the
interest of the City in the furtherance of the prosperity, peace, good order, comfort, convenience and the
general well-being of its inhabitants.
There is nothing pernicious in demanding equal price for both children and adults. The petitioners are
merely conducting their legitimate businesses. The object of every business entrepreneur is to make a
profit out of his venture. There is nothing immoral or injurious in charging the same price for both

children and adults. In fact, no person is under compulsion to purchase a ticket. It is a totally voluntary
act on the part of the purchaser if he buys a ticket to such performances.
Respondent City of Butuan claims that Ordinance No. 640 is reasonable and necessary to lessen the
economic burden of parents whose minor children are lured by the attractive nuisance being maintained
by the petitioners. Respondent further alleges that by charging the full price, the children are being
exploited by movie house operators. We fail to see how the children are exploited if they pay the full
price of admission. They are treated with the same quality of entertainment as the adults. The
supposition of the trial court that because of their age children cannot fully grasp the nuances of such
entertainment as adults do fails to convince Us that the reduction in admission ticket price is justifiable.
In fact, by the very claim of respondent that movies and the like are attractive nuisances, it is difficult
to comprehend why the municipal board passed the subject ordinance. How can the municipal
authorities consider the movies an attractive nuisance and yet encourage parents and children to
patronize them by lowering the price of admission for children? Perhaps, there is some ,truth to the
argument of petitioners that Ordinance No. 640 is detrimental to the public good and the general
welfare of society for it encourages children of tender age to frequent the movies, rather than attend to
their studies in school or be in their homes.
Moreover, as a logical consequence of the ordinance, movie house and theater operators will be
discouraged from exhibiting wholesome movies for general patronage, much less children's pictures if
only to avoid compliance with the ordinance and still earn profits for themselves. For after all, these
movie house and theater operators cannot be compelled to exhibit any particular kind of film except
those films which may be dictated by public demand and those which are restricted by censorship laws.
So instead of children being able to share in the joys of their elders as envisioned by the trial court,
there will be a dearth of wholesome and educational movies for them to enjoy.
There are a number of cases decided by the Supreme Court and the various state courts of the United
States which upheld the right of the proprietor of a theater to fix the price of an admission ticket as
against the right of the state to interfere in this regard and which We consider applicable to the case at
bar.
A theater ticket has been described to be either a mere license, revocable at the will of the proprietor of
the theater or it may be evidence of a contract whereby, for a valuable consideration, the purchaser has
acquired the right to enter the theater and observe the performance on condition that he behaves
properly. 23 Such ticket, therefore, represents a right, Positive or conditional, as the case may be,
according to the terms of the original contract of sale. This right is clearly a right of property. The ticket
which represents that right is also, necessarily, a species of property. As such, the owner thereof, in the
absence of any condition to the contrary in the contract by which he obtained it, has the clear right to
dispose of it, to sell it to whom he pleases and at such price as he can obtain. 24 So that an act
prohibiting the sale of tickets to theaters or other places of amusement at more than the regular price
was held invalid as conflicting with the state constitution securing the right of property. 25
In Collister vs. Hayman, 26 it was held:
The defendants were conducting a private business, which, even if clothed with a public
interest, was without a franchise to accommodate the public, and they had the right to
control it, the same as the proprietors of any other business, subject to such obligations
as were placed upon them by statute. Unlike a carrier of passengers, for instance, with a
franchise from the state, and hence under obligation to transport anyone who applies and
to continue the business year in and year out, the proprietors of a theater can open and
close their place at will, and no one can make a lawful complaint. They can charge what
they choose for admission to their theater. They can limit the number admitted. They can

refuse to sell tickets and collect the price of admission at the door. They can preserve
order and enforce quiet while the performance is going on. They can make it a part of
the contract and condition of admission, by giving due notice and printing the condition
in the ticket that no one shall be admitted under 21 years of age, or that men only or
women only shall be admitted, or that a woman cannot enter unless she is accompanied
by a male escort, and the like. The proprietors, in the control of their business, may
regulate the terms of admission in any reasonable way. If those terms are not
satisfactory, no one is obliged to buy a ticket or make the contract. If the terms are
satisfactory, and the contract is made, the minds of the parties meet upon the condition,
and the purchaser impliedly promises to perform it.
In Tyson and Bro. United Theater Ticket Officers, Inc. vs. Banton, 27 the United States Supreme
Court held:
... And certainly a place of entertainment is in no legal sense a public utility; and quite as
certainly, its activities are not such that their enjoyment can be regarded under any
conditions from the point of view of an emergency.
The interest of the public in theaters and other places of entertainment may be more
nearly, and with better reason, assimilated to the like interest in provision stores and
markets and in the rental of houses and apartments for residence purposes; although in
importance it fails below such an interest in the proportion that food and shelter are of
more moment than amusement or instruction. As we have shown there is no legislative
power to fix the prices of provisions or clothing, or the rental charges for houses and
apartments, in the absence of some controlling emergency; and we are unable to
perceive any dissimilarities of such quality or degree as to justify a different rule in
respect of amusements and entertainment ...
We are in consonance with the foregoing observations and conclusions of American courts. In this
jurisdiction, legislation had been passed controlling the prices of goods commodities and drugs during
periods of emergency,28 limiting the net profits of public utility 29 as well as regulating rentals of
residential apartments for a limited period, 30 as a matter of national policy in the interest of public
health and safety, economic security and the general welfare of the people. And these laws cannot be
impugned as unconstitutional for being violative of the due process clause.
However, the same could not be said of theaters, cinematographs and other exhibitions. In no sense
could these businesses be considered public utilities. The State has not found it appropriate as a
national policy to interfere with the admission prices to these performances. This does not mean
however, that theaters and exhibitions are not affected with public interest even to a certain degree.
Motion pictures have been considered important both as a medium for the communication of Ideas and
expression of the artistic impulse. Their effects on the perceptions by our people of issues and public
officials or public figures as well as the prevailing cultural traits are considerable. 31 People of all ages
flock to movie houses, games and other public exhibitions for recreation and relaxation. The
government realizing their importance has seen it fit to enact censorship laws to regulate the movie
industry.32 Their aesthetic entertainment and even educational values cannot be underestimated. Even
police measures regulating the operation of these businesses have been upheld in order to safeguard
public health and safety.
Nonetheless, as to the question of the subject ordinance being a valid exercise of police power, the
same must be resolved in the negative. While it is true that a business may be regulated, it is equally
true that such regulation must be within the bounds of reason, that is, the regulatory ordinance must be
reasonable, and its provisions cannot be oppressive amounting to an arbitrary interference with the

business or calling subject of regulation. A lawful business or calling may not, under the guise of
regulation, be unreasonably interfered with even by the exercise of police power. 33 A police measure
for the regulation of the conduct, control and operation of a business should not encroach upon the
legitimate and lawful exercise by the citizens of their property rights. 34 The right of the owner to fix a
price at which his property shall be sold or used is an inherent attribute of the property itself and, as
such, within the protection of the due process clause."" Hence, the proprietors of a theater have a right
to manage their property in their own way, to fix what prices of admission they think most for their
own advantage, and that any person who did not approve could stay away. 36
Respondent City of Butuan argues that the presumption is always in favor of the validity of the
ordinance. This maybe the rule but it has already been held that although the presumption is always in
favor of the validity or reasonableness of the ordinance, such presumption must nevertheless be set
aside when the invalidity or unreasonableness appears on the face of the ordinance itself or is
established by proper evidence. 37 The exercise of police power by the local government is valid
unless it contravenes the fundamental law of the land, or an act of the legislature, or unless it is against
public policy or is unreasonable, oppressive, partial, discriminating or in derogation of a common
right. 38
Ordinance No. 640 clearly invades the personal and property rights of petitioners for even if We could
assume that, on its face, the interference was reasonable, from the foregoing considerations, it has been
fully shown that it is an unwarranted and unlawful curtailment of the property and personal rights of
citizens. For being unreasonable and an undue restraint of trade, it cannot, under the guise of exercising
police power, be upheld as valid.
WHEREFORE, the decision of the trial court in Special Civil Case No. 237 is hereby REVERSED and
SET ASIDE and a new judgment is hereby rendered declaring Ordinance No. 640 unconstitutional and,
therefore, null and void. This decision is immediately executory.
SO ORDERED.
Yap, C.J., Narvasa, Cruz, Paras, Padilla, Bidin, Sarmiento and Grio-Aquino, JJ., concur.

Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. L-24670 December 14, 1979
ORTIGAS & CO., LIMITED PARTNERSHIP, plaintiff-appellant,
vs.
FEATI BANK AND TRUST CO., defendant-appellee.
Ramirez & Ortigas for appellant.
Taada, Teehankee & Carreon for appellee.
SANTOS, J.:
An appeal interposed on June 23, 1965 by plaintiff-appellant, Ortigas & Co., Limited Partnership, from
the decision of the Court of First Instance of Rizal, Branch VI, at Pasig, Hon. Andres Reyes presiding,
which dismissed its complaint in Civil Case No. 7706, entitled, "Ortigas & Company, Limited
Partnership, plaintiff, v. Feati Bank and Trust Company, defendant," for lack of merit.
The following facts a reproduction of the lower court's findings, which, in turn, are based on a
stipulation of facts entered into by the parties are not disputed. Plaintiff (formerly known as "Ortigas,
Madrigal y Cia") is a limited partnership and defendant Feati Bank and Trust Co., is a corporation duly
organized and existing in accordance with the laws of the Philippines. Plaintiff is engaged in real estate
business, developing and selling lots to the public, particularly the Highway Hills Subdivision along
Epifanio de los Santos Avenue, Mandaluyong, Rizal.1
On March 4, 1952, plaintiff, as vendor, and Augusto Padilla y Angeles and Natividad Angeles, as
vendees, entered into separate agreements of sale on installments over two parcels of land, known as
Lots Nos. 5 and 6, Block 31, of the Highway Hills Subdivision, situated at Mandaluyong, Rizal. On
July 19, 1962, the said vendees transferred their rights and interests over the aforesaid lots in favor of
one Emma Chavez. Upon completion of payment of the purchase price, the plaintiff executed the
corresponding deeds of sale in favor of Emma Chavez. Both the agreements (of sale on installment)
and the deeds of sale contained the stipulations or restrictions that:
1. The parcel of land subject of this deed of sale shall be used the Buyer exclusively for
residential purposes, and she shall not be entitled to take or remove soil, stones or gravel
from it or any other lots belonging to the Seller.

2. All buildings and other improvements (except the fence) which may be constructed at
any time in said lot must be, (a) of strong materials and properly painted, (b) provided
with modern sanitary installations connected either to the public sewer or to an approved
septic tank, and (c) shall not be at a distance of less than two (2) meters from its
boundary lines. 2
The above restrictions were later annotated in TCT Nos. 101509 and 101511 of the Register of Deeds
of Rizal, covering the said lots and issued in the name of Emma Chavez. 3
Eventually, defendant-appellee acquired Lots Nos. 5 and 6, with TCT Nos. 101613 and 106092 issued
in its name, respectively and the building restrictions were also annotated therein. 4 Defendant-appellee
bought Lot No. 5 directly from Emma Chavez, "free from all liens and encumbrances as stated in
Annex 'D', 5 while Lot No. 6 was acquired from Republic Flour Mills through a "Deed of Exchange,"
Annex "E". 6 TCT No. 101719 in the name of Republic Flour Mills likewise contained the same
restrictions, although defendant-appellee claims that Republic Flour Mills purchased the said Lot No. 6
"in good faith. free from all liens and encumbrances," as stated in the Deed of Sale, Annex
"F" 7 between it and Emma Chavez.
Plaintiff-appellant claims that the restrictions annotated on TCT Nos. 101509, 101511, 101719,
101613, and 106092 were imposed as part of its general building scheme designed for the
beautification and development of the Highway Hills Subdivision which forms part of the big landed
estate of plaintiff-appellant where commercial and industrial sites are also designated or established. 8
Defendant-appellee, upon the other hand, maintains that the area along the western part of Epifanio de
los Santos Avenue (EDSA) from Shaw Boulevard to Pasig River, has been declared a commercial and
industrial zone, per Resolution No. 27, dated February 4, 1960 of the Municipal Council of
Mandaluyong, Rizal. 9 It alleges that plaintiff-appellant 'completely sold and transferred to third
persons all lots in said subdivision facing Epifanio de los Santos Avenue" 10 and the subject lots
thereunder were acquired by it "only on July 23, 1962 or more than two (2) years after the area ... had
been declared a commercial and industrial zone ... 11
On or about May 5, 1963, defendant-appellee began laying the foundation and commenced the
construction of a building on Lots Nos. 5 and 6, to be devoted to banking purposes, but which
defendant-appellee claims could also be devoted to, and used exclusively for, residential purposes. The
following day, plaintiff-appellant demanded in writing that defendant-appellee stop the construction of
the commerical building on the said lots. The latter refused to comply with the demand, contending that
the building was being constructed in accordance with the zoning regulations, defendant-appellee
having filed building and planning permit applications with the Municipality of Mandaluyong, and it
had accordingly obtained building and planning permits to proceed with the construction.12
On the basis of the foregoing facts, Civil Case No. 7706, supra, was submitted in the lower court for
decision. The complaint sought, among other things, the issuance of "a writ of preliminary injunction ...
restraining and enjoining defendant, its agents, assigns, and those acting on its or their behalf from
continuing or completing the construction of a commercial bank building in the premises ... involved,
with the view to commanding the defendant to observe and comply with the building restrictions
annotated in the defendant's transfer certificate of title."
In deciding the said case, the trial court considered, as the fundamental issue, whether or not the
resolution of the Municipal Council of Mandaluyong declaring Lots Nos. 5 and 6, among others, as
part of the commercial and industrial zone of the municipality, prevailed over the building restrictions
imposed by plaintiff-appellant on the lots in question. 13 The records do not show that a writ of
preliminary injunction was issued.

The trial court upheld the defendant-appellee and dismissed the complaint, holding that the subject
restrictions were subordinate to Municipal Resolution No. 27, supra. It predicated its conclusion on the
exercise of police power of the said municipality, and stressed that private interest should "bow down
to general interest and welfare. " In short, it upheld the classification by the Municipal Council of the
area along Epifanio de los Santos Avenue as a commercial and industrial zone, and held that the same
rendered "ineffective and unenforceable" the restrictions in question as against defendantappellee. 14 The trial court decision further emphasized that it "assumes said resolution to be valid,
considering that there is no issue raised by either of the parties as to whether the same is null and
void. 15
On March 2, 1965, plaintiff-appellant filed a motion for reconsideration of the above
decision, 16 which motion was opposed by defendant-appellee on March 17, 1965. 17 It averred,
among others, in the motion for reconsideration that defendant- appellee "was duty bound to comply
with the conditions of the contract of sale in its favor, which conditions were duly annotated in the
Transfer Certificates of Title issued in her (Emma Chavez) favor." It also invited the trial court's
attention to its claim that the Municipal Council had (no) power to nullify the contractual obligations
assumed by the defendant corporation." 18
The trial court denied the motion for reconsideration in its order of March 26, 1965. 19
On April 2, 1965 plaintiff-appellant filed its notice of appeal from the decision dismissing the
complaint and from the order of March 26, 1965 denying the motion for reconsideration, its record on
appeal, and a cash appeal bond." 20 On April 14, the appeal was given due course 21 and the records of
the case were elevated directly to this Court, since only questions of law are raised. 22
Plaintiff-appellant alleges in its brief that the trial court erred
I. When it sustained the view that Resolution No. 27, series of 1960 of the Municipal
Council of Mandaluyong, Rizal declaring Lots Nos. 5 and 6, among others, as part of the
commercial and industrial zone, is valid because it did so in the exercise of its police
power; and
II. When it failed to consider whether or not the Municipal Council had the power to
nullify the contractual obligations assumed by defendant-appellee and when it did not
make a finding that the building was erected along the property line, when it should have
been erected two meters away from said property line. 23
The defendant-appellee submitted its counter-assignment of errors. In this connection, We already had
occasion to hold in Relativo v. Castro 24 that "(I)t is not incumbent on the appellee, who occupies a
purely defensive position, and is seeking no affirmative relief, to make assignments of error, "
The only issues to be resolved, therefore, are: (1) whether Resolution No. 27 s-1960 is a valid exercise
of police power; and (2) whether the said Resolution can nullify or supersede the contractual
obligations assumed by defendant-appellee.
1. The contention that the trial court erred in sustaining the validity of Resolution No. 27 as an exercise
of police power is without merit. In the first place, the validity of the said resolution was never
questioned before it. The rule is that the question of law or of fact which may be included in the
appellant's assignment of errors must be those which have been raised in the court below, and are
within the issues framed by the parties. 25 The object of requiring the parties to present all questions
and issues to the lower court before they can be presented to the appellate court is to enable the lower
court to pass thereon, so that the appellate court upon appeal may determine whether or not such ruling
was erroneous. The requirement is in furtherance of justice in that the other party may not be taken by
surprise.26 The rule against the practice of blowing "hot and cold" by assuming one position in the trial

court and another on appeal will, in the words of Elliot, prevent deception. 27 For it is well-settled that
issues or defenses not raised 28 or properly litigated 29 or pleaded 30 in the Court below cannot be
raised or entertained on appeal.
In this particular case, the validity of the resolution was admitted at least impliedly, in the stipulation of
facts below. when plaintiff-appellant did not dispute the same. The only controversy then as stated by
the trial court was whether or not the resolution of the Municipal Council of Mandaluyong ... which
declared lots Nos. 4 and 5 among others, as a part of the commercial and industrial zone of the
municipality, prevails over the restrictions constituting as encumbrances on the lots in
question. 31 Having admitted the validity of the subject resolution below, even if impliedly, plaintiffappellant cannot now change its position on appeal.
But, assuming arguendo that it is not yet too late in the day for plaintiff-appellant to raise the issue of
the invalidity of the municipal resolution in question, We are of the opinion that its posture is
unsustainable. Section 3 of R.A. No. 2264, otherwise known as the Local Autonomy
Act," 32 empowers a Municipal Council "to adopt zoning and subdivision ordinances
or regulations"; 33 for the municipality. Clearly, the law does not restrict the exercise of the power
through an ordinance. Therefore, granting that Resolution No. 27 is not an ordinance, it certainly is a
regulatory measure within the intendment or ambit of the word "regulation" under the provision. As a
matter of fact the same section declares that the power exists "(A)ny provision of law to the contrary
notwithstanding ... "
An examination of Section 12 of the same law 34 which prescribes the rules for its interpretation
likewise reveals that the implied power of a municipality should be "liberally construed in its favor"
and that "(A)ny fair and reasonable doubt as to the existence of the power should be interpreted in
favor of the local government and it shall be presumed to exist." The same section further mandates
that the general welfare clause be liberally interpreted in case of doubt, so as to give more power to
local governments in promoting the economic conditions, social welfare and material progress of the
people in the community. The only exceptions under Section 12 are existing vested rights arising out of
a contract between "a province, city or municipality on one hand and a third party on the other," in
which case the original terms and provisions of the contract should govern. The exceptions, clearly, do
not apply in the case at bar.
2. With regard to the contention that said resolution cannot nullify the contractual obligations assumed
by the defendant-appellee referring to the restrictions incorporated in the deeds of sale and later in the
corresponding Transfer Certificates of Title issued to defendant-appellee it should be stressed, that
while non-impairment of contracts is constitutionally guaranteed, the rule is not absolute, since it has to
be reconciled with the legitimate exercise of police power, i.e., "the power to prescribe regulations to
promote the health, morals, peace, education, good order or safety and general welfare of the
people. 35 Invariably described as "the most essential, insistent, and illimitable of powers" 36 and "in a
sense, the greatest and most powerful attribute of government, 37 the exercise of the power may be
judicially inquired into and corrected only if it is capricious, 'whimsical, unjust or unreasonable, there
having been a denial of due process or a violation of any other applicable constitutional
guarantee. 38 As this Court held through Justice Jose P. Bengzon in Philippine Long Distance
Company vs. City of Davao, et al. 39 police power "is elastic and must be responsive to various social
conditions; it is not, confined within narrow circumscriptions of precedents resting on past conditions;
it must follow the legal progress of a democratic way of life." We were even more emphatic inVda. de
Genuino vs. The Court of Agrarian Relations, et al., 40 when We declared: "We do not see why public
welfare when clashing with the individual right to property should not be made to prevail through the
state's exercise of its police power.

Resolution No. 27, s-1960 declaring the western part of highway 54, now E. de los Santos Avenue
(EDSA, for short) from Shaw Boulevard to the Pasig River as an industrial and commercial zone, was
obviously passed by the Municipal Council of Mandaluyong, Rizal in the exercise of police power to
safeguard or promote the health, safety, peace, good order and general welfare of the people in the
locality, Judicial notice may be taken of the conditions prevailing in the area, especially where lots Nos.
5 and 6 are located. The lots themselves not only front the highway; industrial and commercial
complexes have flourished about the place. EDSA, a main traffic artery which runs through several
cities and municipalities in the Metro Manila area, supports an endless stream of traffic and the
resulting activity, noise and pollution are hardly conducive to the health, safety or welfare of the
residents in its route. Having been expressly granted the power to adopt zoning and subdivision
ordinances or regulations, the municipality of Mandaluyong, through its Municipal 'council, was
reasonably, if not perfectly, justified under the circumstances, in passing the subject resolution.
The scope of police power keeps expanding as civilization advances, stressed this Court, speaking thru
Justice Laurel in the leading case of Calalang v. Williams et al., 41 ThusAs was said in the case of Dobbins v. Los Angeles (195 US 223, 238 49 L. ed. 169), 'the
right to exercise the police power is a continuing one, and a business lawful today may
in the future, because of changed situation, the growth of population or other causes,
become a menace to the public health and welfare, and be required to yield to the public
good.' And in People v. Pomar (46 Phil. 440), it was observed that 'advancing
civilization is bringing within the scope of police power of the state today things which
were not thought of as being with in such power yesterday. The development of
civilization), the rapidly increasing population, the growth of public opinion, with an
increasing desire on the part of the masses and of the government to look after and care
for the interests of the individuals of the state, have brought within the police power
many questions for regulation which formerly were not so considered. 42 (Emphasis,
supplied.)
Thus, the state, in order to promote the general welfare, may interfere with personal liberty, with
property, and with business and occupations. Persons may be subjected to all kinds of restraints and
burdens, in order to secure the general comfort health and prosperity of the state 43 and to this
fundamental aim of our Government, the rights of the individual are subordinated. 44
The need for reconciling the non-impairment clause of the Constitution and the valid exercise of police
power may also be gleaned from Helvering v. Davis 45 wherein Mr. Justice Cardozo, speaking for the
Court, resolved the conflict "between one welfare and another, between particular and general, thus
Nor is the concept of the general welfare static. Needs that were narrow or parochial a
century ago may be interwoven in our day with the well-being of the nation What is
critical or urgent changes with the times. 46
The motives behind the passage of the questioned resolution being reasonable, and it being a "
legitimate response to a felt public need," 47 not whimsical or oppressive, the non-impairment of
contracts clause of the Constitution will not bar the municipality's proper exercise of the power. Now
Chief Justice Fernando puts it aptly when he declared: "Police power legislation then is not likely to
succumb to the challenge that thereby contractual rights are rendered nugatory." 48
Furthermore, We restated in Philippine American Life Ins. Co. v. Auditor General 49 that laws and
reservation of essential attributes of sovereign power are read into contracts agreed upon by the parties.
Thus

Not only are existing laws read into contracts in order to fix obligations as between the
parties, butthe reservation of essential attributes of sovereign power is also read into
contracts as a postulate of the legal order. The policy of protecting contracts against
impairments presupposes the maintenance of a government by virtue of which
contractual relations are worthwhile a government which retains adequate authority to
secure the peace and good order of society.
Again, We held in Liberation Steamship Co., Inc. v. Court of Industrial Relations, 50 through Justice
J.B.L. Reyes, that ... the law forms part of, and is read into, every contract, unless clearly excluded
therefrom in those cases where such exclusion is allowed." The decision in Maritime Company of the
Philippines v. Reparations Commission, 51 written for the Court by Justice Fernando, now Chief
Justice, restates the rule.
One last observation. Appellant has placed unqualified reliance on American jurisprudence and
authorities 52 to bolster its theory that the municipal resolution in question cannot nullify or supersede
the agreement of the parties embodied in the sales contract, as that, it claims, would impair the
obligation of contracts in violation of the Constitution. Such reliance is misplaced.
In the first place, the views set forth in American decisions and authorities are not per se controlling in
the Philippines, the laws of which must necessarily be construed in accordance with the intention of its
own lawmakers and such intent may be deduced from the language of each law and the context of other
local legislation related thereto. 53 and Burgess, et al v. Magarian, et al., 55 two Of the cases cited by
plaintiff-appellant, lend support to the conclusion reached by the trial court, i.e. that the municipal
resolution supersedes/supervenes over the contractual undertaking between the parties. Dolan v. Brown,
states that "Equity will not, as a rule, enforce a restriction upon the use of property by injunction where
the property has so changed in character and environment as to make it unfit or unprofitable for use
should the restriction be enforced, but will, in such a case, leave the complainant to whatever remedy
he may have at law. 56 (Emphasis supplied.) Hence, the remedy of injunction in Dolan vs. Brown was
denied on the specific holding that "A grantor may lawfully insert in his deed conditions or restrictions
which are not against public policy and do not materially impair the beneficial enjoyment of the
estate. 57 Applying the principle just stated to the present controversy, We can say that since it is now
unprofitable, nay a hazard to the health and comfort, to use Lots Nos. 5 and 6 for strictly residential
purposes, defendants- appellees should be permitted, on the strength of the resolution promulgated
under the police power of the municipality, to use the same for commercial purposes. In Burgess v.
Magarian et al. it was, held that "restrictive covenants running with the land are binding on all
subsequent purchasers ... " However, Section 23 of the zoning ordinance involved therein contained
a proviso expressly declaring that the ordinance was not intended "to interfere with or abrogate or annul
any easements, covenants or other agreement between parties." 58 In the case at bar, no such proviso is
found in the subject resolution.
It is, therefore, clear that even if the subject building restrictions were assumed by the defendantappellee as vendee of Lots Nos. 5 and 6, in the corresponding deeds of sale, and later, in Transfer
Certificates of Title Nos. 101613 and 106092, the contractual obligations so assumed cannot prevail
over Resolution No. 27, of the Municipality of Mandaluyong, which has validly exercised its police
power through the said resolution. Accordingly, the building restrictions, which declare Lots Nos. 5 and
6 as residential, cannot be enforced.
IN VIEW OF THE FOREGOING, the decision appealed from, dismissing the complaint, is hereby
AFFIRMED. "without pronouncement as to costs.
SO ORDERED.

Makasiar, Antonio, Concepcion, Jr., Fernandez, Guerrero, De Castro and Melencio-Herrera, JJ.,
concur.
Teehankee * and Aquino,JJ., took no part.

Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. 91649 May 14, 1991

ATTORNEYS HUMBERTO BASCO, EDILBERTO BALCE, SOCRATES MARANAN AND

LORENZO SANCHEZ,petitioners,
vs.
PHILIPPINE AMUSEMENTS AND GAMING CORPORATION (PAGCOR), respondent.
H.B. Basco & Associates for petitioners.
Valmonte Law Offices collaborating counsel for petitioners.
Aguirre, Laborte and Capule for respondent PAGCOR.
PARAS, J.:p
A TV ad proudly announces:
"The new PAGCOR responding through responsible gaming."
But the petitioners think otherwise, that is why, they filed the instant petition seeking to annul the
Philippine Amusement and Gaming Corporation (PAGCOR) Charter PD 1869, because it is
allegedly contrary to morals, public policy and order, and because
A. It constitutes a waiver of a right prejudicial to a third person with a right recognized
by law. It waived the Manila City government's right to impose taxes and license fees,
which is recognized by law;
B. For the same reason stated in the immediately preceding paragraph, the law has
intruded into the local government's right to impose local taxes and license fees. This, in
contravention of the constitutionally enshrined principle of local autonomy;
C. It violates the equal protection clause of the constitution in that it legalizes PAGCOR
conducted gambling, while most other forms of gambling are outlawed, together with
prostitution, drug trafficking and other vices;
D. It violates the avowed trend of the Cory government away from monopolistic and
crony economy, and toward free enterprise and privatization. (p. 2, Amended Petition; p.
7, Rollo)
In their Second Amended Petition, petitioners also claim that PD 1869 is contrary to the declared
national policy of the "new restored democracy" and the people's will as expressed in the 1987
Constitution. The decree is said to have a "gambling objective" and therefore is contrary to Sections 11,
12 and 13 of Article II, Sec. 1 of Article VIII and Section 3 (2) of Article XIV, of the present
Constitution (p. 3, Second Amended Petition; p. 21, Rollo).
The procedural issue is whether petitioners, as taxpayers and practicing lawyers (petitioner Basco being
also the Chairman of the Committee on Laws of the City Council of Manila), can question and seek the
annulment of PD 1869 on the alleged grounds mentioned above.
The Philippine Amusements and Gaming Corporation (PAGCOR) was created by virtue of P.D. 1067-A
dated January 1, 1977 and was granted a franchise under P.D. 1067-B also dated January 1, 1977 "to
establish, operate and maintain gambling casinos on land or water within the territorial jurisdiction of
the Philippines." Its operation was originally conducted in the well known floating casino "Philippine
Tourist." The operation was considered a success for it proved to be a potential source of revenue to
fund infrastructure and socio-economic projects, thus, P.D. 1399 was passed on June 2, 1978 for
PAGCOR to fully attain this objective.

Subsequently, on July 11, 1983, PAGCOR was created under P.D. 1869 to enable the Government to
regulate and centralize all games of chance authorized by existing franchise or permitted by law, under
the following declared policy
Sec. 1. Declaration of Policy. It is hereby declared to be the policy of the State to
centralize and integrate all games of chance not heretofore authorized by existing
franchises or permitted by law in order to attain the following objectives:
(a) To centralize and integrate the right and authority to operate and conduct games of
chance into one corporate entity to be controlled, administered and supervised by the
Government.
(b) To establish and operate clubs and casinos, for amusement and recreation, including
sports gaming pools, (basketball, football, lotteries, etc.) and such other forms of
amusement and recreation including games of chance, which may be allowed by law
within the territorial jurisdiction of the Philippines and which will: (1) generate sources
of additional revenue to fund infrastructure and socio-civic projects, such as flood
control programs, beautification, sewerage and sewage projects, Tulungan ng Bayan
Centers, Nutritional Programs, Population Control and such other essential public
services; (2) create recreation and integrated facilities which will expand and improve
the country's existing tourist attractions; and (3) minimize, if not totally eradicate, all the
evils, malpractices and corruptions that are normally prevalent on the conduct and
operation of gambling clubs and casinos without direct government involvement.
(Section 1, P.D. 1869)
To attain these objectives PAGCOR is given territorial jurisdiction all over the Philippines. Under its
Charter's repealing clause, all laws, decrees, executive orders, rules and regulations, inconsistent
therewith, are accordingly repealed, amended or modified.
It is reported that PAGCOR is the third largest source of government revenue, next to the Bureau of
Internal Revenue and the Bureau of Customs. In 1989 alone, PAGCOR earned P3.43 Billion, and
directly remitted to the National Government a total of P2.5 Billion in form of franchise tax,
government's income share, the President's Social Fund and Host Cities' share. In addition, PAGCOR
sponsored other socio-cultural and charitable projects on its own or in cooperation with various
governmental agencies, and other private associations and organizations. In its 3 1/2 years of operation
under the present administration, PAGCOR remitted to the government a total of P6.2 Billion. As of
December 31, 1989, PAGCOR was employing 4,494 employees in its nine (9) casinos nationwide,
directly supporting the livelihood of Four Thousand Four Hundred Ninety-Four (4,494) families.
But the petitioners, are questioning the validity of P.D. No. 1869. They allege that the same is "null and
void" for being "contrary to morals, public policy and public order," monopolistic and tends toward
"crony economy", and is violative of the equal protection clause and local autonomy as well as for
running counter to the state policies enunciated in Sections 11 (Personal Dignity and Human Rights),
12 (Family) and 13 (Role of Youth) of Article II, Section 1 (Social Justice) of Article XIII and Section 2
(Educational Values) of Article XIV of the 1987 Constitution.
This challenge to P.D. No. 1869 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." (State v.
Manuel, 20 N.C. 144; Lozano v. Martinez, 146 SCRA 323).
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 or the executive for that matter, has over-stepped 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 (Lozano v. Martinez, supra).
In Victoriano v. Elizalde Rope Workers' Union, et al, 59 SCRA 54, the Court thru Mr. Justice Zaldivar
underscored the
. . . thoroughly established principle which must be followed in all cases where questions
of constitutionality as obtain in the instant cases are involved. All presumptions are
indulged in favor of constitutionality; one who attacks a statute alleging
unconstitutionality must prove its invalidity beyond a reasonable doubt; that a law may
work hardship does not render it unconstitutional; that if any reasonable basis may be
conceived which supports the statute, it will be upheld and the challenger must negate all
possible basis; that the courts are not concerned with the wisdom, justice, policy or
expediency of a statute and that a liberal interpretation of the constitution in favor of the
constitutionality of legislation should be adopted. (Danner v. Hass, 194 N.W. 2nd 534,
539; Spurbeck v. Statton, 106 N.W. 2nd 660, 663; 59 SCRA 66; see also e.g. Salas v.
Jarencio, 46 SCRA 734, 739 [1970]; Peralta v. Commission on Elections, 82 SCRA 30,
55 [1978]; and Heirs of Ordona v. Reyes, 125 SCRA 220, 241-242 [1983] cited in
Citizens Alliance for Consumer Protection v. Energy Regulatory Board, 162 SCRA 521,
540)
Of course, there is first, the procedural issue. The respondents are questioning the legal personality of
petitioners to file the instant petition.
Considering however the importance to the public of the case at bar, and in keeping with the Court's
duty, under the 1987 Constitution, to determine whether or not the other branches of government have
kept themselves within the limits of the Constitution and the laws and that they have not abused the
discretion given to them, the Court has brushed aside technicalities of procedure and has taken
cognizance of this petition. (Kapatiran ng mga Naglilingkod sa Pamahalaan ng Pilipinas Inc. v. Tan,
163 SCRA 371)
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, ordinary citizens and taxpayers were allowed to
question the constitutionality of several executive orders issued by President Quirino
although they were involving 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 the exception in many other cases. (Association
of Small Landowners in the Philippines, Inc. v. Sec. of Agrarian Reform, 175 SCRA
343).
Having disposed of the procedural issue, We will now discuss the substantive issues raised.

Gambling in all its forms, unless allowed by law, is generally prohibited. But the prohibition of
gambling does not mean that the Government cannot regulate it in the exercise of its police power.
The concept of police power is well-established in this jurisdiction. It has been defined as the "state
authority to enact legislation that may interfere with personal liberty or property in order to promote the
general welfare." (Edu v. Ericta, 35 SCRA 481, 487) As defined, it consists of (1) an imposition or
restraint upon liberty or property, (2) in order to foster the common good. It is not capable of an exact
definition but has been, purposely, veiled in general terms to underscore its all-comprehensive embrace.
(Philippine Association of Service Exporters, Inc. v. Drilon, 163 SCRA 386).
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 assuming the greatest benefits. (Edu v. Ericta, supra)
It finds no specific Constitutional grant for the plain reason that it does not owe its origin to the charter.
Along with the taxing power and eminent domain, it is inborn in the very fact of statehood and
sovereignty. It is a fundamental attribute of government that has enabled it to perform the most vital
functions of governance. Marshall, to whom the expression has been credited, refers to it succinctly as
the plenary power of the state "to govern its citizens". (Tribe, American Constitutional Law, 323, 1978).
The police power of the State is a power co-extensive with self-protection and is most aptly termed the
"law of overwhelming necessity." (Rubi v. Provincial Board of Mindoro, 39 Phil. 660, 708) It is "the
most essential, insistent, and illimitable of powers." (Smith Bell & Co. v. National, 40 Phil. 136) It is a
dynamic force that enables the state to meet the agencies of the winds of change.
What was the reason behind the enactment of P.D. 1869?
P.D. 1869 was enacted pursuant to the policy of the government to "regulate and centralize thru an
appropriate institution all games of chance authorized by existing franchise or permitted by law" (1st
whereas clause, PD 1869). As was subsequently proved, regulating and centralizing gambling
operations in one corporate entity the PAGCOR, was beneficial not just to the Government but to
society in general. It is a reliable source of much needed revenue for the cash strapped Government. It
provided funds for social impact projects and subjected gambling to "close scrutiny, regulation,
supervision and control of the Government" (4th Whereas Clause, PD 1869). With the creation of
PAGCOR and the direct intervention of the Government, the evil practices and corruptions that go with
gambling will be minimized if not totally eradicated. Public welfare, then, lies at the bottom of the
enactment of PD 1896.
Petitioners contend that P.D. 1869 constitutes a waiver of the right of the City of Manila to impose
taxes and legal fees; that the exemption clause in P.D. 1869 is violative of the principle of local
autonomy. They must be referring to Section 13 par. (2) of P.D. 1869 which exempts PAGCOR, as the
franchise holder from paying any "tax of any kind or form, income or otherwise, as well as fees,
charges or levies of whatever nature, whether National or Local."
(2) Income and other taxes. a) Franchise Holder: No tax of any kind or form, income
or otherwise as well as fees, charges or levies of whatever nature, whether National or
Local, shall be assessed and collected under this franchise from the Corporation; nor
shall any form or tax or charge attach in any way to the earnings of the Corporation,
except a franchise tax of five (5%) percent of the gross revenues or earnings derived by
the Corporation from its operations under this franchise. Such tax shall be due and
payable quarterly to the National Government and shall be in lieu of all kinds of taxes,
levies, fees or assessments of any kind, nature or description, levied, established or
collected by any municipal, provincial or national government authority (Section 13 [2]).

Their contention stated hereinabove is without merit for the following reasons:
(a) The City of Manila, being a mere Municipal corporation has no inherent right to impose taxes (Icard
v. City of Baguio, 83 Phil. 870; City of Iloilo v. Villanueva, 105 Phil. 337; Santos v. Municipality of
Caloocan, 7 SCRA 643). Thus, "the Charter or statute must plainly show an intent to confer that power
or the municipality cannot assume it" (Medina v. City of Baguio, 12 SCRA 62). Its "power to tax"
therefore must always yield to a legislative act which is superior having been passed upon by the state
itself which has the "inherent power to tax" (Bernas, the Revised [1973] Philippine Constitution, Vol. 1,
1983 ed. p. 445).
(b) The Charter of the City of Manila is subject to control by Congress. It should be stressed that
"municipal corporations are mere creatures of Congress" (Unson v. Lacson, G.R. No. 7909, January 18,
1957) which has the power to "create and abolish municipal corporations" due to its "general legislative
powers" (Asuncion v. Yriantes, 28 Phil. 67; Merdanillo v. Orandia, 5 SCRA 541). Congress, therefore,
has the power of control over Local governments (Hebron v. Reyes, G.R. No. 9124, July 2, 1950). And
if Congress can grant the City of Manila the power to tax certain matters, it can also provide for
exemptions or even take back the power.
(c) The City of Manila's power to impose license fees on gambling, has long been revoked. As early as
1975, the power of local governments to regulate gambling thru the grant of "franchise, licenses or
permits" was withdrawn by P.D. No. 771 and was vested exclusively on the National Government,
thus:
Sec. 1. Any provision of law to the contrary notwithstanding, the authority of chartered
cities and other local governments to issue license, permit or other form of franchise to
operate, maintain and establish horse and dog race tracks, jai-alai and other forms of
gambling is hereby revoked.
Sec. 2. Hereafter, all permits or franchises to operate, maintain and establish, horse and
dog race tracks, jai-alai and other forms of gambling shall be issued by the national
government upon proper application and verification of the qualification of the applicant
...
Therefore, only the National Government has the power to issue "licenses or permits" for the operation
of gambling. Necessarily, the power to demand or collect license fees which is a consequence of the
issuance of "licenses or permits" is no longer vested in the City of Manila.
(d) Local governments have no power to tax instrumentalities of the National Government. PAGCOR is
a government owned or controlled corporation with an original charter, PD 1869. All of its shares of
stocks are owned by the National Government. In addition to its corporate powers (Sec. 3, Title II, PD
1869) it also exercises regulatory powers thus:
Sec. 9. Regulatory Power. The Corporation shall maintain a Registry of the affiliated
entities, and shall exercise all the powers, authority and the responsibilities vested in the
Securities and Exchange Commission over such affiliating entities mentioned under the
preceding section, including, but not limited to amendments of Articles of Incorporation
and By-Laws, changes in corporate term, structure, capitalization and other matters
concerning the operation of the affiliated entities, the provisions of the Corporation Code
of the Philippines to the contrary notwithstanding, except only with respect to original
incorporation.
PAGCOR has a dual role, to operate and to regulate gambling casinos. The latter role is governmental,
which places it in the category of an agency or instrumentality of the Government. Being an
instrumentality of the Government, PAGCOR should be and actually is exempt from local taxes.

Otherwise, its operation might be burdened, impeded or subjected to control by a mere Local
government.
The states have no power by taxation or otherwise, to retard, impede, burden or in any
manner control the operation of constitutional laws enacted by Congress to carry into
execution the powers vested in the federal government. (MC Culloch v. Marland, 4
Wheat 316, 4 L Ed. 579)
This doctrine emanates from the "supremacy" of the National Government over local governments.
Justice Holmes, speaking for the Supreme Court, made reference to the entire absence of
power on the part of the States to touch, in that way (taxation) at least, the
instrumentalities of the United States (Johnson v. Maryland, 254 US 51) and it can be
agreed that no state or political subdivision can regulate a federal instrumentality in
such a way as to prevent it from consummating its federal responsibilities, or even to
seriously burden it in the accomplishment of them. (Antieau, Modern Constitutional
Law, Vol. 2, p. 140, emphasis supplied)
Otherwise, mere creatures of the State can defeat National policies thru extermination of what local
authorities may perceive to be undesirable activities or enterprise using the power to tax as "a tool for
regulation" (U.S. v. Sanchez, 340 US 42).
The power to tax which was called by Justice Marshall as the "power to destroy" (Mc Culloch v.
Maryland, supra) cannot be allowed to defeat an instrumentality or creation of the very entity which
has the inherent power to wield it.
(e) Petitioners also argue that the Local Autonomy Clause of the Constitution will be violated by P.D.
1869. This is a pointless argument. Article X of the 1987 Constitution (on Local Autonomy) provides:
Sec. 5. Each local government unit shall have the power to create its own source of
revenue and to levy taxes, fees, and other charges subject to such guidelines and
limitation as the congress may provide, consistent with the basic policy on local
autonomy. Such taxes, fees and charges shall accrue exclusively to the local government.
(emphasis supplied)
The power of local government to "impose taxes and fees" is always subject to "limitations" which
Congress may provide by law. Since PD 1869 remains an "operative" law until "amended, repealed or
revoked" (Sec. 3, Art. XVIII, 1987 Constitution), its "exemption clause" remains as an exception to the
exercise of the power of local governments to impose taxes and fees. It cannot therefore be violative
but rather is consistent with the principle of local autonomy.
Besides, the principle of local autonomy under the 1987 Constitution simply means "decentralization"
(III Records of the 1987 Constitutional Commission, pp. 435-436, as cited in Bernas, The Constitution
of the Republic of the Philippines, Vol. II, First Ed., 1988, p. 374). It does not make local governments
sovereign within the state or an "imperium in imperio."
Local Government has been described as a political subdivision of a nation or state
which is constituted by law and has substantial control of local affairs. In a unitary
system of government, such as the government under the Philippine Constitution, local
governments can only be an intra sovereign subdivision of one sovereign nation, it
cannot be an imperium in imperio. Local government in such a system can only mean a
measure of decentralization of the function of government. (emphasis supplied)

As to what state powers should be "decentralized" and what may be delegated to local government
units remains a matter of policy, which concerns wisdom. It is therefore a political question. (Citizens
Alliance for Consumer Protection v. Energy Regulatory Board, 162 SCRA 539).
What is settled is that the matter of regulating, taxing or otherwise dealing with gambling is a State
concern and hence, it is the sole prerogative of the State to retain it or delegate it to local governments.
As gambling is usually an offense against the State, legislative grant or express charter
power is generally necessary to empower the local corporation to deal with the subject. .
. . In the absence of express grant of power to enact, ordinance provisions on this subject
which are inconsistent with the state laws are void. (Ligan v. Gadsden, Ala App. 107 So.
733 Ex-Parte Solomon, 9, Cals. 440, 27 PAC 757 following in re Ah You, 88 Cal. 99, 25
PAC 974, 22 Am St. Rep. 280, 11 LRA 480, as cited in Mc Quinllan Vol. 3 Ibid, p. 548,
emphasis supplied)
Petitioners next contend that P.D. 1869 violates the equal protection clause of the Constitution, because
"it legalized PAGCOR conducted gambling, while most gambling are outlawed together with
prostitution, drug trafficking and other vices" (p. 82, Rollo).
We, likewise, find no valid ground to sustain this contention. The petitioners' posture ignores the wellaccepted 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 (Itchong v. Hernandez, 101 Phil. 1155). A law does not
have to operate in equal force on all persons or things to be conformable to Article III, Section 1 of the
Constitution (DECS v. San Diego, G.R. No. 89572, December 21, 1989).
The "equal protection clause" does not prohibit the Legislature from establishing classes of individuals
or objects upon which different rules shall operate (Laurel v. Misa, 43 O.G. 2847). The Constitution
does not require situations which are different in fact or opinion to be treated in law as though they
were the same (Gomez v. Palomar, 25 SCRA 827).
Just how P.D. 1869 in legalizing gambling conducted by PAGCOR is violative of the equal protection
is not clearly explained in the petition. The mere fact that some gambling activities like cockfighting
(P.D 449) horse racing (R.A. 306 as amended by RA 983), sweepstakes, lotteries and races (RA 1169 as
amended by B.P. 42) are legalized under certain conditions, while others are prohibited, does not render
the applicable laws, P.D. 1869 for one, unconstitutional.
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. (Gomez v.
Palomar, 25 SCRA 827)
The equal protection clause of the 14th Amendment does not mean that all occupations
called by the same name must be treated the same way; the state may do what it can to
prevent which is deemed as evil and stop short of those cases in which harm to the few
concerned is not less than the harm to the public that would insure if the rule laid down
were made mathematically exact. (Dominican Hotel v. Arizona, 249 US 2651).
Anent petitioners' claim that PD 1869 is contrary to the "avowed trend of the Cory Government away
from monopolies and crony economy and toward free enterprise and privatization" suffice it to state
that this is not a ground for this Court to nullify P.D. 1869. If, indeed, PD 1869 runs counter to the
government's policies then it is for the Executive Department to recommend to Congress its repeal or
amendment.

The judiciary does not settle policy issues. The Court can only declare what the law is
and not what the law should be. Under our system of government, policy issues are
within the domain of the political branches of government and of the people themselves
as the repository of all state power. (Valmonte v. Belmonte, Jr., 170 SCRA 256).
On the issue of "monopoly," however, the Constitution provides that:
Sec. 19. The State shall regulate or prohibit monopolies when public interest so requires.
No combinations in restraint of trade or unfair competition shall be allowed. (Art. XII,
National Economy and Patrimony)
It should be noted that, as the provision is worded, monopolies are not necessarily prohibited by the
Constitution. The state must still decide whether public interest demands that monopolies be regulated
or prohibited. Again, this is a matter of policy for the Legislature to decide.
On petitioners' allegation that P.D. 1869 violates Sections 11 (Personality Dignity) 12 (Family) and 13
(Role of Youth) of Article II; Section 13 (Social Justice) of Article XIII and Section 2 (Educational
Values) of Article XIV of the 1987 Constitution, suffice it to state also that these are merely statements
of principles and, policies. As such, they are basically not self-executing, meaning a law should be
passed by Congress to clearly define and effectuate such principles.
In general, therefore, the 1935 provisions were not intended to be self-executing
principles ready for enforcement through the courts. They were rather directives
addressed to the executive and the legislature. If the executive and the legislature failed
to heed the directives of the articles the available remedy was not judicial or political.
The electorate could express their displeasure with the failure of the executive and the
legislature through the language of the ballot. (Bernas, Vol. II, p. 2)
Every law has in its favor the presumption of constitutionality (Yu Cong Eng v. Trinidad, 47 Phil. 387;
Salas v. Jarencio, 48 SCRA 734; Peralta v. Comelec, 82 SCRA 30; Abbas v. Comelec, 179 SCRA 287).
Therefore, for PD 1869 to be nullified, it must be shown that there is a clear and unequivocal breach of
the Constitution, not merely a doubtful and equivocal one. In other words, the grounds for nullity must
be clear and beyond reasonable doubt. (Peralta v. Comelec, supra) Those who petition this Court to
declare a law, or parts thereof, unconstitutional must clearly establish the basis for such a declaration.
Otherwise, their petition must fail. Based on the grounds raised by petitioners to challenge the
constitutionality of P.D. 1869, the Court finds that petitioners have failed to overcome the presumption.
The dismissal of this petition is therefore, inevitable. But as to whether P.D. 1869 remains a wise
legislation considering the issues of "morality, monopoly, trend to free enterprise, privatization as well
as the state principles on social justice, role of youth and educational values" being raised, is up for
Congress to determine.
As this Court held in Citizens' Alliance for Consumer Protection v. Energy Regulatory Board, 162
SCRA 521
Presidential Decree No. 1956, as amended by Executive Order No. 137 has, in any case,
in its favor the presumption of validity and constitutionality which petitioners Valmonte
and the KMU have not overturned. Petitioners have not undertaken to identify the
provisions in the Constitution which they claim to have been violated by that statute.
This Court, however, is not compelled to speculate and to imagine how the assailed
legislation may possibly offend some provision of the Constitution. The Court notes,
further, in this respect that petitioners have in the main put in question the wisdom,
justice and expediency of the establishment of the OPSF, issues which are not properly
addressed to this Court and which this Court may not constitutionally pass upon. Those

issues should be addressed rather to the political departments of government: the

President and the Congress.
Parenthetically, We wish to state that gambling is generally immoral, and this is precisely so when the
gambling resorted to is excessive. This excessiveness necessarily depends not only on the financial
resources of the gambler and his family but also on his mental, social, and spiritual outlook on life.
However, the mere fact that some persons may have lost their material fortunes, mental control,
physical health, or even their lives does not necessarily mean that the same are directly attributable to
gambling. Gambling may have been the antecedent,but certainly not necessarily the cause. For the
same consequences could have been preceded by an overdose of food, drink, exercise, work, and even
sex.
WHEREFORE, the petition is DISMISSED for lack of merit.
SO ORDERED.
Fernan, C.J., Narvasa, Gutierrez, Jr., Cruz, Feliciano, Gancayco, Bidin, Sarmiento, Grio-Aquino,
Medialdea, Regalado and Davide, Jr., JJ., concur.

Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. 73155 July 11, 1986
PATRICIO TAN, FELIX FERRER, JUAN M. HAGAD, SERGIO HILADO, VIRGILIO
GASTON, CONCHITA MINAYA, TERESITA ESTACIO, DESIDERIO DEFERIA, ROMEO
GAMBOA, ALBERTO LACSON, FE HOFILENA, EMILY JISON, NIEVES LOPEZ AND
CECILIA MAGSAYSAY, petitioners,
vs.
THE COMMISSION ON ELECTIONS and THE PROVINCIAL TREASURER OF NEGROS
OCCIDENTAL,respondents.
Gamboa & Hofilea Law Office for petitioners.
ALAMPAY, J.:
Prompted by the enactment of Batas Pambansa Blg. 885-An Act Creating a New Province in the Island
of Negros to be known as the Province of Negros del Norte, which took effect on December 3, 1985,
Petitioners herein, who are residents of the Province of Negros Occidental, in the various cities and
municipalities therein, on December 23, 1985, filed with this Court a case for Prohibition for the
purpose of stopping respondents Commission on Elections from conducting the plebiscite which,
pursuant to and in implementation of the aforesaid law, was scheduled for January 3, 1986. Said law
provides:
SECTION 1. The Cities of Silay, Cadiz, and San Carlos and the municipalities of
Calatrava, Taboso, Escalante, Sagay, Manapla, Victorias, E.R. Magalona; and Salvador
Benedicto, all in the northern portion of the Island of Negros, are hereby separated from
the province to be known as the Province of Negros del Norte.

SEC. 2. The boundaries of the new province shall be the southern limits of the City of
Silay, the Municipality of Salvador Benedicto and the City of San Carlos on the south
and the territorial limits of the northern portion to the Island of Negros on the west, north
and east, comprising a territory of 4,019.95 square kilometers more or less.
SEC. 3. The seat of government of the new province shall be the City of Cadiz.
SEC. 4. A plebiscite shall be conducted in the proposed new province which are the
areas affected within a period of one hundred and twenty days from the approval of this
Act. After the ratification of the creation of the Province of Negros del Norte by a
majority of the votes cast in such plebiscite, the President of the Philippines shall
appoint the first officials of the province.
SEC. 5. The Commission on Elections shall conduct and supervise the plebiscite herein
provided, the expenses for which shall be charged to local funds.
SEC. 6. This Act shall takeeffect upon its approval.(Rollo, pp. 23-24)
Petitioners contend that Batas Pambansa Blg. 885 is unconstitutional and it is not in
complete accord with the Local Government Code as in Article XI, Section 3 of our
Constitution, it is expressly mandated that
See. 3. No province, city, municipality or barrio may be created, divided, merged,
abolished, or its boundary substantially altered, except in accordance with the criteria
established in the local government code, and subject to the approval by a majority of
the votes in a plebiscite in the unit or units affected.
Section 197 of the Local Government Code enumerates the conditions which must exist to provide the
legal basis for the creation of a provincial unit and these requisites are:
SEC. 197. Requisites for Creation. A province may be created if it has a territory of at
least three thousand five hundred square kilometers, a population of at least five hundred
thousand persons, an average estimated annual income, as certified by the Ministry of
Finance, of not less than ten million pesos for the last three consecutive years, and its
creation shall not reduce the population and income of the mother province or provinces
at the time of said creation to less than the minimum requirements under this section.
The territory need not be contiguous if it comprises two or more islands.
The average estimated annual income shall include the income alloted for both the
general and infrastructural funds, exclusive of trust funds, transfers and nonrecurring
income. (Rollo, p. 6)
Due to the constraints brought about by the supervening Christmas holidays during which the Court
was in recess and unable to timely consider the petition, a supplemental pleading was filed by
petitioners on January 4, 1986, averring therein that the plebiscite sought to be restrained by them was
held on January 3, 1986 as scheduled but that there are still serious issues raised in the instant case
affecting the legality, constitutionality and validity of such exercise which should properly be passed
upon and resolved by this Court.
The plebiscite was confined only to the inhabitants of the territory of Negros del Nrte, namely: the
Cities of Silay, Cadiz, and San Carlos, and the municipalities of Calatrava, Taboso, Escalante, Sagay,
Manapla, Victorias, E.B. Magalona and Don Salvador Benedicto. Because of the exclusions of the
voters from the rest of the province of Negros Occidental, petitioners found need to change the prayer
of their petition "to the end that the constitutional issues which they have raised in the action will be
ventilated and given final resolution.'"At the same time, they asked that the effects of the plebiscite

which they sought to stop be suspended until the Supreme Court shall have rendered its decision on the
very fundamental and far-reaching questions that petitioners have brought out.
Acknowledging in their supplemental petition that supervening events rendered moot the prayer in their
initial petition that the plebiscite scheduled for January 3, 1986, be enjoined, petitioners plead,
nevertheless, that... a writ of Prohibition be issued, directed to Respondent Commission on Elections to
desist from issuing official proclamation of the results of the plebiscite held on January
3, 1986.
Finding that the exclusion and non-participation of the voters of the Province of Negros
Occidental other than those living within the territory of the new province of Negros del
Norte to be not in accordance with the Constitution, that a writ of mandamus be issued,
directed to the respondent Commission on Elections, to schedule the holding of another
plebiscite at which all the qualified voters of the entire Province of Negros Occidental as
now existing shall participate, at the same time making pronouncement that the
plebiscite held on January 3, 1986 has no legal effect, being a patent legal nullity;
And that a similar writ of Prohibition be issued, directed to the respondent Provincial
Treasurer, to desist from ordering the release of any local funds to answer for expenses
incurred in the holding of such plebiscite until ordered by the Court. (Rollo pp. 9-10).
Petitioners further prayed that the respondent COMELEC hold in abeyance the issuance
of any official proclamation of the results of the aforestated plebiscite.
During the pendency of this case, a motion that he be allowed to appear as amicus curiae in this case
(dated December 27, 1985 and filed with the Court on January 2, 1986) was submitted by former
Senator Ambrosio Padilla. Said motion was granted in Our resolution of January 2, 1986.
Acting on the petition, as well as on the supplemental petition for prohibition with preliminary
injunction with prayer for restraining order, the Court, on January 7, 1986 resolved, without giving due
course to the same, to require respondents to comment, not to file a motion to dismiss. Complying with
said resolution, public respondents, represented by the Office of the Solicitor General, on January 14,
1986, filed their Comment, arguing therein that the challenged statute.-Batas Pambansa 885, should be
accorded the presumption of legality. They submit that the said law is not void on its face and that the
petition does not show a clear, categorical and undeniable demonstration of the supposed infringement
of the Constitution. Respondents state that the powers of the Batasang-Pambansa to enact the assailed
law is beyond question. They claim that Batas Pambansa Big. 885 does not infringe the Constitution
because the requisites of the Local Government Code have been complied with. Furthermore, they
submit that this case has now become moot and academic with the proclamation of the new Province of
Negros del Norte.
Respondents argue that the remaining cities and municipalities of the Province of Negros Occidental
not included in the area of the new Province of Negros del Norte, de not fall within the meaning and
scope of the term "unit or units affected", as referred to in Section 3 of Art. XI of our Constitution. On
this reasoning, respondents maintain that Batas Pambansa Blg. 885 does not violate the Constitution,
invoking and citing the case of Governor Zosimo Paredes versus the Honorable Executive Secretary to
the President, et al. (G.R. No. 55628, March 2, 1984 (128 SCRA 61), particularly the pronouncements
therein, hereunder quoted:
1. Admittedly,this is one of those cases where the discretion of the Court is allowed
considerable leeway. There is indeed an element of ambiguity in the use of the
expression 'unit or units affected'. It is plausible to assert as petitioners do that when

certain Barangays are separated from a parent municipality to form a new one, all the
voters therein are affected. It is much more persuasive, however, to contend as
respondents do that the acceptable construction is for those voters, who are not from the
barangays to be separated, should be excluded in the plebiscite.
2. For one thing, it is in accordance with the settled doctrine that between two possible
constructions, one avoiding a finding of unconstitutionality and the other yielding such a
result, the former is to be preferred. That which will save, not that which will destroy,
commends itself for acceptance. After all, the basic presumption all these years is one of
validity. ...
3. ... Adherence to such philosophy compels the conclusion that when there are
indications that the inhabitants of several barangays are inclined to separate from a
parent municipality they should be allowed to do so. What is more logical than to
ascertain their will in a plebiscite called for that purpose. It is they, and they alone, who
shall constitute the new unit. New responsibilities will be assumed. New burdens will be
imposed. A new municipal corporation will come into existence. Its birth will be a matter
of choice-their choice. They should be left alone then to decide for themselves. To allow
other voters to participate will not yield a true expression of their will. They may even
frustrate it, That certainly will be so if they vote against it for selfish reasons, and they
constitute the majority. That is not to abide by the fundamental principle of the
Constitution to promote local autonomy, the preference being for smaller units. To rule
as this Tribunal does is to follow an accepted principle of constitutional construction,
that in ascertaining the meaning of a particular provision that may give rise to doubts,
the intent of the framers and of the people may be gleaned from provisions in pari
materia.
Respondents submit that said ruling in the aforecited case applies equally with force in the case at bar.
Respondents also maintain that the requisites under the Local Government Code (P.D. 337) for the
creation of the new province of Negros del Norte have all been duly complied with, Respondents
discredit petitioners' allegations that the requisite area of 3,500 square kilometers as so prescribed in
the Local Government Code for a new province to be created has not been satisfied. Petitioners insist
that the area which would comprise the new province of Negros del Norte, would only be about
2,856.56 square kilometers and which evidently would be lesser than the minimum area prescribed by
the governing statute. Respondents, in this regard, point out and stress that Section 2 of Batas
Pambansa Blg. 885 creating said new province plainly declares that the territorial boundaries of Negros
del Norte comprise an area of 4,019.95 square kilometers, more or less.
As a final argument, respondents insist that instant petition has been rendered moot and academic
considering that a plebiscite has been already conducted on January 3, 1986; that as a result thereof, the
corresponding certificate of canvass indicated that out of 195,134 total votes cast in said plebiscite,
164,734 were in favor of the creation of Negros del Norte and 30,400 were against it; and because "the
affirmative votes cast represented a majority of the total votes cast in said plebiscite, the Chairman of
the Board of Canvassers proclaimed the new province which shall be known as "Negros del Norte".
Thus, respondents stress the fact that following the proclamation of Negros del Norte province, the
appointments of the officials of said province created were announced. On these considerations,
respondents urge that this case should be dismissed for having been rendered moot and academic as the
creation of the new province is now a "fait accompli."
In resolving this case, it will be useful to note and emphasize the facts which appear to be agreed to by
the parties herein or stand unchallenged.

Firstly, there is no disagreement that the Provincial Treasurer of the Province of Negros Occidental has
not disbursed, nor was required to disburse any public funds in connection with the plebiscite held on
January 3, 1986 as so disclosed in the Comment to the Petition filed by the respondent Provincial
Treasurer of Negros Occidental dated January 20, 1986 (Rollo, pp. 36-37). Thus, the prayer of the
petitioners that said Provincial Treasurer be directed by this Court to desist from ordering the release of
any public funds on account of such plebiscite should not longer deserve further consideration.
Secondly, in Parliamentary Bill No. 3644 which led to the enactment of Batas Pambansa Blg. 885 and
the creation of the new Province of Negros del Norte, it expressly declared in Sec. 2 of the
aforementioned Parliamentary Bill, the following:
SEC. 2. The boundaries of the new province shall be the southern limits of the City of
Silay, the Municipality of Salvador Benedicto and the City of San Carlos on the South
and the natural boundaries of the northern portion of the Island of Negros on the West,
North and East, containing an area of 285,656 hectares more or less. (Emphasis
supplied).
However, when said Parliamentary Bill No. 3644 was very quickly enacted into Batas Pambansa Blg.
885, the boundaries of the new Province of Negros del Norte were defined therein and its boundaries
then stated to be as follows:
SECTION 1. The Cities of Silay, Cadiz, and San Carlos and the municipalities of
Calatrava, Toboso, Escalante, Sagay, Manapla, Victorias, E.R. Magalona; and Salvador
Benedicto, all in the northern portion of the Island of Negros, are hereby separated from
the Province of Negros Occidental and constituted into a new province to be known as
the Province of Negros del Norte.
SEC. 1. The boundaries of the new province shall be the southern limits of the City of
Silay, the Municipality of Salvador Benedicto and the City of San Carlos on the south
and the territorial limits of the northern portion of the Island of Negros on the West,
North and East, comprising a territory of 4,019.95 square kilometers more or less.
Equally accepted by the parties is the fact that under the certification issued by Provincial Treasurer
Julian L. Ramirez of the Province of Negros Occidental, dated July 16, 1985, it was therein certified as
follows:
xxx xxx xxx
This is to certify that the following cities and municipalities of Negros Occidental have
the land area as indicated hereunder based on the Special Report No. 3, Philippines
1980, Population, Land Area and Density: 1970, 1975 and 1980 by the National Census
and Statistics Office, Manila.
Land Area
(Sq. Km.)
1. Silay City ...................................................................214.8
2. E.B. Magalona............................................................113.3
3. Victorias.....................................................................133.9
4. Manapla......................................................................112.9
5. Cadiz City ..................................................................516.5
6. Sagay .........................................................................389.6

7. Escalante ....................................................................124.0
8. Toboso.......................................................................123.4
9. Calatrava.....................................................................504.5
10. San Carlos City...........................................................451.3
11. Don Salvador Benedicto.................................... (not available)
This certification is issued upon the request of Dr. Patricio Y. Tan for whatever purpose it
may serve him.
(SGD.) JULIAN L. RAMIREZ
Provincial Treasurer (Exh. "C" of Petition, Rollo, p. 90).
Although in the above certification it is stated that the land area of the relatively new municipality of
Don Salvador Benedicto is not available, it is an uncontradicted fact that the area comprising Don
Salvador municipality, one of the component units of the new province, was derived from the City of
San Carlos and from the Municipality of Calatrava, Negros Occidental, and added thereto was a portion
of about one-fourth the land area of the town of Murcia, Negros Occidental. It is significant to note the
uncontroverted submission of petitioners that the total land area of the entire municipality of Murcia,
Negros Occidental is only 322.9 square kilometers (Exh. "D", Rollo, p. 91). One-fourth of this total
land area of Murcia that was added to the portions derived from the land area of Calatrava, Negros
Occidental and San Carlos City (Negros Occidental) would constitute, therefore, only 80.2 square
kilometers. This area of 80.2 square kilometers if then added to 2,685.2 square kilometers, representing
the total land area of the Cities of Silay, San Carlos and Cadiz and the Municipalities of E.R. Magalona,
Victorias, Manapla, Sagay, Escalante, Taboso and Calatrava, will result in approximately an area of
only 2,765.4 square kilometers using as basis the Special Report, Philippines 1980, Population, Land
Area and Density: 1970, 1975 and 1980 of the National Census and Statistics Office, Manila (see
Exhibit "C", Rollo, p. 90).
No controversion has been made by respondent with respect to the allegations of petitioners that the
original provision in the draft legislation, Parliamentary Bill No. 3644, reads:
SEC. 4. A plebiscite shall be conducted in the areas affected within a period of one
hundred and twenty days from the approval of this Act. After the ratification of the
creation of the Province of Negros del Norte by a majority of the votes cast in such
plebiscite, the President shall appoint the first officials of the new province.
However, when Batas Pambansa Blg. 885 was enacted, there was a significant change in the above
provision. The statute, as modified, provides that the requisite plebiscite "shall be conducted in the
proposed new province which are the areas affected."
It is this legislative determination limiting the plebiscite exclusively to the cities and towns which
would comprise the new province that is assailed by the petitioners as violative of the provisions of our
Constitution. Petitioners submit that Sec. 3, ART XI thereof, contemplates a plebiscite that would be
held in the unit or units affected by the creation of the new province as a result of the consequent
division of and substantial alteration of the boundaries of the existing province. In this instance, the
voters in the remaining areas of the province of Negros Occidental should have been allowed to
participate in the questioned plebiscite.
Considering that the legality of the plebiscite itself is challenged for non-compliance with
constitutional requisites, the fact that such plebiscite had been held and a new province proclaimed and
its officials appointed, the case before Us cannot truly be viewed as already moot and academic.

Continuation of the existence of this newly proclaimed province which petitioners strongly profess to
have been illegally born, deserves to be inquired into by this Tribunal so that, if indeed, illegality
attaches to its creation, the commission of that error should not provide the very excuse for
perpetuation of such wrong. For this Court to yield to the respondents' urging that, as there has
been fait accompli then this Court should passively accept and accede to the prevailing situation is an
unacceptable suggestion. Dismissal of the instant petition, as respondents so propose is a proposition
fraught with mischief. Respondents' submission will create a dangerous precedent. Should this Court
decline now to perform its duty of interpreting and indicating what the law is and should be, this might
tempt again those who strut about in the corridors of power to recklessly and with ulterior motives,
create, merge, divide and/or alter the boundaries of political subdivisions, either brazenly or stealthily,
confident that this Court will abstain from entertaining future challenges to their acts if they manage to
bring about a fait accompli.
In the light of the facts and circumstances alluded to by petitioners as attending to the unusually rapid
creation of the instant province of Negros del Norte after a swiftly scheduled plebiscite, this Tribunal
has the duty to repudiate and discourage the commission of acts which run counter to the mandate of
our fundamental law, done by whatever branch of our government. This Court gives notice that it will
not look with favor upon those who may be hereafter inclined to ram through all sorts of legislative
measures and then implement the same with indecent haste, even if such acts would violate the
Constitution and the prevailing statutes of our land. It is illogical to ask that this Tribunal be blind and
deaf to protests on the ground that what is already done is done. To such untenable argument the reply
would be that, be this so, the Court, nevertheless, still has the duty and right to correct and rectify the
wrong brought to its attention.
On the merits of the case.
Aside from the simpler factual issue relative to the land area of the new province of Negros del Norte,
the more significant and pivotal issue in the present case revolves around in the interpretation and
application in the case at bar of Article XI, Section 3 of the Constitution, which being brief and for
convenience, We again quote:
SEC. 3. No province, city, municipality or barrio may be created, divided, merged
abolished, or its boundary substantially altered, except in accordance with the criteria
established in the local government code, and subject to the approval by a majority of
the votes in a plebiscite in the unit or units affected.
It can be plainly seen that the aforecited constitutional provision makes it imperative that there be first
obtained "the approval of a majority of votes in the plebiscite in the unit or units affected" whenever a
province is created, divided or merged and there is substantial alteration of the boundaries. It is thus
inescapable to conclude that the boundaries of the existing province of Negros Occidental would
necessarily be substantially altered by the division of its existing boundaries in order that there can be
created the proposed new province of Negros del Norte. Plain and simple logic will demonstrate than
that two political units would be affected. The first would be the parent province of Negros Occidental
because its boundaries would be substantially altered. The other affected entity would be composed of
those in the area subtracted from the mother province to constitute the proposed province of Negros del
Norte.
We find no way to reconcile the holding of a plebiscite that should conform to said constitutional
requirement but eliminates the participation of either of these two component political units. No
amount of rhetorical flourishes can justify exclusion of the parent province in the plebiscite because of
an alleged intent on the part of the authors and implementors of the challenged statute to carry out what
is claimed to be a mandate to guarantee and promote autonomy of local government units. The alleged

good intentions cannot prevail and overrule the cardinal precept that what our Constitution
categorically directs to be done or imposes as a requirement must first be observed, respected and
complied with. No one should be allowed to pay homage to a supposed fundamental policy intended to
guarantee and promote autonomy of local government units but at the same time transgress, ignore and
disregard what the Constitution commands in Article XI Section 3 thereof. Respondents would be no
different from one who hurries to pray at the temple but then spits at the Idol therein.
We find no merit in the submission of the respondents that the petition should be dismissed because the
motive and wisdom in enacting the law may not be challenged by petitioners. The principal point raised
by the petitioners is not the wisdom and motive in enacting the law but the infringement of the
Constitution which is a proper subject of judicial inquiry.
Petitioners' discussion regarding the motives behind the enactment of B.P. Blg. 885 to say the least, are
most enlightening and provoking but are factual issues the Court cannot properly pass upon in this
case. Mention by petitioners of the unexplained changes or differences in the proposed Parliamentary
Bill No. 3644 and the enacted Batas Pambansa Blg. 885; the swift and surreptitious manner of passage
and approval of said law; the abrupt scheduling of the plebiscite; the reference to news articles
regarding the questionable conduct of the said plebiscite held on January 3, 1986; all serve as
interesting reading but are not the decisive matters which should be reckoned in the resolution of this
case.
What the Court considers the only significant submissions lending a little support to respondents' case
is their reliance on the rulings and pronouncements made by this Court in the case of Governor Zosimo
Paredes versus The Honorable Executive Secretary to the President, et al., G.R. No. 55628, March 2,
1984 (128 SCRA 6). In said case relating to a plebiscite held to ratify the creation of a new
municipality from existing barangays, this Court upheld the legality of the plebiscite which was
participated in exclusively by the people of the barangay that would constitute the new municipality.
This Court is not unmindful of this solitary case alluded to by respondents. What is, however, highly
significant are the prefatory statements therein stating that said case is "one of those cases where the
discretion of the Court is allowed considerable leeway" and that "there is indeed an element of
ambiguity in the use of the expression unit or units affected." The ruling rendered in said case was
based on a claimed prerogative of the Court then to exercise its discretion on the matter. It did not
resolve the question of how the pertinent provision of the Constitution should be correctly interpreted.
The ruling in the aforestated case of Paredes vs. The Honorable Executive Secretary, et al.
(supra) should not be taken as a doctrinal or compelling precedent when it is acknowledged therein that
"it is plausible to assert, as petitioners do, that when certain Barangays are separated from a parent
municipality to form a new one, all the voters therein are affected."
It is relevant and most proper to mention that in the aforecited case of Paredes vs. Executive
Secretary, invoked by respondents, We find very lucidly expressed the strong dissenting view of Justice
Vicente Abad Santos, a distinguished member of this Court, as he therein voiced his opinion, which We
hereunder quote:
2. ... when the Constitution speaks of "the unit or units affected" it means all of the
people of the municipality if the municipality is to be divided such as in the case at bar
or an of the people of two or more municipalities if there be a merger. I see no ambiguity
in the Constitutional provision.
This dissenting opinion of Justice Vicente Abad Santos is the forerunner of the ruling which We now
consider applicable to the case at bar, In the analogous case of Emilio C. Lopez, Jr., versus the
Honorable Commission on Elections, L-56022, May 31, 1985, 136 SCRA 633, this dissent was

reiterated by Justice Abad Santos as he therein assailed as suffering from a constitutional infirmity a
referendum which did not include all the people of Bulacan and Rizal, when such referendum was
intended to ascertain if the people of said provinces were willing to give up some of their towns to
Metropolitan Manila. His dissenting opinion served as a useful guideline in the instant case.
Opportunity to re-examine the views formerly held in said cases is now afforded the present Court. The
reasons in the mentioned cases invoked by respondents herein were formerly considered acceptable
because of the views then taken that local autonomy would be better promoted However, even this
consideration no longer retains persuasive value.
The environmental facts in the case before Us readily disclose that the subject matter under
consideration is of greater magnitude with concomitant multifarious complicated problems. In the
earlier case, what was involved was a division of a barangay which is the smallest political unit in the
Local Government Code. Understandably, few and lesser problems are involved. In the case at bar,
creation of a new province relates to the largest political unit contemplated in Section 3, Art. XI of the
Constitution. To form the new province of Negros del Norte no less than three cities and eight
municipalities will be subtracted from the parent province of Negros Occidental. This will result in the
removal of approximately 2,768.4 square kilometers from the land area of an existing province whose
boundaries will be consequently substantially altered. It becomes easy to realize that the consequent
effects cf the division of the parent province necessarily will affect all the people living in the separate
areas of Negros Occidental and the proposed province of Negros del Norte. The economy of the parent
province as well as that of the new province will be inevitably affected, either for the better or for the
worse. Whatever be the case, either or both of these political groups will be affected and they are,
therefore, the unit or units referred to in Section 3 of Article XI of the Constitution which must be
included in the plebiscite contemplated therein.
It is a well accepted rule that "in ascertaining the meaning of a particular provision that may give rise to
doubts, the intent of the framers and of the people, may be gleaned from the provisions in pari
materia." Parliamentary Bill No. 3644 which proposed the creation of the new province of Negros del
Norte recites in Sec. 4 thereof that "the plebiscite shall be conducted in the areas affected within a
period of one hundred and twenty days from the approval of this Act." As this draft legislation speaks
of "areas," what was contemplated evidently are plurality of areas to participate in the plebiscite.
Logically, those to be included in such plebiscite would be the people living in the area of the proposed
new province and those living in the parent province. This assumption will be consistent with the
requirements set forth in the Constitution.
We fail to find any legal basis for the unexplained change made when Parliamentary Bill No. 3644 was
enacted into Batas Pambansa Blg. 885 so that it is now provided in said enabling law that the plebiscite
"shall be conducted in the proposed new province which are the areas affected." We are not disposed to
agree that by mere legislative fiat the unit or units affected referred in the fundamental law can be
diminished or restricted by the Batasang Pambansa to cities and municipalities comprising the new
province, thereby ignoring the evident reality that there are other people necessarily affected.
In the mind of the Court, the change made by those responsible for the enactment of Batas Pambansa
Blg. 885 betrays their own misgivings. They must have entertained apprehensions that by holding the
plebiscite only in the areas of the new proposed province, this tactic will be tainted with illegality. In
anticipation of a possible strong challenge to the legality of such a plebiscite there was, therefore,
deliberately added in the enacted statute a self-serving phrase that the new province constitutes the area
affected. Such additional statement serves no useful purpose for the same is misleading, erroneous and
far from truth. The remaining portion of the parent province is as much an area affected. The
substantial alteration of the boundaries of the parent province, not to mention the other adverse
economic effects it might suffer, eloquently argue the points raised by the petitioners.

Petitioners have averred without contradiction that after the creation of Negros del Norte, the province
of Negros Occidental would be deprived of the long established Cities of Silay, Cadiz, and San Carlos,
as well as the municipality of Victorias. No controversion has been made regarding petitioners'
assertion that the areas of the Province of Negros Occidental will be diminished by about 285,656
hectares and it will lose seven of the fifteen sugar mills which contribute to the economy of the whole
province. In the language of petitioners, "to create Negros del Norte, the existing territory and political
subdivision known as Negros Occidental has to be partitioned and dismembered. What was involved
was no 'birth' but "amputation." We agree with the petitioners that in the case of Negros what was
involved was a division, a separation; and consequently, as Sec. 3 of Article XI of the Constitution
anticipates, a substantial alteration of boundary.
As contended by petitioners,
Indeed, the terms 'created', 'divided', 'merged', 'abolished' as used in the constitutional
provision do not contemplate distinct situation isolated from the mutually exclusive to
each other. A Province maybe created where an existing province is divided or two
provinces merged. Such cases necessarily will involve existing unit or
units abolished and definitely the boundary being substantially altered.
It would thus be inaccurate to state that where an existing political unit is divided or its
boundary substantially altered, as the Constitution provides, only some and not all the
voters in the whole unit which suffers dismemberment or substantial alteration of its
boundary are affected. Rather, the contrary is true.
It is also Our considered view that even hypothetically assuming that the merits of this case can depend
on the mere discretion that this Court may exercise, nevertheless, it is the petitioners' case that deserve
to be favored.
It is now time for this Court to set aside the equivocations and the indecisive pronouncements in the
adverted case of Paredes vs. the Honorable Executive Secretary, et al. (supra). For the reasons already
here express, We now state that the ruling in the two mentioned cases sanctioning the exclusion of the
voters belonging to an existing political unit from which the new political unit will be derived, from
participating in the plebiscite conducted for the purpose of determining the formation of another new
political unit, is hereby abandoned.
In their supplemental petition, dated January 4, 1986, it is prayed for by petitioners that a writ of
mandamus be issued, directing the respondent Commission on Elections, to schedule the holding of
another plebiscite at which all the qualified voters of the entire province of Negros Occidental as now
existing shall participate and that this Court make a pronouncement that the plebiscite held on January
3, 1986 has no legal effect for being a patent nullity.
The Court is prepared to declare the said plebiscite held on January 3, 1986 as null and void and
violative of the provisions of Sec. 3, Article XI of the Constitution. The Court is not, however, disposed
to direct the conduct of a new plebiscite, because We find no legal basis to do so. With constitutional
infirmity attaching to the subject Batas Pambansa Big. 885 and also because the creation of the new
province of Negros del Norte is not in accordance with the criteria established in the Local Government
Code, the factual and legal basis for the creation of such new province which should justify the holding
of another plebiscite does not exist.
Whatever claim it has to validity and whatever recognition has been gained by the new province of
Negros del Norte because of the appointment of the officials thereof, must now be erased. That Negros
del Norte is but a legal fiction should be announced. Its existence should be put to an end as quickly as
possible, if only to settle the complications currently attending to its creation. As has been manifested,

the parent province of Negros del Norte has been impleaded as the defendant in a suit filed by the new
Province of Negros del Norte, before the Regional Trial Court of Negros (del Norte), docketed as Civil
Case No. 169-C, for the immediate allocation, distribution and transfer of funds by the parent province
to the new province, in an amount claimed to be at least P10,000,000.00.
The final nail that puts to rest whatever pretension there is to the legality of the province of Negros del
Norte is the significant fact that this created province does not even satisfy the area requirement
prescribed in Section 197 of the Local Government Code, as earlier discussed.
It is of course claimed by the respondents in their Comment to the exhibits submitted by the petitioners
(Exhs. C and D, Rollo, pp. 19 and 91), that the new province has a territory of 4,019.95 square
kilometers, more or less. This assertion is made to negate the proofs submitted, disclosing that the land
area of the new province cannot be more than 3,500 square kilometers because its land area would, at
most, be only about 2,856 square kilometers, taking into account government statistics relative to the
total area of the cities and municipalities constituting Negros del Norte. Respondents insist that when
Section 197 of the Local Government Code speaks of the territory of the province to be created and
requires that such territory be at least 3,500 square kilometers, what is contemplated is not only the
land area but also the land and water over which the said province has jurisdiction and control. It is
even the submission of the respondents that in this regard the marginal sea within the three mile limit
should be considered in determining the extent of the territory of the new province. Such an
interpretation is strained, incorrect, and fallacious.
The last sentence of the first paragraph of Section 197 is most revealing. As so stated therein
the "territory need not be contiguous if it comprises two or more islands." The use of the
word territory in this particular provision of the Local Government Code and in the very last sentence
thereof, clearly reflects that "territory" as therein used, has reference only to the mass of land area and
excludes the waters over which the political unit exercises control.
Said sentence states that the "territory need not be contiguous." Contiguous means (a) in physical
contact; (b) touching along all or most of one side; (c) near, text, or adjacent (Webster's New World
Dictionary, 1972 Ed., p. 307). "Contiguous", when employed as an adjective, as in the above sentence,
is only used when it describes physical contact, or a touching of sides of two solid masses of matter.
The meaning of particular terms in a statute may be ascertained by reference to words associated with
or related to them in the statute (Animal Rescue League vs. Assessors, 138 A.L.R. p. 110). Therefore,
in the context of the sentence above, what need not be "contiguous" is the "territory" the physical mass
of land area. There would arise no need for the legislators to use the word contiguous if they had
intended that the term "territory" embrace not only land area but also territorial waters. It can be safely
concluded that the word territory in the first paragraph of Section 197 is meant to be synonymous with
"land area" only. The words and phrases used in a statute should be given the meaning intended by the
legislature (82 C.J.S., p. 636). The sense in which the words are used furnished the rule of construction
(In re Winton Lumber Co., 63 p. 2d., p. 664).
The distinction between "territory" and "land area" which respondents make is an artificial or strained
construction of the disputed provision whereby the words of the statute are arrested from their plain and
obvious meaning and made to bear an entirely different meaning to justify an absurd or unjust result.
The plain meaning in the language in a statute is the safest guide to follow in construing the statute. A
construction based on a forced or artificial meaning of its words and out of harmony of the statutory
scheme is not to be favored (Helvering vs. Hutchings, 85 L. Ed., p. 909).
It would be rather preposterous to maintain that a province with a small land area but which has a long,
narrow, extended coast line, (such as La Union province) can be said to have a larger territory than a

land-locked province (such as Ifugao or Benguet) whose land area manifestly exceeds the province first
mentioned.
Allegations have been made that the enactment of the questioned state was marred by "dirty tricks", in
the introduction and passing of Parliamentary Bill No. 3644 "in secret haste" pursuant to sinister
designs to achieve "pure and simple gerrymandering; "that recent happenings more than amply
demonstrate that far from guaranteeing its autonomy it (Negros del Norte) has become the fiefdom of a
local strongman" (Rollo, p. 43; emphasis supplied).
It is not for this Court to affirm or reject such matters not only because the merits of this case can be
resolved without need of ascertaining the real motives and wisdom in the making of the questioned law.
No proper challenge on those grounds can also be made by petitioners in this proceeding. Neither may
this Court venture to guess the motives or wisdom in the exercise of legislative powers. Repudiation of
improper or unwise actions taken by tools of a political machinery rests ultimately, as recent events
have shown, on the electorate and the power of a vigilant people.
Petitioners herein deserve and should receive the gratitude of the people of the Province of Negros
Occidental and even by our Nation. Commendable is the patriotism displayed by them in daring to
institute this case in order to preserve the continued existence of their historic province. They were
inspired undoubtedly by their faithful commitment to our Constitution which they wish to be respected
and obeyed. Despite the setbacks and the hardships which petitioners aver confronted them, they
valiantly and unfalteringly pursued a worthy cause. A happy destiny for our Nation is assured as long as
among our people there would be exemplary citizens such as the petitioners herein.
WHEREFORE, Batas Pambansa Blg. 885 is hereby declared unconstitutional. The proclamation of the
new province of Negros del Norte, as well as the appointment of the officials thereof are also declared
null and void.
SO ORDERED.
Abad Santos, Feria, Yap, Fernan, Narvasa, Gutierrez, Jr., Cruz and Paras, JJ., concur.
Melencio-Herrera, J., concurs in the result.

FIRST DIVISION

[G.R. No. 127820. July 20, 1998]

MUNICIPALITY
OF
PARAAQUE, petitioner,
CORPORATION, respondent.

vs. V.M.

REALTY

DECISION
PANGANIBAN, J.:
A local government unit (LGU), like the Municipality of Paraaque, cannot authorize an
expropriation of private property through a mere resolution of its lawmaking body. The Local
Government Code expressly and clearly requires an ordinance or a local law for the
purpose. A resolution that merely expresses the sentiment or opinion of the Municipal
Council will not suffice. On the other hand, the principle of res judicata does not bar
subsequent proceedings for the expropriation of the same property when all the legal
requirements for its valid exercise are complied with.

Statement of the Case

These principles are applied by this Court in resolving this petition for review
on certiorari of the July 22, 1996 Decision[1] of the Court of Appeals[2] in CA GR CV No.
48048, which affirmed in toto[3] the Regional Trial Courts August 9, 1994 Resolution.[4] The
trial court dismissed the expropriation suit as follows:
The right of the plaintiff to exercise the power of eminent domain is not disputed. However,
such right may be exercised only pursuant to an Ordinance (Sec. 19, R.A. No. 7160). In the
instant case, there is no such ordinance passed by the Municipal Council of Paraaque
enabling the Municipality, thru its Chief Executive, to exercise the power of eminent
domain. The complaint, therefore, states no cause of action.
Assuming that plaintiff has a cause of action, the same is barred by a prior judgment. On
September 29, 1987, the plaintiff filed a complaint for expropriation involving the same
parcels of land which was docketed as Civil Case No. 17939 of this Court (page 26,
record). Said case was dismissed with prejudice on May 18, 1988 (page 39, record). The
order of dismissal was not appealed, hence, the same became final. The plaintiff can not be
allowed to pursue the present action without violating the principle of [r]es [j]udicata. While
defendant in Civil Case No. 17939 was Limpan Investment Corporation, the doctrine of res
judicata still applies because the judgment in said case (C.C. No. 17939) is conclusive between
the parties and their successors-in-interest (Vda. de Buncio vs. Estate of the late Anita de
Leon). The herein defendant is the successor-in-interest of Limpan Investment Corporation
as shown by the Deed of Assignment Exchange executed on June 13, 1990.
WHEREFORE, defendants motion for reconsideration is hereby granted. The order dated
February 4, 1994 is vacated and set aside.
This case is hereby dismissed. No pronouncement as to costs.
SO ORDERED.[5]

Factual Antecedents

Pursuant to Sangguniang Bayan Resolution No. 93-95, Series of 1993,[6] the

Municipality of Paraaque filed on September 20, 1993, a Complaint for
expropriation[7] against Private Respondent V.M. Realty Corporation over two parcels of
land (Lots 2-A-2 and 2-B-1 of Subdivision Plan Psd-17917), with a combined area of about
10,000 square meters, located at Wakas, San Dionisio, Paraaque, Metro Manila,
and covered by Torrens Certificate of Title No. 48700. Allegedly, the complaint was filed
for the purpose of alleviating the living conditions of the underprivileged by providing
homes for the homeless through a socialized housing project.[8] Parenthetically, it was also
for this stated purpose that petitioner, pursuant to its Sangguniang Bayan Resolution No.
577, Series of 1991,[9] previously made an offer to enter into a negotiated sale of the property
with private respondent, which the latter did not accept.[10]
Finding the Complaint sufficient in form and substance, the Regional Trial Court of
Makati, Branch 134, issued an Order dated January 10, 1994,[11] giving it due course. Acting
on petitioners motion, said court issued an Order dated February 4, 1994,[12] authorizing
petitioner to take possession of the subject property upon deposit with its clerk of court of an
amount equivalent to 15 percent of its fair market value based on its current tax declaration.
On February 21, 1994, private respondent filed its Answer containing affirmative defenses
and a counterclaim,[13] alleging in the main that (a) the complaint failed to state a cause of
action because it was filed pursuant to a resolution and not to an ordinance as required by RA
7160 (the Local Government Code); and (b) the cause of action, if any, was barred by a prior
judgment or res judicata. On private respondents motion, its Answer was treated as a
motion to dismiss.[14] On March 24, 1994,[15] petitioner filed its opposition, stressing that
the trial courts Order dated February 4, 1994 was in accord with Section 19 of RA 7160, and
that the principle of res judicata was not applicable.
Thereafter, the trial court issued its August 9, 1994 Resolution[16] nullifying its February
4, 1994 Order and dismissing the case. Petitioners motions for reconsideration and transfer
of venue were denied by the trial court in a Resolution dated December 2, 1994.[17] Petitioner
then appealed to Respondent Court, raising the following issues:
1. Whether or not the Resolution of the Paraaque Municipal Council No. 93-95, Series of
1993 is a substantial compliance of the statutory requirement of Section 19, R.A. 7180 [sic] in
the exercise of the power of eminent domain by the plaintiff-appellant.
2.

Whether or not the complaint in this case states no cause of action.

3.
Whether or not the strict adherence to the literal observance to the rule of procedure
resulted in technicality standing in the way of substantial justice.
4.

Whether or not the principle of res judicata is applicable to the present case.[18]

As previously mentioned, the Court of Appeals affirmed in toto the trial courts
Decision. Respondent Court, in its assailed Resolution promulgated on January 8, 1997,
[19] denied petitioners Motion for Reconsideration for lack of merit.
Hence, this appeal.[20]

The Issues
Before this Court, petitioner posits two issues, viz.:
1. A resolution duly approved by the municipal council has the same force and effect of an
ordinance and will not deprive an expropriation case of a valid cause of action.
2.
The principle of res judicata as a ground for dismissal of case is not applicable when
public interest is primarily involved.[21]

The Courts Ruling

The petition is not meritorious.

First Issue:

Resolution Different from an Ordinance

Petitioner contends that a resolution approved by the municipal council for the purpose of
initiating an expropriation case substantially complies with the requirements of the
law[22]because the terms ordinance and resolution are synonymous for the purpose of
bestowing authority [on] the local government unit through its chief executive to initiate the
expropriation proceedings in court in the exercise of the power of eminent
domain.[23] Petitioner seeks to bolster this contention by citing Article 36, Rule VI of the
Rules and Regulations Implementing the Local Government Code, which provides: If the
LGU fails to acquire a private property for public use, purpose, or welfare through purchase,
the LGU may expropriate said property through a resolution of the Sanggunian authorizing
its chief executive to initiate expropriation proceedings.[24] (Italics supplied.)
The Court disagrees. The power of eminent domain is lodged in the legislative branch of
government, which may delegate the exercise thereof to LGUs, other public entities and public
utilities.[25] An LGU may therefore exercise the power to expropriate private property only
when authorized by Congress and subject to the latters control and restraints, imposed
through the law conferring the power or in other legislations.[26] In this case, Section 19 of
RA 7160, which delegates to LGUs the power of eminent domain, also lays down the
parameters for its exercise. It provides as follows:
Section 19. Eminent Domain. A local government unit may, through its chief executive and
acting pursuant to an ordinance, exercise the power of eminent domain for public use, or
purpose, or welfare for the benefit of the poor and the landless, upon payment of just
compensation, pursuant to the provisions of the Constitution and pertinent

laws: Provided, however, That the power of eminent domain may not be exercised unless a
valid and definite offer has been previously made to the owner, and such offer was not
accepted: Provided, further, That the local government unit may immediately take
possession of the property upon the filing of the expropriation proceedings and upon making
a deposit with the proper court of at least fifteen percent (15%) of the fair market value of the
property based on the current tax declaration of the property to be
expropriated: Provided, finally, That, the amount to be paid for the expropriated property
shall be determined by the proper court, based on the fair market value at the time of the
taking of the property. (Emphasis supplied)
Thus, the following essential requisites must concur before an LGU can exercise the
power of eminent domain:
1. An ordinance is enacted by the local legislative council authorizing the local chief
executive, in behalf of the LGU, to exercise the power of eminent domain or pursue
expropriation proceedings over a particular private property.
2. The power of eminent domain is exercised for public use, purpose or welfare, or for
the benefit of the poor and the landless.
3. There is payment of just compensation, as required under Section 9, Article III of
the Constitution, and other pertinent laws.
4. A valid and definite offer has been previously made to the owner of the property
sought to be expropriated, but said offer was not accepted.[27]
In the case at bar, the local chief executive sought to exercise the power of eminent
domain pursuant to a resolution of the municipal council. Thus, there was no compliance
with the first requisite that the mayor be authorized through an ordinance. Petitioner
cites Camarines Sur vs. Court of Appeals[28] to show that a resolution may suffice to support
the exercise of eminent domain by an LGU.[29] This case, however, is not in point because the
applicable law at that time was BP 337,[30] the previous Local Government Code, which had
provided that a mere resolution would enable an LGU to exercise eminent domain. In
contrast, RA 7160,[31] the present Local Government Code which was already in force when
the Complaint for expropriation was filed, explicitly required an ordinance for this purpose.
We are not convinced by petitioners insistence that the terms resolution and
ordinance are synonymous. A municipal ordinance is different from a resolution. An
ordinance is a law, but a resolution is merely a declaration of the sentiment or opinion of a
lawmaking body on a specific matter.[32] An ordinance possesses a general and permanent
character, but a resolution is temporary in nature. Additionally, the two are enacted
differently -- a third reading is necessary for an ordinance, but not for a resolution, unless
decided otherwise by a majority of all the Sanggunian members.[33]
If Congress intended to allow LGUs to exercise eminent domain through a mere
resolution, it would have simply adopted the language of the previous Local Government
Code. But Congress did not. In a clear divergence from the previous Local Government Code,
Section 19 of RA 7160 categorically requires that the local chief executive act pursuant to an
ordinance. Indeed, [l]egislative intent is determined principally from the language of a

statute. Where the language of a statute is clear and unambiguous, the law is applied
according to its express terms, and interpretation would be resorted to only where a literal
interpretation would be either impossible or absurd or would lead to an injustice.[34] In the
instant case, there is no reason to depart from this rule, since the law requiring an ordinance
is not at all impossible, absurd, or unjust.
Moreover, the power of eminent domain necessarily involves a derogation of a
fundamental or private right of the people.[35] Accordingly, the manifest change in the
legislative language -- from resolution under BP 337 to ordinance under RA 7160 -demands a strict construction. No species of property is held by individuals with greater
tenacity, and is guarded by the Constitution and laws more sedulously, than the right to the
freehold of inhabitants. When the legislature interferes with that right and, for greater public
purposes, appropriates the land of an individual without his consent, the plain meaning of the
law should not be enlarged by doubtful interpretation.[36]
Petitioner relies on Article 36, Rule VI of the Implementing Rules, which requires only a
resolution to authorize an LGU to exercise eminent domain. This is clearly misplaced,
because Section 19 of RA 7160, the law itself, surely prevails over said rule which merely seeks
to implement it.[37] It is axiomatic that the clear letter of the law is controlling and cannot be
amended by a mere administrative rule issued for its implementation. Besides, what the
discrepancy seems to indicate is a mere oversight in the wording of the implementing rules,
since Article 32, Rule VI thereof, also requires that, in exercising the power of eminent
domain, the chief executive of the LGU must act pursuant to an ordinance.
In this ruling, the Court does not diminish the policy embodied in Section 2, Article X of
the Constitution, which provides that territorial and political subdivisions shall enjoy local
autonomy. It merely upholds the law as worded in RA 7160. We stress that an LGU is
created by law and all its powers and rights are sourced therefrom. It has therefore no power
to amend or act beyond the authority given and the limitations imposed on it by law. Strictly
speaking, the power of eminent domain delegated to an LGU is in reality not eminent but
inferior domain, since it must conform to the limits imposed by the delegation, and thus
partakes only of a share in eminent domain.[38] Indeed, the national legislature is still the
principal of the local government units, which cannot defy its will or modify or violate it.[39]

Complaint Does Not State a Cause of Action

In its Brief filed before Respondent Court, petitioner argues that its Sanguniang
Bayan passed an ordinance on October 11, 1994 which reiterated its Resolution No. 93-35,
Series of 1993, and ratified all the acts of its mayor regarding the subject expropriation.[40]
This argument is bereft of merit. In the first place, petitioner merely alleged the existence
of such an ordinance, but it did not present any certified true copy thereof. In the second
place, petitioner did not raise this point before this Court. In fact, it was mentioned by
private respondent, and only in passing.[41] In any event, this allegation does not cure the
inherent defect of petitioners Complaint for expropriation filed on September 23, 1993. It is
hornbook doctrine that:

 x x x in a motion to dismiss based on the ground that the complaint fails to state a cause of
action, the question submitted before the court for determination is the sufficiency of the
allegations in the complaint itself. Whether those allegations are true or not is beside the
point, for their truth is hypothetically admitted by the motion. The issue rather is: admitting
them to be true, may the court render a valid judgment in accordance with the prayer of the
complaint?[42]
The fact that there is no cause of action is evident from the face of the Complaint for
expropriation which was based on a mere resolution. The absence of an ordinance authorizing
the same is equivalent to lack of cause of action. Consequently, the Court of Appeals
committed no reversible error in affirming the trial courts Decision which dismissed the
expropriation suit.

Second Issue:

Eminent Domain Not Barred by Res Judicata

As correctly found by the Court of Appeals[43] and the trial court,[44] all the requisites
for the application of res judicata are present in this case. There is a previous final judgment
on the merits in a prior expropriation case involving identical interests, subject matter and
cause of action, which has been rendered by a court having jurisdiction over it.
Be that as it may, the Court holds that the principle of res judicata, which finds
application in generally all cases and proceedings,[45] cannot bar the right of the State or its
agent to expropriate private property. The very nature of eminent domain, as an inherent
power of the State, dictates that the right to exercise the power be absolute and unfettered
even by a prior judgment or res judicata. The scope of eminent domain is plenary and, like
police power, can reach every form of property which the State might need for public
use.[46] All separate interests of individuals in property are held of the government under
this tacit agreement or implied reservation. Notwithstanding the grant to individuals,
the eminent domain, the highest and most exact idea of property, remains in the government,
or in the aggregate body of the people in their sovereign capacity; and they have the right to
resume the possession of the property whenever the public interest requires it.[47] Thus, the
State or its authorized agent cannot be forever barred from exercising said right by reason
alone of previous non-compliance with any legal requirement.
While the principle of res judicata does not denigrate the right of the State to exercise
eminent domain, it does apply to specific issues decided in a previous case. For example, a
final judgment dismissing an expropriation suit on the ground that there was no prior offer
precludes another suit raising the same issue; it cannot, however, bar the State or its agent
from thereafter complying with this requirement, as prescribed by law, and subsequently
exercising its power of eminent domain over the same property.[48] By the same token, our
ruling that petitioner cannot exercise its delegated power of eminent domain through a mere
resolution will not bar it from reinstituting similar proceedings, once the said legal

requirement and, for that matter, all others are properly complied with. Parenthetically and
by parity of reasoning, the same is also true of the principle of law of the case. In Republic
vs De Knecht,[49] the Court ruled that the power of the State or its agent to exercise eminent
domain is not diminished by the mere fact that a prior final judgment over the property to be
expropriated has become the law of the case as to the parties. The State or its authorized
agent may still subsequently exercise its right to expropriate the same property, once all legal
requirements are complied with. To rule otherwise will not only improperly diminish the
power of eminent domain, but also clearly defeat social justice.
WHEREFORE, the petition is hereby DENIED without prejudice to petitioners proper
exercise of its power of eminent domain over subject property. Costs against petitioner.
SO ORDERED.
Davide, Jr., (Chairman), Bellosillo, Vitug, and Quisumbing, JJ., concur.

Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. 93654 May 6, 1992
FRANCISCO U. DACANAY, petitioner,
vs.
MAYOR MACARIO ASISTIO, JR., CITY ENGR. LUCIANO SARNE, JR. of Kalookan City,

Metro Manila, MILA PASTRANA AND/OR RODOLFO TEOFE, STALLHOLDERS AND

REPRESENTING CO-STALLHOLDERS,respondents.
David D. Advincula, Jr. for petitioner.
Juan P. Banaga for private respondents.
GRIO-AQUINO, J.:
May public streets or thoroughfares be leased or licensed to market stallholders by virtue of a city
ordinance or resolution of the Metro Manila Commission? This issue is posed by the petitioner, an
aggrieved Caloocan City resident who filed a special civil action of mandamus against the incumbent
city mayor and city engineer, to compel these city officials to remove the market stalls from certain city
streets which the aforementioned city officials have designated as flea markets, and the private
respondents (stallholders) to vacate the streets.
On January 5, 1979, MMC Ordinance No. 79-02 was enacted by the Metropolitan Manila Commission,
designating certain city and municipal streets, roads and open spaces as sites for flea markets. Pursuant,
thereto, the Caloocan City mayor opened up seven (7) flea markets in that city. One of those streets was
the "Heroes del '96" where the petitioner lives. Upon application of vendors Rodolfo Teope, Mila
Pastrana, Carmen Barbosa, Merle Castillo, Bienvenido Menes, Nancy Bugarin, Jose Manuel, Crisaldo
Paguirigan, Alejandro Castron, Ruben Araneta, Juanita and Rafael Malibaran, and others, the
respondents city mayor and city engineer, issued them licenses to conduct vending activities on said
street.
In 1987, Antonio Martinez, as OIC city mayor of Caloocan City, caused the demolition of the market
stalls on Heroes del '96, V. Gozon and Gonzales streets. To stop Mayor Martinez' efforts to clear the
city streets, Rodolfo Teope, Mila Pastrana and other stallowners filed an action for prohibition against
the City of Caloocan, the OIC City Mayor and the City Engineer and/or their deputies (Civil Case No.
C-12921) in the Regional Trial Court of Caloocan City, Branch 122, praying the court to issue a writ of
preliminary injunction ordering these city officials to discontinue the demolition of their stalls during
the pendency of the action.
The court issued the writ prayed for. However, on December 20, 1987, it dismissed the petition and
lifted the writ of preliminary injunction which it had earlier issued. The trial court observed that:
A perusal of Ordinance 2, series of 1979 of the Metropolitan Manila Commission will
show on the title itself that it is an ordinance
Authorizing and regulating the use of certain city and/or municipal
streets, roads and open spaces within Metropolitan Manila as sites for flea
market and/or vending areas, under certain terms and conditions, subject
to the approval of the Metropolitan Manila Commission, and for other
purposes
which is further amplified in Section 2 of the said ordinance, quoted hereunder:
Sec. 2. The streets, roads and open spaces to be used as sites for flea markets (tiangge) or
vending areas; the design, measurement or specification of the structures, equipment and
apparatuses to be used or put up; the allowable distances; the days and time allowed for
the conduct of the businesses and/or activities herein authorized; the rates or fees or
charges to be imposed, levied and collected; the kinds of merchandise, goods and
commodities sold and services rendered; and other matters and activities related to the

establishment, maintenance and management and operation of flea markets and vending
areas, shall be determined and prescribed by the mayors of the cities and municipalities
in the Metropolitan Manila where the same are located, subject to the approval of the
Metropolitan Manila Commission and consistent with the guidelines hereby prescribed.
Further, it is so provided in the guidelines under the said Ordinance No. 2 of the MMC
that
Sec. 6. In the establishment, operation, maintenance and management of flea markets
and vending areas, the following guidelines, among others, shall be observed:
xxx xxx xxx
(m) That the permittee shall remove the equipment, facilities and other appurtenances
used by him in the conduct of his business after the close or termination of business
hours. (Emphasis ours; pp. 15-16, Rollo.)
The trial court found that Heroes del '96, Gozon and Gonzales streets are of public dominion, hence,
outside the commerce of man:
The Heroes del '96 street, V. Gozon street and Gonzales street, being of public dominion
must, therefore, be outside of the commerce of man. Considering the nature of the subject
premises, the following jurisprudence co/principles are applicable on the matter:
1) They cannot be alienated or leased or otherwise be the subject matter
of contracts. (Municipality of Cavite vs. Rojas, 30 Phil. 602);
2) They cannot be acquired by prescription against the state (Insular
Government vs. Aldecoa, 19 Phil. 505). Even municipalities can not
acquire them for use as communal lands against the state (City of Manila
vs. Insular Government, 10 Phil. 327);
3) They are not subject to attachment and execution (Tan Toco vs.
Municipal Council of Iloilo, 49 Phil. 52);
4) They cannot be burdened by any voluntary easement (2-II Colin &
Capitant 520) (Tolentino, Civil Code of the Phils., Vol. II, 1983 Ed. pp.
29-30).
In the aforecited case of Municipality of Cavite vs. Rojas, it was held
that properties for public use may not be leased to private individuals.
Such a lease is null and void for the reason that a municipal council
cannot withdraw part of the plaza from public use. If possession has
already been given, the lessee must restore possession by vacating it and
the municipality must thereupon restore to him any sums it may have
collected as rent.
In the case of City of Manila vs. Gerardo Garcia, 19 SCRA 413, the
Supreme Court held:
The property being a public one, the Manila Mayors did
not have the authority to give permits, written or oral, to
the squatters, and that the permits granted are therefore
considered null and void.

This doctrine was reiterated in the case of Baguio Citizens

Action Inc. vs. The City Council, 121 SCRA 368, where it
was held that:
An ordinance legalizing the occupancy by squatters of
public land is null and void.
The authority of respondent Municipality of Makati to demolish the
shanties
of
the
petitioner's
members
is
mandated
by
P.D. 772, and Sec. 1 of Letter of Instruction No. 19 orders certain public
officials, one of whom is the Municipal Mayor to remove all illegal
constructions including buildings on and along esteros and river banks,
those along railroad tracks and those built without permits on public or
private property (Zansibarian Residents Association vs. Mun. of Makati,
135 SCRA 235). The City Engineer is also among those required to
comply with said Letter of Instruction.
The occupation and use of private individuals of sidewalks and other
public places devoted for public use constitute both public and private
nuisances and nuisance per se, and this applies to even case involving the
use or lease of public places under permits and licenses issued by
competent authority, upon the theory that such holders could not take
advantage of their unlawful permits and license and claim that the land in
question is a part of a public street or a public place devoted to public use,
hence, beyond the commerce of man. (Padilla, Civil Code Annotated, Vol.
II, p. 59, 6th Ed., citing Umali vs. Aquino, IC. A. Rep. 339.)
From the aforequoted jurisprudence/principles, the Court opines that defendants have the
right to demolish the subject stalls of the plaintiffs, more so when Section 185, par. 4 of
Batas Pambansa Blg. 337, otherwise known as the Local Government Code provides
that the City Engineer shall:
(4) . . .
(c) Prevent the encroachment of private buildings and
fences on the streets and public places;
xxx xxx xxx
(j) Inspect and supervise the construction, repair, removal
and safety of private buildings;
xxx xxx xxx
(k) With the previous approval of the City Mayor in each
case, order the removal of materials employed in the
construction or repair of any building or structures made in
violation of law or ordinance, and cause buildings and
structures dangerous to the public to made secure or torn
down;
xxx xxx xxx

Further, the Charter of the City of Caloocan, Republic Act No. 5502, Art. VII, Sec. 27,
par. g, 1 and m, grants the City Engineer similar powers. (Emphasis supplied; pp. 1720, Rollo.)
However, shortly after the decision came out, the city administration in Caloocan City changed hands.
City Mayor Macario Asistio, Jr., as successor of Mayor Martinez, did not pursue the latter's policy of
clearing and cleaning up the city streets.
Invoking the trial court's decision in Civil Case No. C-12921, Francisco U. Dacanay, a concerned
citizen, taxpayer and registered voter of Barangay 74, Zone 7, District II of Caloocan City, who resides
on Heroes del '96 Street, one of the affected streets, wrote a letter dated March 7, 1988 to Mayor
Asistio, Jr., calling his attention to the illegally-constructed stalls on Heroes del '96 Street and asked for
their demolition.
Dacanay followed up that letter with another one dated April 7, 1988 addressed to the mayor and the
city engineer, Luciano Sarne, Jr. (who replaced Engineer Arturo Samonte), inviting their attention to
the Regional Trial Court's decision in Civil Case No. 12921. There was still no response.
Dacanay sought President Corazon C. Aquino's intervention by writing her a letter on the matter. His
letter was referred to the city mayor for appropriate action. The acting Caloocan City secretary,
Asuncion Manalo, in a letter dated August 1, 1988, informed the Presidential Staff Director that the city
officials were still studying the issue of whether or not to proceed with the demolition of the market
stalls.
Dacanay filed a complaint against Mayor Asistio and Engineer Sarne (OMB-0-89-0146) in the Office
of the OMBUDSMAN. In their letter-comment dated April 3, 1989, said city officials explained that in
view of the huge number of stallholders involved, not to mention their dependents, it would be harsh
and inhuman to eject them from the area in question, for their relocation would not be an easy task.
In reply, Dacanay maintained that respondents have been derelict in the performance of their duties and
through manifest partiality constituting a violation of Section 3(e) of R.A. 3019, have caused undue
injury to the Government and given unwarranted benefits to the stallholders.
After conducting a preliminary investigation, the OMBUDSMAN rendered a final evaluation and
report on August 28, 1989, finding that the respondents' inaction is purely motivated by their perceived
moral and social responsibility toward their constituents, but "the fact remains that there is an omission
of an act which ought to be performed, in clear violation of Sections 3(e) and (f) of Republic Act
3019." (pp. 83-84, Rollo.) The OMBUDSMAN recommended the filing of the corresponding
information in court.
As the stallholders continued to occupy Heroes del '96 Street, through the tolerance of the public
respondents, and in clear violation of the decision it Civil Case No. C-12921, Dacanay filed the present
petition for mandamuson June 19, 1990, praying that the public respondents be ordered to enforce the
final decision in Civil Case No. C-12921 which upheld the city mayor's authority to order the
demolition of market stalls on V. Gozon, Gonzales and Heroes del '96 Streets and to enforce P.D. No.
772 and other pertinent laws.
On August 16, 1990, the public respondents, through the City Legal Officer, filed their Comment' on
the petition. The Office of the Solicitor General asked to be excused from filing a separate Comment in
behalf of the public respondents. The City Legal Officer alleged that the vending area was transferred
to Heroes del '96 Street to decongest Malonzo Street, which is comparatively a busier thoroughfare;
that the transfer was made by virtue of Barangay Resolution No. 30 s'78 dated January 15, 1978; that
while the resolution was awaiting approval by the Metropolitan Manila Commission, the latter passed
Ordinance No. 79-2, authorizing the use of certain streets and open spaces as sites for flea markets

and/or vending areas; that pursuant thereto, Acting MMC Mayor Virgilio P. Robles issued Executive
Order No. 135 dated January 10, 1979, ordering the establishment and operation of flea markets in
specified areas and created the Caloocan City Flea Market Authority as a regulatory body; and that
among the sites chosen and approved by the Metro Manila Commission, Heroes del '96 Street has
considered "most viable and progressive, lessening unemployment in the city and servicing the
residents with affordable basic necessities."
The petition for mandamus is meritorious.
There is no doubt that the disputed areas from which the private respondents' market stalls are sought to
be evicted are public streets, as found by the trial court in Civil Case No. C-12921. A public street is
property for public use hence outside the commerce of man (Arts. 420, 424, Civil Code). Being outside
the commerce of man, it may not be the subject of lease or other contract (Villanueva et al. vs.
Castaeda and Macalino, 15 SCRA 142, citing the Municipality of Cavite vs. Rojas, 30 SCRA 602;
Espiritu vs. Municipal Council of Pozorrubio, 102 Phil. 869; and Muyot vs. De la Fuente, 48 O.G.
4860).
As the stallholders pay fees to the City Government for the right to occupy portions of the public street,
the City Government, contrary to law, has been leasing portions of the streets to them. Such leases or
licenses are null and void for being contrary to law. The right of the public to use the city streets may
not be bargained away through contract. The interests of a few should not prevail over the good of the
greater number in the community whose health, peace, safety, good order and general welfare, the
respondent city officials are under legal obligation to protect.
The Executive Order issued by Acting Mayor Robles authorizing the use of Heroes del '96 Street as a
vending area for stallholders who were granted licenses by the city government contravenes the general
law that reserves city streets and roads for public use. Mayor Robles' Executive Order may not infringe
upon the vested right of the public to use city streets for the purpose they were intended to serve: i.e., as
arteries of travel for vehicles and pedestrians. As early as 1989, the public respondents bad started to
look for feasible alternative sites for flea markets. They have had more than ample time to relocate the
street vendors.
WHEREFORE, it having been established that the petitioner and the general public have a legal right
to the relief demanded and that the public respondents have the corresponding duty, arising from public
office, to clear the city streets and restore them to their specific public purpose (Enriquez vs. Bidin, 47
SCRA 183; City of Manila vs. Garcia et al., 19 SCRA, 413 citing Unson vs. Lacson, 100 Phil. 695), the
respondents City Mayor and City Engineer of Caloocan City or their successors in office are hereby
ordered to immediately enforce and implement the decision in Civil Case No. C-1292 declaring that
Heroes del '96, V. Gozon, and Gonzales Streets are public streets for public use, and they are ordered to
remove or demolish, or cause to be removed or demolished, the market stalls occupying said city
streets with utmost dispatch within thirty (30)days from notice of this decision. This decision is
immediately executory.
SO ORDERED.
Narvasa, C.J., Melecio-Herrera, Gutierrez, Jr. Cruz, Paras, Feliciano, Padilla, Bidin, Medialdea,
Regalado, Davide, Jr., Romero and Nocon, JJ., concur.
Bellosillo, J., took no part.

Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. L-23052

January 29, 1968

CITY OF MANILA, petitioner,

vs.
GENARO N. TEOTICO and COURT OF APPEALS, respondents.
City Fiscal Manuel T. Reyes for petitioner.
Sevilla, Daza and Associates for respondents.
CONCEPCION, C.J.:
Appeal by certiorari from a decision of the Court of Appeals.
On January 27, 1958, at about 8:00 p.m., Genaro N. Teotico was at the corner of the Old Luneta and P.
Burgos Avenue, Manila, within a "loading and unloading" zone, waiting for a jeepney to take him down
town. After waiting for about five minutes, he managed to hail a jeepney that came along to a stop. As
he stepped down from the curb to board the jeepney, and took a few steps, he fell inside an uncovered
and unlighted catch basin or manhole on P. Burgos Avenue. Due to the fall, his head hit the rim of the

manhole breaking his eyeglasses and causing broken pieces thereof to pierce his left eyelid. As blood
flowed therefrom, impairing his vision, several persons came to his assistance and pulled him out of the
manhole. One of them brought Teotico to the Philippine General Hospital, where his injuries were
treated, after which he was taken home. In addition to the lacerated wound in his left upper eyelid,
Teotico suffered contusions on the left thigh, the left upper arm, the right leg and the upper lip apart
from an abrasion on the right infra-patella region. These injuries and the allergic eruption caused by
anti-tetanus injections administered to him in the hospital, required further medical treatment by a
private practitioner who charged therefor P1,400.00.
As a consequence of the foregoing occurrence, Teotico filed, with the Court of First Instance of Manila,
a complaint which was, subsequently, amended for damages against the City of Manila, its
mayor, city engineer, city health officer, city treasurer and chief of police. As stated in the decision of
the trial court, and quoted with approval by the Court of Appeals,
At the time of the incident, plaintiff was a practicing public accountant, a businessman and a
professor at the University of the East. He held responsible positions in various business firms
like the Philippine Merchandising Co., the A.U. Valencia and Co., the Silver Swan
Manufacturing Company and the Sincere Packing Corporation. He was also associated with
several civic organizations such as the Wack Wack Golf Club, the Chamber of Commerce of the
Philippines, Y's Men Club of Manila and the Knights of Rizal. As a result of the incident,
plaintiff was prevented from engaging in his customary occupation for twenty days. Plaintiff
has lost a daily income of about P50.00 during his incapacity to work. Because of the incident,
he was subjected to humiliation and ridicule by his business associates and friends. During the
period of his treatment, plaintiff was under constant fear and anxiety for the welfare of his
minor children since he was their only support. Due to the filing of this case, plaintiff has
obligated himself to pay his counsel the sum of P2,000.00.
On the other hand, the defense presented evidence, oral and documentary, to prove that the
Storm Drain Section, Office of the City Engineer of Manila, received a report of the uncovered
condition of a catchbasin at the corner of P. Burgos and Old Luneta Streets, Manila, on January
24, 1958, but the same was covered on the same day (Exhibit 4); that again the iron cover of the
same catch basin was reported missing on January 30, 1958, but the said cover was replaced the
next day (Exhibit 5); that the Office of the City Engineer never received any report to the effect
that the catchbasin in question was not covered between January 25 and 29, 1968; that it has
always been a policy of the said office, which is charged with the duty of installation, repair and
care of storm drains in the City of Manila, that whenever a report is received from whatever
source of the loss of a catchbasin cover, the matter is immediately attended to, either by
immediately replacing the missing cover or covering the catchbasin with steel matting that
because of the lucrative scrap iron business then prevailing, stealing of iron catchbasin covers
was rampant; that the Office of the City Engineer has filed complaints in court resulting from
theft of said iron covers; that in order to prevent such thefts, the city government has changed
the position and layout of catchbasins in the City by constructing them under the sidewalks with
concrete cement covers and openings on the side of the gutter; and that these changes had been
undertaken by the city from time to time whenever funds were available.
After appropriate proceedings the Court of First Instance of Manila rendered the aforementioned
decision sustaining the theory of the defendants and dismissing the amended complaint, without costs.
On appeal taken by plaintiff, this decision was affirmed by the Court of Appeals, except insofar as the
City of Manila is concerned, which was sentenced to pay damages in the aggregate sum of
P6,750.00. 1 Hence, this appeal by the City of Manila.

The first issue raised by the latter is whether the present case is governed by Section 4 of Republic Act
No. 409 (Charter of the City of Manila) reading:
The city shall not be liable or held for damages or injuries to persons or property arising from
the failure of the Mayor, the Municipal Board, or any other city officer, to enforce the
provisions of this chapter, or any other law or ordinance, or from negligence of said Mayor,
Municipal Board, or other officers while enforcing or attempting to enforce said provisions.
or by Article 2189 of the Civil Code of the Philippines which provides:
Provinces, cities and municipalities shall be liable for damages for the death of, or injuries
suffered by, any person by reason of defective conditions of road, streets, bridges, public
buildings, and other public works under their control or supervision.
Manila maintains that the former provision should prevail over the latter, because Republic Act 409, is
a special law, intended exclusively for the City of Manila, whereas the Civil Code is a general law,
applicable to the entire Philippines.
The Court of Appeals, however, applied the Civil Code, and, we think, correctly. It is true that, insofar
as its territorial application is concerned, Republic Act No. 409 is a special law and the Civil Code a
general legislation; but, as regards the subject-matter of the provisions above quoted, Section 4 of
Republic Act 409 establishes a general rule regulating the liability of the City of Manila for: "damages
or injury to persons or property arising from the failure of" city officers "to enforce the provisions of"
said Act "or any other law or ordinance, or from negligence" of the city "Mayor, Municipal Board, or
other officers while enforcing or attempting to enforce said provisions." Upon the other hand, Article
2189 of the Civil Code constitutes a particular prescription making "provinces, cities and municipalities
. . . liable for damages for the death of, or injury suffered by any person by reason" specifically
"of the defective condition of roads, streets, bridges, public buildings, and other-public works under
their control or supervision." In other words, said section 4 refers to liability arising from negligence,
in general, regardless of the object thereof, whereas Article 2189 governs liability due to "defective
streets," in particular. Since the present action is based upon the alleged defective condition of a road,
said Article 2189 is decisive thereon.
It is urged that the City of Manila cannot be held liable to Teotico for damages: 1) because the accident
involving him took place in a national highway; and 2) because the City of Manila has not been
negligent in connection therewith.
As regards the first issue, we note that it is based upon an allegation of fact not made in the answer of
the City. Moreover, Teotico alleged in his complaint, as well as in his amended complaint, that his
injuries were due to the defective condition of a street which is "under the supervision and control" of
the City. In its answer to the amended complaint, the City, in turn, alleged that "the streets
aforementioned were and have been constantly kept in good condition and regularly inspected and the
storm drains and manholes thereof covered by the defendant City and the officers concerned" who
"have been ever vigilant and zealous in the performance of their respective functions and duties as
imposed upon them by law." Thus, the City had, in effect, admitted that P. Burgos Avenue was and
is under its control and supervision.
Moreover, the assertion to the effect that said Avenue is a national highway was made, for the first time,
in its motion for reconsideration of the decision of the Court of Appeals. Such assertion raised,
therefore, a question of fact, which had not been put in issue in the trial court, and cannot be set up, for
the first time, on appeal, much less after the rendition of the decision of the appellate court, in a motion
for the reconsideration thereof.

At any rate, under Article 2189 of the Civil Code, it is not necessary for the liability therein established
to attach that the defective roads or streets belong to the province, city or municipality from which
responsibility is exacted. What said article requires is that the province, city or municipality have either
"control or supervision" over said street or road. Even if P. Burgos Avenue were, therefore, a national
highway, this circumstance would not necessarily detract from its "control or supervision" by the City
of Manila, under Republic Act 409. In fact Section 18(x) thereof provides:
Sec. 18. Legislative powers. The Municipal Board shall have the following legislative
powers:
xxx

xxx

xxx

(x) Subject to the provisions of existing law to provide for the laying out,
construction and improvement, and to regulate the use of streets, avenues, alleys, sidewalks,
wharves, piers, parks, cemeteries, and other public places; to provide for lighting, cleaning, and
sprinkling of streets and public places; . . . to provide for the inspection of, fix the license fees
for and regulate the openings in the same for the laying of gas, water, sewer and other pipes, the
building and repair of tunnels, sewers, and drains, and all structures in and under the same and
the erecting of poles and the stringing of wires therein; to provide for and regulate cross-works,
curbs, and gutters therein, . . . to regulate traffic and sales upon the streets and other public
places; to provide for the abatement of nuisances in the same and punish the authors or owners
thereof; to provide for the construction and maintenance, and regulate the use, of bridges,
viaducts and culverts; to prohibit and regulate ball playing, kite-flying, hoop rolling, and other
amusements which may annoy persons using the streets and public places, or frighten horses or
other animals; to regulate the speed of horses and other animals, motor and other vehicles, cars,
and locomotives within the limits of the city; to regulate the lights used on all vehicles, cars,
and locomotives; . . . to provide for and change the location, grade, and crossing of railroads,
and compel any such railroad to raise or lower its tracks to conform to such provisions or
changes; and to require railroad companies to fence their property, or any part thereof,
to provide suitable protection against injury to persons or property, and to construct and repair
ditches, drains, sewers, and culverts along and under their tracks, so that the natural drainage of
the streets and adjacent property shall not be obstructed.
This authority has been neither withdrawn nor restricted by Republic Act No. 917 and Executive Order
No. 113, dated May 2, 1955, upon which the City relies. Said Act governs the disposition or
appropriation of the highway funds and the giving of aid to provinces, chartered cities and
municipalities in the construction of roads and streets within their respective boundaries, and Executive
Order No. 113 merely implements the provisions of said Republic Act No. 917, concerning the
disposition and appropriation of the highway funds. Moreover, it provides that "the
construction, maintenance and improvement of national primary, national secondary and national aid
provincial and city roads shall be accomplished by the Highway District Engineers and
Highway City Engineers under the supervision of the Commissioner of Public Highways and shall be
financed from such appropriations as may be authorized by the Republic of the Philippines in annual or
special appropriation Acts."
Then, again, the determination of whether or not P. Burgos Avenue is under the control or supervision
of the City of Manila and whether the latter is guilty of negligence, in connection with the maintenance
of said road, which were decided by the Court of Appeals in the affirmative, is one of fact, and the
findings of said Court thereon are not subject to our review.
WHEREFORE, the decision appealed from should be as it is hereby affirmed, with costs against the
City of Manila. It is so ordered.1wph1.t

Reyes, J.B.L., Dizon, Makalintal, Bengzon, J.P., Zaldivar, Sanchez, Castro, Angeles and Fernando, JJ.,
concur.

Republic of the Philippines

SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 71049 May 29, 1987
BERNARDINO JIMENEZ, petitioner,
vs.
CITY OF MANILA and INTERMEDIATE APPELLATE COURT, respondents.
PARAS, J.:
This is a petition for review on certiorari of: (1) the decision * of the Intermediate Appellate Court in
AC-G.R. No. 013887-CVBernardino Jimenez v. Asiatic Integrated Corporation and City of Manila,
reversing the decision ** of the Court of First Instance of Manila, Branch XXII in Civil Case No.
96390 between the same parties, but only insofar as holding Asiatic Integrated Corporation solely liable
for damages and attorney's fees instead of making the City of Manila jointly and solidarily liable with it
as prayed for by the petitioner and (2) the resolution of the same Appellate Court denying his Partial
Motion for Reconsideration (Rollo, p. 2).
The dispositive portion of the Intermediate Appellate Court's decision is as follows:
WHEREFORE, the decision appealed from is hereby REVERSED. A new one is hereby
entered ordering the defendant Asiatic Integrated Corporation to pay the plaintiff
P221.90 actual medical expenses, P900.00 for the amount paid for the operation and
management of a school bus, P20,000.00 as moral damages due to pains, sufferings and
sleepless nights and P l0,000.00 as attorney's fees.
SO ORDERED. (p. 20, Rollo)

The findings of respondent Appellate Court are as follows:

The evidence of the plaintiff (petitioner herein) shows that in the morning of August 15, 1974 he,
together with his neighbors, went to Sta. Ana public market to buy "bagoong" at the time when the
public market was flooded with ankle deep rainwater. After purchasing the "bagoong" he turned around
to return home but he stepped on an uncovered opening which could not be seen because of the dirty
rainwater, causing a dirty and rusty four- inch nail, stuck inside the uncovered opening, to pierce the
left leg of plaintiff-petitioner penetrating to a depth of about one and a half inches. After administering
first aid treatment at a nearby drugstore, his companions helped him hobble home. He felt ill and
developed fever and he had to be carried to Dr. Juanita Mascardo. Despite the medicine administered to
him by the latter, his left leg swelled with great pain. He was then rushed to the Veterans Memorial
Hospital where he had to be confined for twenty (20) days due to high fever and severe pain.
Upon his discharge from the hospital, he had to walk around with crutches for fifteen (15) days. His
injury prevented him from attending to the school buses he is operating. As a result, he had to engage
the services of one Bienvenido Valdez to supervise his business for an aggregate compensation of nine
hundred pesos (P900.00). (Decision, AC-G.R. CV No. 01387, Rollo, pp. 13-20).
Petitioner sued for damages the City of Manila and the Asiatic Integrated Corporation under whose
administration the Sta. Ana Public Market had been placed by virtue of a Management and Operating
Contract (Rollo, p. 47).
The lower court decided in favor of respondents, the dispositive portion of the decision reading:
WHEREFORE, judgment is hereby rendered in favor of the defendants and against the
plaintiff dismissing the complaint with costs against the plaintiff. For lack of sufficient
evidence, the counterclaims of the defendants are likewise dismissed. (Decision, Civil
Case No. 96390, Rollo, p. 42).
As above stated, on appeal, the Intermediate Appellate Court held the Asiatic Integrated Corporation
liable for damages but absolved respondent City of Manila.
Hence this petition.
The lone assignment of error raised in this petition is on whether or not the Intermediate Appellate
Court erred in not ruling that respondent City of Manila should be jointly and severally liable with
Asiatic Integrated Corporation for the injuries petitioner suffered.
In compliance with the resolution of July 1, 1985 of the First Division of this Court (Rollo, p. 29)
respondent City of Manila filed its comment on August 13, 1985 (Rollo, p. 34) while petitioner filed its
reply on August 21, 1985 (Reno, p. 51).
Thereafter, the Court in the resolution of September 11, 1985 (Rollo, p. 62) gave due course to the
petition and required both parties to submit simultaneous memoranda
Petitioner filed his memorandum on October 1, 1985 (Rollo, p. 65) while respondent filed its
memorandum on October 24, 1985 (Rollo, p. 82).
In the resolution of October 13, 1986, this case was transferred to the Second Division of this Court,
the same having been assigned to a member of said Division (Rollo, p. 92).
The petition is impressed with merit.
As correctly found by the Intermediate Appellate Court, there is no doubt that the plaintiff suffered
injuries when he fell into a drainage opening without any cover in the Sta. Ana Public Market.
Defendants do not deny that plaintiff was in fact injured although the Asiatic Integrated Corporation
tries to minimize the extent of the injuries, claiming that it was only a small puncture and that as a war

veteran, plaintiff's hospitalization at the War Veteran's Hospital was free. (Decision, AC-G.R. CV No.
01387, Rollo, p. 6).
Respondent City of Manila maintains that it cannot be held liable for the injuries sustained by the
petitioner because under the Management and Operating Contract, Asiatic Integrated Corporation
assumed all responsibility for damages which may be suffered by third persons for any cause
attributable to it.
It has also been argued that the City of Manila cannot be held liable under Article 1, Section 4 of
Republic Act No. 409 as amended (Revised Charter of Manila) which provides:
The City shall not be liable or held for damages or injuries to persons or property arising
from the failure of the Mayor, the Municipal Board, or any other City Officer, to enforce
the provisions of this chapter, or any other law or ordinance, or from negligence of said
Mayor, Municipal Board, or any other officers while enforcing or attempting to enforce
said provisions.
This issue has been laid to rest in the case of City of Manila v. Teotico (22 SCRA 269-272 [1968])
where the Supreme Court squarely ruled that Republic Act No. 409 establishes a general rule regulating
the liability of the City of Manila for "damages or injury to persons or property arising from the failure
of city officers" to enforce the provisions of said Act, "or any other law or ordinance or from
negligence" of the City "Mayor, Municipal Board, or other officers while enforcing or attempting to
enforce said provisions."
Upon the other hand, Article 2189 of the Civil Code of the Philippines which provides that:
Provinces, cities and municipalities shall be liable for damages for the death of, or
injuries suffered by any person by reason of defective conditions of roads, streets,
bridges, public buildings and other public works under their control or supervision.
constitutes a particular prescription making "provinces, cities and municipalities ... liable for damages
for the death of, or injury suffered by any person by reason" specifically "of the defective
condition of roads, streets, bridges, public buildings, and other public works under their control or
supervision." In other words, Art. 1, sec. 4, R.A. No. 409 refers to liability arising from negligence, in
general, regardless of the object, thereof, while Article 2189 of the Civil Code governs liability due to
"defective streets, public buildings and other public works" in particular and is therefore decisive on
this specific case.
In the same suit, the Supreme Court clarified further that under Article 2189 of the Civil Code, it is not
necessary for the liability therein established to attach, that the defective public works belong to the
province, city or municipality from which responsibility is exacted. What said article requires is that the
province, city or municipality has either "control or supervision" over the public building in question.
In the case at bar, there is no question that the Sta. Ana Public Market, despite the Management and
Operating Contract between respondent City and Asiatic Integrated Corporation remained under the
control of the former.
For one thing, said contract is explicit in this regard, when it provides:
II
That immediately after the execution of this contract, the SECOND PARTY shall start
the painting, cleaning, sanitizing and repair of the public markets and talipapas and
within ninety (90) days thereof, the SECOND PARTY shall submit a program of

improvement, development, rehabilitation and reconstruction of the city public markets

and talipapas subject to prior approval of the FIRST PARTY. (Rollo, p. 44)
xxx xxx xxx
VI
That all present personnel of the City public markets and talipapas shall be retained by
the SECOND PARTY as long as their services remain satisfactory and they shall be
extended the same rights and privileges as heretofore enjoyed by them. Provided,
however, that the SECOND PARTY shall have the right, subject to prior approval of the
FIRST PARTY to discharge any of the present employees for cause. (Rollo, p. 45).
VII
That the SECOND PARTY may from time to time be required by the FIRST PARTY, or
his duly authorized representative or representatives, to report, on the activities and
operation of the City public markets and talipapas and the facilities and conveniences
installed therein, particularly as to their cost of construction, operation and maintenance
in connection with the stipulations contained in this Contract. (lbid)
The fact of supervision and control of the City over subject public market was admitted by Mayor
Ramon Bagatsing in his letter to Secretary of Finance Cesar Virata which reads:
These cases arose from the controversy over the Management and Operating Contract
entered into on December 28, 1972 by and between the City of Manila and the Asiatic
Integrated Corporation, whereby in consideration of a fixed service fee, the City hired
the services of the said corporation to undertake the physical management, maintenance,
rehabilitation and development of the City's public markets and' Talipapas' subject to the
control and supervision of the City.
xxx xxx xxx
It is believed that there is nothing incongruous in the exercise of these powers vis-a-vis
the existence of the contract, inasmuch as the City retains the power of supervision and
control over its public markets and talipapas under the terms of the contract. (Exhibit
"7-A") (Emphasis supplied.) (Rollo, p. 75).
In fact, the City of Manila employed a market master for the Sta. Ana Public Market whose primary
duty is to take direct supervision and control of that particular market, more specifically, to check the
safety of the place for the public.
Thus the Asst. Chief of the Market Division and Deputy Market Administrator of the City of Manila
testified as follows:
Court This market master is an employee of the City of Manila?
Mr. Ymson Yes, Your Honor.
Q What are his functions?
A Direct supervision and control over the market area assigned to
him."(T.s.n.,pp. 41-42, Hearing of May 20, 1977.)
xxx xxx xxx

Court As far as you know there is or is there any specific employee

assigned with the task of seeing to it that the Sta. Ana Market is safe for
the public?
Mr. Ymson Actually, as I stated, Your Honor, that the Sta. Ana has its own
market master. The primary duty of that market master is to make the
direct supervision and control of that particular market, the check or
verifying whether the place is safe for public safety is vested in the
market master. (T.s.n., pp. 2425, Hearing of July 27, 1977.) (Emphasis
supplied.) (Rollo, p. 76).
Finally, Section 30 (g) of the Local Tax Code as amended, provides:
The treasurer shall exercise direct and immediate supervision administration and
control over public markets and the personnel thereof, including those whose duties
concern the maintenance and upkeep of the market and ordinances and other pertinent
rules and regulations. (Emphasis supplied.) (Rollo, p. 76)
The contention of respondent City of Manila that petitioner should not have ventured to go to Sta. Ana
Public Market during a stormy weather is indeed untenable. As observed by respondent Court of
Appeals, it is an error for the trial court to attribute the negligence to herein petitioner. More
specifically stated, the findings of appellate court are as follows:
... The trial court even chastised the plaintiff for going to market on a rainy day just to
buy bagoong. A customer in a store has the right to assume that the owner will comply
with his duty to keep the premises safe for customers. If he ventures to the store on the
basis of such assumption and is injured because the owner did not comply with his duty,
no negligence can be imputed to the customer. (Decision, AC-G. R. CV No. 01387,
Rollo, p. 19).
As a defense against liability on the basis of a quasi-delict, one must have exercised the diligence of a
good father of a family. (Art. 1173 of the Civil Code).
There is no argument that it is the duty of the City of Manila to exercise reasonable care to keep the
public market reasonably safe for people frequenting the place for their marketing needs.
While it may be conceded that the fulfillment of such duties is extremely difficult during storms and
floods, it must however, be admitted that ordinary precautions could have been taken during good
weather to minimize the dangers to life and limb under those difficult circumstances.
For instance, the drainage hole could have been placed under the stalls instead of on the passage ways.
Even more important is the fact, that the City should have seen to it that the openings were covered.
Sadly, the evidence indicates that long before petitioner fell into the opening, it was already uncovered,
and five (5) months after the incident happened, the opening was still uncovered. (Rollo, pp. 57; 59).
Moreover, while there are findings that during floods the vendors remove the iron grills to hasten the
flow of water (Decision, AC-G.R. CV No. 0 1387; Rollo, p. 17), there is no showing that such practice
has ever been prohibited, much less penalized by the City of Manila. Neither was it shown that any sign
had been placed thereabouts to warn passersby of the impending danger.
To recapitulate, it appears evident that the City of Manila is likewise liable for damages under Article
2189 of the Civil Code, respondent City having retained control and supervision over the Sta. Ana
Public Market and as tort-feasor under Article 2176 of the Civil Code on quasi-delicts
Petitioner had the right to assume that there were no openings in the middle of the passageways and if
any, that they were adequately covered. Had the opening been covered, petitioner could not have fallen

into it. Thus the negligence of the City of Manila is the proximate cause of the injury suffered, the City
is therefore liable for the injury suffered by the peti- 4 petitioner.
Respondent City of Manila and Asiatic Integrated Corporation being joint tort-feasors are solidarily
liable under Article 2194 of the Civil Code.
PREMISES CONSIDERED, the decision of the Court of Appeals is hereby MODIFIED, making the
City of Manila and the Asiatic Integrated Corporation solidarily liable to pay the plaintiff P221.90
actual medical expenses, P900.00 for the amount paid for the operation and management of the school
bus, P20,000.00 as moral damages due to pain, sufferings and sleepless nights and P10,000.00 as
attorney's fees.
SO ORDERED.
Fernan (Chairman), Gutierrez, Jr., Padilla, Bidin and Cortes JJ., concur.

Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. 97764 August 10, 1992
LEVY D. MACASIANO, Brigadier General/PNP Superintendent, Metropolitan Traffic
Command, petitioner,
vs.
HONORABLE ROBERTO C. DIOKNO, Presiding Judge, Branch 62, Regional Trial Court of
Makati, Metro Manila, MUNICIPALITY OF PARAAQUE, METRO MANILA, PALANYAG
KILUSANG BAYAN FOR SERVICE,respondents.
Ceferino, Padua Law Office for Palanyag Kilusang Bayan for service.
Manuel de Guia for Municipality of Paraaque.
MEDIALDEA, J.:
This is a petition for certiorari under Rule 65 of the Rules of Court seeking the annulment of the
decision of the Regional Trial Court of Makati, Branch 62, which granted the writ of preliminary
injunction applied for by respondents Municipality of Paraaque and Palanyag Kilusang Bayan for
Service (Palanyag for brevity) against petitioner herein.
The antecedent facts are as follows:
On June 13, 1990, the respondent municipality passed Ordinance No. 86, Series of 1990 which
authorized the closure of J. Gabriel, G.G. Cruz, Bayanihan, Lt. Garcia Extension and Opena Streets
located at Baclaran, Paraaque, Metro Manila and the establishment of a flea market thereon. The said
ordinance was approved by the municipal council pursuant to MMC Ordinance No. 2, Series of 1979,
authorizing and regulating the use of certain city and/or municipal streets, roads and open spaces within
Metropolitan Manila as sites for flea market and/or vending areas, under certain terms and conditions.
On July 20, 1990, the Metropolitan Manila Authority approved Ordinance No. 86, s. 1990 of the
municipal council of respondent municipality subject to the following conditions:
1. That the aforenamed streets are not used for vehicular traffic, and that the majority of
the residents do not oppose the establishment of the flea market/vending areas thereon;

2. That the 2-meter middle road to be used as flea market/vending area shall be marked
distinctly, and that the 2 meters on both sides of the road shall be used by pedestrians;
3. That the time during which the vending area is to be used shall be clearly designated;
4. That the use of the vending areas shall be temporary and shall be closed once the
reclaimed areas are developed and donated by the Public Estate Authority.
On June 20, 1990, the municipal council of Paraaque issued a resolution authorizing Paraaque Mayor
Walfrido N. Ferrer to enter into contract with any service cooperative for the establishment, operation,
maintenance and management of flea markets and/or vending areas.
On August 8, 1990, respondent municipality and respondent Palanyag, a service cooperative, entered
into an agreement whereby the latter shall operate, maintain and manage the flea market in the
aforementioned streets with the obligation to remit dues to the treasury of the municipal government of
Paraaque. Consequently, market stalls were put up by respondent Palanyag on the said streets.
On September 13, 1990, petitioner Brig. Gen. Macasiano, PNP Superintendent of the Metropolitan
Traffic Command, ordered the destruction and confiscation of stalls along G.G. Cruz and J. Gabriel St.
in Baclaran. These stalls were later returned to respondent Palanyag.
On October 16, 1990, petitioner Brig. General Macasiano wrote a letter to respondent Palanyag giving
the latter ten (10) days to discontinue the flea market; otherwise, the market stalls shall be dismantled.
Hence, on October 23, 1990, respondents municipality and Palanyag filed with the trial court a joint
petition for prohibition and mandamus with damages and prayer for preliminary injunction, to which
the petitioner filed his memorandum/opposition to the issuance of the writ of preliminary injunction.
On October 24, 1990, the trial court issued a temporary restraining order to enjoin petitioner from
enforcing his letter-order of October 16, 1990 pending the hearing on the motion for writ of
preliminary injunction.
On December 17, 1990, the trial court issued an order upholding the validity of Ordinance No. 86 s.
1990 of the Municipality' of Paraaque and enjoining petitioner Brig. Gen. Macasiano from enforcing
his letter-order against respondent Palanyag.
Hence, this petition was filed by the petitioner thru the Office of the Solicitor General alleging grave
abuse of discretion tantamount to lack or excess of jurisdiction on the part of the trial judge in issuing
the assailed order.
The sole issue to be resolved in this case is whether or not an ordinance or resolution issued by the
municipal council of Paraaque authorizing the lease and use of public streets or thoroughfares as sites
for flea markets is valid.
The Solicitor General, in behalf of petitioner, contends that municipal roads are used for public service
and are therefore public properties; that as such, they cannot be subject to private appropriation or
private contract by any person, even by the respondent Municipality of Paraaque. Petitioner submits
that a property already dedicated to public use cannot be used for another public purpose and that
absent a clear showing that the Municipality of Paraaque has been granted by the legislature specific
authority to convert a property already in public use to another public use, respondent municipality is,
therefore, bereft of any authority to close municipal roads for the establishment of a flea market.
Petitioner also submits that assuming that the respondent municipality is authorized to close streets, it
failed to comply with the conditions set forth by the Metropolitan Manila Authority for the approval of
the ordinance providing for the establishment of flea markets on public streets. Lastly, petitioner
contends that by allowing the municipal streets to be used by market vendors the municipal council of

respondent municipality violated its duty under the Local Government Code to promote the general
welfare of the residents of the municipality.
In upholding the legality of the disputed ordinance, the trial court ruled:
. . . that Chanter II Section 10 of the Local Government Code is a statutory grant of
power given to local government units, the Municipality of Paraaque as such, is
empowered under that law to close its roads, streets or alley subject to limitations stated
therein (i.e., that it is in accordance with existing laws and the provisions of this code).
xxx xxx xxx
The actuation of the respondent Brig. Gen. Levi Macasiano, though apparently within its
power is in fact an encroachment of power legally vested to the municipality, precisely
because when the municipality enacted the ordinance in question the authority of the
respondent as Police Superintendent ceases to be operative on the ground that the streets
covered by the ordinance ceases to be a public thoroughfare. (pp. 33-34, Rollo)
We find the petition meritorious. In resolving the question of whether the disputed municipal ordinance
authorizing the flea market on the public streets is valid, it is necessary to examine the laws in force
during the time the said ordinance was enacted, namely, Batas Pambansa Blg. 337, otherwise known as
Local Government Code, in connection with established principles embodied in the Civil Code an
property and settled jurisprudence on the matter.
The property of provinces, cities and municipalities is divided into property for public use and
patrimonial property (Art. 423, Civil Code). As to what consists of property for public use, Article 424
of Civil Code states:
Art. 424. Property for public use, in the provinces, cities and municipalities, consists of
the provincial roads, city streets, the squares, fountains, public waters, promenades, and
public works for public service paid for by said provinces, cities or municipalities.
All other property possessed by any of them is patrimonial and shall be governed by this
Code, without prejudice to the provisions of special laws.
Based on the foregoing, J. Gabriel G.G. Cruz, Bayanihan, Lt. Garcia Extension and Opena streets are
local roads used for public service and are therefore considered public properties of respondent
municipality. Properties of the local government which are devoted to public service are deemed public
and are under the absolute control of Congress (Province of Zamboanga del Norte v. City of
Zamboanga, L-24440, March 28, 1968, 22 SCRA 1334). Hence, local governments have no authority
whatsoever to control or regulate the use of public properties unless specific authority is vested upon
them by Congress. One such example of this authority given by Congress to the local governments is
the power to close roads as provided in Section 10, Chapter II of the Local Government Code, which
states:
Sec. 10. Closure of roads. A local government unit may likewise, through its head
acting pursuant to a resolution of its sangguniang and in accordance with existing law
and the provisions of this Code, close any barangay, municipal, city or provincial road,
street, alley, park or square. No such way or place or any part of thereof shall be close
without indemnifying any person prejudiced thereby. A property thus withdrawn from
public use may be used or conveyed for any purpose for which other real property
belonging to the local unit concerned might be lawfully used or conveyed. (Emphasis
ours).

However, the aforestated legal provision which gives authority to local government units to close roads
and other similar public places should be read and interpreted in accordance with basic principles
already established by law. These basic principles have the effect of limiting such authority of the
province, city or municipality to close a public street or thoroughfare. Article 424 of the Civil Code
lays down the basic principle that properties of public dominion devoted to public use and made
available to the public in general are outside the commerce of man and cannot be disposed of or leased
by the local government unit to private persons. Aside from the requirement of due process which
should be complied with before closing a road, street or park, the closure should be for the sole purpose
of withdrawing the road or other public property from public use when circumstances show that such
property is no longer intended or necessary for public use or public service. When it is already
withdrawn from public use, the property then becomes patrimonial property of the local government
unit concerned (Article 422, Civil Code; Cebu Oxygen, etc. et al. v. Bercilles, et al., G.R. No. L-40474,
August 29, 1975, 66 SCRA 481). It is only then that the respondent municipality can "use or convey
them for any purpose for which other real property belonging to the local unit concerned might be
lawfully used or conveyed" in accordance with the last sentence of Section 10, Chapter II of Blg. 337,
known as Local Government Code. In one case, the City Council of Cebu, through a resolution,
declared the terminal road of M. Borces Street, Mabolo, Cebu City as an abandoned road, the same not
being included in the City Development Plan. Thereafter, the City Council passes another resolution
authorizing the sale of the said abandoned road through public bidding. We held therein that the City of
Cebu is empowered to close a city street and to vacate or withdraw the same from public use. Such
withdrawn portion becomes patrimonial property which can be the object of an ordinary contract (Cebu
Oxygen
and
Acetylene
Co.,
Inc.
v.
Bercilles,
et
al.,
G.R.
No.
L-40474, August 29, 1975, 66 SCRA 481). However, those roads and streets which are available to the
public in general and ordinarily used for vehicular traffic are still considered public property devoted to
public use. In such case, the local government has no power to use it for another purpose or to dispose
of or lease it to private persons. This limitation on the authority of the local government over public
properties has been discussed and settled by this Court en banc in "Francisco V. Dacanay, petitioner v.
Mayor Macaria Asistio, Jr., et al., respondents, G.R. No. 93654, May 6, 1992." This Court ruled:
There is no doubt that the disputed areas from which the private respondents' market
stalls are sought to be evicted are public streets, as found by the trial court in Civil Case
No. C-12921. A public street is property for public use hence outside the commerce of
man (Arts. 420, 424, Civil Code). Being outside the commerce of man, it may not be the
subject of lease or others contract (Villanueva, et al. v. Castaeda and Macalino, 15
SCRA 142 citing the Municipality of Cavite v. Rojas, 30 SCRA 602; Espiritu v.
Municipal Council of Pozorrubio, 102 Phil. 869; And Muyot v. De la Fuente, 48 O.G.
4860).
As the stallholders pay fees to the City Government for the right to occupy portions of
the public street, the City Government, contrary to law, has been leasing portions of the
streets to them. Such leases or licenses are null and void for being contrary to law. The
right of the public to use the city streets may not be bargained away through contract.
The interests of a few should not prevail over the good of the greater number in the
community whose health, peace, safety, good order and general welfare, the respondent
city officials are under legal obligation to protect.
The Executive Order issued by acting Mayor Robles authorizing the use of Heroes del
'96 Street as a vending area for stallholders who were granted licenses by the city
government contravenes the general law that reserves city streets and roads for public
use. Mayor Robles' Executive Order may not infringe upon the vested right of the public

to use city streets for the purpose they were intended to serve: i.e., as arteries of travel
for vehicles and pedestrians.
Even assuming, in gratia argumenti, that respondent municipality has the authority to pass the disputed
ordinance, the same cannot be validly implemented because it cannot be considered approved by the
Metropolitan Manila Authority due to non-compliance by respondent municipality of the conditions
imposed by the former for the approval of the ordinance, to wit:
1. That the aforenamed streets are not used for vehicular traffic, and that the majority of
the residents do(es) not oppose the establishment of the flea market/vending areas
thereon;
2. That the 2-meter middle road to be used as flea market/vending area shall be marked
distinctly, and that the 2 meters on both sides of the road shall be used by pedestrians;
3. That the time during which the vending area is to be used shall be clearly designated;
4. That the use of the vending areas shall be temporary and shall be closed once the
reclaimed areas are developed and donated by the Public Estate Authority. (p. 38, Rollo)
Respondent municipality has not shown any iota of proof that it has complied with the foregoing
conditions precedent to the approval of the ordinance. The allegations of respondent municipality that
the closed streets were not used for vehicular traffic and that the majority of the residents do not oppose
the establishment of a flea market on said streets are unsupported by any evidence that will show that
this first condition has been met. Likewise, the designation by respondents of a time schedule during
which the flea market shall operate is absent.
Further, it is of public notice that the streets along Baclaran area are congested with people, houses and
traffic brought about by the proliferation of vendors occupying the streets. To license and allow the
establishment of a flea market along J. Gabriel, G.G. Cruz, Bayanihan, Lt. Garcia Extension and Opena
streets in Baclaran would not help in solving the problem of congestion. We take note of the other
observations of the Solicitor General when he said:
. . . There have been many instances of emergencies and fires where ambulances and fire
engines, instead of using the roads for a more direct access to the fire area, have to
maneuver and look for other streets which are not occupied by stalls and vendors thereby
losing valuable time which could, otherwise, have been spent in saving properties and
lives.
Along G.G. Cruz Street is a hospital, the St. Rita Hospital. However, its ambulances and
the people rushing their patients to the hospital cannot pass through G.G. Cruz because
of the stalls and the vendors. One can only imagine the tragedy of losing a life just
because of a few seconds delay brought about by the inaccessibility of the streets leading
to the hospital.
The children, too, suffer. In view of the occupancy of the roads by stalls and vendors,
normal transportation flow is disrupted and school children have to get off at a distance
still far from their schools and walk, rain or shine.
Indeed one can only imagine the garbage and litter left by vendors on the streets at the
end of the day. Needless to say, these cause further pollution, sickness and deterioration
of health of the residents therein. (pp. 21-22, Rollo)
Respondents do not refute the truth of the foregoing findings and observations of petitioners. Instead,
respondents want this Court to focus its attention solely on the argument that the use of public spaces

for the establishment of a flea market is well within the powers granted by law to a local government
which should not be interfered with by the courts.
Verily, the powers of a local government unit are not absolute. They are subject to limitations laid down
by toe Constitution and the laws such as our Civil Code. Moreover, the exercise of such powers should
be subservient to paramount considerations of health and well-being of the members of the community.
Every local government unit has the sworn obligation to enact measures that will enhance the public
health, safety and convenience, maintain peace and order, and promote the general prosperity of the
inhabitants of the local units. Based on this objective, the local government should refrain from acting
towards that which might prejudice or adversely affect the general welfare.
As what we have said in the Dacanay case, the general public have a legal right to demand the
demolition of the illegally constructed stalls in public roads and streets and the officials of respondent
municipality have the corresponding duty arising from public office to clear the city streets and restore
them to their specific public purpose.
The instant case as well as the Dacanay case, involves an ordinance which is void and illegal for lack of
basis and authority in laws applicable during its time. However, at this point, We find it worthy to note
that Batas Pambansa Blg. 337, known as Local Government Lode, has already been repealed by
Republic Act No. 7160 known as Local Government Code of 1991 which took effect on January 1,
1992. Section 5(d) of the new Code provides that rights and obligations existing on the date of
effectivity of the new Code and arising out of contracts or any other source of prestation involving a
local government unit shall be governed by the original terms and conditions of the said contracts or
the law in force at the time such rights were vested.
ACCORDINGLY, the petition is GRANTED and the decision of the respondent Regional Trial Court
dated December 17, 1990 which granted the writ of preliminary injunction enjoining petitioner as PNP
Superintendent, Metropolitan Traffic Command from enforcing the demolition of market stalls along J.
Gabriel, G.G. Cruz, Bayanihan, Lt. Garcia Extension and Opena streets is hereby RESERVED and SET
ASIDE.
SO ORDERED.
Narvasa, C.J., Gutierrez, Jr., Cruz, Feliciano, Padilla, Bidin, Grio-Aquino, Regalado, Davide, Jr.,
Romero, Nocon and Bellosillo, JJ., concur.

Republic of the Philippines

SUPREME COURT
Manila
EN BANC

G.R. No. 111097 July 20, 1994

MAYOR PABLO P. MAGTAJAS & THE CITY OF CAGAYAN DE ORO, petitioners,
vs.
PRYCE PROPERTIES CORPORATION, INC. & PHILIPPINE AMUSEMENT AND GAMING
CORPORATION,respondents.
Aquilino G. Pimentel, Jr. and Associates for petitioners.
R.R. Torralba & Associates for private respondent.
CRUZ, J.:
There was instant opposition when PAGCOR announced the opening of a casino in Cagayan de Oro
City. Civic organizations angrily denounced the project. The religious elements echoed the objection
and so did the women's groups and the youth. Demonstrations were led by the mayor and the city
legislators. The media trumpeted the protest, describing the casino as an affront to the welfare of the
city.
The trouble arose when in 1992, flush with its tremendous success in several cities, PAGCOR decided
to expand its operations to Cagayan de Oro City. To this end, it leased a portion of a building belonging
to Pryce Properties Corporation, Inc., one of the herein private respondents, renovated and equipped the
same, and prepared to inaugurate its casino there during the Christmas season.
The reaction of the Sangguniang Panlungsod of Cagayan de Oro City was swift and hostile. On
December 7, 1992, it enacted Ordinance No. 3353 reading as follows:
ORDINANCE NO. 3353
AN ORDINANCE PROHIBITING THE ISSUANCE OF BUSINESS PERMIT AND
CANCELLING EXISTING BUSINESS PERMIT TO ANY ESTABLISHMENT FOR
THE USING AND ALLOWING TO BE USED ITS PREMISES OR PORTION
THEREOF FOR THE OPERATION OF CASINO.
BE IT ORDAINED by the Sangguniang Panlungsod of the City of Cagayan de Oro, in
session assembled that:
Sec. 1. That pursuant to the policy of the city banning the operation of casino within
its territorial jurisdiction, no business permit shall be issued to any person, partnership or
corporation for the operation of casino within the city limits.
Sec. 2. That it shall be a violation of existing business permit by any persons,
partnership or corporation to use its business establishment or portion thereof, or allow
the use thereof by others for casino operation and other gambling activities.
Sec. 3. PENALTIES. Any violation of such existing business permit as defined in
the preceding section shall suffer the following penalties, to wit:
a) Suspension of the business permit for sixty (60) days for
the first offense and a fine of P1,000.00/day
b) Suspension of the business permit for Six (6) months for
the second offense, and a fine of P3,000.00/day

c) Permanent revocation of the business permit and

imprisonment of One (1) year, for the third and subsequent
offenses.
Sec. 4. This Ordinance shall take effect ten (10) days from publication thereof.
Nor was this all. On January 4, 1993, it adopted a sterner Ordinance No. 3375-93 reading as follows:
ORDINANCE NO. 3375-93
AN ORDINANCE PROHIBITING THE OPERATION
PROVIDING PENALTY FOR VIOLATION THEREFOR.

OF

CASINO

AND

WHEREAS, the City Council established a policy as early as 1990 against CASINO
under its Resolution No. 2295;
WHEREAS, on October 14, 1992, the City Council passed another Resolution No. 2673,
reiterating its policy against the establishment of CASINO;
WHEREAS, subsequently, thereafter, it likewise passed Ordinance No. 3353,
prohibiting the issuance of Business Permit and to cancel existing Business Permit to
any establishment for the using and allowing to be used its premises or portion thereof
for the operation of CASINO;
WHEREAS, under Art. 3, section 458, No. (4), sub paragraph VI of the Local
Government Code of 1991 (Rep. Act 7160) and under Art. 99, No. (4), Paragraph VI of
the implementing rules of the Local Government Code, the City Council as the
Legislative Body shall enact measure to suppress any activity inimical to public morals
and general welfare of the people and/or regulate or prohibit such activity pertaining to
amusement or entertainment in order to protect social and moral welfare of the
community;
NOW THEREFORE,
BE IT ORDAINED by the City Council in session duly assembled that:
Sec. 1. The operation of gambling CASINO in the City of Cagayan de Oro is hereby
prohibited.
Sec. 2. Any violation of this Ordinance shall be subject to the following penalties:
a) Administrative fine of P5,000.00 shall be imposed against the proprietor, partnership
or corporation undertaking the operation, conduct, maintenance of gambling CASINO in
the City and closure thereof;
b) Imprisonment of not less than six (6) months nor more than one (1) year or a fine in
the amount of P5,000.00 or both at the discretion of the court against the manager,
supervisor, and/or any person responsible in the establishment, conduct and maintenance
of gambling CASINO.
Sec. 3. This Ordinance shall take effect ten (10) days after its publication in a local
newspaper of general circulation.
Pryce assailed the ordinances before the Court of Appeals, where it was joined by PAGCOR as
intervenor and supplemental petitioner. Their challenge succeeded. On March 31, 1993, the Court of
Appeals declared the ordinances invalid and issued the writ prayed for to prohibit their
enforcement. 1 Reconsideration of this decision was denied on July 13, 1993. 2

Cagayan de Oro City and its mayor are now before us in this petition for review under Rule 45 of the
Rules of Court. 3 They aver that the respondent Court of Appeals erred in holding that:
1. Under existing laws, the Sangguniang Panlungsod of the City of Cagayan de Oro does
not have the power and authority to prohibit the establishment and operation of a
PAGCOR gambling casino within the City's territorial limits.
2. The phrase "gambling and other prohibited games of chance" found in Sec. 458, par.
(a), sub-par. (1) (v) of R.A. 7160 could only mean "illegal gambling."
3. The questioned Ordinances in effect annul P.D. 1869 and are therefore invalid on that
point.
4. The questioned Ordinances are discriminatory to casino and partial to cockfighting
and are therefore invalid on that point.
5. The questioned Ordinances are not reasonable, not consonant with the general powers
and purposes of the instrumentality concerned and inconsistent with the laws or policy
of the State.
6. It had no option but to follow the ruling in the case of Basco, et al. v. PAGCOR, G.R.
No. 91649, May 14, 1991, 197 SCRA 53 in disposing of the issues presented in this
present case.
PAGCOR is a corporation created directly by P.D. 1869 to help centralize and regulate all games of
chance, including casinos on land and sea within the territorial jurisdiction of the Philippines. In Basco
v. Philippine Amusements and Gaming Corporation, 4 this Court sustained the constitutionality of the
decree and even cited the benefits of the entity to the national economy as the third highest revenueearner in the government, next only to the BIR and the Bureau of Customs.
Cagayan de Oro City, like other local political subdivisions, is empowered to enact ordinances for the
purposes indicated in the Local Government Code. It is expressly vested with the police power under
what is known as the General Welfare Clause now embodied in Section 16 as follows:
Sec. 16. General Welfare. Every local government unit shall exercise the powers
expressly granted, those necessarily implied therefrom, as well as powers necessary,
appropriate, or incidental for its efficient and effective governance, and those which are
essential to the promotion of the general welfare. Within their respective territorial
jurisdictions, local government units shall ensure and support, among other things, the
preservation and enrichment of culture, promote health and safety, enhance the right of
the people to a balanced ecology, encourage and support the development of appropriate
and self-reliant scientific and technological capabilities, improve public morals, enhance
economic prosperity and social justice, promote full employment among their residents,
maintain peace and order, and preserve the comfort and convenience of their inhabitants.
In addition, Section 458 of the said Code specifically declares that:
Sec. 458. Powers, Duties, Functions and Compensation. (a) The Sangguniang
Panlungsod, as the legislative body of the city, shall enact ordinances, approve
resolutions and appropriate funds for the general welfare of the city and its inhabitants
pursuant to Section 16 of this Code and in the proper exercise of the corporate powers of
the city as provided for under Section 22 of this Code, and shall:
(1) Approve ordinances and pass resolutions necessary for an efficient and effective city
government, and in this connection, shall:

xxx xxx xxx

(v) Enact ordinances intended to prevent, suppress and
impose appropriate penalties for habitual drunkenness in
public places, vagrancy, mendicancy, prostitution,
establishment and maintenance of houses of ill
repute,gambling and other prohibited games of chance,
fraudulent devices and ways to obtain money or property,
drug addiction, maintenance of drug dens, drug pushing,
juvenile delinquency, the printing, distribution or
exhibition of obscene or pornographic materials or
publications, and such other activities inimical to the
welfare and morals of the inhabitants of the city;
This section also authorizes the local government units to regulate properties and businesses within
their territorial limits in the interest of the general welfare. 5
The petitioners argue that by virtue of these provisions, the Sangguniang Panlungsod may prohibit the
operation of casinos because they involve games of chance, which are detrimental to the people.
Gambling is not allowed by general law and even by the Constitution itself. The legislative power
conferred upon local government units may be exercised over all kinds of gambling and not only over
"illegal gambling" as the respondents erroneously argue. Even if the operation of casinos may have
been permitted under P.D. 1869, the government of Cagayan de Oro City has the authority to prohibit
them within its territory pursuant to the authority entrusted to it by the Local Government Code.
It is submitted that this interpretation is consonant with the policy of local autonomy as mandated in
Article II, Section 25, and Article X of the Constitution, as well as various other provisions therein
seeking to strengthen the character of the nation. In giving the local government units the power to
prevent or suppress gambling and other social problems, the Local Government Code has recognized
the competence of such communities to determine and adopt the measures best expected to promote the
general welfare of their inhabitants in line with the policies of the State.
The petitioners also stress that when the Code expressly authorized the local government units to
prevent and suppress gambling and other prohibited games of chance, like craps, baccarat, blackjack
and roulette, it meant allforms of gambling without distinction. Ubi lex non distinguit, nec nos
distinguere debemos. 6 Otherwise, it would have expressly excluded from the scope of their power
casinos and other forms of gambling authorized by special law, as it could have easily done. The fact
that it did not do so simply means that the local government units are permitted to prohibit all kinds of
gambling within their territories, including the operation of casinos.
The adoption of the Local Government Code, it is pointed out, had the effect of modifying the charter
of the PAGCOR. The Code is not only a later enactment than P.D. 1869 and so is deemed to prevail in
case of inconsistencies between them. More than this, the powers of the PAGCOR under the decree are
expressly discontinued by the Code insofar as they do not conform to its philosophy and provisions,
pursuant to Par. (f) of its repealing clause reading as follows:
(f) All general and special laws, acts, city charters, decrees, executive orders,
proclamations and administrative regulations, or part or parts thereof which are
inconsistent with any of the provisions of this Code are hereby repealed or modified
accordingly.
It is also maintained that assuming there is doubt regarding the effect of the Local Government Code
on P.D. 1869, the doubt must be resolved in favor of the petitioners, in accordance with the direction in

the Code calling for its liberal interpretation in favor of the local government units. Section 5 of the
Code specifically provides:
Sec. 5. Rules of Interpretation. In the interpretation of the provisions of this Code, the
following rules shall apply:
(a) Any provision on a power of a local government unit shall be liberally interpreted in
its favor, and in case of doubt, any question thereon shall be resolved in favor of
devolution of powers and of the lower local government unit. Any fair and reasonable
doubt as to the existence of the power shall be interpreted in favor of the local
government unit concerned;
xxx xxx xxx
(c) The general welfare provisions in this Code shall be liberally interpreted to give
more powers to local government units in accelerating economic development and
upgrading the quality of life for the people in the community; . . . (Emphasis supplied.)
Finally, the petitioners also attack gambling as intrinsically harmful and cite various provisions of the
Constitution and several decisions of this Court expressive of the general and official disapprobation of
the vice. They invoke the State policies on the family and the proper upbringing of the youth and, as
might be expected, call attention to the old case of U.S. v. Salaveria, 7 which sustained a municipal
ordinance prohibiting the playing of panguingue. The petitioners decry the immorality of gambling.
They also impugn the wisdom of P.D. 1869 (which they describe as "a martial law instrument") in
creating PAGCOR and authorizing it to operate casinos "on land and sea within the territorial
jurisdiction of the Philippines."
This is the opportune time to stress an important point.
The morality of gambling is not a justiciable issue. Gambling is not illegal per se. While it is generally
considered inimical to the interests of the people, there is nothing in the Constitution categorically
proscribing or penalizing gambling or, for that matter, even mentioning it at all. It is left to Congress to
deal with the activity as it sees fit. In the exercise of its own discretion, the legislature may prohibit
gambling altogether or allow it without limitation or it may prohibit some forms of gambling and allow
others for whatever reasons it may consider sufficient. Thus, it has prohibited jueteng and monte but
permits lotteries, cockfighting and horse-racing. In making such choices, Congress has consulted its
own wisdom, which this Court has no authority to review, much less reverse. Well has it been said that
courts do not sit to resolve the merits of conflicting theories. 8 That is the prerogative of the political
departments. It is settled that questions regarding the wisdom, morality, or practicibility of statutes are
not addressed to the judiciary but may be resolved only by the legislative and executive departments, to
which the function belongs in our scheme of government. That function is exclusive. Whichever way
these branches decide, they are answerable only to their own conscience and the constituents who will
ultimately judge their acts, and not to the courts of justice.
The only question we can and shall resolve in this petition is the validity of Ordinance No. 3355 and
Ordinance No. 3375-93 as enacted by the Sangguniang Panlungsod of Cagayan de Oro City. And we
shall do so only by the criteria laid down by law and not by our own convictions on the propriety of
gambling.
The tests of a valid ordinance are well established. A long line of decisions 9 has held that to be valid,
an ordinance must conform to the following substantive requirements:
1) It must not contravene the constitution or any statute.
2) It must not be unfair or oppressive.

3) It must not be partial or discriminatory.

4) It must not prohibit but may regulate trade.
5) It must be general and consistent with public policy.
6) It must not be unreasonable.
We begin by observing that under Sec. 458 of the Local Government Code, local government units are
authorized to prevent or suppress, among others, "gambling and other prohibited games of chance."
Obviously, this provision excludes games of chance which are not prohibited but are in fact permitted
by law. The petitioners are less than accurate in claiming that the Code could have excluded such
games of chance but did not. In fact it does. The language of the section is clear and unmistakable.
Under the rule of noscitur a sociis, a word or phrase should be interpreted in relation to, or given the
same meaning of, words with which it is associated. Accordingly, we conclude that since the word
"gambling" is associated with "and other prohibited games of chance," the word should be read as
referring to only illegal gambling which, like the other prohibited games of chance, must be prevented
or suppressed.
We could stop here as this interpretation should settle the problem quite conclusively. But we will not.
The vigorous efforts of the petitioners on behalf of the inhabitants of Cagayan de Oro City, and the
earnestness of their advocacy, deserve more than short shrift from this Court.
The apparent flaw in the ordinances in question is that they contravene P.D. 1869 and the public policy
embodied therein insofar as they prevent PAGCOR from exercising the power conferred on it to
operate a casino in Cagayan de Oro City. The petitioners have an ingenious answer to this misgiving.
They deny that it is the ordinances that have changed P.D. 1869 for an ordinance admittedly cannot
prevail against a statute. Their theory is that the change has been made by the Local Government Code
itself, which was also enacted by the national lawmaking authority. In their view, the decree has been,
not really repealed by the Code, but merely "modified pro tanto" in the sense that PAGCOR cannot
now operate a casino over the objection of the local government unit concerned. This modification of
P.D. 1869 by the Local Government Code is permissible because one law can change or repeal another
law.
It seems to us that the petitioners are playing with words. While insisting that the decree has only been
"modifiedpro tanto," they are actually arguing that it is already dead, repealed and useless for all intents
and purposes because the Code has shorn PAGCOR of all power to centralize and regulate casinos.
Strictly speaking, its operations may now be not only prohibited by the local government unit; in fact,
the prohibition is not only discretionary but mandated by Section 458 of the Code if the word "shall" as
used therein is to be given its accepted meaning. Local government units have now no choice but to
prevent and suppress gambling, which in the petitioners' view includes both legal and illegal gambling.
Under this construction, PAGCOR will have no more games of chance to regulate or centralize as they
must all be prohibited by the local government units pursuant to the mandatory duty imposed upon
them by the Code. In this situation, PAGCOR cannot continue to exist except only as a toothless tiger
or a white elephant and will no longer be able to exercise its powers as a prime source of government
revenue through the operation of casinos.
It is noteworthy that the petitioners have cited only Par. (f) of the repealing clause, conveniently
discarding the rest of the provision which painstakingly mentions the specific laws or the parts thereof
which are repealed (or modified) by the Code. Significantly, P.D. 1869 is not one of them. A reading of
the entire repealing clause, which is reproduced below, will disclose the omission:

Sec. 534. Repealing Clause. (a) Batas Pambansa Blg. 337, otherwise known as the
"Local Government Code," Executive Order No. 112 (1987), and Executive Order No.
319 (1988) are hereby repealed.
(b) Presidential Decree Nos. 684, 1191, 1508 and such other decrees, orders,
instructions, memoranda and issuances related to or concerning the barangay are hereby
repealed.
(c) The provisions of Sections 2, 3, and 4 of Republic Act No. 1939 regarding hospital
fund; Section 3, a (3) and b (2) of Republic Act. No. 5447 regarding the Special
Education Fund; Presidential Decree No. 144 as amended by Presidential Decree Nos.
559 and 1741; Presidential Decree No. 231 as amended; Presidential Decree No. 436 as
amended by Presidential Decree No. 558; and Presidential Decree Nos. 381, 436, 464,
477, 526, 632, 752, and 1136 are hereby repealed and rendered of no force and effect.
(d) Presidential Decree No. 1594 is hereby repealed insofar as it governs locally-funded
projects.
(e) The following provisions are hereby repealed or amended insofar as they are
inconsistent with the provisions of this Code: Sections 2, 16, and 29 of Presidential
Decree No. 704; Sections 12 of Presidential Decree No. 87, as amended; Sections 52,
53, 66, 67, 68, 69, 70, 71, 72, 73, and 74 of Presidential Decree No. 463, as amended;
and Section 16 of Presidential Decree No. 972, as amended, and
(f) All general and special laws, acts, city charters, decrees, executive orders,
proclamations and administrative regulations, or part or parts thereof which are
inconsistent with any of the provisions of this Code are hereby repealed or modified
accordingly.
Furthermore, it is a familiar rule that implied repeals are not lightly presumed in the absence of a clear
and unmistakable showing of such intention. In Lichauco & Co. v. Apostol, 10 this Court explained:
The cases relating to the subject of repeal by implication all proceed on the assumption
that if the act of later date clearly reveals an intention on the part of the lawmaking
power to abrogate the prior law, this intention must be given effect; but there must
always be a sufficient revelation of this intention, and it has become an unbending rule
of statutory construction that the intention to repeal a former law will not be imputed to
the Legislature when it appears that the two statutes, or provisions, with reference to
which the question arises bear to each other the relation of general to special.
There is no sufficient indication of an implied repeal of P.D. 1869. On the contrary, as the private
respondent points out, PAGCOR is mentioned as the source of funding in two later enactments of
Congress, to wit, R.A. 7309, creating a Board of Claims under the Department of Justice for the benefit
of victims of unjust punishment or detention or of violent crimes, and R.A. 7648, providing for
measures for the solution of the power crisis. PAGCOR revenues are tapped by these two statutes. This
would show that the PAGCOR charter has not been repealed by the Local Government Code but has in
fact been improved as it were to make the entity more responsive to the fiscal problems of the
government.
It is a canon of legal hermeneutics that instead of pitting one statute against another in an inevitably
destructive confrontation, courts must exert every effort to reconcile them, remembering that both laws
deserve a becoming respect as the handiwork of a coordinate branch of the government. On the
assumption of a conflict between P.D. 1869 and the Code, the proper action is not to uphold one and
annul the other but to give effect to both by harmonizing them if possible. This is possible in the case

before us. The proper resolution of the problem at hand is to hold that under the Local Government
Code, local government units may (and indeed must) prevent and suppress all kinds of gambling within
their territories except only those allowed by statutes like P.D. 1869. The exception reserved in such
laws must be read into the Code, to make both the Code and such laws equally effective and mutually
complementary.
This approach would also affirm that there are indeed two kinds of gambling, to wit, the illegal and
those authorized by law. Legalized gambling is not a modern concept; it is probably as old as illegal
gambling, if not indeed more so. The petitioners' suggestion that the Code authorizes them to prohibit
all kinds of gambling would erase the distinction between these two forms of gambling without a clear
indication that this is the will of the legislature. Plausibly, following this theory, the City of Manila
could, by mere ordinance, prohibit the Philippine Charity Sweepstakes Office from conducting a lottery
as authorized by R.A. 1169 and B.P. 42 or stop the races at the San Lazaro Hippodrome as authorized
by R.A. 309 and R.A. 983.
In light of all the above considerations, we see no way of arriving at the conclusion urged on us by the
petitioners that the ordinances in question are valid. On the contrary, we find that the ordinances violate
P.D. 1869, which has the character and force of a statute, as well as the public policy expressed in the
decree allowing the playing of certain games of chance despite the prohibition of gambling in general.
The rationale of the requirement that the ordinances should not contravene a statute is obvious.
Municipal governments are only agents of the national government. Local councils exercise only
delegated legislative powers conferred on them by Congress as the national lawmaking body. The
delegate cannot be superior to the principal or exercise powers higher than those of the latter. It is a
heresy to suggest that the local government units can undo the acts of Congress, from which they have
derived their power in the first place, and negate by mere ordinance the mandate of the statute.
Municipal corporations owe their origin to, and derive their powers and rights wholly
from the legislature. It breathes into them the breath of life, without which they cannot
exist. As it creates, so it may destroy. As it may destroy, it may abridge and control.
Unless there is some constitutional limitation on the right, the legislature might, by a
single act, and if we can suppose it capable of so great a folly and so great a wrong,
sweep from existence all of the municipal corporations in the State, and the corporation
could not prevent it. We know of no limitation on the right so far as to the corporation
themselves are concerned. They are, so to phrase it, the mere tenants at will of the
legislature. 11
This basic relationship between the national legislature and the local government units has not been
enfeebled by the new provisions in the Constitution strengthening the policy of local autonomy.
Without meaning to detract from that policy, we here confirm that Congress retains control of the local
government units although in significantly reduced degree now than under our previous Constitutions.
The power to create still includes the power to destroy. The power to grant still includes the power to
withhold or recall. True, there are certain notable innovations in the Constitution, like the direct
conferment on the local government units of the power to tax, 12which cannot now be withdrawn by
mere statute. By and large, however, the national legislature is still the principal of the local
government units, which cannot defy its will or modify or violate it.
The Court understands and admires the concern of the petitioners for the welfare of their constituents
and their apprehensions that the welfare of Cagayan de Oro City will be endangered by the opening of
the casino. We share the view that "the hope of large or easy gain, obtained without special effort, turns
the head of the workman" 13 and that "habitual gambling is a cause of laziness and ruin." 14 In People
v. Gorostiza, 15 we declared: "The social scourge of gambling must be stamped out. The laws against

gambling must be enforced to the limit." George Washington called gambling "the child of avarice, the
brother of iniquity and the father of mischief." Nevertheless, we must recognize the power of the
legislature to decide, in its own wisdom, to legalize certain forms of gambling, as was done in P.D.
1869 and impliedly affirmed in the Local Government Code. That decision can be revoked by this
Court only if it contravenes the Constitution as the touchstone of all official acts. We do not find such
contravention here.
We hold that the power of PAGCOR to centralize and regulate all games of chance, including casinos
on land and sea within the territorial jurisdiction of the Philippines, remains unimpaired. P.D. 1869 has
not been modified by the Local Government Code, which empowers the local government units to
prevent or suppress only those forms of gambling prohibited by law.
Casino gambling is authorized by P.D. 1869. This decree has the status of a statute that cannot be
amended or nullified by a mere ordinance. Hence, it was not competent for the Sangguniang
Panlungsod of Cagayan de Oro City to enact Ordinance No. 3353 prohibiting the use of buildings for
the operation of a casino and Ordinance No. 3375-93 prohibiting the operation of casinos. For all their
praiseworthy motives, these ordinances are contrary to P.D. 1869 and the public policy announced
therein and are therefore ultra vires and void.
WHEREFORE, the petition is DENIED and the challenged decision of the respondent Court of
Appeals is AFFIRMED, with costs against the petitioners. It is so ordered.
Narvasa, C.J., Feliciano, Bidin, Regalado, Romero, Bellosillo, Melo, Quiason, Puno, Vitug,
Kapunan and Mendoza, JJ., concur.