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G.R. No. L-19550

June 19, 1967

HARRY S. STONEHILL, ROBERT P. BROOKS, JOHN J. BROOKS and KARL BECK, petitioners,
vs.
HON. JOSE W. DIOKNO, in his capacity as SECRETARY OF JUSTICE; JOSE LUKBAN, in his
capacity as Acting Director, National Bureau of Investigation; SPECIAL PROSECUTORS PEDRO D.
CENZON, EFREN I. PLANA and MANUEL VILLAREAL, JR. and ASST. FISCAL MANASES G.
REYES; JUDGE AMADO ROAN, Municipal Court of Manila; JUDGE ROMAN CANSINO, Municipal
Court of Manila; JUDGE HERMOGENES CALUAG, Court of First Instance of Rizal-Quezon City
Branch, and JUDGE DAMIAN JIMENEZ, Municipal Court of Quezon City, respondents.
Paredes, Poblador, Cruz and Nazareno and Meer, Meer and Meer and Juan T. David for petitioners.
Office of the Solicitor General Arturo A. Alafriz, Assistant Solicitor General Pacifico P. de Castro, Assistant
Solicitor General Frine C. Zaballero, Solicitor Camilo D. Quiason and Solicitor C. Padua for respondents.
CONCEPCION, C.J.:
Upon application of the officers of the government named on the margin 1 hereinafter referred to as
Respondents-Prosecutors several judges2 hereinafter referred to as Respondents-Judges
issued, on different dates,3 a total of 42 search warrants against petitioners herein 4 and/or the
corporations of which they were officers,5 directed to the any peace officer, to search the persons abovenamed and/or the premises of their offices, warehouses and/or residences, and to seize and take
possession of the following personal property to wit:
Books of accounts, financial records, vouchers, correspondence, receipts, ledgers, journals,
portfolios, credit journals, typewriters, and other documents and/or papers showing all business
transactions including disbursements receipts, balance sheets and profit and loss statements and
Bobbins (cigarette wrappers).
as "the subject of the offense; stolen or embezzled and proceeds or fruits of the offense," or "used or
intended to be used as the means of committing the offense," which is described in the applications
adverted to above as "violation of Central Bank Laws, Tariff and Customs Laws, Internal Revenue (Code)
and the Revised Penal Code."
Alleging that the aforementioned search warrants are null and void, as contravening the Constitution and
the Rules of Court because, inter alia: (1) they do not describe with particularity the documents, books
and things to be seized; (2) cash money, not mentioned in the warrants, were actually seized; (3) the
warrants were issued to fish evidence against the aforementioned petitioners in deportation cases filed
against them; (4) the searches and seizures were made in an illegal manner; and (5) the documents,
papers and cash money seized were not delivered to the courts that issued the warrants, to be disposed
of in accordance with law on March 20, 1962, said petitioners filed with the Supreme Court this original
action for certiorari, prohibition, mandamus and injunction, and prayed that, pending final disposition of
the present case, a writ of preliminary injunction be issued restraining Respondents-Prosecutors, their
agents and /or representatives from using the effects seized as aforementioned or any copies thereof, in
the deportation cases already adverted to, and that, in due course, thereafter, decision be rendered
quashing the contested search warrants and declaring the same null and void, and commanding the
respondents, their agents or representatives to return to petitioners herein, in accordance with Section 3,
Rule 67, of the Rules of Court, the documents, papers, things and cash moneys seized or confiscated
under the search warrants in question.

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In their answer, respondents-prosecutors alleged, 6 (1) that the contested search warrants are valid and
have been issued in accordance with law; (2) that the defects of said warrants, if any, were cured by
petitioners' consent; and (3) that, in any event, the effects seized are admissible in evidence against
herein petitioners, regardless of the alleged illegality of the aforementioned searches and seizures.
On March 22, 1962, this Court issued the writ of preliminary injunction prayed for in the petition. However,
by resolution dated June 29, 1962, the writ was partially lifted or dissolved, insofar as the papers,
documents and things seized from the offices of the corporations above mentioned are concerned; but,
the injunction was maintained as regards the papers, documents and things found and seized in the
residences of petitioners herein.7
Thus, the documents, papers, and things seized under the alleged authority of the warrants in question
may be split into two (2) major groups, namely: (a) those found and seized in the offices of the
aforementioned corporations, and (b) those found and seized in the residences of petitioners herein.
As regards the first group, we hold that petitioners herein have no cause of action to assail the legality of
the contested warrants and of the seizures made in pursuance thereof, for the simple reason that said
corporations have their respective personalities, separate and distinct from the personality of herein
petitioners, regardless of the amount of shares of stock or of the interest of each of them in said
corporations, and whatever the offices they hold therein may be. 8 Indeed, it is well settled that the legality
of a seizure can be contested only by the party whose rights have been impaired thereby,9 and that the
objection to an unlawful search and seizure is purely personal and cannot be availed of by third
parties. 10 Consequently, petitioners herein may not validly object to the use in evidence against them of
the documents, papers and things seized from the offices and premises of the corporations adverted to
above, since the right to object to the admission of said papers in evidence belongsexclusively to the
corporations, to whom the seized effects belong, and may not be invoked by the corporate officers in
proceedings against them in their individual capacity. 11 Indeed, it has been held:
. . . that the Government's action in gaining possession of papers belonging to the corporation did
not relate to nor did it affect the personal defendants. If these papers were unlawfully seized and
thereby the constitutional rights of or any one were invaded, they were the rights of
the corporation and not the rights of the other defendants. Next, it is clear that a question of the
lawfulness of a seizure can be raised only by one whose rights have been invaded. Certainly,
such a seizure, if unlawful, could not affect the constitutional rights of defendants whose property
had not been seized or the privacy of whose homes had not been disturbed; nor could they claim
for themselves the benefits of the Fourth Amendment, when its violation, if any, was with
reference to the rights of another. Remus vs. United States (C.C.A.)291 F. 501, 511. It follows,
therefore, that the question of the admissibility of the evidence based on an alleged unlawful
search and seizure does not extend to the personal defendants but
embraces only the corporation whose property was taken. . . . (A Guckenheimer & Bros. Co. vs.
United States, [1925] 3 F. 2d. 786, 789, Emphasis supplied.)
With respect to the documents, papers and things seized in the residences of petitioners herein, the
aforementioned resolution of June 29, 1962, lifted the writ of preliminary injunction previously issued by
this Court,12 thereby, in effect, restraining herein Respondents-Prosecutors from using them in evidence
against petitioners herein.
In connection with said documents, papers and things, two (2) important questions need be settled,
namely: (1) whether the search warrants in question, and the searches and seizures made under the
authority thereof, are valid or not, and (2) if the answer to the preceding question is in the negative,

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whether said documents, papers and things may be used in evidence against petitioners
herein.1wph1.t
Petitioners maintain that the aforementioned search warrants are in the nature of general warrants and
that accordingly, the seizures effected upon the authority there of are null and void. In this connection, the
Constitution13 provides:
The right of the people to be secure in their persons, houses, papers, and effects against
unreasonable searches and seizures shall not be violated, and no warrants shall issue but upon
probable cause, to be determined by the judge after examination under oath or affirmation of the
complainant and the witnesses he may produce, and particularly describing the place to be
searched, and the persons or things to be seized.
Two points must be stressed in connection with this constitutional mandate, namely: (1) that no warrant
shall issue but upon probable cause, to be determined by the judge in the manner set forth in said
provision; and (2) that the warrant shall particularly describe the things to be seized.
None of these requirements has been complied with in the contested warrants. Indeed, the same were
issued upon applications stating that the natural and juridical person therein named had committed a
"violation of Central Ban Laws, Tariff and Customs Laws, Internal Revenue (Code) and Revised Penal
Code." In other words, nospecific offense had been alleged in said applications. The averments thereof
with respect to the offense committed were abstract. As a consequence, it was impossible for the judges
who issued the warrants to have found the existence of probable cause, for the same presupposes the
introduction of competent proof that the party against whom it is sought has performed particular acts, or
committed specific omissions, violating a given provision of our criminal laws. As a matter of fact, the
applications involved in this case do not allege any specific acts performed by herein petitioners. It would
be the legal heresy, of the highest order, to convict anybody of a "violation of Central Bank Laws, Tariff
and Customs Laws, Internal Revenue (Code) and Revised Penal Code," as alleged in the
aforementioned applications without reference to any determinate provision of said laws or
To uphold the validity of the warrants in question would be to wipe out completely one of the most
fundamental rights guaranteed in our Constitution, for it would place the sanctity of the domicile and the
privacy of communication and correspondence at the mercy of the whims caprice or passion of peace
officers. This is precisely the evil sought to be remedied by the constitutional provision above quoted to
outlaw the so-called general warrants. It is not difficult to imagine what would happen, in times of keen
political strife, when the party in power feels that the minority is likely to wrest it, even though by legal
means.
Such is the seriousness of the irregularities committed in connection with the disputed search warrants,
that this Court deemed it fit to amend Section 3 of Rule 122 of the former Rules of Court 14 by providing in
its counterpart, under the Revised Rules of Court 15 that "a search warrant shall not issue but upon
probable cause in connection with one specific offense." Not satisfied with this qualification, the Court
added thereto a paragraph, directing that "no search warrant shall issue for more than one specific
offense."
The grave violation of the Constitution made in the application for the contested search warrants was
compounded by the description therein made of the effects to be searched for and seized, to wit:
Books of accounts, financial records, vouchers, journals, correspondence, receipts, ledgers,
portfolios, credit journals, typewriters, and other documents and/or papers showing all business

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transactions including disbursement receipts, balance sheets and related profit and loss
statements.
Thus, the warrants authorized the search for and seizure of records pertaining to all business
transactions of petitioners herein, regardless of whether the transactions were legal or illegal. The
warrants sanctioned the seizure of all records of the petitioners and the aforementioned corporations,
whatever their nature, thus openly contravening the explicit command of our Bill of Rights that the
things to be seized be particularly described as well as tending to defeat its major objective: the
elimination of general warrants.
Relying upon Moncado vs. People's Court (80 Phil. 1), Respondents-Prosecutors maintain that, even if
the searches and seizures under consideration were unconstitutional, the documents, papers and things
thus seized are admissible in evidence against petitioners herein. Upon mature deliberation, however, we
are unanimously of the opinion that the position taken in the Moncado case must be abandoned. Said
position was in line with the American common law rule, that the criminal should not be allowed to go free
merely "because the constable has blundered," 16 upon the theory that the constitutional prohibition
against unreasonable searches and seizures is protected by means other than the exclusion of evidence
unlawfully obtained, 17 such as the common-law action for damages against the searching officer, against
the party who procured the issuance of the search warrant and against those assisting in the execution of
an illegal search, their criminal punishment, resistance, without liability to an unlawful seizure, and such
other legal remedies as may be provided by other laws.
However, most common law jurisdictions have already given up this approach and eventually adopted the
exclusionary rule, realizing that this is the only practical means of enforcing the constitutional
injunction against unreasonable searches and seizures. In the language of Judge Learned Hand:
As we understand it, the reason for the exclusion of evidence competent as such, which has been
unlawfully acquired, is that exclusion is the only practical way of enforcing the constitutional
privilege. In earlier times the action of trespass against the offending official may have been
protection enough; but that is true no longer. Only in case the prosecution which itself controls the
seizing officials, knows that it cannot profit by their wrong will that wrong be repressed.18
In fact, over thirty (30) years before, the Federal Supreme Court had already declared:
If letters and private documents can thus be seized and held and used in evidence against a
citizen accused of an offense, the protection of the 4th Amendment, declaring his rights to be
secure against such searches and seizures, is of no value, and, so far as those thus placed are
concerned, might as well be stricken from the Constitution. The efforts of the courts and their
officials to bring the guilty to punishment, praiseworthy as they are, are not to be aided by the
sacrifice of those great principles established by years of endeavor and suffering which have
resulted in their embodiment in the fundamental law of the land.19
This view was, not only reiterated, but, also, broadened in subsequent decisions on the same Federal
Court. 20After reviewing previous decisions thereon, said Court held, in Mapp vs. Ohio (supra.):
. . . Today we once again examine the Wolf's constitutional documentation of the right of privacy
free from unreasonable state intrusion, and after its dozen years on our books, are led by it to
close the only courtroom door remaining open to evidence secured by official lawlessness in
flagrant abuse of that basic right, reserved to all persons as a specific guarantee against that very
same unlawful conduct. We hold that all evidence obtained by searches and seizures in violation
of the Constitution is, by that same authority, inadmissible in a State.

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Since the Fourth Amendment's right of privacy has been declared enforceable against the States
through the Due Process Clause of the Fourteenth, it is enforceable against them by the same
sanction of exclusion as it used against the Federal Government. Were it otherwise, then just as
without the Weeks rule the assurance against unreasonable federal searches and seizures would
be "a form of words," valueless and underserving of mention in a perpetual charter of inestimable
human liberties, so too, without that rule the freedom from state invasions of privacy would be so
ephemeral and so neatly severed from its conceptual nexus with the freedom from all brutish
means of coercing evidence as not to permit this Court's high regard as a freedom "implicit in the
concept of ordered liberty." At the time that the Court held in Wolf that the amendment was
applicable to the States through the Due Process Clause, the cases of this Court as we have
seen, had steadfastly held that as to federal officers the Fourth Amendment included the
exclusion of the evidence seized in violation of its provisions. Even Wolf "stoutly adhered" to that
proposition. The right to when conceded operatively enforceable against the States, was not
susceptible of destruction by avulsion of the sanction upon which its protection and enjoyment
had always been deemed dependent under the Boyd, Weeks and Silverthorne Cases. Therefore,
in extending the substantive protections of due process to all constitutionally unreasonable
searches state or federal it was logically and constitutionally necessarily that the exclusion
doctrine an essential part of the right to privacy be also insisted upon as an essential
ingredient of the right newly recognized by the Wolf Case. In short, the admission of the new
constitutional Right by Wolf could not tolerate denial of its most important constitutional privilege,
namely, the exclusion of the evidence which an accused had been forced to give by reason of the
unlawful seizure. To hold otherwise is to grant the right but in reality to withhold its privilege and
enjoyment. Only last year the Court itself recognized that the purpose of the exclusionary rule
to "is to deter to compel respect for the constitutional guaranty in the only effectively available
way by removing the incentive to disregard it" . . . .
The ignoble shortcut to conviction left open to the State tends to destroy the entire system of
constitutional restraints on which the liberties of the people rest. Having once recognized that the
right to privacy embodied in the Fourth Amendment is enforceable against the States, and that
the right to be secure against rude invasions of privacy by state officers is, therefore constitutional
in origin, we can no longer permit that right to remain an empty promise. Because it is
enforceable in the same manner and to like effect as other basic rights secured by its Due
Process Clause, we can no longer permit it to be revocable at the whim of any police officer who,
in the name of law enforcement itself, chooses to suspend its enjoyment. Our decision, founded
on reason and truth, gives to the individual no more than that which the Constitution guarantees
him to the police officer no less than that to which honest law enforcement is entitled, and, to the
courts, that judicial integrity so necessary in the true administration of justice. (emphasis ours.)
Indeed, the non-exclusionary rule is contrary, not only to the letter, but also, to the spirit of the
constitutional injunction against unreasonable searches and seizures. To be sure, if the applicant for a
search warrant has competent evidence to establish probable cause of the commission of a given crime
by the party against whom the warrant is intended, then there is no reason why the applicant should not
comply with the requirements of the fundamental law. Upon the other hand, if he has no such competent
evidence, then it is not possible for the Judge to find that there is probable cause, and, hence, no
justification for the issuance of the warrant. The only possible explanation (not justification) for its
issuance is the necessity of fishing evidence of the commission of a crime. But, then, this fishing
expedition is indicative of the absence of evidence to establish a probable cause.
Moreover, the theory that the criminal prosecution of those who secure an illegal search warrant and/or
make unreasonable searches or seizures would suffice to protect the constitutional guarantee under
consideration, overlooks the fact that violations thereof are, in general, committed By agents of the party

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in power, for, certainly, those belonging to the minority could not possibly abuse a power they do not have.
Regardless of the handicap under which the minority usually but, understandably finds itself in
prosecuting agents of the majority, one must not lose sight of the fact that the psychological and moral
effect of the possibility 21 of securing their conviction, is watered down by the pardoning power of the party
for whose benefit the illegality had been committed.
In their Motion for Reconsideration and Amendment of the Resolution of this Court dated June 29, 1962,
petitioners allege that Rooms Nos. 81 and 91 of Carmen Apartments, House No. 2008, Dewey Boulevard,
House No. 1436, Colorado Street, and Room No. 304 of the Army-Navy Club, should be included among
the premises considered in said Resolution as residences of herein petitioners, Harry S. Stonehill, Robert
P. Brook, John J. Brooks and Karl Beck, respectively, and that, furthermore, the records, papers and other
effects seized in the offices of the corporations above referred to include personal belongings of said
petitioners and other effects under their exclusive possession and control, for the exclusion of which they
have a standing under the latest rulings of the federal courts of federal courts of the United States. 22
We note, however, that petitioners' theory, regarding their alleged possession of and control over the
aforementioned records, papers and effects, and the alleged "personal" nature thereof, has Been
Advanced, notin their petition or amended petition herein, but in the Motion for Reconsideration and
Amendment of the Resolution of June 29, 1962. In other words, said theory would appear to be
readjustment of that followed in said petitions, to suit the approach intimated in the Resolution sought to
be reconsidered and amended. Then, too, some of the affidavits or copies of alleged affidavits attached to
said motion for reconsideration, or submitted in support thereof, contain either inconsistent allegations, or
allegations inconsistent with the theory now advanced by petitioners herein.
Upon the other hand, we are not satisfied that the allegations of said petitions said motion for
reconsideration, and the contents of the aforementioned affidavits and other papers submitted in support
of said motion, have sufficiently established the facts or conditions contemplated in the cases relied upon
by the petitioners; to warrant application of the views therein expressed, should we agree thereto. At any
rate, we do not deem it necessary to express our opinion thereon, it being best to leave the matter open
for determination in appropriate cases in the future.
We hold, therefore, that the doctrine adopted in the Moncado case must be, as it is hereby, abandoned;
that the warrants for the search of three (3) residences of herein petitioners, as specified in the Resolution
of June 29, 1962, are null and void; that the searches and seizures therein made are illegal; that the writ
of preliminary injunction heretofore issued, in connection with the documents, papers and other effects
thus seized in said residences of herein petitioners is hereby made permanent; that the writs prayed for
are granted, insofar as the documents, papers and other effects so seized in the aforementioned
residences are concerned; that the aforementioned motion for Reconsideration and Amendment should
be, as it is hereby, denied; and that the petition herein is dismissed and the writs prayed for denied, as
regards the documents, papers and other effects seized in the twenty-nine (29) places, offices and other
premises enumerated in the same Resolution, without special pronouncement as to costs.
It is so ordered.
Reyes, J.B.L., Dizon, Makalintal, Bengzon, J.P., Zaldivar and Sanchez, JJ., concur.
CASTRO, J., concurring and dissenting:
From my analysis of the opinion written by Chief Justice Roberto Concepcion and from the import of the
deliberations of the Court on this case, I gather the following distinct conclusions:

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1. All the search warrants served by the National Bureau of Investigation in this case are general
warrants and are therefore proscribed by, and in violation of, paragraph 3 of section 1 of Article III
(Bill of Rights) of the Constitution;
2. All the searches and seizures conducted under the authority of the said search warrants were
consequently illegal;
3. The non-exclusionary rule enunciated in Moncado vs. People, 80 Phil. 1, should be, and is
declared, abandoned;
4. The search warrants served at the three residences of the petitioners are expressly declared
null and void the searches and seizures therein made are expressly declared illegal; and the writ
of preliminary injunction heretofore issued against the use of the documents, papers and effect
seized in the said residences is made permanent; and
5. Reasoning that the petitioners have not in their pleadings satisfactorily demonstrated that they
have legal standing to move for the suppression of the documents, papers and effects seized in
the places other than the three residences adverted to above, the opinion written by the Chief
Justice refrains from expresslydeclaring as null and void the such warrants served at such other
places and as illegal the searches and seizures made therein, and leaves "the matter open for
determination in appropriate cases in the future."
It is precisely the position taken by the Chief Justice summarized in the immediately preceding paragraph
(numbered 5) with which I am not in accord.
I do not share his reluctance or unwillingness to expressly declare, at this time, the nullity of the search
warrants served at places other than the three residences, and the illegibility of the searches and seizures
conducted under the authority thereof. In my view even the exacerbating passions and prejudices
inordinately generated by the environmental political and moral developments of this case should not
deter this Court from forthrightly laying down the law not only for this case but as well for future cases and
future generations. All the search warrants, without exception, in this case are admittedly general, blanket
and roving warrants and are therefore admittedly and indisputably outlawed by the Constitution; and the
searches and seizures made were therefore unlawful. That the petitioners, let us assume in gratia
argumente, have no legal standing to ask for the suppression of the papers, things and effects seized
from places other than their residences, to my mind, cannot in any manner affect, alter or otherwise
modify the intrinsic nullity of the search warrants and the intrinsic illegality of the searches and seizures
made thereunder. Whether or not the petitioners possess legal standing the said warrants are void and
remain void, and the searches and seizures were illegal and remain illegal. No inference can be drawn
from the words of the Constitution that "legal standing" or the lack of it is a determinant of the nullity or
validity of a search warrant or of the lawfulness or illegality of a search or seizure.
On the question of legal standing, I am of the conviction that, upon the pleadings submitted to this Court
the petitioners have the requisite legal standing to move for the suppression and return of the documents,
papers and effects that were seized from places other than their family residences.
Our constitutional provision on searches and seizures was derived almost verbatim from the Fourth
Amendment to the United States Constitution. In the many years of judicial construction and interpretation
of the said constitutional provision, our courts have invariably regarded as doctrinal the pronouncement
made on the Fourth Amendment by federal courts, especially the Federal Supreme Court and the Federal
Circuit Courts of Appeals.

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The U.S. doctrines and pertinent cases on standing to move for the suppression or return of documents,
papers and effects which are the fruits of an unlawful search and seizure, may be summarized as follows;
(a) ownership of documents, papers and effects gives "standing;" (b) ownership and/or control or
possession actual or constructive of premises searched gives "standing"; and (c) the "aggrieved
person" doctrine where the search warrant and the sworn application for search warrant are "primarily"
directed solely and exclusively against the "aggrieved person," gives "standing."
An examination of the search warrants in this case will readily show that, excepting three, all were
directed against the petitioners personally. In some of them, the petitioners were named personally,
followed by the designation, "the President and/or General Manager" of the particular corporation. The
three warrants excepted named three corporate defendants. But the "office/house/warehouse/premises"
mentioned in the said three warrants were also the same "office/house/warehouse/premises" declared to
be owned by or under the control of the petitioners in all the other search warrants directed against the
petitioners and/or "the President and/or General Manager" of the particular corporation. (see pages 5-24
of Petitioners' Reply of April 2, 1962). The searches and seizures were to be made, and were actually
made, in the "office/house/warehouse/premises" owned by or under the control of the petitioners.
Ownership of matters seized gives "standing."
Ownership of the properties seized alone entitles the petitioners to bring a motion to return and suppress,
and gives them standing as persons aggrieved by an unlawful search and seizure regardless of their
location at the time of seizure. Jones vs. United States, 362 U.S. 257, 261 (1960) (narcotics stored in the
apartment of a friend of the defendant); Henzel vs. United States, 296 F. 2d. 650, 652-53 (5th Cir. 1961),
(personal and corporate papers of corporation of which the defendant was president), United States vs.
Jeffers, 342 U.S. 48 (1951) (narcotics seized in an apartment not belonging to the defendant); Pielow vs.
United States, 8 F. 2d 492, 493 (9th Cir. 1925) (books seized from the defendant's sister but belonging to
the defendant); Cf. Villano vs. United States, 310 F. 2d 680, 683 (10th Cir. 1962) (papers seized in desk
neither owned by nor in exclusive possession of the defendant).
In a very recent case (decided by the U.S. Supreme Court on December 12, 1966), it was held that under
the constitutional provision against unlawful searches and seizures, a person places himself or his
property within a constitutionally protected area, be it his home or his office, his hotel room or his
automobile:
Where the argument falls is in its misapprehension of the fundamental nature and scope of
Fourth Amendment protection. What the Fourth Amendment protects is the security a man relies
upon when heplaces himself or his property within a constitutionally protected area, be it his
home or his office, his hotel room or his automobile. There he is protected from unwarranted
governmental intrusion. And when he puts some thing in his filing cabinet, in his desk drawer, or
in his pocket, he has the right to know it will be secure from an unreasonable search or an
unreasonable seizure. So it was that the Fourth Amendment could not tolerate the warrantless
search of the hotel room in Jeffers, the purloining of the petitioner's private papers in Gouled, or
the surreptitious electronic surveilance in Silverman. Countless other cases which have come to
this Court over the years have involved a myriad of differing factual contexts in which the
protections of the Fourth Amendment have been appropriately invoked. No doubt, the future will
bring countless others. By nothing we say here do we either foresee or foreclose factual
situations to which the Fourth Amendment may be applicable. (Hoffa vs. U.S., 87 S. Ct. 408
(December 12, 1966). See also U.S. vs. Jeffers, 342 U.S. 48, 72 S. Ct. 93 (November 13, 1951).
(Emphasis supplied).
Control of premises searched gives "standing."

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Independent of ownership or other personal interest in the records and documents seized, the petitioners
have standing to move for return and suppression by virtue of their proprietary or leasehold interest in
many of the premises searched. These proprietary and leasehold interests have been sufficiently set forth
in their motion for reconsideration and need not be recounted here, except to emphasize that the
petitioners paid rent, directly or indirectly, for practically all the premises searched (Room 91, 84 Carmen
Apts; Room 304, Army & Navy Club; Premises 2008, Dewey Boulevard; 1436 Colorado Street);
maintained personal offices within the corporate offices (IBMC, USTC); had made improvements or
furnished such offices; or had paid for the filing cabinets in which the papers were stored (Room 204,
Army & Navy Club); and individually, or through their respective spouses, owned the controlling stock of
the corporations involved. The petitioners' proprietary interest in most, if not all, of the premises searched
therefore independently gives them standing to move for the return and suppression of the books, papers
and affects seized therefrom.
In Jones vs. United States, supra, the U.S. Supreme Court delineated the nature and extent of the
interest in the searched premises necessary to maintain a motion to suppress. After reviewing what it
considered to be the unduly technical standard of the then prevailing circuit court decisions, the Supreme
Court said (362 U.S. 266):
We do not lightly depart from this course of decisions by the lower courts. We are persuaded,
however, that it is unnecessarily and ill-advised to import into the law surrounding the
constitutional right to be free from unreasonable searches and seizures subtle distinctions,
developed and refined by the common law in evolving the body of private property law which,
more than almost any other branch of law, has been shaped by distinctions whose validity is
largely historical. Even in the area from which they derive, due consideration has led to the
discarding of those distinctions in the homeland of the common law. See Occupiers' Liability Act,
1957, 5 and 6 Eliz. 2, c. 31, carrying out Law Reform Committee, Third Report, Cmd. 9305.
Distinctions such as those between "lessee", "licensee," "invitee," "guest," often only of gossamer
strength, ought not be determinative in fashioning procedures ultimately referable to constitutional
safeguards. See also Chapman vs. United States, 354 U.S. 610, 616-17 (1961).
It has never been held that a person with requisite interest in the premises searched must own the
property seized in order to have standing in a motion to return and suppress. In Alioto vs. United States,
216 F. Supp. 48 (1963), a Bookkeeper for several corporations from whose apartment the corporate
records were seized successfully moved for their return. In United States vs. Antonelli, Fireworks Co., 53
F. Supp. 870, 873 (W D. N. Y. 1943), the corporation's president successfully moved for the return and
suppression is to him of both personal and corporate documents seized from his home during the course
of an illegal search:
The lawful possession by Antonelli of documents and property, "either his own or the
corporation's was entitled to protection against unreasonable search and seizure. Under the
circumstances in the case at bar, the search and seizure were unreasonable and unlawful. The
motion for the return of seized article and the suppression of the evidence so obtained should be
granted. (Emphasis supplied).
Time was when only a person who had property in interest in either the place searched or the articles
seize had the necessary standing to invoke the protection of the exclusionary rule. But in MacDonald vs.
Unite States, 335 U.S. 461 (1948), Justice Robert Jackson joined by Justice Felix Frankfurter, advanced
the view that "even a guest may expect the shelter of the rooftree he is under against criminal intrusion."
This view finally became the official view of the U.S. Supreme Court and was articulated in United States
vs. Jeffers, 432 U.S 48 (1951). Nine years later, in 1960, in Jones vs. Unite States, 362 U.S. 257, 267, the
U.S. Supreme Court went a step further. Jones was a mere guest in the apartment unlawfully searched

10
but the Court nonetheless declared that the exclusionary rule protected him as well. The concept of
"person aggrieved by an unlawful search and seizure" was enlarged to include "anyone legitimately on
premise where the search occurs."
Shortly after the U.S. Supreme Court's Jones decision the U.S. Court of Appeals for the Fifth Circuit held
that the defendant organizer, sole stockholder and president of a corporation had standing in a mail fraud
prosecution against him to demand the return and suppression of corporate property. Henzel vs. United
States, 296 F 2d 650, 652 (5th Cir. 1961), supra. The court conclude that the defendant had standing on
two independent grounds:First he had a sufficient interest in the property seized, and second he
had an adequate interest in the premises searched (just like in the case at bar). A postal inspector had
unlawfully searched the corporation' premises and had seized most of the corporation's book and records.
Looking to Jones, the court observed:
Jones clearly tells us, therefore, what is not required qualify one as a "person aggrieved by an
unlawful search and seizure." It tells us that appellant should not have been precluded from
objecting to the Postal Inspector's search and seizure of the corporation's books and records
merely because the appellant did not show ownership or possession of the books and records or
a substantial possessory interest in the invade premises . . . (Henzel vs. United States, 296 F. 2d
at 651). .
Henzel was soon followed by Villano vs. United States, 310 F. 2d 680, 683, (10th Cir. 1962). In Villano,
police officers seized two notebooks from a desk in the defendant's place of employment; the defendant
did not claim ownership of either; he asserted that several employees (including himself) used the
notebooks. The Court held that the employee had a protected interest and that there also was an invasion
of privacy. Both Henzel and Villanoconsidered also the fact that the search and seizure were "directed at"
the moving defendant. Henzel vs. United States, 296 F. 2d at 682; Villano vs. United States, 310 F. 2d at
683.
In a case in which an attorney closed his law office, placed his files in storage and went to Puerto Rico,
the Court of Appeals for the Eighth Circuit recognized his standing to move to quash as unreasonable
search and seizure under the Fourth Amendment of the U.S. Constitution a grand jury subpoena duces
tecum directed to the custodian of his files. The Government contended that the petitioner had no
standing because the books and papers were physically in the possession of the custodian, and because
the subpoena was directed against the custodian. The court rejected the contention, holding that
Schwimmer legally had such possession, control and unrelinquished personal rights in the books
and papers as not to enable the question of unreasonable search and seizure to be escaped
through the mere procedural device of compelling a third-party naked possessor to produce and
deliver them. Schwimmer vs. United States, 232 F. 2d 855, 861 (8th Cir. 1956).
Aggrieved person doctrine where the search warrant s primarily directed against said person
gives "standing."
The latest United States decision squarely in point is United States vs. Birrell, 242 F. Supp. 191 (1965,
U.S.D.C. S.D.N.Y.). The defendant had stored with an attorney certain files and papers, which attorney, by
the name of Dunn, was not, at the time of the seizing of the records, Birrell's attorney. * Dunn, in turn, had
stored most of the records at his home in the country and on a farm which, according to Dunn's affidavit,
was under his (Dunn's) "control and management." The papers turned out to be private, personal and
business papers together with corporate books and records of certain unnamed corporations in which
Birrell did not even claim ownership. (All of these type records were seized in the case at bar).
Nevertheless, the search in Birrell was held invalid by the court which held that even though Birrell did not

11
own the premises where the records were stored, he had "standing" to move for the return of all the
papers and properties seized. The court, relying on Jones vs. U.S.,supra; U.S. vs. Antonelli Fireworks
Co., 53 F. Supp. 870, Aff'd 155 F. 2d 631: Henzel vs. U.S., supra; andSchwimmer vs. U.S., supra, pointed
out that
It is overwhelmingly established that the searches here in question were directed solely and
exclusively against Birrell. The only person suggested in the papers as having violated the law
was Birrell. The first search warrant described the records as having been used "in committing a
violation of Title 18, United States Code, Section 1341, by the use of the mails by one Lowell M.
Birrell, . . ." The second search warrant was captioned: "United States of America vs. Lowell M.
Birrell. (p. 198)
Possession (actual or constructive), no less than ownership, gives standing to move to suppress.
Such was the rule even before Jones. (p. 199)
If, as thus indicated Birrell had at least constructive possession of the records stored with Dunn, it
matters not whether he had any interest in the premises searched. See also Jeffers v. United
States, 88 U.S. Appl. D.C. 58, 187 F. 2d 498 (1950), affirmed 432 U.S. 48, 72 S. Ct. 93, 96 L. Ed.
459 (1951).
The ruling in the Birrell case was reaffirmed on motion for reargument; the United States did not appeal
from this decision. The factual situation in Birrell is strikingly similar to the case of the present petitioners;
as in Birrell, many personal and corporate papers were seized from premises not petitioners' family
residences; as in Birrell, the searches were "PRIMARILY DIRECTED SOLETY AND EXCLUSIVELY"
against the petitioners. Still both types of documents were suppressed in Birrell because of the illegal
search. In the case at bar, the petitioners connection with the premises raided is much closer than
in Birrell.
Thus, the petitioners have full standing to move for the quashing of all the warrants regardless whether
these were directed against residences in the narrow sense of the word, as long as the documents were
personal papers of the petitioners or (to the extent that they were corporate papers) were held by them in
a personal capacity or under their personal control.
Prescinding a from the foregoing, this Court, at all events, should order the return to the petitioners
all personaland private papers and effects seized, no matter where these were seized, whether from their
residences or corporate offices or any other place or places. The uncontradicted sworn statements of the
petitioners in their, various pleadings submitted to this Court indisputably show that amongst the things
seized from the corporate offices and other places were personal and private papers and effects
belonging to the petitioners.
If there should be any categorization of the documents, papers and things which where the objects of the
unlawful searches and seizures, I submit that the grouping should be: (a) personal or private papers of
the petitioners were they were unlawfully seized, be it their family residences offices, warehouses and/or
premises owned and/or possessed (actually or constructively) by them as shown in all the search and in
the sworn applications filed in securing the void search warrants and (b) purely corporate papers
belonging to corporations. Under such categorization or grouping, the determination of which unlawfully
seized papers, documents and things arepersonal/private of the petitioners or purely corporate papers will
have to be left to the lower courts which issued the void search warrants in ultimately effecting the
suppression and/or return of the said documents.

12
And as unequivocally indicated by the authorities above cited, the petitioners likewise have clear legal
standing to move for the suppression of purely corporate papers as "President and/or General Manager"
of the corporations involved as specifically mentioned in the void search warrants.
Finally, I must articulate my persuasion that although the cases cited in my disquisition were criminal
prosecutions, the great clauses of the constitutional proscription on illegal searches and seizures do not
withhold the mantle of their protection from cases not criminal in origin or nature.

G.R. No. 172428

November 28, 2008

HERMAN C. CRYSTAL, LAMBERTO C. CRYSTAL, ANN GEORGIA C. SOLANTE, and DORIS C.


MAGLASANG, as Heirs of Deceased SPOUSES RAYMUNDO I. CRYSTAL and DESAMPARADOS C.
CRYSTAL, petitioners,
vs.
BANK OF THE PHILIPPINE ISLANDS, respondent.
DECISION
TINGA, J.:
Before us is a Petition for Review1 of the Decision2 and Resolution3 of the Court of Appeals dated 24
October 2005 and 31 March 2006, respectively, in CA G.R. CV No. 72886, which affirmed the 8 June
2001 decision of the Regional Trial Court, Branch 5, of Cebu City.4
The facts, as culled from the records, follow.
On 28 March 1978, spouses Raymundo and Desamparados Crystal obtained a P300,000.00 loan in
behalf of the Cebu Contractors Consortium Co. (CCCC) from the Bank of the Philippine Islands-Butuan

13
branch (BPI-Butuan). The loan was secured by a chattel mortgage on heavy equipment and machinery of
CCCC. On the same date, the spouses executed in favor of BPI-Butuan a Continuing Suretyship 5 where
they bound themselves as surety of CCCC in the aggregate principal sum of not exceeding P300,000.00.
Thereafter, or on 29 March 1979, Raymundo Crystal executed a promissory note 6 for the amount
of P300,000.00, also in favor of BPI-Butuan.
Sometime in August 1979, CCCC renewed a previous loan, this time from BPI, Cebu City branch (BPICebu City). The renewal was evidenced by a promissory note 7 dated 13 August 1979, signed by the
spouses in their personal capacities and as managing partners of CCCC. The promissory note states that
the spouses are jointly and severally liable with CCCC. It appears that before the original loan could be
granted, BPI-Cebu City required CCCC to put up a security.
However, CCCC had no real property to offer as security for the loan; hence, the spouses executed a real
estate mortgage8 over their own real property on 22 September 1977. 9 On 3 October 1977, they executed
another real estate mortgage over the same lot in favor of BPI-Cebu City, to secure an additional loan
of P20,000.00 of CCCC.10
CCCC failed to pay its loans to both BPI-Butuan and BPI-Cebu City when they became due. CCCC, as
well as the spouses, failed to pay their obligations despite demands. Thus, BPI resorted to the foreclosure
of the chattel mortgage and the real estate mortgage. The foreclosure sale on the chattel mortgage was
initially stalled with the issuance of a restraining order against BPI. 11 However, following BPIs compliance
with the necessary requisites of extrajudicial foreclosure, the foreclosure sale on the chattel mortgage
was consummated on 28 February 1988, with the proceeds amounting to P240,000.00 applied to the loan
from BPI-Butuan which had then reached P707,393.90.12Meanwhile, on 7 July 1981, Insular Bank of Asia
and America (IBAA), through its Vice-President for Legal and Corporate Affairs, offered to buy the lot
subject of the two (2) real
estate mortgages and to pay directly the spouses indebtedness in exchange for the release of the
mortgages. BPI rejected IBAAs offer to pay.13
BPI filed a complaint for sum of money against CCCC and the spouses before the Regional Trial Court of
Butuan City (RTC Butuan), seeking to recover the deficiency of the loan of CCCC and the spouses with
BPI-Butuan. The trial court ruled in favor of BPI. Pursuant to the decision, BPI instituted extrajudicial
foreclosure of the spouses mortgaged property.14
On 10 April 1985, the spouses filed an action for Injunction With Damages, With A Prayer For A
Restraining Order and/ or Writ of Preliminary Injunction.15 The spouses claimed that the foreclosure of the
real estate mortgages is illegal because BPI should have exhausted CCCCs properties first, stressing
that they are mere guarantors of the renewed loans. They also prayed that they be awarded moral and
exemplary damages, attorneys fees, litigation expenses and cost of suit. Subsequently, the spouses filed
an amended complaint,16 additionally alleging that CCCC had opened and maintained a foreign currency
savings account (FCSA-197) with bpi, Makati branch (BPI-Makati), and that said FCSA was used as
security for a P450,000.00 loan also extended by BPI-Makati. TheP450,000.00 loan was allegedly paid,
and thereafter the spouses demanded the return of the FCSA passbook. BPI rejected the demand; thus,
the spouses were unable to withdraw from the said account to pay for their other obligations to BPI.
The trial court dismissed the spouses complaint and ordered them to pay moral and exemplary damages
and attorneys fees to BPI.17 It ruled that since the spouses agreed to bind themselves jointly and
severally, they are solidarily liable for the loans; hence, BPI can validly foreclose the two real estate
mortgages. Moreover, being guarantors-mortgagors, the spouses are not entitled to the benefit of
exhaustion. Anent the FCSA, the trial court found that CCCC originally had FCDU SA No. 197 with BPI,

14
Dewey Boulevard branch, which was transferred to BPI-Makati as FCDU SA 76/0035, at the request of
Desamparados Crystal. FCDU SA 76/0035 was thus closed, but Desamparados Crystal failed to
surrender the passbook because it was lost. The transferred FCSA in BPI-Makati was the one used as
security for CCCCs P450,000.00 loan from BPI-Makati. CCCC was no longer allowed to withdraw from
FCDU SA No. 197 because it was already closed.
The spouses appealed the decision of the trial court to the Court of Appeals, but their appeal was
dismissed.18 The spouses moved for the reconsideration of the decision, but the Court of Appeals also
denied their motion for reconsideration.19 Hence, the present petition.
Before the Court, petitioners who are the heirs of the spouses argue that the failure of the spouses to pay
the BPI-Cebu City loan of P120,000.00 was due to BPIs illegal refusal to accept payment for the loan
unless the P300,000.00 loan from BPI-Butuan would also be paid. Consequently, in view of BPIs unjust
refusal to accept payment of the BPI-Cebu City loan, the loan obligation of the spouses was extinguished,
petitioners contend.
The contention has no merit. Petitioners rely on IBAAs offer to purchase the mortgaged lot from them and
to directly pay BPI out of the proceeds thereof to settle the loan. 20 BPIs refusal to agree to such payment
scheme cannot extinguish the spouses loan obligation. In the first place, IBAA is not privy to the loan
agreement or the promissory note between the spouses and BPI. Contracts, after all, take effect only
between the parties, their successors in interest, heirs
and assigns.21 Besides, under Art. 1236 of the Civil Code, the creditor is not bound to accept payment or
performance by a third person who has no interest in the fulfillment of the obligation, unless there is a
stipulation to the contrary. We see no stipulation in the promissory note which states that a third person
may fulfill the spouses obligation. Thus, it is clear that the spouses alone bear responsibility for the same.
In any event, the promissory note is the controlling repository of the obligation of the spouses. Under the
promissory note, the spouses defined the parameters of their obligation as follows:
On or before June 29, 1980 on demand, for value received, I/we promise to pay, jointly and
severally, to the BANK OF THE PHILIPPINE ISLANDS, at its office in the city of Cebu Philippines,
the sum of ONE HUNDRED TWENTY THOUSAND PESOS (P120,0000.00), Philippine Currency,
subject to periodic installments on the principal as follows: P30,000.00 quarterly amortization
starting September 28, 1979. x x x 22
A solidary obligation is one in which each of the debtors is liable for the entire obligation, and each of the
creditors is entitled to demand the satisfaction of the whole obligation from any or all of the debtors. 23 A
liability is solidary "only when the obligation expressly so states, when the law so provides or when the
nature of the
obligation so requires."24 Thus, when the obligor undertakes to be "jointly and severally" liable, it means
that the obligation is solidary,25 such as in this case. By stating "I/we promise to pay, jointly and severally,
to the BANK OF THE PHILIPPINE ISLANDS," the spouses agreed to be sought out and be demanded
payment from, by BPI. BPI did demand payment from them, but they failed to comply with their obligation,
prompting BPIs valid resort to the foreclosure of the chattel mortgage and the real estate mortgages.
More importantly, the promissory note, wherein the spouses undertook to be solidarily liable for the
principal loan, partakes the nature of a suretyship and therefore is an additional security for the loan. Thus
we held in one case that if solidary liability was instituted to "guarantee" a principal obligation, the law
deems the contract to be one of suretyship.26 And while a contract of a surety is in essence secondary

15
only to a valid principal obligation, the suretys liability to the creditor or promisee of the principal is said to
be direct, primary, and absolute; in other words, the surety is directly and equally bound with the principal.
The surety therefore becomes liable for the debt or duty of another even if he possesses no direct or
personal interest over the obligations nor does he receive any benefit therefrom. 27
Petitioners contend that the Court of Appeals erred in not granting their counterclaims, considering that
they suffered moral damages in view of the unjust refusal of BPI to accept the payment scheme proposed
by IBAA and the allegedly unjust and illegal foreclosure of the real estate mortgages on their
property.28 Conversely, they argue that the Court of Appeals erred in awarding moral damages to BPI,
which is a corporation, as well as exemplary damages, attorneys fees and expenses of litigation. 29
We do not agree. Moral damages are meant to compensate the claimant for any physical suffering,
mental anguish, fright, serious anxiety, besmirched reputation, wounded feelings, moral shock, social
humiliation and similar injuries unjustly caused.30 Such damages, to be recoverable, must be the
proximate result of a wrongful act or omission the factual basis for which is satisfactorily established by
the aggrieved party.31 There being no wrongful or unjust act on the part of BPI in demanding payment
from them and in seeking the foreclosure of the chattel and real estate mortgages, there is no lawful basis
for award of damages in favor of the spouses.
Neither is BPI entitled to moral damages. A juridical person is generally not entitled to moral damages
because, unlike a natural person, it cannot experience physical suffering or such sentiments as wounded
feelings, serious anxiety, mental anguish or moral shock. 32 The Court of Appeals found BPI as "being
famous and having gained its familiarity and respect not only in the Philippines but also in the whole world
because of its good will and good reputation must protect and defend the same against any unwarranted
suit such as the case at bench."33 In holding that BPI is entitled to moral damages, the Court of Appeals
relied on the case of People v. Manero,34 wherein the Court ruled that "[i]t is only when a juridical person
has a good reputation that is debased, resulting in social humiliation, that moral damages may be
awarded."35
We do not agree with the Court of Appeals. A statement similar to that made by the Court in Manerocan
be found in the case of Mambulao Lumber Co. v. PNB, et al.,36 thus:
x x x Obviously, an artificial person like herein appellant corporation cannot experience physical
sufferings, mental anguish, fright, serious anxiety, wounded feelings, moral shock or social
humiliation which are basis of moral damages. A corporation may have good reputation
which, if besmirched may also be a ground for the award of moral damages. x x x
(Emphasis supplied)
Nevertheless, in the more recent cases of ABS-CBN Corp. v. Court of Appeals, et al.,37 and Filipinas
Broadcasting Network, Inc. v. Ago Medical and Educational Center-Bicol Christian College of Medicine
(AMEC-BCCM),38 the Court held that the statements in Manero and Mambulao were mere obiter dicta,
implying that the award of moral damages to corporations is not a hard and fast rule. Indeed, while the
Court may allow the grant of moral damages to corporations, it is not automatically granted; there must
still be proof of the existence of the factual basis of the damage and its causal relation to the defendants
acts. This is so because moral damages, though incapable of pecuniary estimation, are in the category of
an award designed to compensate the claimant for actual injurysuffered and not to impose a penalty on
the wrongdoer.39
The spouses complaint against BPI proved to be unfounded, but it does not automatically entitle BPI to
moral damages. Although the institution of a clearly unfounded civil suit can at times be a legal

16
justification for an award of attorney's fees, such filing, however, has almost invariably been held not to be
a ground for an award of moral damages. The rationale for the rule is that the law could not have meant
to impose a penalty on the right to litigate. Otherwise, moral damages must every time be awarded in
favor of the prevailing defendant against an unsuccessful plaintiff.40 BPI may have been inconvenienced
by the suit, but we do not see how it could have possibly suffered besmirched reputation on account of
the single suit alone. Hence, the award of moral damages should be deleted.
The awards of exemplary damages and attorneys fees, however, are proper. Exemplary damages, on the
other hand, are imposed by way of example or correction for the public good, when the party to a contract
acts in a wanton, fraudulent, oppressive or malevolent manner, while attorneys fees are allowed when
exemplary damages are awarded and when the party to a suit is compelled to incur expenses to protect
his interest.41 The spouses instituted their complaint against BPI notwithstanding the fact that they were
the ones who failed to pay their obligations. Consequently, BPI was forced to litigate and defend its
interest. For these reasons, BPI is entitled to the awards of exemplary damages and attorneys fees.
WHEREFORE, the petition is DENIED. The Decision and Resolution of the Court of Appeals dated 24
October 2005 and 31 March 2006, respectively, are hereby AFFIRMED, with the MODIFICATION that the
award of moral damages to Bank of the Philippine Islands is DELETED.
Costs against the petitioners.
SO ORDERED.

G.R. No. 122846

January 20, 2009

WHITE LIGHT CORPORATION, TITANIUM CORPORATION and STA. MESA TOURIST &
DEVELOPMENT CORPORATION, Petitioners,
vs.
CITY OF MANILA, represented by DE CASTRO, MAYOR ALFREDO S. LIM, Respondent.
DECISION
Tinga, J.:

17
With another city ordinance of Manila also principally involving the tourist district as subject, the Court is
confronted anew with the incessant clash between government power and individual liberty in tandem
with the archetypal tension between law and morality.
In City of Manila v. Laguio, Jr.,1 the Court affirmed the nullification of a city ordinance barring the operation
of motels and inns, among other establishments, within the Ermita-Malate area. The petition at bar assails
a similarly-motivated city ordinance that prohibits those same establishments from offering short-time
admission, as well as pro-rated or "wash up" rates for such abbreviated stays. Our earlier decision tested
the city ordinance against our sacred constitutional rights to liberty, due process and equal protection of
law. The same parameters apply to the present petition.
This Petition2 under Rule 45 of the Revised Rules on Civil Procedure, which seeks the reversal of the
Decision3 in C.A.-G.R. S.P. No. 33316 of the Court of Appeals, challenges the validity of Manila City
Ordinance No. 7774 entitled, "An Ordinance Prohibiting Short-Time Admission, Short-Time Admission
Rates, and Wash-Up Rate Schemes in Hotels, Motels, Inns, Lodging Houses, Pension Houses, and
Similar Establishments in the City of Manila" (the Ordinance).
I.
The facts are as follows:
On December 3, 1992, City Mayor Alfredo S. Lim (Mayor Lim) signed into law the Ordinance. 4 The
Ordinance is reproduced in full, hereunder:
SECTION 1. Declaration of Policy. It is hereby the declared policy of the City Government to protect the
best interest, health and welfare, and the morality of its constituents in general and the youth in particular.
SEC. 2. Title. This ordinance shall be known as "An Ordinance" prohibiting short time admission in hotels,
motels, lodging houses, pension houses and similar establishments in the City of Manila.
SEC. 3. Pursuant to the above policy, short-time admission and rate [sic], wash-up rate or other similarly
concocted terms, are hereby prohibited in hotels, motels, inns, lodging houses, pension houses and
similar establishments in the City of Manila.
SEC. 4. Definition of Term[s]. Short-time admission shall mean admittance and charging of room rate for
less than twelve (12) hours at any given time or the renting out of rooms more than twice a day or any
other term that may be concocted by owners or managers of said establishments but would mean the
same or would bear the same meaning.
SEC. 5. Penalty Clause. Any person or corporation who shall violate any provision of this ordinance shall
upon conviction thereof be punished by a fine of Five Thousand (P5,000.00) Pesos or imprisonment for a
period of not exceeding one (1) year or both such fine and imprisonment at the discretion of the court;
Provided, That in case of [a] juridical person, the president, the manager, or the persons in charge of the
operation thereof shall be liable: Provided, further, That in case of subsequent conviction for the same
offense, the business license of the guilty party shall automatically be cancelled.
SEC. 6. Repealing Clause. Any or all provisions of City ordinances not consistent with or contrary to this
measure or any portion hereof are hereby deemed repealed.
SEC. 7. Effectivity. This ordinance shall take effect immediately upon approval.

18
Enacted by the city Council of Manila at its regular session today, November 10, 1992.
Approved by His Honor, the Mayor on December 3, 1992.
On December 15, 1992, the Malate Tourist and Development Corporation (MTDC) filed a complaint for
declaratory relief with prayer for a writ of preliminary injunction and/or temporary restraining order
( TRO)5 with the Regional Trial Court (RTC) of Manila, Branch 9 impleading as defendant, herein
respondent City of Manila (the City) represented by Mayor Lim. 6 MTDC prayed that the Ordinance, insofar
as it includes motels and inns as among its prohibited establishments, be declared invalid and
unconstitutional. MTDC claimed that as owner and operator of the Victoria Court in Malate, Manila it was
authorized by Presidential Decree (P.D.) No. 259 to admit customers on a short time basis as well as to
charge customers wash up rates for stays of only three hours.
On December 21, 1992, petitioners White Light Corporation (WLC), Titanium Corporation (TC) and Sta.
Mesa Tourist and Development Corporation (STDC) filed a motion to intervene and to admit attached
complaint-in-intervention7 on the ground that the Ordinance directly affects their business interests as
operators of drive-in-hotels and motels in Manila.8 The three companies are components of the Anito
Group of Companies which owns and operates several hotels and motels in Metro Manila. 9
On December 23, 1992, the RTC granted the motion to intervene. 10 The RTC also notified the Solicitor
General of the proceedings pursuant to then Rule 64, Section 4 of the Rules of Court. On the same date,
MTDC moved to withdraw as plaintiff.11
On December 28, 1992, the RTC granted MTDC's motion to withdraw.12 The RTC issued a TRO on
January 14, 1993, directing the City to cease and desist from enforcing the Ordinance. 13 The City filed an
Answer dated January 22, 1993 alleging that the Ordinance is a legitimate exercise of police power.14
On February 8, 1993, the RTC issued a writ of preliminary injunction ordering the city to desist from the
enforcement of the Ordinance.15 A month later, on March 8, 1993, the Solicitor General filed his Comment
arguing that the Ordinance is constitutional.
During the pre-trial conference, the WLC, TC and STDC agreed to submit the case for decision without
trial as the case involved a purely legal question. 16 On October 20, 1993, the RTC rendered a decision
declaring the Ordinance null and void. The dispositive portion of the decision reads:
WHEREFORE, in view of all the foregoing, [O]rdinance No. 7774 of the City of Manila is hereby declared
null and void.
Accordingly, the preliminary injunction heretofor issued is hereby made permanent.
SO ORDERED.17
The RTC noted that the ordinance "strikes at the personal liberty of the individual guaranteed and
jealously guarded by the Constitution."18 Reference was made to the provisions of the Constitution
encouraging private enterprises and the incentive to needed investment, as well as the right to operate
economic enterprises. Finally, from the observation that the illicit relationships the Ordinance sought to
dissuade could nonetheless be consummated by simply paying for a 12-hour stay, the RTC likened the
law to the ordinance annulled in Ynot v. Intermediate Appellate Court,19 where the legitimate purpose of
preventing indiscriminate slaughter of carabaos was sought to be effected through an inter-province ban
on the transport of carabaos and carabeef.

19
The City later filed a petition for review on certiorari with the Supreme Court.20 The petition was docketed
as G.R. No. 112471. However in a resolution dated January 26, 1994, the Court treated the petition as a
petition forcertiorari and referred the petition to the Court of Appeals. 21
Before the Court of Appeals, the City asserted that the Ordinance is a valid exercise of police power
pursuant to Section 458 (4)(iv) of the Local Government Code which confers on cities, among other local
government units, the power:
[To] regulate the establishment, operation and maintenance of cafes, restaurants, beerhouses, hotels,
motels, inns, pension houses, lodging houses and other similar establishments, including tourist guides
and transports.22
The Ordinance, it is argued, is also a valid exercise of the power of the City under Article III, Section
18(kk) of the Revised Manila Charter, thus:
"to enact all ordinances it may deem necessary and proper for the sanitation and safety, the furtherance
of the prosperity and the promotion of the morality, peace, good order, comfort, convenience and general
welfare of the city and its inhabitants, and such others as be necessary to carry into effect and discharge
the powers and duties conferred by this Chapter; and to fix penalties for the violation of ordinances which
shall not exceed two hundred pesos fine or six months imprisonment, or both such fine and imprisonment
for a single offense.23
Petitioners argued that the Ordinance is unconstitutional and void since it violates the right to privacy and
the freedom of movement; it is an invalid exercise of police power; and it is an unreasonable and
oppressive interference in their business.
The Court of Appeals reversed the decision of the RTC and affirmed the constitutionality of the
Ordinance.24First, it held that the Ordinance did not violate the right to privacy or the freedom of
movement, as it only penalizes the owners or operators of establishments that admit individuals for short
time stays. Second, the virtually limitless reach of police power is only constrained by having a lawful
object obtained through a lawful method. The lawful objective of the Ordinance is satisfied since it aims to
curb immoral activities. There is a lawful method since the establishments are still allowed to operate.
Third, the adverse effect on the establishments is justified by the well-being of its constituents in general.
Finally, as held in Ermita-Malate Motel Operators Association v. City Mayor of Manila, liberty is regulated
by law.
TC, WLC and STDC come to this Court via petition for review on certiorari. 25 In their petition and
Memorandum, petitioners in essence repeat the assertions they made before the Court of Appeals. They
contend that the assailed Ordinance is an invalid exercise of police power.
II.
We must address the threshold issue of petitioners standing. Petitioners allege that as owners of
establishments offering "wash-up" rates, their business is being unlawfully interfered with by the
Ordinance. However, petitioners also allege that the equal protection rights of their clients are also being
interfered with. Thus, the crux of the matter is whether or not these establishments have the requisite
standing to plead for protection of their patrons' equal protection rights.
Standing or locus standi is the ability of a party to demonstrate to the court sufficient connection to and
harm from the law or action challenged to support that party's participation in the case. More importantly,
the doctrine of standing is built on the principle of separation of powers, 26 sparing as it does unnecessary

20
interference or invalidation by the judicial branch of the actions rendered by its co-equal branches of
government.
The requirement of standing is a core component of the judicial system derived directly from the
Constitution.27The constitutional component of standing doctrine incorporates concepts which concededly
are not susceptible of precise definition.28 In this jurisdiction, the extancy of "a direct and personal
interest" presents the most obvious cause, as well as the standard test for a petitioner's standing. 29 In a
similar vein, the United States Supreme Court reviewed and elaborated on the meaning of the three
constitutional standing requirements of injury, causation, and redressability in Allen v. Wright.30
Nonetheless, the general rules on standing admit of several exceptions such as the overbreadth doctrine,
taxpayer suits, third party standing and, especially in the Philippines, the doctrine of transcendental
importance.31
For this particular set of facts, the concept of third party standing as an exception and the overbreadth
doctrine are appropriate. In Powers v. Ohio,32 the United States Supreme Court wrote that: "We have
recognized the right of litigants to bring actions on behalf of third parties, provided three important criteria
are satisfied: the litigant must have suffered an injury-in-fact, thus giving him or her a "sufficiently
concrete interest" in the outcome of the issue in dispute; the litigant must have a close relation to the third
party; and there must exist some hindrance to the third party's ability to protect his or her own
interests."33 Herein, it is clear that the business interests of the petitioners are likewise injured by the
Ordinance. They rely on the patronage of their customers for their continued viability which appears to be
threatened by the enforcement of the Ordinance. The relative silence in constitutional litigation of such
special interest groups in our nation such as the American Civil Liberties Union in the United States may
also be construed as a hindrance for customers to bring suit. 34
American jurisprudence is replete with examples where parties-in-interest were allowed standing to
advocate or invoke the fundamental due process or equal protection claims of other persons or classes of
persons injured by state action. In Griswold v. Connecticut,35 the United States Supreme Court held that
physicians had standing to challenge a reproductive health statute that would penalize them as
accessories as well as to plead the constitutional protections available to their patients. The Court held
that:
"The rights of husband and wife, pressed here, are likely to be diluted or adversely affected unless those
rights are considered in a suit involving those who have this kind of confidential relation to them." 36
An even more analogous example may be found in Craig v. Boren,37 wherein the United States Supreme
Court held that a licensed beverage vendor has standing to raise the equal protection claim of a male
customer challenging a statutory scheme prohibiting the sale of beer to males under the age of 21 and to
females under the age of 18. The United States High Court explained that the vendors had standing "by
acting as advocates of the rights of third parties who seek access to their market or function." 38
Assuming arguendo that petitioners do not have a relationship with their patrons for the former to assert
the rights of the latter, the overbreadth doctrine comes into play. In overbreadth analysis, challengers to
government actionare in effect permitted to raise the rights of third parties. Generally applied to statutes
infringing on the freedom of speech, the overbreadth doctrine applies when a statute needlessly restrains
even constitutionally guaranteed rights.39 In this case, the petitioners claim that the Ordinance makes a
sweeping intrusion into the right to liberty of their clients. We can see that based on the allegations in the
petition, the Ordinance suffers from overbreadth.

21
We thus recognize that the petitioners have a right to assert the constitutional rights of their clients to
patronize their establishments for a "wash-rate" time frame.
III.
To students of jurisprudence, the facts of this case will recall to mind not only the recent City of
Manila ruling, but our 1967 decision in Ermita-Malate Hotel and Motel Operations Association, Inc., v.
Hon. City Mayor of Manila.40Ermita-Malate concerned the City ordinance requiring patrons to fill up a
prescribed form stating personal information such as name, gender, nationality, age, address and
occupation before they could be admitted to a motel, hotel or lodging house. This earlier ordinance was
precisely enacted to minimize certain practices deemed harmful to public morals. A purpose similar to the
annulled ordinance in City of Manila which sought a blanket ban on motels, inns and similar
establishments in the Ermita-Malate area. However, the constitutionality of the ordinance in ErmitaMalate was sustained by the Court.
The common thread that runs through those decisions and the case at bar goes beyond the singularity of
the localities covered under the respective ordinances. All three ordinances were enacted with a view of
regulating public morals including particular illicit activity in transient lodging establishments. This could be
described as the middle case, wherein there is no wholesale ban on motels and hotels but the services
offered by these establishments have been severely restricted. At its core, this is another case about the
extent to which the State can intrude into and regulate the lives of its citizens.
The test of a valid ordinance is well established. A long line of decisions including City of Manila has held
that for an ordinance to be valid, it must not only be within the corporate powers of the local government
unit to enact and pass according to the procedure prescribed by law, it must also conform to the following
substantive requirements: (1) must not contravene the Constitution or any statute; (2) must not be unfair
or oppressive; (3) must not be partial or discriminatory; (4) must not prohibit but may regulate trade; (5)
must be general and consistent with public policy; and (6) must not be unreasonable. 41
The Ordinance prohibits two specific and distinct business practices, namely wash rate admissions and
renting out a room more than twice a day. The ban is evidently sought to be rooted in the police power as
conferred on local government units by the Local Government Code through such implements as the
general welfare clause.
A.
Police power, while incapable of an exact definition, has been purposely veiled in general terms to
underscore its comprehensiveness to meet all exigencies and provide enough room for an efficient and
flexible response as the conditions warrant.42 Police power is based upon the concept of necessity of the
State and its corresponding right to protect itself and its people. 43 Police power has been used as
justification for numerous and varied actions by the State. These range from the regulation of dance
halls,44 movie theaters,45 gas stations46 and cockpits.47 The awesome scope of police power is best
demonstrated by the fact that in its hundred or so years of presence in our nations legal system, its use
has rarely been denied.
The apparent goal of the Ordinance is to minimize if not eliminate the use of the covered establishments
for illicit sex, prostitution, drug use and alike. These goals, by themselves, are unimpeachable and
certainly fall within the ambit of the police power of the State. Yet the desirability of these ends do not
sanctify any and all means for their achievement. Those means must align with the Constitution, and our
emerging sophisticated analysis of its guarantees to the people. The Bill of Rights stands as a rebuke to

22
the seductive theory of Macchiavelli, and, sometimes even, the political majorities animated by his
cynicism.
Even as we design the precedents that establish the framework for analysis of due process or equal
protection questions, the courts are naturally inhibited by a due deference to the co-equal branches of
government as they exercise their political functions. But when we are compelled to nullify executive or
legislative actions, yet another form of caution emerges. If the Court were animated by the same passing
fancies or turbulent emotions that motivate many political decisions, judicial integrity is compromised by
any perception that the judiciary is merely the third political branch of government. We derive our respect
and good standing in the annals of history by acting as judicious and neutral arbiters of the rule of law,
and there is no surer way to that end than through the development of rigorous and sophisticated legal
standards through which the courts analyze the most fundamental and far-reaching constitutional
questions of the day.
B.
The primary constitutional question that confronts us is one of due process, as guaranteed under Section
1, Article III of the Constitution. Due process evades a precise definition. 48 The purpose of the guaranty is
to prevent arbitrary governmental encroachment against the life, liberty and property of individuals. The
due process guaranty serves as a protection against arbitrary regulation or seizure. Even corporations
and partnerships are protected by the guaranty insofar as their property is concerned.
The due process guaranty has traditionally been interpreted as imposing two related but distinct
restrictions on government, "procedural due process" and "substantive due process." Procedural due
process refers to the procedures that the government must follow before it deprives a person of life,
liberty, or property.49 Procedural due process concerns itself with government action adhering to the
established process when it makes an intrusion into the private sphere. Examples range from the form of
notice given to the level of formality of a hearing.
If due process were confined solely to its procedural aspects, there would arise absurd situation of
arbitrary government action, provided the proper formalities are followed. Substantive due process
completes the protection envisioned by the due process clause. It inquires whether the government has
sufficient justification for depriving a person of life, liberty, or property.50
The question of substantive due process, moreso than most other fields of law, has reflected dynamism in
progressive legal thought tied with the expanded acceptance of fundamental freedoms. Police power,
traditionally awesome as it may be, is now confronted with a more rigorous level of analysis before it can
be upheld. The vitality though of constitutional due process has not been predicated on the frequency with
which it has been utilized to achieve a liberal result for, after all, the libertarian ends should sometimes
yield to the prerogatives of the State. Instead, the due process clause has acquired potency because of
the sophisticated methodology that has emerged to determine the proper metes and bounds for its
application.
C.
The general test of the validity of an ordinance on substantive due process grounds is best tested when
assessed with the evolved footnote 4 test laid down by the U.S. Supreme Court in U.S. v. Carolene
Products.51 Footnote 4 of the Carolene Products case acknowledged that the judiciary would defer to the
legislature unless there is a discrimination against a "discrete and insular" minority or infringement of a
"fundamental right."52 Consequently, two standards of judicial review were established: strict scrutiny for

23
laws dealing with freedom of the mind or restricting the political process, and the rational basis standard
of review for economic legislation.
A third standard, denominated as heightened or immediate scrutiny, was later adopted by the U.S.
Supreme Court for evaluating classifications based on gender 53 and legitimacy.54 Immediate scrutiny was
adopted by the U.S. Supreme Court in Craig, 55 after the Court declined to do so in Reed v. Reed.56 While
the test may have first been articulated in equal protection analysis, it has in the United States since been
applied in all substantive due process cases as well.
We ourselves have often applied the rational basis test mainly in analysis of equal protection
challenges.57 Using the rational basis examination, laws or ordinances are upheld if they rationally further
a legitimate governmental interest.58 Under intermediate review, governmental interest is extensively
examined and the availability of less restrictive measures is considered. 59 Applying strict scrutiny, the
focus is on the presence of compelling, rather than substantial, governmental interest and on the absence
of less restrictive means for achieving that interest.
In terms of judicial review of statutes or ordinances, strict scrutiny refers to the standard for determining
the quality and the amount of governmental interest brought to justify the regulation of fundamental
freedoms.60 Strict scrutiny is used today to test the validity of laws dealing with the regulation of speech,
gender, or race as well as other fundamental rights as expansion from its earlier applications to equal
protection.61 The United States Supreme Court has expanded the scope of strict scrutiny to protect
fundamental rights such as suffrage,62 judicial access63 and interstate travel.64
If we were to take the myopic view that an Ordinance should be analyzed strictly as to its effect only on
the petitioners at bar, then it would seem that the only restraint imposed by the law which we are
capacitated to act upon is the injury to property sustained by the petitioners, an injury that would warrant
the application of the most deferential standard the rational basis test. Yet as earlier stated, we
recognize the capacity of the petitioners to invoke as well the constitutional rights of their patrons those
persons who would be deprived of availing short time access or wash-up rates to the lodging
establishments in question.
Viewed cynically, one might say that the infringed rights of these customers were are trivial since they
seem shorn of political consequence. Concededly, these are not the sort of cherished rights that, when
proscribed, would impel the people to tear up their cedulas. Still, the Bill of Rights does not shelter
gravitas alone. Indeed, it is those "trivial" yet fundamental freedoms which the people reflexively
exercise any day without the impairing awareness of their constitutional consequence that accurately
reflect the degree of liberty enjoyed by the people. Liberty, as integrally incorporated as a fundamental
right in the Constitution, is not a Ten Commandments-style enumeration of what may or what may not be
done; but rather an atmosphere of freedom where the people do not feel labored under a Big Brother
presence as they interact with each other, their society and nature, in a manner innately understood by
them as inherent, without doing harm or injury to others.
D.
The rights at stake herein fall within the same fundamental rights to liberty which we upheld in City of
Manila v. Hon. Laguio, Jr. We expounded on that most primordial of rights, thus:
Liberty as guaranteed by the Constitution was defined by Justice Malcolm to include "the right to exist and
the right to be free from arbitrary restraint or servitude. The term cannot be dwarfed into mere freedom
from physical restraint of the person of the citizen, but is deemed to embrace the right of man to enjoy the
facilities with which he has been endowed by his Creator, subject only to such restraint as are necessary

24
for the common welfare."[65] In accordance with this case, the rights of the citizen to be free to use his
faculties in all lawful ways; to live and work where he will; to earn his livelihood by any lawful calling; and
to pursue any avocation are all deemed embraced in the concept of liberty.[ 66]
The U.S. Supreme Court in the case of Roth v. Board of Regents, sought to clarify the meaning of
"liberty." It said:
While the Court has not attempted to define with exactness the liberty . . . guaranteed [by the Fifth and
Fourteenth Amendments], the term denotes not merely freedom from bodily restraint but also the right of
the individual to contract, to engage in any of the common occupations of life, to acquire useful
knowledge, to marry, establish a home and bring up children, to worship God according to the dictates of
his own conscience, and generally to enjoy those privileges long recognized . . . as essential to the
orderly pursuit of happiness by free men. In a Constitution for a free people, there can be no doubt that
the meaning of "liberty" must be broad indeed.67 [Citations omitted]
It cannot be denied that the primary animus behind the ordinance is the curtailment of sexual behavior.
The City asserts before this Court that the subject establishments "have gained notoriety as venue of
prostitution, adultery and fornications in Manila since they provide the necessary atmosphere for
clandestine entry, presence and exit and thus became the ideal haven for prostitutes and thrillseekers."68 Whether or not this depiction of a mise-en-scene of vice is accurate, it cannot be denied that
legitimate sexual behavior among willing married or consenting single adults which is constitutionally
protected69 will be curtailed as well, as it was in the City of Manila case. Our holding therein retains
significance for our purposes:
The concept of liberty compels respect for the individual whose claim to privacy and interference
demands respect. As the case of Morfe v. Mutuc, borrowing the words of Laski, so very aptly stated:
Man is one among many, obstinately refusing reduction to unity. His separateness, his isolation, are
indefeasible; indeed, they are so fundamental that they are the basis on which his civic obligations are
built. He cannot abandon the consequences of his isolation, which are, broadly speaking, that his
experience is private, and the will built out of that experience personal to himself. If he surrenders his will
to others, he surrenders himself. If his will is set by the will of others, he ceases to be a master of himself.
I cannot believe that a man no longer a master of himself is in any real sense free.
Indeed, the right to privacy as a constitutional right was recognized in Morfe, the invasion of which should
be justified by a compelling state interest. Morfe accorded recognition to the right to privacy independently
of its identification with liberty; in itself it is fully deserving of constitutional protection. Governmental
powers should stop short of certain intrusions into the personal life of the citizen. 70
We cannot discount other legitimate activities which the Ordinance would proscribe or impair. There are
very legitimate uses for a wash rate or renting the room out for more than twice a day. Entire families are
known to choose pass the time in a motel or hotel whilst the power is momentarily out in their homes. In
transit passengers who wish to wash up and rest between trips have a legitimate purpose for abbreviated
stays in motels or hotels. Indeed any person or groups of persons in need of comfortable private spaces
for a span of a few hours with purposes other than having sex or using illegal drugs can legitimately look
to staying in a motel or hotel as a convenient alternative.
E.
That the Ordinance prevents the lawful uses of a wash rate depriving patrons of a product and the
petitioners of lucrative business ties in with another constitutional requisite for the legitimacy of the

25
Ordinance as a police power measure. It must appear that the interests of the public generally, as
distinguished from those of a particular class, require an interference with private rights and the means
must be reasonably necessary for the accomplishment of the purpose and not unduly oppressive of
private rights.71 It must also be evident that no other alternative for the accomplishment of the purpose
less intrusive of private rights can work. More importantly, a reasonable relation must exist between the
purposes of the measure and the means employed for its accomplishment, for even under the guise of
protecting the public interest, personal rights and those pertaining to private property will not be permitted
to be arbitrarily invaded.72
Lacking a concurrence of these requisites, the police measure shall be struck down as an arbitrary
intrusion into private rights. As held in Morfe v. Mutuc, the exercise of police power is subject to judicial
review when life, liberty or property is affected.73 However, this is not in any way meant to take it away
from the vastness of State police power whose exercise enjoys the presumption of validity.74
Similar to the Comelec resolution requiring newspapers to donate advertising space to candidates, this
Ordinance is a blunt and heavy instrument.75 The Ordinance makes no distinction between places
frequented by patrons engaged in illicit activities and patrons engaged in legitimate actions. Thus it
prevents legitimate use of places where illicit activities are rare or even unheard of. A plain reading of
section 3 of the Ordinance shows it makes no classification of places of lodging, thus deems them all
susceptible to illicit patronage and subject them without exception to the unjustified prohibition.
The Court has professed its deep sentiment and tenderness of the Ermita-Malate area, its longtime
home,76 and it is skeptical of those who wish to depict our capital city the Pearl of the Orient as a
modern-day Sodom or Gomorrah for the Third World set. Those still steeped in Nick Joaquin-dreams of
the grandeur of Old Manila will have to accept that Manila like all evolving big cities, will have its
problems. Urban decay is a fact of mega cities such as Manila, and vice is a common problem confronted
by the modern metropolis wherever in the world. The solution to such perceived decay is not to prevent
legitimate businesses from offering a legitimate product. Rather, cities revive themselves by offering
incentives for new businesses to sprout up thus attracting the dynamism of individuals that would bring a
new grandeur to Manila.
The behavior which the Ordinance seeks to curtail is in fact already prohibited and could in fact be
diminished simply by applying existing laws. Less intrusive measures such as curbing the proliferation of
prostitutes and drug dealers through active police work would be more effective in easing the situation. So
would the strict enforcement of existing laws and regulations penalizing prostitution and drug use. These
measures would have minimal intrusion on the businesses of the petitioners and other legitimate
merchants. Further, it is apparent that the Ordinance can easily be circumvented by merely paying the
whole day rate without any hindrance to those engaged in illicit activities. Moreover, drug dealers and
prostitutes can in fact collect "wash rates" from their clientele by charging their customers a portion of the
rent for motel rooms and even apartments.
IV.
We reiterate that individual rights may be adversely affected only to the extent that may fairly be required
by the legitimate demands of public interest or public welfare. The State is a leviathan that must be
restrained from needlessly intruding into the lives of its citizens. However well-intentioned the Ordinance
may be, it is in effect an arbitrary and whimsical intrusion into the rights of the establishments as well as
their patrons. The Ordinance needlessly restrains the operation of the businesses of the petitioners as
well as restricting the rights of their patrons without sufficient justification. The Ordinance rashly equates
wash rates and renting out a room more than twice a day with immorality without accommodating
innocuous intentions.

26
The promotion of public welfare and a sense of morality among citizens deserves the full endorsement of
the judiciary provided that such measures do not trample rights this Court is sworn to protect. 77 The notion
that the promotion of public morality is a function of the State is as old as Aristotle. 78 The advancement of
moral relativism as a school of philosophy does not de-legitimize the role of morality in law, even if it may
foster wider debate on which particular behavior to penalize. It is conceivable that a society with relatively
little shared morality among its citizens could be functional so long as the pursuit of sharply variant moral
perspectives yields an adequate accommodation of different interests. 79
To be candid about it, the oft-quoted American maxim that "you cannot legislate morality" is ultimately
illegitimate as a matter of law, since as explained by Calabresi, that phrase is more accurately interpreted
as meaning that efforts to legislate morality will fail if they are widely at variance with public attitudes
about right and wrong.80 Our penal laws, for one, are founded on age-old moral traditions, and as long as
there are widely accepted distinctions between right and wrong, they will remain so oriented.
Yet the continuing progression of the human story has seen not only the acceptance of the right-wrong
distinction, but also the advent of fundamental liberties as the key to the enjoyment of life to the fullest.
Our democracy is distinguished from non-free societies not with any more extensive elaboration on our
part of what is moral and immoral, but from our recognition that the individual liberty to make the choices
in our lives is innate, and protected by the State. Independent and fair-minded judges themselves are
under a moral duty to uphold the Constitution as the embodiment of the rule of law, by reason of their
expression of consent to do so when they take the oath of office, and because they are entrusted by the
people to uphold the law.81
Even as the implementation of moral norms remains an indispensable complement to governance, that
prerogative is hardly absolute, especially in the face of the norms of due process of liberty. And while the
tension may often be left to the courts to relieve, it is possible for the government to avoid the
constitutional conflict by employing more judicious, less drastic means to promote morality.
WHEREFORE, the Petition is GRANTED. The Decision of the Court of Appeals is REVERSED, and the
Decision of the Regional Trial Court of Manila, Branch 9, is REINSTATED. Ordinance No. 7774 is hereby
declared UNCONSTITUTIONAL. No pronouncement as to costs.
SO ORDERED.

27

G.R. No. 15574

September 17, 1919

SMITH, BELL & COMPANY (LTD.), petitioner,


vs.
JOAQUIN NATIVIDAD, Collector of Customs of the port of Cebu, respondent.
Ross and Lawrence for petitioner.
Attorney-General Paredes for respondent.
MALCOLM, J.:
A writ of mandamus is prayed for by Smith, Bell & Co. (Ltd.), against Joaquin Natividad, Collector of
Customs of the port of Cebu, Philippine Islands, to compel him to issue a certificate of Philippine registry
to the petitioner for its motor vessel Bato. The Attorney-General, acting as counsel for respondent,
demurs to the petition on the general ground that it does not state facts sufficient to constitute a cause of
action. While the facts are thus admitted, and while, moreover, the pertinent provisions of law are clear
and understandable, and interpretative American jurisprudence is found in abundance, yet the issue
submitted is not lightly to be resolved. The question, flatly presented, is, whether Act. No. 2761 of the
Philippine Legislature is valid or, more directly stated, whether the Government of the Philippine
Islands, through its Legislature, can deny the registry of vessels in its coastwise trade to corporations
having alien stockholders.
FACTS.
Smith, Bell & Co., (Ltd.), is a corporation organized and existing under the laws of the Philippine Islands.
A majority of its stockholders are British subjects. It is the owner of a motor vessel known as the Bato built
for it in the Philippine Islands in 1916, of more than fifteen tons gross The Bato was brought to Cebu in
the present year for the purpose of transporting plaintiff's merchandise between ports in the Islands.
Application was made at Cebu, the home port of the vessel, to the Collector of Customs for a certificate of
Philippine registry. The Collector refused to issue the certificate, giving as his reason that all the
stockholders of Smith, Bell & Co., Ltd., were not citizens either of the United States or of the Philippine
Islands. The instant action is the result.
LAW.
The Act of Congress of April 29, 1908, repealing the Shipping Act of April 30, 1906 but reenacting a
portion of section 3 of this Law, and still in force, provides in its section 1:

28
That until Congress shall have authorized the registry as vessels of the United States of vessels
owned in the Philippine Islands, the Government of the Philippine Islands is hereby authorized to
adopt, from time to time, and enforce regulations governing the transportation of merchandise
and passengers between ports or places in the Philippine Archipelago. (35 Stat. at L., 70; Section
3912, U. S. Comp Stat. [1916]; 7 Pub. Laws, 364.)
The Act of Congress of August 29, 1916, commonly known as the Jones Law, still in force, provides in
section 3, (first paragraph, first sentence), 6, 7, 8, 10, and 31, as follows.
SEC. 3. That no law shall be enacted in said Islands which shall deprive any person of life, liberty,
or property without due process of law, or deny to any person therein the equal protection of the
laws. . . .
SEC. 6. That the laws now in force in the Philippines shall continue in force and effect, except as
altered, amended, or modified herein, until altered, amended, or repealed by the legislative
authority herein provided or by Act of Congress of the United States.
SEC. 7. That the legislative authority herein provided shall have power, when not inconsistent
with this Act, by due enactment to amend, alter modify, or repeal any law, civil or criminal,
continued in force by this Act as it may from time to time see fit
This power shall specifically extend with the limitation herein provided as to the tariff to all laws
relating to revenue provided as to the tariff to all laws relating to revenue and taxation in effect in
the Philippines.
SEC. 8. That general legislative power, except as otherwise herein provided, is hereby granted to
the Philippine Legislature, authorized by this Act.
SEC. 10. That while this Act provides that the Philippine government shall have the authority to
enact a tariff law the trade relations between the islands and the United States shall continue to
be governed exclusively by laws of the Congress of the United States: Provided, That tariff acts or
acts amendatory to the tariff of the Philippine Islands shall not become law until they shall receive
the approval of the President of the United States, nor shall any act of the Philippine Legislature
affecting immigration or the currency or coinage laws of the Philippines become a law until it has
been approved by the President of the United States: Provided further, That the President shall
approve or disapprove any act mentioned in the foregoing proviso within six months from and
after its enactment and submission for his approval, and if not disapproved within such time it
shall become a law the same as if it had been specifically approved.
SEC. 31. That all laws or parts of laws applicable to the Philippines not in conflict with any of the
provisions of this Act are hereby continued in force and effect." (39 Stat at L., 546.)
On February 23, 1918, the Philippine Legislature enacted Act No. 2761. The first section of this law
amended section 1172 of the Administrative Code to read as follows:
SEC. 1172. Certificate of Philippine register. Upon registration of a vessel of domestic
ownership, and of more than fifteen tons gross, a certificate of Philippine register shall be issued
for it. If the vessel is of domestic ownership and of fifteen tons gross or less, the taking of the
certificate of Philippine register shall be optional with the owner.

29
"Domestic ownership," as used in this section, means ownership vested in some one or more of
the following classes of persons: (a) Citizens or native inhabitants of the Philippine Islands; (b)
citizens of the United States residing in the Philippine Islands; (c) any corporation or company
composed wholly of citizens of the Philippine Islands or of the United States or of both, created
under the laws of the United States, or of any State thereof, or of thereof, or the managing agent
or master of the vessel resides in the Philippine Islands
Any vessel of more than fifteen gross tons which on February eighth, nineteen hundred and
eighteen, had a certificate of Philippine register under existing law, shall likewise be deemed a
vessel of domestic ownership so long as there shall not be any change in the ownership thereof
nor any transfer of stock of the companies or corporations owning such vessel to person not
included under the last preceding paragraph.
Sections 2 and 3 of Act No. 2761 amended sections 1176 and 1202 of the Administrative Code to read as
follows:
SEC. 1176. Investigation into character of vessel. No application for a certificate of Philippine
register shall be approved until the collector of customs is satisfied from an inspection of the
vessel that it is engaged or destined to be engaged in legitimate trade and that it is of domestic
ownership as such ownership is defined in section eleven hundred and seventy-two of this Code.
The collector of customs may at any time inspect a vessel or examine its owner, master, crew, or
passengers in order to ascertain whether the vessel is engaged in legitimate trade and is entitled
to have or retain the certificate of Philippine register.
SEC. 1202. Limiting number of foreign officers and engineers on board vessels. No Philippine
vessel operating in the coastwise trade or on the high seas shall be permitted to have on board
more than one master or one mate and one engineer who are not citizens of the United States or
of the Philippine Islands, even if they hold licenses under section one thousand one hundred and
ninety-nine hereof. No other person who is not a citizen of the United States or of the Philippine
Islands shall be an officer or a member of the crew of such vessel. Any such vessel which fails to
comply with the terms of this section shall be required to pay an additional tonnage tax of fifty
centavos per net ton per month during the continuance of said failure.
ISSUES.
Predicated on these facts and provisions of law, the issues as above stated recur, namely, whether Act No
2761 of the Philippine Legislature is valid in whole or in part whether the Government of the Philippine
Islands, through its Legislature, can deny the registry of vessel in its coastwise trade to corporations
having alien stockholders .
OPINION.
1. Considered from a positive standpoint, there can exist no measure of doubt as to the power of the
Philippine Legislature to enact Act No. 2761. The Act of Congress of April 29, 1908, with its specific
delegation of authority to the Government of the Philippine Islands to regulate the transportation of
merchandise and passengers between ports or places therein, the liberal construction given to the
provisions of the Philippine Bill, the Act of Congress of July 1, 1902, by the courts, and the grant by the
Act of Congress of August 29, 1916, of general legislative power to the Philippine Legislature, are
certainly superabundant authority for such a law. While the Act of the local legislature may in a way be
inconsistent with the Act of Congress regulating the coasting trade of the Continental United States, yet

30
the general rule that only such laws of the United States have force in the Philippines as are expressly
extended thereto, and the abnegation of power by Congress in favor of the Philippine Islands would leave
no starting point for convincing argument. As a matter of fact, counsel for petitioner does not assail
legislative action from this direction (See U. S. vs. Bull [1910], 15 Phil., 7; Sinnot vs. Davenport [1859] 22
How., 227.)
2. It is from the negative, prohibitory standpoint that counsel argues against the constitutionality of Act No.
2761. The first paragraph of the Philippine Bill of Rights of the Philippine Bill, repeated again in the first
paragraph of the Philippine Bill of Rights as set forth in the Jones Law, provides "That no law shall be
enacted in said Islands which shall deprive any person of life, liberty, or property without due process of
law, or deny to any person therein the equal protection of the laws." Counsel says that Act No. 2761
denies to Smith, Bell & Co., Ltd., the equal protection of the laws because it, in effect, prohibits the
corporation from owning vessels, and because classification of corporations based on the citizenship of
one or more of their stockholders is capricious, and that Act No. 2761 deprives the corporation of its
properly without due process of law because by the passage of the law company was automatically
deprived of every beneficial attribute of ownership in the Bato and left with the naked title to a boat it could
not use .
The guaranties extended by the Congress of the United States to the Philippine Islands have been used
in the same sense as like provisions found in the United States Constitution. While the "due process of
law and equal protection of the laws" clause of the Philippine Bill of Rights is couched in slightly different
words than the corresponding clause of the Fourteenth Amendment to the United States Constitution, the
first should be interpreted and given the same force and effect as the latter. (Kepner vs. U.S. [1904], 195
U. S., 100; Sierra vs. Mortiga [1907], 204 U. S.,.470; U. S. vs. Bull [1910], 15 Phil., 7.) The meaning of the
Fourteenth Amendment has been announced in classic decisions of the United States Supreme Court.
Even at the expense of restating what is so well known, these basic principles must again be set down in
order to serve as the basis of this decision.
The guaranties of the Fourteenth Amendment and so of the first paragraph of the Philippine Bill of Rights,
are universal in their application to all person within the territorial jurisdiction, without regard to any
differences of race, color, or nationality. The word "person" includes aliens. (Yick Wo vs. Hopkins [1886],
118 U. S., 356; Truaxvs. Raich [1915], 239 U. S., 33.) Private corporations, likewise, are "persons" within
the scope of the guaranties in so far as their property is concerned. (Santa Clara County vs. Southern
Pac. R. R. Co. [1886], 118.U. S., 394; Pembina Mining Co. vs. Pennsylvania [1888],.125 U. S., 181
Covington & L. Turnpike Road Co. vs. Sandford [1896], 164 U. S., 578.) Classification with the end in
view of providing diversity of treatment may be made among corporations, but must be based upon some
reasonable ground and not be a mere arbitrary selection (Gulf, Colorado & Santa Fe Railway Co. vs. Ellis
[1897],.165 U. S., 150.) Examples of laws held unconstitutional because of unlawful discrimination against
aliens could be cited. Generally, these decisions relate to statutes which had attempted arbitrarily to forbid
aliens to engage in ordinary kinds of business to earn their living. (Statevs. Montgomery [1900], 94 Maine,
192, peddling but see. Commonwealth vs. Hana [1907], 195 Mass., 262; Templar vs. Board of
Examiners of Barbers [1902], 131 Mich., 254, barbers; Yick Wo vs. Hopkins [1886], 118 U. S.,.356,
discrimination against Chinese; Truax vs. Raich [1915], 239 U. S., 33; In re Parrott [1880], 1 Fed , 481;
Fraser vs. McConway & Torley Co. [1897], 82 Fed , 257; Juniata Limestone Co. vs. Fagley [1898], 187
Penn., 193, all relating to the employment of aliens by private corporations.)
A literal application of general principles to the facts before us would, of course, cause the inevitable
deduction that Act No. 2761 is unconstitutional by reason of its denial to a corporation, some of whole
members are foreigners, of the equal protection of the laws. Like all beneficient propositions, deeper
research discloses provisos. Examples of a denial of rights to aliens notwithstanding the provisions of the
Fourteenth Amendment could be cited. (Tragesser vs. Gray [1890], 73 Md., 250, licenses to sell spirituous

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liquors denied to persons not citizens of the United States; Commonwealth vs. Hana [1907], 195 Mass ,
262, excluding aliens from the right to peddle; Patsone vs. Commonwealth of Pennsylvania [1914], 232 U.
S. , 138, prohibiting the killing of any wild bird or animal by any unnaturalized foreign-born resident; Ex
parte Gilleti [1915], 70 Fla., 442, discriminating in favor of citizens with reference to the taking for private
use of the common property in fish and oysters found in the public waters of the State; Heim vs. McCall
[1915], 239 U. S.,.175, and Crane vs. New York [1915], 239 U. S., 195, limiting employment on public
works by, or for, the State or a municipality to citizens of the United States.)
One of the exceptions to the general rule, most persistent and far reaching in influence is, that neither the
Fourteenth Amendment to the United States Constitution, broad and comprehensive as it is, nor any other
amendment, "was designed to interfere with the power of the State, sometimes termed its `police power,'
to prescribe regulations to promote the health, peace, morals, education, and good order of the people,
and legislate so as to increase the industries of the State, develop its resources and add to its wealth and
prosperity. From the very necessities of society, legislation of a special character, having these objects in
view, must often be had in certain districts." (Barbier vs. Connolly [1884], 113 U.S., 27; New Orleans Gas
Co. vs. Lousiana Light Co. [1885], 115 U.S., 650.) This is the same police power which the United States
Supreme Court say "extends to so dealing with the conditions which exist in the state as to bring out of
them the greatest welfare in of its people." (Bacon vs. Walker [1907], 204 U.S., 311.) For quite similar
reasons, none of the provision of the Philippine Organic Law could could have had the effect of denying to
the Government of the Philippine Islands, acting through its Legislature, the right to exercise that most
essential, insistent, and illimitable of powers, the sovereign police power, in the promotion of the general
welfare and the public interest. (U. S. vs. Toribio [1910], 15 Phil., 85; Churchill and Tait vs. Rafferty [1915],
32 Phil., 580; Rubi vs. Provincial Board of Mindoro [1919], 39 Phil., 660.) Another notable exception
permits of the regulation or distribution of the public domain or the common property or resources of the
people of the State, so that use may be limited to its citizens. (Ex parte Gilleti [1915], 70 Fla., 442;
McCready vs. Virginia [1876], 94 U. S., 391; Patsone vs. Commonwealth of Pennsylvania [1914], 232U.
S., 138.) Still another exception permits of the limitation of employment in the construction of public works
by, or for, the State or a municipality to citizens of the United States or of the State. (Atkin vs. Kansas
[1903],191 U. S., 207; Heim vs. McCall [1915], 239 U.S., 175; Crane vs. New York [1915], 239 U. S.,
195.) Even as to classification, it is admitted that a State may classify with reference to the evil to be
prevented; the question is a practical one, dependent upon experience. (Patsone vs. Commonwealth of
Pennsylvania [1914], 232 U. S., 138.)
To justify that portion of Act no. 2761 which permits corporations or companies to obtain a certificate of
Philippine registry only on condition that they be composed wholly of citizens of the Philippine Islands or
of the United States or both, as not infringing Philippine Organic Law, it must be done under some one of
the exceptions here mentioned This must be done, moreover, having particularly in mind what is so often
of controlling effect in this jurisdiction our local experience and our peculiar local conditions.
To recall a few facts in geography, within the confines of Philippine jurisdictional limits are found more
than three thousand islands. Literally, and absolutely, steamship lines are, for an Insular territory thus
situated, the arteries of commerce. If one be severed, the life-blood of the nation is lost. If on the other
hand these arteries are protected, then the security of the country and the promotion of the general
welfare is sustained. Time and again, with such conditions confronting it, has the executive branch of the
Government of the Philippine Islands, always later with the sanction of the judicial branch, taken a firm
stand with reference to the presence of undesirable foreigners. The Government has thus assumed to act
for the all-sufficient and primitive reason of the benefit and protection of its own citizens and of the selfpreservation and integrity of its dominion. (In re Patterson [1902], 1 Phil., 93; Forbes vs. Chuoco, Tiaco
and Crossfield [1910], 16 Phil., 534;.228 U.S., 549; In re McCulloch Dick [1918], 38 Phil., 41.) Boats
owned by foreigners, particularly by such solid and reputable firms as the instant claimant, might indeed
traverse the waters of the Philippines for ages without doing any particular harm. Again, some evilminded

32
foreigner might very easily take advantage of such lavish hospitality to chart Philippine waters, to obtain
valuable information for unfriendly foreign powers, to stir up insurrection, or to prejudice Filipino or
American commerce. Moreover, under the Spanish portion of Philippine law, the waters within the
domestic jurisdiction are deemed part of the national domain, open to public use. (Book II, Tit. IV, Ch. I,
Civil Code; Spanish Law of Waters of August 3, 1866, arts 1, 2, 3.) Common carriers which in the
Philippines as in the United States and other countries are, as Lord Hale said, "affected with a public
interest," can only be permitted to use these public waters as a privilege and under such conditions as to
the representatives of the people may seem wise. (See De Villata vs. Stanley [1915], 32 Phil., 541.)
In Patsone vs. Commonwealth of Pennsylvania ([1913], 232 U.S., 138), a case herein before mentioned,
Justice Holmes delivering the opinion of the United States Supreme Court said:
This statute makes it unlawful for any unnaturalized foreign-born resident to kill any wild bird or
animal except in defense of person or property, and `to that end' makes it unlawful for such
foreign-born person to own or be possessed of a shotgun or rifle; with a penalty of $25 and a
forfeiture of the gun or guns. The plaintiff in error was found guilty and was sentenced to pay the
abovementioned fine. The judgment was affirmed on successive appeals. (231 Pa., 46; 79 Atl.,
928.) He brings the case to this court on the ground that the statute is contrary to the 14th
Amendment and also is in contravention of the treaty between the United States and Italy, to
which latter country the plaintiff in error belongs .
Under the 14th Amendment the objection is twofold; unjustifiably depriving the alien of property,
and discrimination against such aliens as a class. But the former really depends upon the latter,
since it hardly can be disputed that if the lawful object, the protection of wild life
(Geer vs. Connecticut, 161 U.S., 519; 40 L. ed., 793; 16 Sup. Ct. Rep., 600), warrants the
discrimination, the, means adopted for making it effective also might be adopted. . . .
The discrimination undoubtedly presents a more difficult question. But we start with reference to
the evil to be prevented, and that if the class discriminated against is or reasonably might be
considered to define those from whom the evil mainly is to be feared, it properly may be picked
out. A lack of abstract symmetry does not matter. The question is a practical one, dependent upon
experience. . . .
The question therefore narrows itself to whether this court can say that the legislature of
Pennsylvania was not warranted in assuming as its premise for the law that resident
unnaturalized aliens were the peculiar source of the evil that it desired to prevent.
(Barrett vs. Indiana,. 229 U.S., 26, 29; 57 L. ed., 1050, 1052; 33 Sup. Ct. Rep., 692.)
Obviously the question, so stated, is one of local experience, on which this court ought to be very
slow to declare that the state legislature was wrong in its facts (Adams vs. Milwaukee, 228 U.S.,
572, 583; 57 L. ed., 971,.977; 33 Sup. Ct. Rep., 610.) If we might trust popular speech in some
states it was right; but it is enough that this court has no such knowledge of local conditions as to
be able to say that it was manifestly wrong. . . .
Judgment affirmed.
We are inclined to the view that while Smith, Bell & Co. Ltd., a corporation having alien stockholders, is
entitled to the protection afforded by the due-process of law and equal protection of the laws clause of the
Philippine Bill of Rights, nevertheless, Act No. 2761 of the Philippine Legislature, in denying to
corporations such as Smith, Bell &. Co. Ltd., the right to register vessels in the Philippines coastwise
trade, does not belong to that vicious species of class legislation which must always be condemned, but

33
does fall within authorized exceptions, notably, within the purview of the police power, and so does not
offend against the constitutional provision.
This opinion might well be brought to a close at this point. It occurs to us, however, that the legislative
history of the United States and the Philippine Islands, and, probably, the legislative history of other
countries, if we were to take the time to search it out, might disclose similar attempts at restriction on the
right to enter the coastwise trade, and might thus furnish valuable aid by which to ascertain and, if
possible, effectuate legislative intention.
3. The power to regulate commerce, expressly delegated to the Congress by the Constitution,
includes the power to nationalize ships built and owned in the United States by registries and
enrollments, and the recording of the muniments of title of American vessels. The Congress "may
encourage or it may entirely prohibit such commerce, and it may regulate in any way it may see fit
between these two extremes." (U.S.vs. Craig [1886], 28 Fed., 795; Gibbons vs. Ogden [1824], 9
Wheat., 1; The Passenger Cases [1849], 7 How., 283.)
Acting within the purview of such power, the first Congress of the United States had not been long
convened before it enacted on September 1, 1789, "An Act for Registering and Clearing Vessels,
Regulating the Coasting Trade, and for other purposes." Section 1 of this law provided that for any ship or
vessel to obtain the benefits of American registry, it must belong wholly to a citizen or citizens of the
United States "and no other." (1 Stat. at L., 55.) That Act was shortly after repealed, but the same idea
was carried into the Acts of Congress of December 31, 1792 and February 18, 1793. (1 Stat. at L., 287,
305.).Section 4 of the Act of 1792 provided that in order to obtain the registry of any vessel, an oath shall
be taken and subscribed by the owner, or by one of the owners thereof, before the officer authorized to
make such registry, declaring, "that there is no subject or citizen of any foreign prince or state, directly or
indirectly, by way of trust, confidence, or otherwise, interested in such vessel, or in the profits or issues
thereof." Section 32 of the Act of 1793 even went so far as to say "that if any licensed ship or vessel shall
be transferred to any person who is not at the time of such transfer a citizen of and resident within the
United States, ... every such vessel with her tackle, apparel, and furniture, and the cargo found on board
her, shall be forefeited." In case of alienation to a foreigner, Chief Justice Marshall said that all the
privileges of an American bottom were ipso facto forfeited. (U.S. vs. Willings and Francis [1807], 4
Cranch, 48.) Even as late as 1873, the Attorney-General of the United States was of the opinion that
under the provisions of the Act of December 31, 1792, no vessel in which a foreigner is directly or
indirectly interested can lawfully be registered as a vessel of the United. States. (14 Op. Atty.-Gen. [U.S.],
340.)
These laws continued in force without contest, although possibly the Act of March 3, 1825, may have
affected them, until amended by the Act of May 28, 1896 (29 Stat. at L., 188) which extended the
privileges of registry from vessels wholly owned by a citizen or citizens of the United States to
corporations created under the laws of any of the states thereof. The law, as amended, made possible the
deduction that a vessel belonging to a domestic corporation was entitled to registry or enrollment even
though some stock of the company be owned by aliens. The right of ownership of stock in a corporation
was thereafter distinct from the right to hold the property by the corporation (Humphreys vs. McKissock
[1890], 140 U.S., 304; Queen vs. Arnaud [1846], 9 Q. B., 806; 29 Op. Atty.-Gen. [U.S.],188.)
On American occupation of the Philippines, the new government found a substantive law in operation in
the Islands with a civil law history which it wisely continued in force Article fifteen of the Spanish Code of
Commerce permitted any foreigner to engage in Philippine trade if he had legal capacity to do so under
the laws of his nation. When the Philippine Commission came to enact the Customs Administrative Act
(No. 355) in 1902, it returned to the old American policy of limiting the protection and flag of the United
States to vessels owned by citizens of the United States or by native inhabitants of the Philippine Islands

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(Sec. 117.) Two years later, the same body reverted to the existing Congressional law by permitting
certification to be issued to a citizen of the United States or to a corporation or company created under
the laws of the United States or of any state thereof or of the Philippine Islands (Act No. 1235, sec. 3.)
The two administration codes repeated the same provisions with the necessary amplification of inclusion
of citizens or native inhabitants of the Philippine Islands (Adm. Code of 1916, sec. 1345; Adm. Code of
1917, sec. 1172). And now Act No. 2761 has returned to the restrictive idea of the original Customs
Administrative Act which in turn was merely a reflection of the statutory language of the first American
Congress.
Provisions such as those in Act No. 2761, which deny to foreigners the right to a certificate of Philippine
registry, are thus found not to be as radical as a first reading would make them appear.
Without any subterfuge, the apparent purpose of the Philippine Legislature is seen to be to enact an antialien shipping act. The ultimate purpose of the Legislature is to encourage Philippine ship-building. This,
without doubt, has, likewise, been the intention of the United States Congress in passing navigation or
tariff laws on different occasions. The object of such a law, the United States Supreme Court once said,
was to encourage American trade, navigation, and ship-building by giving American ship-owners
exclusive privileges. (Old Dominion Steamship Co. vs. Virginia [1905], 198 U.S., 299; Kent's
Commentaries, Vol. 3, p. 139.)
In the concurring opinion of Justice Johnson in Gibbons vs. Ogden ([1824], 9 Wheat., 1) is found the
following:
Licensing acts, in fact, in legislation, are universally restraining acts; as, for example, acts
licensing gaming houses, retailers of spirituous liquors, etc. The act, in this instance, is distinctly
of that character, and forms part of an extensive system, the object of which is to encourage
American shipping, and place them on an equal footing with the shipping of other nations. Almost
every commercial nation reserves to its own subjects a monopoly of its coasting trade; and a
countervailing privilege in favor of American shipping is contemplated, in the whole legislation of
the United States on this subject. It is not to give the vessel an American character, that the
license is granted; that effect has been correctly attributed to the act of her enrollment. But it is to
confer on her American privileges, as contradistinguished from foreign; and to preserve the.
Government from fraud by foreigners, in surreptitiously intruding themselves into the American
commercial marine, as well as frauds upon the revenue in the trade coastwise, that this whole
system is projected.
The United States Congress in assuming its grave responsibility of legislating wisely for a new country did
so imbued with a spirit of Americanism. Domestic navigation and trade, it decreed, could only be carried
on by citizens of the United States. If the representatives of the American people acted in this patriotic
manner to advance the national policy, and if their action was accepted without protest in the courts, who
can say that they did not enact such beneficial laws under the all-pervading police power, with the prime
motive of safeguarding the country and of promoting its prosperity? Quite similarly, the Philippine
Legislature made up entirely of Filipinos, representing the mandate of the Filipino people and the
guardian of their rights, acting under practically autonomous powers, and imbued with a strong sense of
Philippinism, has desired for these Islands safety from foreign interlopers, the use of the common
property exclusively by its citizens and the citizens of the United States, and protection for the common
good of the people. Who can say, therefore, especially can a court, that with all the facts and
circumstances affecting the Filipino people before it, the Philippine Legislature has erred in the enactment
of Act No. 2761?

35
Surely, the members of the judiciary are not expected to live apart from active life, in monastic seclusion
amidst dusty tomes and ancient records, but, as keen spectators of passing events and alive to the
dictates of the general the national welfare, can incline the scales of their decisions in favor of that
solution which will most effectively promote the public policy. All the presumption is in favor of the
constitutionally of the law and without good and strong reasons, courts should not attempt to nullify the
action of the Legislature. "In construing a statute enacted by the Philippine Commission (Legislature), we
deem it our duty not to give it a construction which would be repugnant to an Act of Congress, if the
language of the statute is fairly susceptible of another construction not in conflict with the higher law." (In
re Guaria [1913], 24. Phil., 36; U.S. vs. Ten Yu [1912], 24 Phil., 1.) That is the true construction which will
best carry legislative intention into effect.
With full consciousness of the importance of the question, we nevertheless are clearly of the opinion that
the limitation of domestic ownership for purposes of obtaining a certificate of Philippine registry in the
coastwise trade to citizens of the Philippine Islands, and to citizens of the United States, does not violate
the provisions of paragraph 1 of section 3 of the Act of Congress of August 29, 1916 No treaty right relied
upon Act No. 2761 of the Philippine Legislature is held valid and constitutional .
The petition for a writ of mandamus is denied, with costs against the petitioner. So ordered.