controvert the basis of such ex parte order.

That such an opportunity is subsequently available is really all that is required by the due process clause of the Constitution in situations like that we have here. HIRD DIVISION [G.R. No. 93891. March 11, 1991.] POLLUTION ADJUDICATION BOARD, petitioner, vs. COURT OF APPEALS and SOLAR TEXTILE FINISHING CORPORATION, respondents. 5.REMEDIAL LAW; ACTIONS; APPEAL; PROPER REMEDY WHERE QUESTIONED ORDER AND WRIT OF EXECUTION WHERE LAWFUL. Solar claims finally that the petition for certiorari was the proper remedy as the questioned Order and Writ of Execution issued by the Board were patent nullities. Since we have concluded that Order and Writ of Execution were entirely within the lawful authority of petitioner Board, the trial court did not err when it dismissed Solar's petition for certiorari. It follows that the proper remedy was an appeal from the trial court to the Court of Appeals, as Solar did in fact appeal. RESOLUTION FELICIANO, J :
p

Oscar A. Pascua and Charemon Clio L. Borre for petitioner. Leonardo A. Aurelio for respondent Solar Textile Finishing Corp.

SYLLABUS 1.ADMINISTRATIVE LAW; POLLUTION ADJUDICATION BOARD; MAY ISSUE CEASE AND DESIST ORDERS EX-PARTE; BASIS. Section 7(a) of P.D. No. 984 authorized petitioner Board to issue ex parte cease and desist orders. Anex parte cease and desist order may be issued by the Board (a) whenever the wastes discharged by an establishment pose an "immediate threat to life, public health, safety or welfare, or to animal or plant life," or (b) whenever such discharges or wastes exceed "the allowable standards set by the [NPCC]." On the one hand, it is not essential that the Board prove that an "immediate threat to life, public health, safety or welfare, or to animal or plant life" exists before anex parte cease and desist order may be issued. It is enough if the Board finds that the wastes discharged do exceed "the allowable standards set by the [NPCC]." In respect of discharges of wastes as to which allowable standards have been set by the Commission, the Board may issue an ex parte cease and desist order when there is prima facie evidence of an establishment exceeding such allowable standards. Where, however, the effluents or discharges have not yet been the subject matter of allowable standards set by the Commission, then the Board may act on an ex parte basis when it finds at least prima facie proof that the wastewater or material involved presents an "immediate threat to life, public health, safety or welfare or to animal or plant life." Since the applicable standards set by the Commission existing at any given time may well not cover every possible or imaginable kind of effluent or waste discharge, the general standard of an "immediate threat to life public health, safety or welfare, or to animal and plant life" remains necessary. 2.POLITICAL LAW; POLICE POWER; ENACTMENT OF POLLUTION CONTROL STATUTES AND IMPLEMENTING REGULATIONS, AN EXERCISE THEREOF. The relevant pollution control statute and implementing regulations were enacted and promulgated in the exercise of that persuasive, sovereign power to protect the safety, health, and general welfare and comfort of the public, as well as the protection of plant and animal life, commonly designated as the police power. 3.CONSTITUTIONAL LAW; DUE PROCESS; YIELDS TO THE EXERCISE OF POLICE POWER. It is a constitutional common place that the ordinary requirements of procedural due process yield to the necessities of protecting vital public interests like those here involved, through the exercise of police power. 4.ADMINISTRATIVE LAW; POLLUTION ADJUDICATION BOARD; DUE PROCESS; HOLDING OF PUBLIC HEARING AFTER EX-PARTE ISSUANCE OF A CEASE AND DESIST ORDER, SUFFICIENT COMPLIANCE WITH DUE PROCESS CLAUSE. Where the establishment affected by an ex parte cease and desist order contests the correctness of theprima facie findings of the Board, the Board must hold a public hearing where such establishment would have an opportunity to

Petitioner Pollution Adjudication Board ("Board") asks us to review the Decision and Resolution promulgated on 7 February 1990 and 10 May 1990, respectively, by the Court of Appeals in C.A.-G.R. No. SP 18821 entitled "Solar Textile Finishing Corporation v. Pollution Adjudication Board." In that Decision and Resolution, the Court of Appeals reversed an order of the Regional Trial Court, Quezon City, Branch 77, in Civil Case No. Q-89-2287 dismissing private respondent Solar Textile Finishing Corporation's ("Solar") petition for certiorari and remanded the case to the trial court for further proceedings. On 22 September 1988, petitioner Board issued an ex parte Order directing Solar immediately to cease and desist from utilizing its wastewater pollution source installations which were discharging untreated wastewater directly into a canal leading to the adjacent Tullahan-Tinejeros River. The Order signed by Hon. Fulgencio Factoran, Jr., as Board Chairman, reads in full as follows:
"Respondent, Solar Textile Finishing Corporation with plant and place of business at 999 General Pascual Avenue, Malabon, Metro Manila is involved in bleaching, rinsing and dyeing textiles with wastewater of about 30 gpm. being directly discharged untreated into the sewer. Based on findings in the Inspections conducted on 05 November 1986 and 15 November 1986, the volume of untreated wastewater discharged in the final outfall outside of the plant's compound was even greater. The result of inspection conducted on 06 September 1988 showed that respondent's Wastewater Treatment Plant was noted unoperational and the combined wastewater generated from its operation was about 30 gallons per minute and 80% of the wastewater was being directly discharged into a drainage canal leading to the Tullahan-Tinejeros River by means of a by-pass and the remaining 20% was channeled into the plant's existing Wastewater Treatment Plant (WTP). Result of the analyses of the sample taken from the by - pass showed that the wastewater is highly pollutive in terms of Color units, BOD and Suspended Solids, among others. These acts of respondent in spite of directives to comply with the requirements are clearly in violation of Section 8 of Presidential Decree No. 984 and Section 103 of its Implementing Rules and Regulations and the 1982 Effluent Regulations. WHEREFORE, pursuant to Section 7 of P.D. 984 and Section 38 of its Implementing Rules and Regulations, respondent is hereby ordered to cease and desist from utilizing its wastewater pollution source installations and discharging its untreated wastewater directly into the canal leading to the Tullahan-Tinejeros River effective immediately upon receipt hereof and until such time when it has fully complied with all the requirements and until further orders from this Board. SO ORDERED."

We note that the above Order was based on findings of several inspections of Solar's plant:
a.inspections conducted on 5 November 1986 and 12 November 1986 by the National Pollution Control Commission ("NPCC"), the predecessor of the Board; 2 and

b.the inspection conducted on 6 September 1988 by the Department of Environment and Natural Resources ("DENR").

The only issue before us at this time is whether or not the Court of Appeals erred in reversing the trial court on the ground that Solar had been denied due process by the Board.
LibLex

The findings of these two (2) inspections were that Solar's wastewater treatment plant was non-operational and that its plant generated about 30 gallons per minute of wastewater, 80% of which was being directly discharged into a drainage canal leading to the Tullahan-Tinejeros River. The remaining 20% of the wastewater was being channeled through Solar's non-operational wastewater treatment plant. Chemical analysis of samples of Solar's effluents showed the presence of pollutants on a level in excess of what was permissible under P.D. No. 984 and its Implementing Regulations. A copy of the above Order was received by Solar on 26 September 1988. A Writ of Execution issued by the Board was received by Solar on 31 March 1989. Meantime, Solar filed a motion for reconsideration appeal with prayer for stay of execution of the Order dated 22 September 1988. Acting on this motion, the Board issued an Order dated 24 April 1989 allowing Solar to operate temporarily, to enable the Board to conduct another inspection and evaluation of Solar's wastewater treatment facilities. In the same Order, the Board directed the Regional Executive Director of the DENR NCR to conduct the inspection and evaluation within thirty (30) days. On 21 April 1989, however, Solar went to the Regional Trial Court of Quezon City, Branch 77, on petition for certiorari with preliminary injunction against the Board, the petition being docketed as Civil Case No. Q-89-2287. On 21 July 1989, the Regional Trial Court dismissed Solar's petition upon two (2) grounds, i.e., that appeal and not certiorari from the questioned Order of the Board as well as the Writ of Execution was the proper remedy, and that the Board's subsequent Order allowing Solar to operate temporarily had rendered Solar's petition moot and academic. Dissatisfied, Solar went on appeal to the Court of Appeals which, in the Decision here assailed, reversed the Order of dismissal of the trial court and remanded the case to that court for further proceedings. In addition, the Court of Appeals declared the Writ of Execution null and void. At the same time, the Court of Appeals said in the dispositive portion of its Decision that:
". . . Still and all, this decision is without prejudice to whatever action the appellee [Board] may take relative to the projected 'inspection and evaluation' of appellant's [Solar's] water treatment facilities." 3

Petitioner Board claims that under P.D. No. 984, Section 7(a), it has legal authority to issue ex parte orders to suspend the operations of an establishment when there is prima facie evidence that such establishment is discharging effluents or wastewater, the pollution level of which exceeds the maximum permissible standards set by the NPCC (now, the Board). Petitioner Board contends that the reports before it concerning the effluent discharges of Solar into the TullahanTinejeros River provided prima facie evidence of violation by Solar of Section 5 of the 1982 Effluent Code. Solar, on the other hand, contends that under the Board's own rules and regulations, an ex parte order may issue only if the effluents discharged pose an "immediate threat to life, public health; safety or welfare, or to animal and plant life." In the instant case, according to Solar, the inspection reports before the Board made no finding that Solar's wastewater discharged posed such a threat. The Court is not persuaded by Solar's contention. Section 7(a) of P.D. No. 984 authorized petitioner Board to issue ex parte cease and desist orders under the following circumstances:
"P.D. 984, Section 7, paragraph (a), provides: (a)Public Hearing . . . Provided, That whenever the Commission finds prima facie evidence that the discharged

sewage or wastes are of immediate threat to life, public health, safety or welfare, or to animal or plant life, or exceeds the allowable standards set by the Commission, the Commissioner may issue an ex-parte order directing the discontinuance of the same or the temporary suspension or cessation of operation of the establishment or person generating such sewage or wastes without the necessity of a prior public hearing. The said ex-parte order shall be immediately executory and shall remain in force until said establishment or person prevents or abates
the said pollution within the allowable standards or modified or nullified by a competent court." (Emphasis supplied).

The Court of Appeals, in so ruling, held that certiorari was a proper remedy since the Orders of petitioner Board may result in great and irreparable injury to Solar; and that while the case might be moot and academic, "larger issues" demanded that the question of due process be settled. Petitioner Board moved for reconsideration, without success.

prcd

The Board is now before us on a Petition for Review basically arguing that: 1.its ex parte Order dated 22 September 1988 and the Writ of Execution were issued in accordance with law and were not violative of the requirements of due process; and 2.the ex parte Order and the Writ of Execution are not the proper subjects of a petition for certiorari.

We note that under the above-quoted portion of Section 7(a) of P.D. No. 984, an ex parte cease and desist order may be issued by the Board (a) whenever the wastes discharged by an establishment pose an "immediate threat to life, public health, safety or welfare, or to animal or plant life," or (b) whenever such discharges or wastes exceed "the allowable standards set by the [NPCC]." On the one hand, it is not essential that the Board prove that an "immediate threat to life, public health, safety or welfare, or to animal or plant life" exists before an ex parte cease and desist order may be issued. It is enough if the Board finds that the wastes discharged do exceed "the allowable standards set by the [NPCC]." In respect of discharges of wastes as to which allowable standards have been set by the Commission, the Board may issue an ex parte cease and desist order when there is prima facie evidence of an establishment exceeding such allowable standards. Where, however, the effluents or discharges have not yet been the subject matter of allowable standards set by the Commission, then the Board may act on an ex parte basis when it finds at least prima facie proof that the wastewater or material involved presents an "immediate threat to life, public health, safety or welfare or to animal or plant life." Since the applicable standards set by the Commission existing at any given time may well not cover every possible or imaginable kind of effluent or waste discharge, the general standard of an "immediate threat to life public health, safety or welfare, or to animal and plant life" remains necessary.
Cdpr

Upon the other hand, the Court must assume that the extant allowable standards have been set by the Commission or Board precisely in order to avoid or neutralize an "immediate threat to life, public health, safety or welfare, or to animal or plant life." Section 5 of the Effluent Regulations of 1982 4 sets out the maximum permissible levels of physical and chemical substances which effluents from domestic wastewater treatment plants and industrial plants must not exceed "when discharged into bodies of water classified as Class A, B, C, D, SB and SC in accordance with the 1978 NPCC Rules and

Regulations." The waters of Tullahan-Tinejeros River are classified as inland waters Class D under Section 68 of the 1978 NPCC Rules and Regulations, 5 which in part provides that:
"Section 68.Water Usage and Classification. The quality of Philippine waters shall be maintained in a safe and

satisfactory condition according to their best usages. For this purpose, all water shall be classified according to the following beneficial usages:
(a)Fresh Surface Water. ClassificationBest usage xxx xxx xxx

i)Dissolved0 Oxygen, mg./l. j)Settleable0.41.5 Matter, mg./l. k)Total Dis-800610 solved Solids mg./l. l)Total Solids1,400690 mg./l. m)Turbidity NTU/ppm. SiO370

The November 1986 inspections report concluded that:

"Records of the Commission show that the plant under its previous owner, Fine Touch Finishing Corporation, was issued a Notice of Violation on 20 December 1985 directing same to cease and desist from conducting dyeing operation until such time the waste treatment plant is already completed and operational. The new owner Solar Textile Corporation informed the Commission of the plant acquisition thru its letter dated March 1986 (sic). The new owner was summoned to a hearing held on 13 October 1986 based on the adverse findings during the inspection/water sampling test conducted on 08 August 1986. As per instruction of the Legal Division a reinspection/sampling test should be conducted first before an appropriate legal action is instituted; hence, this inspection. Based on the above findings, it is clear that the new owner continuously violates the directive of the Commission

Class DFor agriculture, irrigation,

live stock watering and

industrial cooling and processing

xxx xxx xxx (Emphases supplied)

The reports on the inspections carried on Solar's wastewater treatment facilities on 5 and 12 November 1986 and 6 September 1988 set forth the following identical finding:
"a.For legal action in [view of] violation of Section 103 of the implementing rules and regulations of P.D. No. 984 and Section 5 of the Effluent Regulations of 1982." 6

by undertaking dyeing operation without completing first and operating its existing WTP. The analysis of results on water samples taken showed that the untreated wastewater from the firm pollutes our water resources . In
this connection, it is recommended that appropriate legal action be instituted immediately against the firm . . ."

10

The September 1988 inspection report's conclusions were:

"1.The plant was undertaking dyeing, bleaching and rinsing operations during the inspection. The combined wastewater generated from the said operations was estimated at about 30 gallons per minute. About 80% of the wastewater was traced directly discharged into a drainage canal leading to the Tullahan - Tinejeros river by means of a bypass. The remaining 20% was channeled into the plant's existing wastewater treatment plant (WTP). 2.The WTP was noted not yet fully operational some accessories were not yet installed. Only the sump pit and the holding/collecting tank are functional but appeared seldom used. The wastewater mentioned channeled was noted held indefinitely into the collection tank for primary treatment. There was no effluent discharge [from such collection tank]. 3.A sample from the bypass wastewater was collected for laboratory analyses. Result of the analyses show that the bypass wastewater is polluted in terms of color units, BOD and suspended solids, among others. (Please see attached laboratory result)." 11

Placing the maximum allowable standards set in Section 5 of the Effluent Regulations of 1982 alongside the findings of the November 1986 and September 1988 inspection reports, we get the following results:
"InlandNovemberSeptember Waters19861988 (Class C & D)

7Report 8

Report

Station 1Station 1
a)Color in100a)Color units250125 platinum(Apparent cobaltColor) units b)p H6-8.5b)pH9.38.7 c)Tempera-40c)Temperature ture in C(C) d)Phenols in0.1d)Phenols in mg./l.mg./l. e)Suspended75e)Suspended34080 solids insolids in mg./l.mg./l. f)BOD in80f)BOD (5-day)1,100152 mg./lmg./l. g)oil/Grease10g)Oil/Grease in mg./l.mg./l. h)Detergents5h)Detergents2.93 in mg./l."mg./l. MBAS

From the foregoing reports, it is clear to this Court that there was at least prima facie evidence before the Board that the effluents emanating from Solar's plant exceeded the maximum allowable levels of physical and chemical substances set by the NPCC and that accordingly there was adequate basis supporting the ex parte cease and desist order issued by the Board. It is also well to note that the previous owner of the plant facility Fine Touch Finishing Corporation had been issued a Notice of Violation on 20 December 1985 directing it to cease and refrain from carrying out dyeing operations until the water treatment plant was completed and operational. Solar, the new owner, informed the NPCC of the acquisition of the plant on March 1986. Solar was summoned by the NPCC to a hearing on 13 October 1986 based on the results of the sampling test conducted by the NPCC on 8 August 1986. Petitioner Board refrained from issuing an ex

parte cease and desist order until after the November 1986 and September 1988 re-inspections were conducted and the
violation of applicable standards was confirmed. In other words, petitioner Board appears to have been remarkably forbearing in its efforts to enforce the applicable standards vis-a-vis Solar. Solar, on the other hand, seemed very casual about its continued discharge of untreated, pollutive effluents into the Tullahan-Tinejeros River, presumably loath to spend the money necessary to put its Wastewater Treatment Plant ("WTP") in an operating condition.
cdrep

In this connection, we note that in Technology Developers, Inc. v. Court of Appeals, et al., 12 the Court very recently upheld the summary closure ordered by the Acting Mayor of Sta. Maria, Bulacan, of a pollution-causing establishment, after finding that the records showed that:
"1.No mayor's permit had been secured. While it is true that the matter of determining whether there is a pollution of the environment that requires control if not prohibition of the operation of a business is essentially addressed to the then National Pollution Control Commission of the Ministry of Human Settlements, now the Environmental Management Bureau of the Department of Environment and Natural Resources, it must be recognized that the mayor of a town has as much responsibility to protect its inhabitants from pollution, and by virtue of his police power, he may deny the application for a permit to operate a business or otherwise close the same unless appropriate measures are taken to control and or avoid injury to the health of the residents of the community from the emission in the operation of the business. 2.The Acting Mayor, in a letter of February 16, 1989, called the attention of petitioner to the pollution emitted by the fumes of its plant whose offensive odor "not only pollute the air in the locality but also affect the health of the residents in the area," so that petitioner was ordered to stop its operation until further orders and it was required to bring the following: xxx xxx xxx (3)Region III-Department of Environment and Natural Resources Anti-Pollution permit. (Annex A-2, petition). 3.This action of the Acting Mayor was in response to the complaint of the residents of Barangay Guyong, Sta. Maria, Bulacan, directed to the Provincial Governor through channels (Annex A-B, petition). . . . 4.The closure order of the Acting Mayor was issued only after an investigation was made by Marivic Guina who in her report of December 8, 1988 observed that the fumes emitted by the plant of petitioner goes directly to the surrounding houses and that no proper air pollution device has been installed. (Annex A-9, petition). xxx xxx xxx 6.While petitioner was able to present a temporary permit to operate by the then National Pollution Control Commission on December 15, 1987, the permit was good only up to May 25, 1988 (Annex A-12, petition). Petitioner had not exerted any effort to extend or validate its permit much less to install any device to control the pollution and prevent any hazard to the health of the residents of the community."

has run its full course, including multiple and sequential appeals such as those which Solar has taken, which of course may take several years. The relevant pollution control statute and implementing regulations were enacted and promulgated in the exercise of that persuasive, sovereign power to protect the safety, health, and general welfare and comfort of the public, as well as the protection of plant and animal life, commonly designated as the police power. It is a constitutional common place that the ordinary requirements of procedural due process yield to the necessities of protecting vital public interests like those here involved, through the exercise of police power. The Board's ex parteOrder and Writ of Execution would, of course, have compelled Solar temporarily to stop its plant operations, a state of affairs Solar could in any case have avoided by simply absorbing the bother and burden of putting its WTP on an operational basis. Industrial establishments are not constitutionally entitled to reduce their capitals costs and operating expenses and to increase their profits by imposing upon the public threats and risks to its safety, health, general welfare and comfort, by disregarding the requirements of anti-pollution statutes and their implementing regulations.
cdll

It should perhaps be made clear the Court is not here saying that the correctness of the ex parte Order and Writ of Execution may not be contested by Solar in a hearing before the Board itself. Where the establishment affected by an ex parte cease and desist order contests the correctness of the prima facie findings of the Board, the Board must hold a public hearing where such establishment would have an opportunity to controvert the basis of such ex parte order. That such an opportunity is subsequently available is really all that is required by the due process clause of the Constitution in situations like that we have here. The Board's decision rendered after the public hearing may then be tested judicially by an appeal to the Court of Appeals in accordance with Section 7(c) of P.D. No. 984 and Section 42 of the Implementing Rules and Regulations. A subsequent public hearing is precisely what Solar should have sought instead of going to court to seek nullification of the Board's Order and Writ of Execution and instead of appealing to the Court of Appeals. It will be recalled that the Board in fact gave Solar authority temporarily to continue operations until still another inspection of its wastewater treatment facilities and then another analysis of effluent samples could be taken and evaluated. Solar claims finally that the petition for certiorari was the proper remedy as the questioned Order and Writ of Execution issued by the Board were patent nullities. Since we have concluded that Order and Writ of Execution were entirely within the lawful authority of petitioner Board, the trial court did not err when it dismissed Solar's petition for certiorari. It follows that the proper remedy was an appeal from the trial court to the Court of Appeals, as Solar did in fact appeal. ACCORDINGLY, the Petition for Review is given DUE COURSE and the Decision of the Court of Appeals dated 7 February 1990 and its Resolution dated 10 May 1990 in A.C.-G.R. No. SP 18821 are hereby SET ASIDE. The Order of petitioner Board dated 22 September 1988 and the Writ of Execution, as well as the decision of the trial court dated 21 July 1989, are hereby REINSTATED, without prejudice to the right of Solar to contest the correctness of the basis of the Board's Order and Writ of Execution at a public hearing before the Board.

Fernan, C.J., Gutierrez, Jr., Bidin and Davide, Jr., JJ., concur.

In the instant case, the ex parte cease and desist Order was issued not by a local government official but by the Pollution Adjudication Board, the very agency of the Government charged with the task of determining whether the effluents of a particular industrial establishment comply with or violate applicable anti-pollution statutory and regulatory provisions.

Ex parte cease and desist orders are permitted by law and regulations in situations like that here presented precisely

because stopping the continuous discharge of pollutive and untreated effluents into the rivers and other inland waters of the Philippines cannot be made to wait until protracted litigation over the ultimate correctness or propriety of such orders

YOU ARE HEREBY DIRECTED TO REPORT TO THE MMDA TRAFFIC OPERATIONS CENTER PORT AREA MANILA AFTER 48 HOURS FROM DATE OF APPREHENSION FOR DISPOSITION/APPROPRIATE ACTION THEREON. CRIMINAL CASE SHALL BE FILED FOR FAILURE TO REDEEM LICENSE AFTER 30 DAYS. VALID AS TEMPORARY DRIVER'S LICENSE FOR SEVEN DAYS FROM DATE OF APPREHENSION.

Shortly before the expiration of the TVR's validity, the respondent addressed a letter 2 to then MMDA Chairman Prospero Oreta requesting the return of his driver's license, and expressing his preference for his case to be filed in court. Receiving no immediate reply, Garin filed the original complaint 3 with application for preliminary injunction in Branch 260 of the Regional Trial Court (RTC) of Paraaque, on 12 September 1995, contending that, in the absence of any implementing rules and regulations, Sec. 5(f) of Rep. Act No. 7924 grants the MMDA unbridled discretion to deprive erring motorists of their licenses, pre-empting a judicial determination of the validity of the deprivation, thereby violating the due process clause of the Constitution. The respondent further contended that the provision violates the constitutional prohibition against undue delegation of legislative authority, allowing as it does the MMDA to fix and impose unspecified and therefore unlimited fines and other penalties on erring motorists.
SaHTCE

In support of his application for a writ of preliminary injunction, Garin alleged that he suffered and continues to suffer great and irreparable damage because of the deprivation of his license and that, absent any implementing rules from the Metro Manila Council, the TVR and the confiscation of his license have no legal basis. For its part, the MMDA, represented by the Office of the Solicitor General, pointed out that the powers granted to it by Sec. 5(f) of Rep. Act No. 7924 are limited to the fixing, collection and imposition of fines and penalties for traffic violations, which powers are legislative and executive in nature; the judiciary retains the right to determine the validity of the penalty imposed. It further argued that the doctrine of separation of powers does not preclude "admixture" of the three powers of government in administrative agencies. 4 SECOND DIVISION [G.R. No. 130230. April 15, 2005.] METROPOLITAN MANILA DEVELOPMENT AUTHORITY, petitioner, vs. DANTE O. GARIN,respondent. The MMDA also refuted Garin's allegation that the Metro Manila Council, the governing board and policy making body of the petitioner, has as yet to formulate the implementing rules for Sec. 5(f) of Rep. Act No. 7924 and directed the court's attention to MMDA Memorandum Circular No. TT-95-001 dated 15 April 1995. Respondent Garin, however, questioned the validity of MMDA Memorandum Circular No. TT-95-001, as he claims that it was passed by the Metro Manila Council in the absence of a quorum. Judge Helen Bautista-Ricafort issued a temporary restraining order on 26 September 1995, extending the validity of the TVR as a temporary driver's license for twenty more days. A preliminary mandatory injunction was granted on 23 October 1995, and the MMDA was directed to return the respondent's driver's license. On 14 August 1997, the trial court rendered the assailed decision 5 in favor of the herein respondent and held that:
a.There was indeed no quorum in that First Regular Meeting of the MMDA Council held on March 23, 1995, hence MMDA Memorandum Circular No. TT-95-001, authorizing confiscation of driver's licenses upon issuance of a TVR, is void ab initio. b.The summary confiscation of a driver's license without first giving the driver an opportunity to be heard; depriving him of a property right (driver's license) without DUE PROCESS; not filling (sic) in Court the complaint of supposed traffic infraction, cannot be justified by any legislation (and is) hence unconstitutional.

DECISION CHICO-NAZARIO, J :
p

At issue in this case is the validity of Section 5(f) of Republic Act No. 7924 creating the Metropolitan Manila Development Authority (MMDA), which authorizes it to confiscate and suspend or revoke driver's licenses in the enforcement of traffic laws and regulations. The issue arose from an incident involving the respondent Dante O. Garin, a lawyer, who was issued a traffic violation receipt (TVR) and his driver's license confiscated for parking illegally along Gandara Street, Binondo, Manila, on 05 August 1995. The following statements were printed on the TVR:

WHEREFORE, the temporary writ of preliminary injunction is hereby made permanent; th(e) MMDA is directed to return to plaintiff his driver's license; th(e) MMDA is likewise ordered to desist from confiscating driver's license without first giving the driver the opportunity to be heard in an appropriate proceeding.

Factoran 10 on timber licensing agreements, and Surigao Electric Co., Inc. v. Municipality of Surigao 11 on a legislative
franchise to operate an electric plant.

In filing this petition, 6 the MMDA reiterates and reinforces its argument in the court below and contends that a license to operate a motor vehicle is neither a contract nor a property right, but is a privilege subject to reasonable regulation under the police power in the interest of the public safety and welfare. The petitioner further argues that revocation or suspension of this privilege does not constitute a taking without due process as long as the licensee is given the right to appeal the revocation. To buttress its argument that a licensee may indeed appeal the taking and the judiciary retains the power to determine the validity of the confiscation, suspension or revocation of the license, the petitioner points out that under the terms of the confiscation, the licensee has three options: 1.To voluntarily pay the imposable fine, 2.To protest the apprehension by filing a protest with the MMDA Adjudication Committee, or 3.To request the referral of the TVR to the Public Prosecutor's Office. The MMDA likewise argues that Memorandum Circular No. TT-95-001 was validly passed in the presence of a quorum, and that the lower court's finding that it had not was based on a "misapprehension of facts," which the petitioner would have us review. Moreover, it asserts that though the circular is the basis for the issuance of TVRs, the basis for the summary confiscation of licenses is Sec. 5(f) of Rep. Act No. 7924 itself, and that such power is self-executory and does not require the issuance of any implementing regulation or circular.
SHacC D

Petitioner cites a long list of American cases to prove this point, such as State ex. Rel. Sullivan, 12 which states in part that, "the legislative power to regulate travel over the highways and thoroughfares of the state for the general welfare is extensive. It may be exercised in any reasonable manner to conserve the safety of travelers and pedestrians. Since motor vehicles are instruments of potential danger, their registration and the licensing of their operators have been required almost from their first appearance. The right to operate them in public places is not a natural and unrestrained right, but a privilege subject to reasonable regulation, under the police power, in the interest of the public safety and welfare. The power to license imports further power to withhold or to revoke such license upon noncompliance with prescribed conditions." Likewise, the petitioner quotes the Pennsylvania Supreme Court in Commonwealth v. Funk, 13 to the effect that: "Automobiles are vehicles of great speed and power. The use of them constitutes an element of danger to persons and property upon the highways. Carefully operated, an automobile is still a dangerous instrumentality, but, when operated by careless or incompetent persons, it becomes an engine of destruction. The Legislature, in the exercise of the police power of the commonwealth, not only may, but must, prescribe how and by whom motor vehicles shall be operated on the highways. One of the primary purposes of a system of general regulation of the subject matter, as here by the Vehicle Code, is to insure the competency of the operator of motor vehicles. Such a general law is manifestly directed to the promotion of public safety and is well within the police power."

The common thread running through the cited cases is that it is the legislature, in the exercise of police power, which has the power and responsibility to regulate how and by whom motor vehicles may be operated on the state highways.
HIA EcT

Meanwhile, on 12 August 2004, the MMDA, through its Chairman Bayani Fernando, implemented Memorandum Circular No. 04, Series of 2004, outlining the procedures for the use of the Metropolitan Traffic Ticket (MTT) scheme. Under the circular, erring motorists are issued an MTT, which can be paid at any Metrobank branch. Traffic enforcers may no longer confiscate drivers' licenses as a matter of course in cases of traffic violations. All motorists with unredeemed TVRs were given seven days from the date of implementation of the new system to pay their fines and redeem their license or vehicle plates. 7 It would seem, therefore, that insofar as the absence of a prima facie case to enjoin the petitioner from confiscating drivers' licenses is concerned, recent events have overtaken the Court's need to decide this case, which has been rendered moot and academic by the implementation of Memorandum Circular No. 04, Series of 2004. The petitioner, however, is not precluded from re-implementing Memorandum Circular No. TT-95-001, or any other scheme, for that matter, that would entail confiscating drivers' licenses. For the proper implementation, therefore, of the petitioner's future programs, this Court deems it appropriate to make the following observations: 1.A license to operate a motor vehicle is a privilege that the state may withhold in the exercise of its police power. The petitioner correctly points out that a license to operate a motor vehicle is not a property right, but a privilege granted by the state, which may be suspended or revoked by the state in the exercise of its police power, in the interest of the public safety and welfare, subject to the procedural due process requirements. This is consistent with our rulings in Pedro v. Provincial Board of Rizal 8 on the license to operate a cockpit, Tan v. Director of Forestry 9 and Oposa v.

2.The MMDA is not vested with police power. In Metro Manila Development Authority v. Bel-Air Village Association, Inc., 14 we categorically stated that Rep. Act No. 7924 does not grant the MMDA with police power, let alone legislative power, and that all its functions are administrative in nature. The said case also involved the herein petitioner MMDA which claimed that it had the authority to open a subdivision street owned by the Bel-Air Village Association, Inc. to public traffic because it is an agent of the state endowed with police power in the delivery of basic services in Metro Manila. From this premise, the MMDA argued that there was no need for the City of Makati to enact an ordinance opening Neptune Street to the public. Tracing the legislative history of Rep. Act No. 7924 creating the MMDA, we concluded that the MMDA is not a local government unit or a public corporation endowed with legislative power, and, unlike its predecessor, the Metro Manila Commission, it has no power to enact ordinances for the welfare of the community. Thus, in the absence of an ordinance from the City of Makati, its own order to open the street was invalid. We restate here the doctrine in the said decision as it applies to the case at bar: police power, as an inherent attribute of sovereignty, is the power vested by the Constitution in the legislature to make, ordain, and establish all manner of wholesome and reasonable laws, statutes and ordinances, either with penalties or without, not repugnant to the Constitution, as they shall judge to be for the good and welfare of the commonwealth, and for the subjects of the same.

Having been lodged primarily in the National Legislature, it cannot be exercised by any group or body of individuals not possessing legislative power. The National Legislature, however, may delegate this power to the president and administrative boards as well as the lawmaking bodies of municipal corporations or local government units (LGUs). Once delegated, the agents can exercise only such legislative powers as are conferred on them by the national lawmaking body. Our Congress delegated police power to the LGUs in the Local Government Code of 1991. 15 A local government is a "political subdivision of a nation or state which is constituted by law and has substantial control of local affairs." 16 Local government units are the provinces, cities, municipalities and barangays, which exercise police power through their respective legislative bodies. Metropolitan or Metro Manila is a body composed of several local government units. With the passage of Rep. Act No. 7924 in 1995, Metropolitan Manila was declared as a "special development and administrative region" and the administration of "metro-wide" basic services affecting the region placed under "a development authority" referred to as the MMDA. Thus:
. . . [T]he powers of the MMDA are limited to the following acts: formulation, coordination, regulation, implementation, preparation, management, monitoring, setting of policies, installation of a system and administration. There is no syllable in R. A. No. 7924 that grants the MMDA police power, let alone legislative power. Even the Metro Manila Council has not been delegated any legislative power . Unlike the legislative bodies of the local government units, there is no provision in R. A. No. 7924 that empowers the MMDA or its Council to "enact ordinances, approve resolutions and appropriate funds for the general welfare" of the inhabitants of Metro Manila . The MMDA is, as termed in the charter itself, a "development authority." It is an agency created for the purpose of laying down policies and coordinating with the various national government agencies, people's organizations, nongovernmental organizations and the private sector for the efficient and expeditious delivery of basic services in the vast metropolitan area. All its functions are administrative in nature and these are actually summed up in the charter itself, viz: "Sec. 2.Creation of the Metropolitan Manila Development Authority. . . .

nature, and confiscate and suspend or revoke drivers' licenses in the enforcement of such traffic laws and regulations, the provisions of Rep. Act No. 4136 18 and P.D. No. 1605 19 to the contrary notwithstanding," and that "(f)or this purpose, the Authority shall enforce all traffic laws and regulations in Metro Manila, through its traffic operation center, and may deputize members of the PNP, traffic enforcers of local government units, duly licensed security guards, or members of non-governmental organizations to whom may be delegated certain authority, subject to such conditions and requirements as the Authority may impose." Thus, where there is a traffic law or regulation validly enacted by the legislature or those agencies to whom legislative powers have been delegated (the City of Manila in this case), the petitioner is not precluded and in fact is duty-bound to confiscate and suspend or revoke drivers' licenses in the exercise of its mandate of transport and traffic management, as well as the administration and implementation of all traffic enforcement operations, traffic engineering services and traffic education programs. 20 This is consistent with our ruling in Bel-Air that the MMDA is a development authority created for the purpose of laying down policies and coordinating with the various national government agencies, people's organizations, non-governmental organizations and the private sector, which may enforce, but not enact, ordinances. This is also consistent with the fundamental rule of statutory construction that a statute is to be read in a manner that would breathe life into it, rather than defeat it, 21 and is supported by the criteria in cases of this nature that all reasonable doubts should be resolved in favor of the constitutionality of a statute. 22 A last word. The MMDA was intended to coordinate services with metro-wide impact that transcend local political boundaries or would entail huge expenditures if provided by the individual LGUs, especially with regard to transport and traffic management, 23 and we are aware of the valiant efforts of the petitioner to untangle the increasingly trafficsnarled roads of Metro Manila. But these laudable intentions are limited by the MMDA's enabling law, which we can but interpret, and petitioner must be reminded that its efforts in this respect must be authorized by a valid law, or ordinance, or regulation arising from a legitimate source.
AEDISC

WHEREFORE, the petition is dismissed.

The MMDA shall perform planning, monitoring and coordinative functions, and in the process exercise regulatory and supervisory authority over the delivery of metro-wide services within Metro Manila, without diminution of the autonomy of the local government units concerning purely local matters."
Ic HSCT

SO ORDERED.

xxx xxx xxx Clearly, the MMDA is not a political unit of government. The power delegated to the MMDA is that given to the Metro Manila Council to promulgate administrative rules and regulations in the implementation of the MMDA's functions. There is no grant of authority to enact ordinances and regulations for the general welfare of the inhabitants of the metropolis. 17 (footnotes omitted, emphasis supplied)

Puno, Austria-Martinez, Callejo, Sr. and Tinga, JJ., concur.

Therefore, insofar as Sec. 5(f) of Rep. Act No. 7924 is understood by the lower court and by the petitioner to grant the MMDA the power to confiscate and suspend or revoke drivers' licenses without need of any other legislative enactment, such is an unauthorized exercise of police power. 3.Sec. 5(f) grants the MMDA with the duty to enforce existing traffic rules and regulations. Section 5 of Rep. Act No. 7924 enumerates the "Functions and Powers of the Metro Manila Development Authority." The contested clause in Sec. 5(f) states that the petitioner shall "install and administer a single ticketing system, fix, impose and collect fines and penalties for all kinds of violations of traffic rules and regulations, whether moving or nonmoving in

SECOND DIVISION [G.R. No. 126102. December 4, 2000.] ORTIGAS & CO. LTD., petitioner, vs. THE COURT OF APPEALS and ISMAEL G. MATHAY III,respondents.

Atty. Eulogio R. Rodriguez for petitioner. Puhawan Aldon & Associates Law Offices for private respondent.

SYNOPSIS Petitioner Ortigas sold to the Hermosos a parcel of land in Greenhills Subdivision. The contract of sale provided that the lot will be used for single-family residential building only and this was annotated at the back of the title of the lot. In 1981, the Metropolitan Commission enacted MMC Ordinance No. 81-01 reclassifying as a commercial zone the stretch of Ortigas Avenue from Roosevelt Street to Madison Street. Subsequently in 1984, private respondent Mathay III leased the lot from Hermoso and constructed a commercial building for Greenhills Autohaus, Inc., a car sales company. Petitioner filed Civil Case No. 4 seeking to enjoin the building by respondent of structure on the lot and sought the demolition of the commercial structure for having violated the terms and conditions of the Deed of Sale. The trial court issued the injunctive order ruling that the ordinance should be given prospective application. On certiorari, however, the CA granted the petition, ruling that the trial court gravely abused its discretion in refusing to treat MMC Ordinance No. 8101 as applicable to Civil Case No. 64931. CA held that the ordinance effectively nullified the restrictions allowing only residential use of the property in question. In this petition, petitioner claims that even with the zoning ordinance, the seller and buyer of the re-classified lot can voluntarily agree to an exclusive residential use thereof; and that respondent Mathay III as a mere lessee of the lot in question, is a total stranger to the deed of sale and is thus barred from questioning the condition of said deed. The Supreme Court denied the petition, ruling: that while as a rule, laws are to be construed as having only prospective operation, one exception is a law which involves police power, which could be given retroactive effect and may reasonably impair vested rights or contracts; that the MMC Ordinance No. 81-01 has been held to be a legitimate police power measure to which the non-impairment of contracts or vested rights clauses will have to yield; and that Mathay III in this case is clearly a real party in interest because he holds the lot pursuant to a valid lease and it is his building of a commercial structure which petitioner seeks to enjoin.

SYLLABUS 1.STATUTORY CONSTRUCTION; LAWS ARE GENERALLY GIVEN PROSPECTIVE APPLICATION; LAW WHICH INVOLVES POLICE POWER IS AN EXCEPTION. In general, we agree that laws are to be construed as having only prospective operation. Lex prospicit, non respicit. Equally settled, only laws existing at the time of the execution of a contract are applicable thereto and are not later statutes, unless the latter are specifically intended to have a retroactive effect. A later law which enlarges, abridges, or in any manner changes the intent of the parties to the contract necessarily impairs the

contract itself and cannot be given retroactive effect without violating the constitutional prohibition against impairment of contracts. But, the foregoing principles do admit of certain exceptions. One involves police power. A law enacted in the exercise of police power to regulate or govern certain activities or transactions could be given retroactive effect and may reasonably impair vested rights or contracts. Police power legislation is applicable not only to future contracts, but equally to those already in existence. Nonimpairment of contracts or vested rights clauses will have to yield to the superior and legitimate exercise by the State of police power to promote the health, morals, peace, education, good order, safety, and general welfare of the people. Moreover, statutes in exercise of valid police power must be read into every contract. 2.CONSTITUTIONAL LAW; POLICE POWER; CONTRACTUAL STIPULATIONS AND VESTED RIGHTS MUST YIELD TO POLICE POWER; CASE AT BAR. Noteworthy, in Sangalang vs. Intermediate Appellate Court, we already upheld MMC Ordinance No. 81-01 as a legitimate police power measure. Following our ruling in Ortigas & Co., Ltd. vs. Feati Bank & Trust Co., 94 SCRA 533 (1979), the contractual stipulations annotated on the Torrens Title, on which Ortigas relies, must yield to the ordinance. When that stretch of Ortigas Avenue from Roosevelt Street to Madison Street was reclassified as a commercial zone by the Metropolitan Manila Commission in March 1981, the restrictions in the contract of sale between Ortigas and Hermoso, limiting all construction on the disputed lot to single-family residential buildings, were deemed extinguished by the retroactive operation of the zoning ordinance and could no longer be enforced. While our legal system upholds the sanctity of contract so that a contract is deemed law between the contracting parties, nonetheless, stipulations in a contract cannot contravene "law, morals, good customs, public order, or public policy." Otherwise such stipulations would be deemed null and void. 3.REMEDIAL LAW; CIVIL PROCEDURE; REAL PARTY IN INTEREST; LESSEE WHO BUILT COMMERCIAL STRUCTURE SOUGHT TO BE DEMOLISHED IS A REAL PARTY IN INTEREST. By real interest is meant a present substantial interest, as distinguished from a mere expectancy or a future, contingent, subordinate, or consequential interest. Tested by the foregoing definition, private respondent in this case is clearly a real party in interest. It is not disputed that he is in possession of the lot pursuant to valid lease. He is a possessor in the concept of a "holder of the thing" under Article 525 of the Civil Code. He was impleaded as a defendant in the amended complaint in Civil Case No. 64931. Further, what petitioner seeks to enjoin is the building by respondent of a commercial structure on the lot. Clearly, it is private respondent's acts which are in issue, and his interest in said issue cannot be a mere incidental interest. In its amended complaint, petitioner prayed for, among others, judgment "ordering the demolition of all improvements illegally built on the lot in question." These show that it is petitioner Mathay III, doing business as "Greenhills Autohaus, Inc.," and not only the Hermosos, who will be adversely affected by the court's decree.
ACEIac

1.. . . (1) be used exclusively . . . for residential purposes only, and not more than one single-family residential building will be constructed thereon, . . . xxx xxx xxx 6.The BUYER shall not erect . . . any sign or billboard on the roof . . . for advertising purposes . . . xxx xxx xxx 11.No single-family residential building shall be erected . . . until the building plans, specification . . . have been approved by the SELLER . . . xxx xxx xxx 14.. . . restrictions shall run with the land and shall be construed as real covenants until December 31, 2025 when they shall cease and terminate . . .

These and the other conditions were duly annotated on the certificate of title issued to Emilia. In 1981, the Metropolitan Manila Commission (now Metropolitan Manila Development Authority) enacted MMC Ordinance No. 81-01, also known as the Comprehensive Zoning Area for the National Capital Region. The ordinance reclassified as a commercial area a portion of Ortigas Avenue from Madison to Roosevelt Streets of Greenhills Subdivision where the lot is located. On June 8, 1984, private respondent Ismael Mathay III leased the lot from Emilia Hermoso and J.P. Hermoso Realty Corp.. The lease contract did not specify the purposes of the lease. Thereupon, private respondent constructed a single story commercial building for Greenhills Autohaus, Inc., a car sales company. On January 18, 1995, petitioner filed a complaint against Emilia Hermoso with the Regional Trial Court of Pasig, Branch 261. Docketed as Civil Case No. 64931, the complaint sought the demolition of the said commercial structure for having violated the terms and conditions of the Deed of Sale. Complainant prayed for the issuance of a temporary restraining order and a writ of preliminary injunction to prohibit petitioner from constructing the commercial building and/or engaging in commercial activity on the lot. The complaint was later amended to implead Ismael G. Mathay III and J.P. Hermoso Realty Corp., which has a ten percent (10%) interest in the lot. In his answer, Mathay III denied any knowledge of the restrictions on the use of the lot and filed a cross-claim against the Hermosos. On June 16, 1995, the trial court issued the writ of preliminary injunction. On June 29, 1995, Mathay III moved to set aside the injunctive order, but the trial court denied the motion. Mathay III then filed with the Court of Appeals a special civil action for certiorari, docketed as CA-G.R. SP No. 39193, ascribing to the trial court grave abuse of discretion in issuing the writ of preliminary injunction. He claimed that MMC Ordinance No. 81-01 classified the area where the lot was located as commercial area and said ordinance must be read into the August 25, 1976 Deed of Sale as a concrete exercise of police power.

DECISION QUISUMBING, J :
p

This petition seeks to reverse the decision of the Court of Appeals, dated March 25, 1996, in CA-G.R. SP No. 39193, which nullified the writ of preliminary injunction issued by the Regional Trial Court of Pasig City, Branch 261, in Civil Case No. 64931. It also assails the resolution of the appellate court, dated August 13, 1996, denying petitioner's motion for reconsideration.
ATc EDS

The facts of this case, as culled from the records, are as follows: On August 25, 1976, petitioner Ortigas & Company sold to Emilia Hermoso, a parcel of land known as Lot 1, Block 21, Psd-66759, with an area of 1,508 square meters, located in Greenhills Subdivision IV, San Juan, Metro Manila, and covered by Transfer Certificate of Title No. 0737. The contract of sale provided that the lot:

Ortigas and Company averred that inasmuch as the restrictions on the use of the lot were duly annotated on the title it issued to Emilia Hermoso, said restrictions must prevail over the ordinance, specially since these restrictions were agreed upon before the passage of MMC Ordinance No. 81-01. On March 25, 1996, the appellate court disposed of the case as follows:
WHEREFORE, in light of the foregoing, the petition is hereby GRANTED. The assailed orders are hereby nullified and set aside. SO ORDERED.

We note that in issuing the disputed writ of preliminary injunction, the trial court observed that the contract of sale was entered into in August 1976, while the zoning ordinance was enacted only in March 1981. The trial court reasoned that since private respondent had failed to show that MMC Ordinance No. 81-01 had retroactive effect, said ordinance should be given prospective application only, 6 citing Co vs. Intermediate Appellate Court, 162 SCRA 390 (1988). In general, we agree that laws are to be construed as having only prospective operation. Lex prospicit, non respicit. Equally settled, only laws existing at the time of the execution of a contract are applicable thereto and not later statutes, unless the latter are specifically intended to have retroactive effect. 7 A later law which enlarges, abridges, or in any manner changes the intent of the parties to the contract necessarily impairs the contract itself 8 and cannot be given retroactive effect without violating the constitutional prohibition against impairment of contracts. 9 But, the foregoing principles do admit of certain exceptions. One involves police power. A law enacted in the exercise of police power to regulate or govern certain activities or transactions could be given retroactive effect and may reasonably impair vested rights or contracts. Police power legislation is applicable not only to future contracts, but equally to those already in existence. 10 Non-impairment of contracts or vested rights clauses will have to yield to the superior and legitimate exercise by the State of police power to promote the health, morals, peace, education, good order, safety, and general welfare of the people. 11 Moreover, statutes in exercise of valid police power must be read into every contract. 12 Noteworthy, in Sangalang vs. Intermediate Appellate Court, 13 we already upheld MMC Ordinance No. 8101 as a legitimate police power measure. The trial court's reliance on the Co vs. IAC, 14 is misplaced. In Co, the disputed area was agricultural and Ordinance No. 81-01 did not specifically provide that "it shall have retroactive effect so as to discontinue all rights previously acquired over lands located within the zone which are neither residential nor light industrial in nature," 15 and stated with respect to agricultural areas covered that "the zoning ordinance should be given prospective operation only." 16 The area in this case involves not agricultural but urban residential land. Ordinance No. 81-01 retroactively affected the operation of the zoning ordinance in Greenhills by reclassifying certain locations therein as commercial. Following our ruling in Ortigas & Co., Ltd. vs. Feati Bank & Trust Co., 94 SCRA 533 (1979), the contractual stipulations annotated on the Torrens Title, on which Ortigas relies, must yield to the ordinance. When that stretch of Ortigas Avenue from Roosevelt Street to Madison Street was reclassified as a commercial zone by the Metropolitan Manila Commission in March 1981, the restrictions in the contract of sale between Ortigas and Hermoso, limiting all construction on the disputed lot to single-family residential buildings, were deemed extinguished by the retroactive operation of the zoning ordinance and could no longer be enforced. While our legal system upholds the sanctity of contract so that a contract is deemed law between the contracting parties, 17 nonetheless, stipulations in a contract cannot contravene "law, morals, good customs, public order, or public policy." 18 Otherwise such stipulations would be deemed null and void. Respondent court correctly found that the trial court committed in this case a grave abuse of discretion amounting to want of or excess of jurisdiction in refusing to treat Ordinance No. 81-01 as applicable to Civil Case No. 64931. In resolving matters in litigation, judges are not only duty-bound to ascertain the facts and the applicable laws, 19 they are also bound by their oath of office to apply the applicable law. 20 As a secondary issue, petitioner contends that respondent Mathay III, as a mere lessee of the lot in question, is a total stranger to the deed of sale and is thus barred from questioning the conditions of said deed. Petitioner points out that the owners of the lot voluntarily agreed to the restrictions on the use of the lot and do not question the validity of these restrictions. Petitioner argues that Mathay III as a lessee is merely an agent of the owners, and could not override and rise above the status of his principals. Petitioner submits that he could not have a higher interest than those of the owners, the Hermosos, and thus had no locus standi to file CA-G.R. SP No. 39193 to dissolve the injunctive writ issued by the RTC of Pasig City.

In finding for Mathay III, the Court of Appeals held that the MMC Ordinance No. 81-01 effectively nullified the restrictions allowing only residential use of the property in question. Ortigas seasonably moved for reconsideration, but the appellate court denied it on August 13, 1996. Hence, the instant petition. In its Memorandum, petitioner now submits that the "principal issue in this case is whether respondent Court of Appeals correctly set aside the Order dated June 16, 1995 of the trial court which issued the writ of preliminary injunction on thesole ground that MMC Ordinance No. 81-01 nullified the building restriction imposing exclusive residential use on the property in question." 3 It also asserts that "Mathay III lacks legal capacity to question the validity of conditions of the deed of sale; and he is barred by estoppel or waiver to raise the same question like his principals, the owners." 4 Lastly, it avers that the appellate court "unaccountably failed to address" several questions of fact. Principally, we must resolve the issue of whether the Court of Appeals erred in holding that the trial court committed grave abuse of discretion when it refused to apply MMC Ordinance No. 81-01 to Civil Case No. 64931. But first, we must address petitioner's allegation that the Court of Appeals "unaccountably failed to address" questions of fact. For basic is the rule that factual issues may not be raised before this Court in a petition for review and this Court is not duty-bound to consider said questions. 5 CA-G.R. SP No. 39193 was a special civil action for certiorari, and the appellate court only had to determine if the trial court committed grave abuse of discretion amounting to want or excess of jurisdiction in issuing the writ of preliminary injunction. Thus, unless vital to our determination of the issue at hand, we shall refrain from further consideration of factual questions. Petitioner contends that the appellate court erred in limiting its decision to the cited zoning ordinance. It avers that a contractual right is not automatically discarded once a claim is made that it conflicts with police power. Petitioner submits that the restrictive clauses in the questioned contract is not in conflict with the zoning ordinance. For one, according to petitioner, the MMC Ordinance No. 81-01 did not prohibit the construction of residential buildings. Petitioner argues that even with the zoning ordinance, the seller and buyer of the re-classified lot can voluntarily agree to an exclusive residential use thereof. Hence, petitioner concludes that the Court of Appeals erred in holding that the condition imposing exclusive residential use was effectively nullified by the zoning ordinance.
EcHA aS

In its turn, private respondent argues that the appellate court correctly ruled that the trial court had acted with grave abuse of discretion in refusing to subject the contract to the MMC Ordinance No. 81-01. He avers that the appellate court properly held the police power superior to the non-impairment of contract clause in the Constitution. He concludes that the appellate court did not err in dissolving the writ of preliminary injunction issued by the trial court in excess of its jurisdiction.

10

For his part, private respondent argues that as the lessee who built the commercial structure, it is he and he alone who stands to be either benefited or injured by the results of the judgment in Civil Case No. 64931. He avers he is the party with real interest in the subject matter of the action, as it would be his business, not the Hermosos', which would suffer had not the respondent court dissolved the writ of preliminary injunction. A real party in interest is defined as "the party who stands to be benefited or injured by the judgment or the party entitled to the avails of the suit." "Interest" within the meaning of the rule means material interest, an interest in issue and to be affected by the decree, as distinguished from mere interest in the question involved, or a mere incidental interest. 21 By real interest is meant a present substantial interest, as distinguished from a mere expectancy or a future, contingent, subordinate, or consequential interest. 22 Tested by the foregoing definition, private respondent in this case is clearly a real party in interest. It is not disputed that he is in possession of the lot pursuant to a valid lease. He is a possessor in the concept of a "holder of the thing" under Article 525 of the Civil Code. 23 He was impleaded as a defendant in the amended complaint in Civil Case No. 64931. Further, what petitioner seeks to enjoin is the building by respondent of a commercial structure on the lot. Clearly, it is private respondent's acts which are in issue, and his interest in said issue cannot be a mere incidental interest. In its amended complaint, petitioner prayed for, among others, judgment "ordering the demolition of all improvements illegally built on the lot in question." 24 These show that it is petitioner Mathay III, doing business as "Greenhills Autohaus, Inc.," and not only the Hermosos, who will be adversely affected by the court's decree. EN BANC Petitioner also cites the rule that a stranger to a contract has no rights or obligations under it, 25 and thus has no standing to challenge its validity. 26 But in seeking to enforce the stipulations in the deed of sale, petitioner impleaded private respondent as a defendant. Thus petitioner must recognize that where a plaintiff has impleaded a party as a defendant, he cannot subsequently question the latter's standing in court. 27 WHEREFORE, the instant petition is DENIED. The challenged decision of the Court of Appeals dated March 25, 1996, as well as the assailed resolution of August 13, 1996, in CA-G.R. SP No. 39193 is AFFIRMED. Costs against petitioner. SO ORDERED. [G.R. No. 119694. May 22, 1995.] PHILIPPINE PRESS INSTITUTE, INC., for and in behalf of 139 members, represented by its President Amado P. Macasaet and its Executive Director Ermin F. Garcia, Jr., petitioner, vs. COMMISSION ON ELECTIONS, respondent.

SYLLABUS 1. CONSTITUTIONAL LAW; BILL OF RIGHTS; PROHIBITION AGAINST TAKING OF PRIVATE PROPERTY FOR PUBLIC USE WITHOUT JUST COMPENSATION; COMPELLING PUBLISHERS TO "DONATE" COMELEC SPACE, A VIOLATION OF. To compel print media companies to donate "Comelec space" of the dimensions specified in Section 2 of Resolution No. 2722 (not less than one-half page), amounts to "taking" of private personal property for public use or purposes. Section 2 failed to specify the intended frequency of such compulsory "donation": only once during the period from 6 March 1995 (or 21 March 1995) until 12 May 1995? or everyday or once a week? or as often as Comelec may direct during the same period? The extent of the taking or deprivation is not insubstantial; this is not a case of a de minimis temporary limitation or restraint upon the use of private property. The monetary value of the compulsory "donation," measured by the advertising rates ordinarily charged by newspaper publishers whether in cities or in non-urban areas, may be very substantial indeed. The taking of private property for public use is, of course, authorized by the Constitution, but not without payment of "just compensation" (Article III, Section 9). And apparently the necessity of paying compensation for "Comelec space" is precisely what is sought to be avoided by respondent Commission, whether Section 2 of Resolution No. 2772 is read as petitioner PPI reads it, as an assertion of authority to require newspaper publishers to "donate" free print space for Comelec purposes, or as an exhortation, or perhaps an appeal, to publishers to donate free print space, as Section 1 of Resolution No. 2772-A attempts to suggest. The threshold requisites for a lawful taking of private property for public use need to be examined here: one is the necessity for the taking; another is the legal authority to effect the taking. The element of necessity for the taking has not been shown by respondent Comelec. It has not been suggested

Bellosillo, Mendoza, Buena, and De Leon, Jr., JJ ., concur.

11

that the members of PPI are unwilling to sell print space at their normal rates to Comelec for election purposes. Indeed, the unwillingness or reluctance of Comelec to buy print space lies at the heart of the problem. Similarly, it has not been suggested, let alone demonstrated, that Comelec has been granted the power of eminent domain either by the Constitution or by the legislative authority. A reasonable relationship between that power and the enforcement and administration of election laws by Comelec must be shown; it is not casually to be assumed. . . . Section 2 does not constitute a valid exercise of the power of eminent domain. 2. ID.; ID.; ID.; ID.; PUBLIC FUNDS, NOT PUBLISHERS SOLELY, SHOULD BEAR COSTS FOR PUBLIC INFORMATION OF ELECTORAL PROCESSES. The ruling here laid down by the Court is entirely in line with the theory of democratic representative government. The economic costs of informing the general public about the qualifications and programs of those seeking elective office are most appropriately distributed as widely as possible throughout our society by the utilization of public funds, especially funds raised by taxation, rather than cast solely on one small sector of society, i.e., print media enterprises. The benefits which flow from a heightened level of information on and the awareness of the electoral process are commonly thought to be community-wide; the burdens should be allocated on the same basis. 3. ID.; POLICE POWER; REQUISITES FOR A VALID EXERCISE THEREOF NOT COMPLIED WITH IN CASE AT BAR. As earlier noted, the Solicitor General also contended that Section 2 of Resolution No. 2772, even if read as compelling publishers to "donate" "Comelec space," may be sustained as a valid exercise of the police power of the state. This argument was, however, made too casually to require prolonged consideration on our part. Firstly, there was no effort (and apparently no inclination on the part of Comelec) to show that the police power essentially a power of legislation has been constitutionally delegated to respondent Commission. Secondly, while private property may indeed be validly taken in the legitimate exercise of the police power of the state, there was no attempt to show compliance in the instant case with the requisites of a lawful taking under the police power. Section 2 of Resolution No. 2772 is a blunt and heavy instrument that purports, without a showing of existence of a national emergency or other imperious public necessity, indiscriminately and without regard to the individual business condition of particular newspapers or magazines located in differing parts of the country, to take private property of newspaper or magazine publishers. No attempt was made to demonstrate that a real and palpable or urgent necessity for the taking of print space confronted the Comelec and that Section 2 of Resolution No. 2772 was itself the only reasonable and calibrated response to such necessity available to the Comelec. Section 2 does not constitute a valid exercise of the police power of the State. 4. ID.; SUPREME COURT; POWER OF JUDICIAL REVIEW; CONSTITUTIONALITY OF SEC. 8 COMELEC RESOLUTION NO. 2772, WITHOUT ACTUAL CONTROVERSY, IS NOT RIPE FOR JUDICIAL REVIEW; CASE AT BAR. Section 8 of Resolution No. 2772 should be viewed in the context of our decision in National Press Club v. Commission on Elections. There the Court sustained the constitutionality of Section 11 (b) of R.A. No. 6646, known as the Electoral Reforms Law of 1987, which prohibits the sale or donation of print space and airtime for campaign or other political purposes, except to the Comelec. In doing so, the Court carefully distinguished (a) paid political advertisements which are reached by the prohibition of Section 11 (b), from (b) the reporting of news, commentaries and expressions of belief or opinion by reporters, broadcasters, editors, commentators or columnists which fall outside the scope of Section 11 (b) and which are protected by the constitutional guarantees of freedom of speech and of the press. . . . Section 8 of Resolution No. 2772 appears to represent the effort of the Comelec to establish a guideline for implementation of the above-quoted distinction and doctrine in National Press Club, an effort not blessed with evident success. Section 2 of Resolution No. 2772-A while possibly helpful, does not add substantially to the utility of Section 8 of Resolution No. 2772. The distinction between paid political advertisements on the one hand and news reports, commentaries and expressions of belief or opinion by reporters, broadcasters, editors, etc. on the other hand, can realistically be given operative meaning only in actual cases or controversies, on a case-to-case basis, in terms of very specific sets of facts. At all events, the Court is bound to note that PPI has failed to allege any specific affirmative action on the part of Comelec designed to enforce or implement Section 8. PPI has not claimed that it or any of its members has sustained actual or imminent injury by reason of Comelec action under Section 8. Put a little differently, the Court considers that the precise constitutional issue here sought to be raised whether or not Section 8 of Resolution No. 2772 constitutes a permissible exercise of the Comelec's power under Article IX, Section 4 of the Constitution . . . is not ripe for judicial review for lack of an actual case or controversy involving, as the very lis mota thereof, the constitutionality of Section 8.

RESOLUTION FELICIANO, J :
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The Philippine Press Institute, Inc. ("PPI") is before this Court assailing the constitutional validity of Resolution No. 2772 issued by respondent Commission on Elections ("Comelec") and its corresponding Comelec directive dated 22 March 1995, through a Petition for Certiorari and Prohibition. Petitioner PPI is a non-stock, nonprofit organization of newspaper and magazine publishers.
cdphil

On 2 March 1995, Comelec promulgated Resolution No. 2772, which reads in part:
xxx xxx xxx Sec. 2.Comelec Space. The Commission shall procure free print space of not less than one half (1/2) page in at least one newspaper of general circulation in every province or city for use as 'Comelec Space' from March 6, 1995 in the case of candidates for senators and from March 21, 1995 until May 12, 1995. In the absence of said newspaper, 'Comelec Space' shall be obtained from any magazine or periodical of said province or city. Sec. 3.Uses of Comelec Space. 'Comelec Space' shall be allocated by the Commission, free of charge, among all candidates within the area in which the newspaper, magazine or periodical is circulated to enable the candidates to make known their qualifications, their stand on public issues and their platforms and programs of government.

'Comelec Space' shall also be used by the Commission for dissemination of vital election information .
Sec. 4.Allocation of Comelec Space. (a) 'Comelec Space' shall be available to all candidates during the periods stated in Section 2 hereof. Its allocation shall be equal and impartial among all candidates for the same office . All candidates concerned shall be furnished a copy of the allocation of 'Comelec Space' for their information, guidance and compliance. (b)Any candidate desiring to avail himself of 'Comelec Space' from newspapers or publications based in the Metropolitan Manila Area shall submit an application therefor, in writing, to the Committee on Mass Media of the Commission. Any candidate desiring to avail himself of 'Comelec Space' in newspapers or publications based in the provinces shall submit his application therefor, in writing, to the Provincial Election Supervisor concerned. Applications for availment of 'Comelec Space' may be filed at any time from the date of effectivity of this Resolution.

(c)The Committee on Mass Media and the Provincial Election Supervisors shall allocate available 'Comelec Space' among the candidates concerned by lottery of which said candidates shall be notified in advance, in writing, to be present personally or by representative to witness the lottery at the date, time and place specified in the notice. Any party objecting to the result of the lottery may appeal to the Commission. (d)The candidates concerned shall be notified by the Committee on Mass Media or the Provincial Election Supervisor, as the case may be, sufficiently in advance and in writing of the date of issue and the newspaper or publication allocated to him, and the time within which he must submit the written material for publication in the 'Comelec Space'. xxx xxx xxx Sec. 8.Undue Reference to Candidates/Political Parties in Newspapers . No newspaper or publication shall allow to be printed or published in the news, opinion, features, or other sections of the newspaper or publication

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accounts or comments which manifestly favor or oppose any candidate or political party by unduly or repeatedly referring to or including therein said candidate or political party. However, unless the facts and circumstances clearly indicate otherwise, the Commission will respect the determination by the publisher and/or editors of the newspapers or publication that the accounts or views published are significant, newsworthy and of public interest." (Emphasis supplied)

Pardo represented to the Court that that Resolution and the related letter-directives were merely designed to solicit from the publishers the same free print space which many publishers had voluntarily given to Comelec during the election period relating to the 11 May 1992 elections. Indeed, the Chairman stated that the Comelec would, that very afternoon, meet and adopt an appropriate amending or clarifying resolution, a certified true copy of which would forthwith be filed with the Court.
cdrep

Apparently in implementation of this Resolution, Comelec through Commissioner Regalado E. Maambong sent identical letters, dated 22 March 1995, to various publishers of newspapers like the Business World, the Philippine Star, the Malaya and the Philippine Times Journal, all members of PPI. These letters read as follows:
"This is to advise you that pursuant to Resolution No. 2772 of the Commission on Elections, you are directed to provide free print space of not less than one half () page for use as 'Comelec Space' or similar to the print support which you have extended during the May 11, 1992 synchronized elections which was 2 full pages for each political party fielding senatorial candidates, from March 6, 1995 to May 6, 1995, to make known to their qualifications, their stand on public issues and their platforms and programs of government. We shall be informing the political parties and candidates to submit directly to you their pictures, biographicaldata, stand on key public issues and platforms of government, either as raw data or in the form of positives or camera-ready materials. Please be reminded that the political parties/candidates may be accommodated in your publications any day upon receipt of their materials until May 6, 1995 which is the day for campaigning. We trust you to extend your full support and cooperation in this regard." (Emphasis supplied)

On 5 May 1995, the Court received from the Office of the Solicitor general a manifestation which attached a copy of Comelec resolution No. 2772-A dated 4 May 1995. The operative portion of this Resolution follows:
NOW THEREFORE, pursuant to the powers vested in it by the Constitution, the Omnibus Election Code, Republic Acts No. 6646 and 7166 and other election laws, the Commission on Elections RESOLVED to clarify Sections 2 and 8 of Res. No. 2772 as follows: 1.Section 2 of Res. No. 2772 shall not be construed to mean as requiring publishers of the different mass media print publications to provide print space under pain of prosecution, whether administrative, civil or criminal, there being no sanction or penalty for violation of said Section provided for either in said Resolution or in Section 90 of Batas Pambansa Blg. 881, otherwise known as the Omnibus Election Code, on the grant of 'Comelec Space.' 2.Section 8 of Res. No. 2772 shall not be construed to mean as constituting prior restraint on the part of the publishers with respect to the printing or publication of materials in the news, opinion, features or other sections of their respective publications or other accounts or comments, it being clear from the last sentence of said Section 8 that the Commission shall, 'unless the facts and circumstances clearly indicate otherwise . . . respect the

determination by the publishers and/or editors of the newspapers or publications that the accounts or views published are significant, newsworthy and of public interest.'

In this Petition for Certiorari and Prohibition with prayer for the issuance of a Temporary restraining order, PPI asks us to declare Comelec Resolution No. 2772 unconstitutional and void on the ground that it violates the prohibition imposed by the Constitution upon the government, and any of its agencies, against the taking of private property for public use without just compensation. Petitioner also contends that the 22 March 1995 letter directives of Comelec requiring publishers to give free "Comelec Space" and at the same time process raw data to make it camera-ready, constitute impositions of involuntary servitude, contrary to the provisions of Section 18 (2), Article III of the 1987 Constitution. Finally, PPI argues that Section 8 of Comelec Resolution No. 2772 is violative of the constitutionally guaranteed freedom of speech, of the press and of expression. 1 On 20 April 1995, this Court issued a Temporary Restraining Order enjoining Comelec from enforcing and implementing Section 2 of Resolution No. 2772, as well as the Comelec directives addressed to various print media enterprises all dated 22 March 1995. The Court also required the respondent to file a Comment on the Petition.
prcd

This Resolution shall take effect upon approval." (Emphasis in the original)

While, at this point, the Court could perhaps simply dismiss the petition for Certiorari and Prohibition as having become moot and academic, we consider it not inappropriate to pass upon the first constitutional issue raised in this case. Our hope is to put this issue to rest and prevent its resurrection. Section 2 of Resolution No. 2772 is not a model of clarity in expression. Section 1 of Resolution No. 2772A did not try to redraft Section 2; accordingly, Section 2 of resolution No. 2772 persists in its original form. Thus, we must point out that, as presently worded, and in particular as interpreted and applied by the Comelec itself in its 22 March 1995 letter-directives to newspaper publishers, Section 2 of Resolution No. 2772 is clearly susceptible of the reading that petitioner PPI has given it. That Resolution No. 2772 does not, in express terms, threaten publishers who would disregard it or its implementing letters with some criminal or other sanction, does not by itself demonstrate that the Comelec's original intention was simply to solicit or request voluntary donations of print space from publishers. A written communication officially directing a print media company to supply free print space, dispatched by government (here a constitutional) agency and signed by member of the Commission presumably legally authorized to do so, is bound to produce a coercive effect upon the company so addressed. That the agency may not be legally authorized to impose, or cause the imposition of, criminal or other sanctions for disregard of such direction, only aggravates the constitutional difficulties inhering in the present situation. The enactment or addition of such sanctions by the legislative authority itself would be open to serious constitutional objection. To compel print media companies to donate "Comelec space" of the dimensions specified in Section 2 of Resolution No. 2772 (not less than one-half Page), amounts to "taking" of private personal property for public use or purposes. Section 2 failed to specify the intended frequency of such compulsory "donation:" only once during the period from 6 March 1995 (or 21 March 1995) until 12 May 1995? or everyday or once a week? or has often as Comelec may direct during the same period? the extent of the taking or deprivation is not insubstantial; this is not a case of a de minimis temporary limitation or restraint upon the use of private property. The monetary value of the

The Office of the Solicitor General filed its Comment on behalf of respondent Comelec alleging that Comelec Resolution No. 2772 does not impose upon the publishers any obligation to provide free print space in the newspapers as it does not provide any criminal or administrative sanction for non-compliance with that Resolution. According to the Solicitor General, the questioned Resolution merely established guidelines to be followed in connection with the procurement of "Comelec space," the procedure for and mode of allocation of such space to candidates and the conditions or requirements for the candidate's utilization of the "Comelec space" procured. At the same time, however, the Solicitor General argues that even if the questioned Resolution and its implementing letter directives are viewed as mandatory, the same would nevertheless be valid as an exercise of the police power of the State. The Solicitor general also maintains that Section 8 of Resolution No. 2772 is a permissible exercise of the power of supervisor or regulation of the Comelec over the communication and information operations of print media enterprises during the election period to safeguard and ensure a fair, impartial and credible election. 2 At the oral hearing of this case held on 28 April 1995, respondent Comelec through its Chairman, Hon. Bernardo Pardo, in response to inquiries from the Chief Justice and other Members of the Court, stated that Resolution No. 2772, particularly Section 2 thereof and the 22 March 1995 letters dispatched to various members of petitioner PPI, were not intended to compel those members to supply Comelec with free print space. Chairman

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compulsory "donation," measured by the advertising rates ordinarily charged by newspaper publishers whether in cities or in non-urban areas, may be very substantial indeed.
Le xLib

palpable or urgent necessity for the taking of print space confronted the Comelec and that Section 2 of Resolution No. 2772 was itself the only reasonable and calibrated response to such necessity available to Comelec. Section 2 does not constitute a valid exercise of the police power of the State. We turn to Section 8 of Resolution No. 2772, which needs to be quoted in full again:
Sec. 8.Undue Reference to Candidates/Political parties in Newspaper. No newspaper or publication shall allow to be printed or published in the news, opinion, features, or other sections of the newspaper or publication accounts or comments which manifest favor or oppose any candidate or political party by unduly or repeatedly referring to or including therein said candidate or political party. However, unless the facts and circumstances clearly indicates otherwise, the Commission will respect the determination by the publisher and/or editors of the newspapers or publications that the accounts or views published are significant, newsworthy and of public interest."

The taking of print space here sought to be effected may first be appraised under the rubric of expropriation of private personal property for public use. The threshold requisites for a lawful taking of private property for public use need to be examined here: one is the necessity for the taking; another is the legal authority to effect the taking. The element of necessity for the taking has not been shown by respondent Comelec. It has not been suggested that the members of PPI are unwilling to sell print space at their normal rates to Comelec for election purposes. Indeed, the unwillingness or reluctance of Comelec to buy print space lies at the heart of the problem. 3 Similarly, it has not been suggested, let alone demonstrated, that Comelec has been granted the power of imminent domain either by the Constitution or by the legislative authority. A reasonable relationship between that power and the enforcement and administration of election laws by Comelec must be shown; it is not casually to be assumed. That the taking is designed to subserve "public use" is not contested by petitioner PPI. We note only that, under Section 3 of Resolution No. 2772, the free "Comelec space" sought by the respondent Commission would be used not only for informing the public about the identities, qualifications and programs of government of candidates for elective office but also for "dissemination of vital election information" (including, presumably, circulars, regulations, notices, directives, etc. issued by Comelec). It seems to the Court a matter of judicial notice that government offices and agencies (including the Supreme Court) simply purchase print space, in the ordinary course of events, when their rules and regulations, circulars, notices and so forth need officially to be brought to the attention of the general public. The taking of private property for public use is, of course, authorized by the Constitution, but not without payment of "just compensation" (Article III, Section 9). And apparently the necessity of paying compensation for "Comelec space" is precisely what is sought to be avoided by respondent Commission, whether Section 2 of Resolution No. 2772 is read as petitioner PPI reads it, as an assertion of authority to require newspaper publishers to "donate" free print space for Comelec purposes, or as an exhortion, or perhaps an appeal, to publishers to donate free print space, as Section 1 of Resolution No. 2772-A attempts to suggest. There is nothing at all to prevent newspaper and magazine publishers from voluntarily giving free print space to Comelec for the purposes contemplated in Resolution No. 2772. Section 2 of Resolution No. 2772 does not, however, provide a constitutional basis for compelling publishers, against their will, in the kind of factual context here present, to provide free print space for Comelec purposes. Section 2 does not constitute a valid exercise of the power of eminent domain.
Cdpr

It is not easy to understand why Section 8 was included at all in Resolution No 2772. In any case, Section 8 should be viewed in the context of our decision in National Press Club v. Commission on Elections. 6 There the Court sustained the constitutionality of Section 11 (b) of R.A. No. 6646, known as the Electoral Reforms Law of 1987, which prohibits the sale or donation of print space and airtime for campaign or other political purposes, except to the Comelec. In doing so, the Court carefully distinguished (a) paid political advertisements which are reached by the prohibition of Section 11 (b), from (b) the reporting of news, commentaries and expressions of belief or opinion by reporters, broadcasters, editors, commentators or columnists which fall outside the scope of Section 11 (b) and which are protected by the constitutional guarantees of freedom of speech and of the press:
LLjur

"Secondly, and more importantly, Section 11 (b) is limited in its scope of application. Analysis of Section 11 (b)shows that it purports to apply only to the purchase and sale, including purchase and sale disguised as a donation, of print space and air time for campaign or other political purposes. Section 11 (b) does not purportin any way to restrict the reporting by newspapers or radio or television stations of news or news-noteworthy events relating to candidates, their qualifications, political parties and programs of government. Moreover, Section

11 (b) does not reach commentaries and expressions of belief or opinion by reporters or broadcasters or editors or commentators or columnists in respect of candidates, their qualifications, and programs and so forth , so long

at least as such comments, opinions and beliefs are not in fact advertisements for particular candidates covertly paid for. In sum Section 11 (b) is not to be read as reaching any report or commentary or other coverage that, in responsible media, is not paid for by candidates for political office. We read Section 11 (b) as designed to cover only paid political advertisements of particular candidates. The above limitation in scope of application of Section 11 (b) that it does not restrict either the reporting of or the expression of belief or opinion or comment upon the qualifications and programs and activities of any and all candidates for office constitutes the critical distinction which must be made between the instant case and that of Sanidad v. Commission on Elections. . . ."7 (Citations omitted; emphasis supplied)

We would note that the ruling here laid down by the Court is entirely in line with the theory of democratic representative government. The economic costs of informing the general public about the qualifications and programs of those seeking elective office are most appropriately distributed as widely as possible throughout our society by the utilization of public funds, especially funds raised by taxation, rather than cast solely on one small sector of society, i.e., print media enterprises. The benefits which flow from a heightened level of information on and the awareness of the electoral process are commonly thought to be community-wide; the burdens should be allocated on the same basis. As earlier noted, the Solicitor General also contended that Section 2 of Resolution No. 2772, even if read as compelling publishers to "donate" "Comelec space," may be sustained as a valid exercise of the police power of the state. This argument was, however, made too casually to require prolonged consideration on their part. Firstly, there was no effort (and apparently no inclination on the part of Comelec) to show that the police power essentially a power of legislation has been constitutionally delegated to respondent Commission. 4 Secondly, while private property may indeed be validly taken in the legitimate exercise of the police power of the state, there was no attempt to show compliance in the instant case with the requisites of a lawful taking under the police power. 5 Section 2 of Resolution No. 2772 is a blunt and heavy instrument that purports, without a showing of existence of a national emergency or other imperious public necessity, indiscriminately and without regard to the individual business condition of particular newspapers or magazines located in different parts of the country, to take private property of newspaper or magazine publishers. No attempt was made to demonstrate that a real and

Section 8 of Resolution No. 2772 appears to represent the effort of the Comelec to establish a guidelines for implementation of the above-quoted distinction and doctrine in National Press Club, an effort not blessed with evident success. Section 2 of Resolution No. 2772-A while possibly helpful, does not add substantially to the utility of Section 8 of Resolution No. 2772. The distinction between paid political advertisements on the one hand and news reports, commentaries and expressions of belief or opinion by reporters, broadcasters, editors, etc. on the other hand, can realistically be given operative meaning only in actual cases or controversies, on a case-to-case basis, in terms of very specific sets of facts. At all events, the Court is bound to note that PPI has failed to allege any specific affirmative action on the part of Comelec designed to enforce or implement Section 8. PPI has not claimed that it or any of its members has sustained actual or imminent injury by reason of Comelec action under Section 8. Put a little differently, the Court considers that the precise constitutional issue here sought to be raised whether or not Section 8 of Resolution No. 2772 constitutes a permissible exercise of the Comelec's power under Article IX, Section 4 of the Constitution to

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"supervise or regulate the enjoyment or utilization of all franchise or permits for the operation of media of communication or information [for the purpose of ensuring] equal opportunity, time and space, and the right of reply, including reasonable, equal rates therefor, for public-information campaigns and forums among candidates in connection with the objective of holding free, orderly, honest, peaceful and credible elections "

5.See National Development Company v. Philippine Veterans Banks, 192 SCRA 257 (1990); Association of Small Landowners in the Philippines, Inc. v. Secretary of Agrarian Reform, 175 SCRA 343 (1989).

is not ripe for judicial review for lack of an actual case or controversy involving, as the very lis motathereof, the constitutionality of Section 8. 1.Section 2 of Resolution No. 2772, in its present form and as interpreted by Comelec in its 22 March 1995 letter directives, purports to require print media enterprises to "donate" free print space to Comelec. As such, Section 2 suffers from fatal constitutional vice and must be set aside and nullified.
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2.To the extent it pertains to Section 8 of Resolution No. 2772, the Petition for Certiorari and Prohibition must be dismissed for lack of an actual, justiciable case or controversy. WHEREFORE, for all the foregoing, the Petition for Certiorari and Prohibition is GRANTED in part and Section 2 of Resolution No. 2772 in its present from and the related letter-directives dated 22 March 1995 are hereby SET ASIDE as null and void, and the Temporary Restraining Order is hereby MADE PERMANENT. The Petition is DISMISSED in part, to the extent it relates to Section 8 of Resolution No. 2772. No pronouncement as to costs.

Narvasa, C.J ., Padilla, Regalado, Davide, Jr., Romero, Bellosillo, Melo, Puno, Vitug, Kapunan, Mendozaand Francisco, JJ., concur. Quiason, J., is on leave.
Footnotes
1.Petition, pp. 6-11; Rollo, pp. 7-12. 2.Comment, pp. 5-15; Rollo, pp. 70-80. 3.As I.A. Cruz, Constitutional Law, p. 59 (1991 ed.), citing Noble v. City of Manila, 67 Phil. 1 (1938), stressed: "[w]here private property is needed for conversion to some public use, the first thing obviously that the government

should do is to offer to buy it. If the owner is willing to sell and the parties can agree on the price and the other conditions of the sale, a voluntary transaction can then be concluded and the transfer effected without the necessity of judicial action.

But if the owner of the private property is unwilling to part with it, or, being willing, cannot agree to the condition of the transfer, then it will be necessary for the government to use its coercive authority . By its power of eminent domain, it can then, upon payment of just compensation, forcibly acquire the needed property in order to devote it to the intended public use." (Emphasis supplied) 4.See, in this connection, Cruz, supra note 3 at pp. 44-45. The police power may be delegated by the legislative authority to local governments under the general welfare clause (Section 16, R.A. No. 7160, "Local Government Code of 1991"), to the President and administrative agencies. See also Binay v. Domingo, 201 SCRA 508 (1991); Philippine Association of Service Exporters, Inc. v. Drilon , 163 SCRA 386 (1988); Villacosta v. Bernardo, 143 SCRA 480 (1986).

SECOND DIVISION [G.R. No. 144681. June 21, 2004.]

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PROFESSIONAL REGULATION COMMISSION (PRC), CHAIRMAN HERMOGENES P. POBRE, ASSOCIATE COMMISSIONER ARMANDO PASCUAL, BOARD OF MEDICINE, CHAIRMAN RODOLFO P. DE GUZMAN, JOSE S. RAMIREZ, JUANITO B. BILLOTE, RUBEN R. POLICARPIO, EDGARDO T. FERNANDO and RICARDO D. FULGENCIO II, petitioners, vs. ARLENE V. DE GUZMAN, VIOLETA V. MENESES, CELERINA S. NAVARRO, JOSE RAMONCITO P. NAVARRO, ARNEL V. HERRERA and GERALDINE ELIZABETH M. PAGILAGAN, ELNORA R. RAQUENO, MARISSA A. REGODON, LAURA M. SANTOS, KARANGALAN D. SERRANO, DANILO A. VILLAVER, MARIA ROSARIO L. LEONOR, ALICIA S. LIZANO, MARITEL M. ECHIVERRI, BERNADETTE T. MENDOZA, FERNANDO F. MANDAPAT, ALELI A. GOLLAYAN, ELCIN C. ARRIOLA, HERMINIGILDA E. CONEJOS, SALLY B. BUNAGAN, ROGELIO B. ANCHETA, OSCAR H. PADUA, JR., EVELYN D. GRAJO, EVELYN S. ACOSTA, MARGARITA BELINDA L. VICENCIO, VALENTINO P. ARBOLEDA, EVELYN O. RAMOS, ACHILLES J. PERALTA, CORAZON M. CRUZ, LEUVINA P. CHICO, JOSEPH A. JAO, MA. LUISA S. GUTIERREZ, LYDIA C. CHAN, OPHELIA C. HIDALGO, FERNANDO T. CRUZ, MELVIN M. USITA, RAFAEL I. TOLENTINO, GRACE E. UY, CHERYL R. TRIGUERO, MICHAEL L. SERRANO, FEDERICO L. CASTILLO, MELITA J. CAEDO, SAMUEL B. BANGOY, BERNARDITA B. SY, GLORIA T. JULARBAL, FREDERICK D. FRANCISCO, CARLOS M. BERNARDO, JR., HUBERT S. NAZARENO, CLARISSA B. BACLIG, DAYMINDA G. BONTUYAN, BERNADETTE H. CABUHAT, NANCY J. CHAVEZ, MARIO D. CUARESMA, ERNESTO L. CUE, EVELYN C. CUNDANGAN, RHONEIL R. DEVERATURDA, DERILEEN D. DORADO, SAIBZUR N. EDDING, VIOLETA C. FELIPE, HERMINIO V. FERNANDEZ, JR., MARIA VICTORIA M. LACSAMANA, NORMA G. LAFAVILLA, RUBY B. LANTIN, MA. ELOISA Q. MALLARI, CLARISA SJ. NICOLAS, PERCIVAL H. PANGILINAN, ARNULFO A. SALVADOR, ROBERT B. SANCHEZ, MERLY D. STA. ANA and YOLANDA P. UNICA, respondents.

observed that strangely, the unusually high ratings were true only for Fatima College examinees. It was a record-breaking phenomenon in the history of the Physician Licensure Examination. On June 7, 1993, the Board issued Resolution No. 19, withholding the registration as physicians of all the examinees from the Fatima College of Medicine. 4 The PRC asked the National Bureau of Investigation (NBI) to investigate whether any anomaly or irregularity marred the February 1993 Physician Licensure Examination. Prior to the NBI investigation, the Board requested Fr. Bienvenido F. Nebres, S.J., an expert mathematician and authority in statistics, and later president of the Ateneo de Manila University, to conduct a statistical analysis of the results in BioChem and Ob-Gyne of the said examination. On June 10, 1993, Fr. Nebres submitted his report. He reported that a comparison of the scores in Bio-Chem and ObGyne, of the Fatima College examinees with those of examinees from De La Salle University and Perpetual Help College of Medicine showed that the scores of Fatima College examinees were not only incredibly high but unusually clustered close to each other. He concluded that there must be some unusual reason creating the clustering of scores in the two subjects. It must be a cause "strong enough to eliminate the normal variations that one should expect from the examinees [of Fatima College] in terms of talent, effort, energy, etc." 5 For its part, the NBI found that "the questionable passing rate of Fatima examinees in the [1993] Physician Examination leads to the conclusion that the Fatima examinees gained early access to the test questions." 6 On July 5, 1993, respondents Arlene V. De Guzman, Violeta V. Meneses, Celerina S. Navarro, Jose Ramoncito P. Navarro, Arnel V. Herrera, and Geraldine Elizabeth M. Pagilagan (Arlene V. De Guzman et al., for brevity) filed a special civil action for mandamus, with prayer for preliminary mandatory injunction docketed as Civil Case No. 93-66530 with the Regional Trial Court (RTC) of Manila, Branch 52. Their petition was adopted by the other respondents as intervenors. Meanwhile, the Board issued Resolution No. 26, dated July 21, 1993, charging respondents with "immorality, dishonest conduct, fraud, and deceit" in connection with the Bio-Chem and Ob-Gyne examinations. It recommended that the test results of the Fatima examinees be nullified. The case was docketed as Adm. Case No. 1687 by the PRC. On July 28, 1993, the RTC issued an Order in Civil Case No. 93-66530 granting the preliminary mandatory injunction sought by the respondents. It ordered the petitioners to administer the physician's oath to Arlene V. De Guzman et al., and enter their names in the rolls of the PRC. The petitioners then filed a special civil action for certiorari with the Court of Appeals to set aside the mandatory injunctive writ, docketed as CA-G.R. SP No. 31701. On October 21, 1993, the appellate court decided CA-G.R. SP No. 31701, with the dispositive portion of the Decisionordaining as follows:
WHEREFORE, this petition is GRANTED. Accordingly, the writ of preliminary mandatory injunction issued by the lower court against petitioners is hereby nullified and set aside. SO ORDERED.
7

DECISION TINGA, J :
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This petition for review under Rule 45 of the 1997 Rules of Civil Procedure seeks to nullify the Decision, 1 dated May 16, 2000, of the Court of Appeals in CA-G.R. SP No. 37283. The appellate court affirmed the judgment 2 dated December 19, 1994, of the Regional Trial Court (RTC) of Manila, Branch 52, in Civil Case No. 93-66530. The trial court allowed the respondents to take their physician's oath and to register as duly licensed physicians. Equally challenged is theResolution 3 promulgated on August 25, 2000 of the Court of Appeals, denying petitioners' Motion for Reconsideration. The facts of this case are as follows: The respondents are all graduates of the Fatima College of Medicine, Valenzuela City, Metro Manila. They passed the Physician Licensure Examination conducted in February 1993 by the Board of Medicine (Board). Petitioner Professional Regulation Commission (PRC) then released their names as successful examinees in the medical licensure examination. Shortly thereafter, the Board observed that the grades of the seventy-nine successful examinees from Fatima College in the two most difficult subjects in the medical licensure exam, Biochemistry (Bio-Chem) and Obstetrics and Gynecology (OB-Gyne), were unusually and exceptionally high. Eleven Fatima examinees scored 100% in Bio-Chem and ten got 100% in OB-Gyne, another eleven got 99% in Bio-Chem, and twenty-one scored 99% in OB-Gyne. The Board also observed that many of those who passed from Fatima got marks of 95% or better in both subjects, and no one got a mark lower than 90%. A comparison of the performances of the candidates from other schools was made. The Board

Arlene V. de Guzman, et al., then elevated the foregoing Decision to this Court in G.R. No. 112315. In our Resolutiondated May 23, 1994, we denied the petition for failure to show reversible error on the part of the appellate court.
DcC EHI

16

Meanwhile, on November 22, 1993, during the pendency of the instant petition, the pre-trial conference in Civil Case No. 93-66530 was held. Then, the parties, agreed to reduce the testimonies of their respective witnesses to sworn questionsand-answers. This was without prejudice to cross-examination by the opposing counsel. On December 13, 1993, petitioners' counsel failed to appear at the trial in the mistaken belief that the trial was set for December 15. The trial court then ruled that petitioners waived their right to cross-examine the witnesses. On January 27, 1994, counsel for petitioners filed a Manifestation and Motion stating the reasons for her non-appearance and praying that the cross-examination of the witnesses for the opposing parties be reset. The trial court denied the motion for lack of notice to adverse counsel. It also denied the Motion for Reconsideration that followed on the ground that adverse counsel was notified less than three (3) days prior to the hearing. Meanwhile, to prevent the PRC and the Board from proceeding with Adm. Case No. 1687, the respondents herein moved for the issuance of a restraining order, which the lower court granted in its Order dated April 4, 1994. The petitioners then filed with this Court a petition for certiorari docketed as G.R. No. 115704, to annul the Orders of the trial court dated November 13, 1993, February 28, 1994, and April 4, 1994. We referred the petition to the Court of Appeals where it was docketed as CA-G.R. SP No. 34506. On August 31, 1994, the appellate court decided CA-G.R. SP No. 34506 as follows:
WHEREFORE, the present petition for certiorari with prayer for temporary restraining order/preliminary injunction is GRANTED and the Orders of December 13, 1993, February 7, 1994, February 28, 1994, and April 4, 1994 of the RTC-Manila, Branch 52, and all further proceedings taken by it in Special Civil Action No. 93-66530 are hereby DECLARED NULL and VOID. The said RTC-Manila is ordered to allow petitioners' counsel to crossexamine the respondents' witnesses, to allow petitioners to present their evidence in due course of trial, and thereafter to decide the case on the merits on the basis of the evidence of the parties. Costs against respondents. IT IS SO ORDERED.
8

On November 25, 1994, petitioners' counsel moved for the inhibition of the trial court judge for alleged partiality. On November 28, 1994, the day the Motion to Inhibit was to be heard, petitioners failed to appear. Thus, the trial court denied the Motion to Inhibit and declared Civil Case No. 93-66530 deemed submitted for decision. On December 19, 1994, the trial court handed down its judgment in Civil Case No. 93-66530, the fallo of which reads:
WHEREFORE, judgment is rendered ordering the respondents to allow the petitioners and intervenors (except those with asterisks and footnotes in pages 1 & 2 of this decision) [sic], 9 to take the physician's oath and to register them as physicians. It should be made clear that this decision is without prejudice to any administrative disciplinary action which may be taken against any of the petitioners for such causes and in the manner provided by law and consistent with the requirements of the Constitution as any other professionals. No costs. SO ORDERED.
10

As a result of these developments, petitioners filed with this Court a petition for review on certiorari docketed as G.R. No. 118437, entitled Professional Regulation Commission v. Hon. David G. Nitafan, praying inter alia, that (1) G.R. No. 118437 be consolidated with G.R. No. 117817; (2) the decision of the Court of Appeals dated August 31, 1994 in CA-G.R. SP No. 34506 be nullified for its failure to decree the dismissal of Civil Case No. 93-66530, and in the alternative, to set aside the decision of the trial court in Civil Case No. 93-66530, order the trial court judge to inhibit himself, and Civil Case No. 93-66530 be re-raffled to another branch. On December 26, 1994, the petitioners herein filed their Notice of Appeal 11 in Civil Case No. 93-66530, thereby elevating the case to the Court of Appeals, where it was docketed as CA-G.R. SP No. 37283. In our Resolution of June 7, 1995, G.R. No. 118437 was consolidated with G.R. No. 117817. On July 9, 1998, we disposed of G.R. Nos. 117817 and 118437 in this wise:
WHEREFORE, the petition in G.R. No. 117817 is DISMISSED for being moot. The petition in G.R. No. 118437 is likewise DISMISSED on the ground that there is a pending appeal before the Court of Appeals. Assistant Solicitor General Amparo M. Cabotaje-Tang is advised to be more circumspect in her dealings with the courts as a repetition of the same or similar acts will be dealt with accordingly. SO ORDERED.
12

The trial was then set and notices were sent to the parties. A day before the first hearing, on September 22, 1994, the petitioners filed an Urgent Ex-Parte Manifestation and Motionpraying for the partial reconsideration of the appellate court's decision in CA-G.R. SP No. 34506, and for the outright dismissal of Civil Case No. 93-66530. The petitioners asked for the suspension of the proceedings. In its Order dated September 23, 1994, the trial court granted the aforesaid motion, cancelled the scheduled hearing dates, and reset the proceedings to October 21 and 28, 1994. Meanwhile, on October 25, 1994, the Court of Appeals denied the partial motion for reconsideration in CA-G.R. SP No. 34506. Thus, petitioners filed with the Supreme Court a petition for review docketed as G.R. No. 117817, entitledProfessional Regulation Commission, et al. v. Court of Appeals, et al.

On November 11, 1994, counsel for the petitioners failed to appear at the trial of Civil Case No. 93-66530. Upon motion of the respondents herein, the trial court ruled that herein petitioners waived their right to cross-examine the herein respondents. Trial was reset to November 28, 1994.

While CA-G.R. SP No. 37283 was awaiting disposition by the appellate court, Arnel V. Herrera, one of the original petitioners in Civil Case No. 93-66530, joined by twenty-seven intervenors, to wit: Fernando F. Mandapat, Ophelia C. Hidalgo, Bernadette T. Mendoza, Ruby B. Lantin-Tan, Fernando T. Cruz, Marissa A. Regodon, Ma. Eloisa Q. MallariLargoza, Cheryl R. Triguero, Joseph A. Jao, Bernadette H. Cabuhat, Evelyn S. Acosta-Cabanes, Laura M. Santos, Maritel M. Echiverri, Bernadette C. Escusa, Carlosito C. Domingo, Alicia S. Lizano, Elnora R. Raqueno-Rabaino, Saibzur N. Edding, Derileen D. Dorado-Edding, Robert B. Sanchez, Maria Rosario L. Leonor-Lacandula, Geraldine Elizabeth M. PagilaganPalma, Margarita Belinda L. Vicencio-Gamilla, Herminigilda E. Conejos, Leuvina P. Chico-Paguio, Elcin C. Arriola-Ocampo, and Jose Ramoncito P. Navarro, manifested that they were no longer interested in proceeding with the case and moved for its dismissal. A similar manifestation and motion was later filed by intervenors Mary Jean I. Yeban-Merlan, Michael L. Serrano, Norma G. Lafavilla, Arnulfo A. Salvador, Belinda C. Rabara, Yolanda P. Unica, Dayminda G. Bontuyan, Clarissa B.

17

Baclig, Ma. Luisa S. Gutierrez, Rhoneil R. Deveraturda, Aleli A. Gollayan, Evelyn C. Cundangan, Frederick D. Francisco, Violeta V. Meneses, Melita J. Caedo, Clarisa SJ. Nicolas, Federico L. Castillo, Karangalan D. Serrano, Danilo A. Villaver, Grace E. Uy, Lydia C. Chan, and Melvin M. Usita. The Court of Appeals ruled that its decision in CA-G.R. SP No. 37283 would not apply to them. On May 16, 2000, the Court of Appeals decided CA-G.R. SP No. 37283, with the following fallo, to wit:
WHEREFORE, finding no reversible error in the decision appealed from, We hereby AFFIRM the same and DISMISS the instant appeal. No pronouncement as to costs. SO ORDERED.
13

Respondents counter that having passed the 1993 licensure examinations for physicians, the petitioners have the obligation to administer to them the oath as physicians and to issue their certificates of registration as physicians pursuant to Section 20 16 of Rep. Act No. 2382. The Court of Appeals in CA-G.R. SP No. 37283, found that respondents complied with all the requirements of Rep. Act No. 2382. Furthermore, respondents were admitted by the Medical Board to the licensure examinations and had passed the same. Hence, pursuant to Section 20 of Rep. Act No. 2382, the petitioners had the obligation to administer their oaths as physicians and register them.

Mandamus is a command issuing from a court of competent jurisdiction, in the name of the state or the sovereign,

directed to some inferior court, tribunal, or board, or to some corporation or person requiring the performance of a particular duty therein specified, which duty results from the official station of the party to whom the writ is directed, or from operation of law. 17 Section 3 of Rule 65 18 of the 1997 Rules of Civil Procedure outlines two situations when a writ of mandamus may issue, when any tribunal, corporation, board, officer or person unlawfully (1) neglects the performance of an act which the law specifically enjoins as a duty resulting from an office, trust, or station; or (2) excludes another from the use and enjoyment of a right or office to which the other is entitled. We shall discuss the issues successively. 1.On The Existence of a Duty of the Board of Medicine To Issue Certificates of Registration as Physicians under Rep.Act No. 2382. For mandamus to prosper, there must be a showing that the officer, board, or official concerned, has a clear legal duty, not involving discretion. 19 Moreover, there must be statutory authority for the performance of the act, 20 and the performance of the duty has been refused. 21 Thus, it must be pertinently asked now: Did petitioners have the duty to administer the Hippocratic Oath and register respondents as physicians under the Medical Act of 1959? As found by the Court of Appeals, on which we agree on the basis of the records:
It bears emphasizing herein that petitioner-appellees and intervenor-appellees have fully complied with all the statutory requirements for admission into the licensure examinations for physicians conducted and administered by the respondent-appellants on February 12, 14, 20 and 21, 1993. Stress, too, must be made of the fact that all of them successfully passed the same examinations. 22

In sustaining the trial court's decision, the appellate court ratiocinated that the respondents complied with all the statutory requirements for admission into the licensure examination for physicians in February 1993. They all passed the said examination. Having fulfilled the requirements of Republic Act No. 2382, 14 they should be allowed to take their oaths as physicians and be registered in the rolls of the PRC.
aSDHCT

Hence, this petition raising the following issues:

I WHETHER OR NOT RESPONDENTS HAVE A VALID CAUSE OF ACTION FOR MANDAMUS AGAINST PETITIONERS IN THE LIGHT OF THE RESOLUTION OF THIS HONORABLE COURT IN G.R. NO. 112315 AFFIRMING THE COURT OF APPEALS' DECISION DECLARING THAT IF EVER THERE IS SOME DOUBT AS TO THE MORAL FITNESS OF EXAMINEES, THE ISSUANCE OF LICENSE TO PRACTICE MEDICINE IS NOT AUTOMATICALLY GRANTED TO THE SUCCESSFUL EXAMINEES. II WHETHER OR NOT THE PETITION FOR MANDAMUS COULD PROCEED DESPITE THE PENDENCY OF ADMINISTRATIVE CASE NO. 1687, WHICH WAS PRECISELY LODGED TO DETERMINE THE MORAL FITNESS OF RESPONDENTS TO BECOME DOCTORS. 15

The crucial query now is whether the Court of Appeals erred in concluding that petitioners should allow the respondents to take their oaths as physicians and register them, steps which would enable respondents to practice the medical profession 23 pursuant to Section 20 of the Medical Act of 1959?

To our mind, the only issue is: Did the Court of Appeals commit a reversible error of law in sustaining the judgment of the trial court that respondents are entitled to a writ of mandamus? The petitioners submit that a writ of mandamus will not lie in this case. They point out that for a writ of mandamus to issue, the applicant must have a well-defined, clear and certain legal right to the thing demanded and it is the duty of the respondent to perform the act required. Thus, mandamus may be availed of only when the duty sought to be performed is a ministerial and not a discretionary one. The petitioners argue that the appellate court's decision in CA-G.R. SP No. 37283 upholding the decision of the trial court in Civil Case No. 93-66530 overlooked its own pronouncement in CA-G.R. SP No. 31701. The Court of Appeals held in CA-G.R. SP No. 31701 that the issuance of a license to engage in the practice of medicine becomes discretionary on the PRC if there exists some doubt that the successful examinee has not fully met the requirements of the law. The petitioners stress that this Court's Resolution dated May 24, 1994 in G.R. No. 112315 held that there was no showing "that the Court of Appeals had committed any reversible error in rendering the questioned judgment" in CA-G.R. SP No. 31701. The petitioners point out that our Resolution in G.R. No. 112315 has long become final and executory. The appellate court relied on a single provision, Section 20 of Rep. Act No. 2382, in concluding that the petitioners had the ministerial obligation to administer the Hippocratic Oath to respondents and register them as physicians. But it is a basic rule in statutory construction that each part of a statute should be construed in connection with every other part to produce a harmonious whole, not confining construction to only one section. 24 The intent or meaning of the statute should be ascertained from the statute taken as a whole, not from an isolated part of the provision. Accordingly, Section 20, of Rep. Act No. 2382, as amended should be read in conjunction with the other provisions of the Act. Thus, to determine whether the petitioners had the ministerial obligation to administer the Hippocratic Oath to respondents and register them as physicians, recourse must be had to the entirety of the Medical Act of 1959. A careful reading of Section 20 of the Medical Act of 1959 discloses that the law uses the word "shall" with respect to the issuance of certificates of registration. Thus, the petitioners "shall sign and issue certificates of registration to those who have satisfactorily complied with the requirements of the Board." In statutory construction the term "shall" is a word of

18

command. It is given imperative meaning. Thus, when an examinee satisfies the requirements for the grant of his physician's license, the Board is obliged to administer to him his oath and register him as a physician, pursuant to Section 20 and par. (1) of Section 22 25 of the Medical Act of 1959. However, the surrounding circumstances in this case call for serious inquiry concerning the satisfactory compliance with the Board requirements by the respondents. The unusually high scores in the two most difficult subjects was phenomenal, according to Fr. Nebres, the consultant of PRC on the matter, and raised grave doubts about the integrity, if not validity, of the tests. These doubts have to be appropriately resolved. Under the second paragraph of Section 22, the Board is vested with the power to conduct administrative investigations and "disapprove applications for examination or registration," pursuant to the objectives of Rep. Act No. 2382 as outlined in Section 1 26 thereof. In this case, after the investigation, the Board filed before the PRC, Adm. Case No. 1687 against the respondents to ascertain their moral and mental fitness to practice medicine, as required by Section 9 27 of Rep. Act No. 2382. In its Decision dated July 1, 1997, the Board ruled:
WHEREFORE, the BOARD hereby CANCELS the respondents['] examination papers in the Physician Licensure Examinations given in February 1993 and further DEBARS them from taking any licensure examination for a period of ONE (1) YEAR from the date of the promulgation of this DECISION. They may, if they so desire, apply for the scheduled examinations for physicians after the lapse of the period imposed by the BOARD. SO ORDERED.
28

right. 32 There must be a well-defined, clear and certain legal right to the thing demanded. 33 It is long established rule that a license to practice medicine is a privilege or franchise granted by the government. 34 It is true that this Court has upheld the constitutional right 35 of every citizen to select a profession or course of study subject to a fair, reasonable, and equitable admission and academic requirements. 36 But like all rights and freedoms guaranteed by the Charter, their exercise may be so regulated pursuant to the police power of the State to safeguard health, morals, peace, education, order, safety, and general welfare of the people. 37 Thus, persons who desire to engage in the learned professions requiring scientific or technical knowledge may be required to take an examination as a prerequisite to engaging in their chosen careers. This regulation takes particular pertinence in the field of medicine, to protect the public from the potentially deadly effects of incompetence and ignorance among those who would practice medicine. In a previous case, it may be recalled, this Court has ordered the Board of Medical Examiners to annul both its resolution and certificate authorizing a Spanish subject, with the degree of Licentiate in Medicine and Surgery from the University of Barcelona, Spain, to practice medicine in the Philippines, without first passing the examination required by the Philippine Medical Act. 38 In another case worth noting, we upheld the power of the State to upgrade the selection of applicants into medical schools through admission tests. 39 It must be stressed, nevertheless, that the power to regulate the exercise of a profession or pursuit of an occupation cannot be exercised by the State or its agents in an arbitrary, despotic, or oppressive manner. A political body that regulates the exercise of a particular privilege has the authority to both forbid and grant such privilege in accordance with certain conditions. Such conditions may not, however, require giving up ones constitutional rights as a condition to acquiring the license. 40 Under the view that the legislature cannot validly bestow an arbitrary power to grant or refuse a license on a public agency or officer, courts will generally strike down license legislation that vests in public officials discretion to grant or refuse a license to carry on some ordinarily lawful business, profession, or activity without prescribing definite rules and conditions for the guidance of said officials in the exercise of their power. 41 In the present case, the aforementioned guidelines are provided for in Rep. Act No. 2382, as amended, which prescribes the requirements for admission to the practice of medicine, the qualifications of candidates for the board examinations, the scope and conduct of the examinations, the grounds for denying the issuance of a physician's license, or revoking a license that has been issued. Verily, to be granted the privilege to practice medicine, the applicant must show that he possesses all the qualifications and none of the disqualifications. Furthermore, it must appear that he has fully complied with all the conditions and requirements imposed by the law and the licensing authority. Should doubt taint or mar the compliance as being less than satisfactory, then the privilege will not issue. For said privilege is distinguishable from a matter of right, which may be demanded if denied. Thus, without a definite showing that the aforesaid requirements and conditions have been satisfactorily met, the courts may not grant the writ of mandamus to secure said privilege without thwarting the legislative will. 3.On the Ripeness of the Petition for Mandamus Lastly, the petitioners herein contend that the Court of Appeals should have dismissed the petition for mandamus below for being premature. They argue that the administrative remedies had not been exhausted. The records show that this is not the first time that petitioners have sought the dismissal of Civil Case No. 93-66530. This issue was raised in G.R. No. 115704, which petition we referred to the Court of Appeals, where it was docketed as CA-G.R. SP No. 34506. On motion for reconsideration in CA-G.R. SP No. 34506, the appellate court denied the motion to dismiss on the ground that the prayers for the nullification of the order of the trial court and the dismissal of Civil Case No. 93-66530 were inconsistent reliefs. In G.R. No. 118437, the petitioners sought to nullify the decision of the Court of Appeals in CA-G.R. SP No. 34506 insofar as it did not order the dismissal of Civil Case No. 93-66530. In our consolidated decision, dated July 9, 1998, in G.R. Nos. 117817 & 118437, this Court speaking through Justice Bellosillo opined that:

Until the moral and mental fitness of the respondents could be ascertained, according to petitioners, the Board has discretion to hold in abeyance the administration of the Hippocratic Oath and the issuance of the certificates to them. The writ of mandamus does not lie to compel performance of an act which is not duly authorized. The respondents nevertheless argue that under Section 20, the Board shall not issue a certificate of registration only in the following instances: (1) to any candidate who has been convicted by a court of competent jurisdiction of any criminal offense involving moral turpitude; (2) or has been found guilty of immoral or dishonorable conduct after the investigation by the Board; or (3) has been declared to be of unsound mind. They aver that none of these circumstances are present in their case. Petitioners reject respondents' argument. We are informed that in Board Resolution No. 26, 29 dated July 21, 1993, the Board resolved to file charges against the examinees from Fatima College of Medicine for "immorality, dishonesty, fraud, and deceit in the Obstetrics-Gynecology and Biochemistry examinations." It likewise sought to cancel the examination results obtained by the examinees from the Fatima College.
cHaA DC

Section 8 30 of Rep. Act No. 2382 prescribes, among others, that a person who aspires to practice medicine in the Philippines, must have "satisfactorily passed the corresponding Board Examination." Section 22, in turn, provides that the oath may only be administered "to physicians who qualified in the examinations." The operative word here is "satisfactorily," defined as "sufficient to meet a condition or obligation" or "capable of dispelling doubt or ignorance." 31Gleaned from Board Resolution No. 26, the licensing authority apparently did not find that the respondents "satisfactorily passed" the licensure examinations. The Board instead sought to nullify the examination results obtained by the respondents. 2.On the Right Of The Respondents To Be Registered As Physicians The function of mandamus is not to establish a right but to enforce one that has been established by law. If no legal right has been violated, there can be no application of a legal remedy, and the writ of mandamus is a legal remedy for a legal

19

Indeed, the issue as to whether the Court of Appeals erred in not ordering the dismissal of Civil Case No. 9366530 sought to be resolved in the instant petition has been rendered meaningless by an event taking place prior to the filing of this petition and denial thereof should follow as a logical consequence. 42 There is no longer any justiciable controversy so that any declaration thereon would be of no practical use or value. 43 It should be recalled that in its decision of 19 December 1994 the trial court granted the writ of mandamus prayed for by private respondents, which decision was received by petitioners on 20 December 1994. Three (3) days after, or on 23 December 1994, petitioners filed the instant petition. By then, the remedy available to them was to appeal the decision to the Court of Appeals, which they in fact did, by filing a notice of appeal on 26 December 1994. 44

reconsideration, are REVERSED and SET ASIDE; and (2) the writ of mandamus, issued in Civil Case No. 93-66530, and affirmed by the appellate court in CA-G.R. SP No. 37283 is NULLIFIED AND SET ASIDE.
EcICDT

SO ORDERED.

Puno and Callejo, Sr., JJ ., concur. Quisumbing, J ., took no part. Austria-Martinez, J ., took no part is on leave.

The petitioners have shown no cogent reason for us to reverse the aforecited ruling. Nor will their reliance upon the doctrine of the exhaustion of administrative remedies in the instant case advance their cause any. Section 26 45 of the Medical Act of 1959 provides for the administrative and judicial remedies that respondents herein can avail to question Resolution No. 26 of the Board of Medicine, namely: (a) appeal the unfavorable judgment to the PRC; (b) should the PRC ruling still be unfavorable, to elevate the matter on appeal to the Office of the President; and (c) should they still be unsatisfied, to ask for a review of the case or to bring the case to court via a special civil action ofcertiorari. Thus, as a rule, mandamus will not lie when administrative remedies are still available. 46 However, the doctrine of exhaustion of administrative remedies does not apply where, as in this case, a pure question of law is raised.47 On this issue, no reversible error may, thus, be laid at the door of the appellate court in CA-G.R. SP No. 37283, when it refused to dismiss Civil Case No. 93-66530. As we earlier pointed out, herein respondents Arnel V. Herrera, Fernando F. Mandapat, Ophelia C. Hidalgo, Bernadette T. Mendoza, Ruby B. Lantin-Tan, Fernando T. Cruz, Marissa A. Regodon, Ma. Eloisa Q. Mallari-Largoza, Cheryl R. Triguero, Joseph A. Jao, Bernadette H. Cabuhat, Evelyn S. Acosta-Cabanes, Laura M. Santos, Maritel M. Echiverri, Bernadette C. Escusa, Carlosito C. Domingo, Alicia S. Lizano, Elnora R. Raqueno-Rabaino, Saibzur N. Edding, Derileen D. Dorado-Edding, Robert B. Sanchez, Maria Rosario Leonor-Lacandula, Geraldine Elizabeth M. Pagilagan-Palma, Margarita Belinda L. Vicencio-Gamilla, Herminigilda E. Conejos, Leuvina P. Chico-Paguio, Elcin C. Arriola-Ocampo, and Jose Ramoncito P. Navarro manifested to the Court of Appeals during the pendency of CA-G.R. SP No. 37283, that they were no longer interested in proceeding with the case and moved for its dismissal insofar as they were concerned. A similar manifestation and motion were later filed by intervenors Mary Jean I. Yeban-Merlan, Michael L. Serrano, Norma G. Lafavilla, Arnulfo A. Salvador, Belinda C. Rabarra, Yolanda P. Unica, Dayminda G. Bontuyan, Clarissa B. Baclig, Ma. Luisa S. Gutierrez, Rhoneil R. Deveraturda, Aleli A. Gollayan, Evelyn C. Cundangan, Frederick D. Francisco, Violeta V. Meneses, Melita J. Caedo, Clarisa SJ. Nicolas, Federico L. Castillo, Karangalan D. Serrano, Danilo A. Villaver, Grace E. Uy, Lydia C. Chan, and Melvin M. Usita. Following these manifestations and motions, the appellate court in CA-G.R. SP No. 37283 decreed that its ruling would not apply to them. Thus, inasmuch as the instant case is a petition for review of the appellate court's ruling in CAG.R. SP No. 37283, a decision which is inapplicable to the aforementioned respondents will similarly not apply to them. As to Achilles J. Peralta, Evelyn O. Ramos, Sally B. Bunagan, Rogelio B. Ancheta, Oscar H. Padua, Jr., Evelyn D. Grajo, Valentino P. Arboleda, Carlos M. Bernardo, Jr., Mario D. Cuaresma, Violeta C. Felipe, Percival H. Pangilinan, Corazon M. Cruz and Samuel B. Bangoy, herein decision shall not apply pursuant to the Orders of the trial court in Civil Case No. 9366530, dropping their names from the suit. Consequently, this Decision is binding only on the remaining respondents, namely: Arlene V. de Guzman, Celerina S. Navarro, Rafael I. Tolentino, Bernardita B. Sy, Gloria T. Jularbal, Hubert S. Nazareno, Nancy J. Chavez, Ernesto L. Cue, Herminio V. Fernandez, Jr., Maria Victoria M. Lacsamana and Merly D. Sta. Ana, as well as the petitioners. WHEREFORE, the instant petition is GRANTED. Accordingly, (1) the assailed decision dated May 16, 2000, of the Court of Appeals, in CA-G.R. SP No. 37283, which affirmed the judgment dated December 19, 1994, of the Regional Trial Court of Manila, Branch 52, in Civil Case No. 93-66530, ordering petitioners to administer the physician's oath to herein respondents as well as the resolution dated August 25, 2000, of the appellate court, denying the petitioners' motion for

20

all public needs," this "least limitable" of governmental powers grants a wide panoply of instruments through which the state, as parens patriae gives effect to a host of its regulatory powers. Describing the nature and scope of the police power, Justice Malcolm, in the early case of Rubi v. Provincial Board of Mindoro (89 Phil. 660, 708, [1919]) wrote: "The police power of the State," one court has said . . . 'is a power coexistensive with self-protection, and is not inaptly termed 'the law of overruling necessity.' It may be said to be that inherent and plenary power in the state which enables it to prohibit all things hurtful to the comfort, safety and welfare of society." Carried onward by the current of legislature. the judiciary rarely attempts to dam the onrushing power of legislative discretion, provided the purposes of the law do not go beyond the great principles that mean security for the public welfare or do not arbitrarily interfere with the right of the individual." 2.ID.; ID.; ID.; EXERCISE THEREOF ENJOYS A PRESUMED VALIDITY UNLESS IT IS SHOWN THAT IT DOES NOT ENHANCE THE PUBLIC WELFARE OR WAS EXERCISED ARBITRARILY OR UNREASONABLY. Thus, police power concerns government enactments which precisely interfere with personal liberty or property in order to promote the general welfare or the common good. As the assailed Department Order enjoys a presumed validity, it follows that the burden rests upon petitioners to demonstrate that the said order, particularly its ARB requirement, does not enhance the public welfare or was exercised arbitrarily or unreasonably. 3.ID.; ID.; ID.; THE PROPER REGULATION OF A PROFESSION, CALLING, BUSINESS OR TRADE IS A VALID EXERCISE THEREOF. Nevertheless, no right is absolute, and the proper regulation of a profession, calling business or trade has always been upheld as a legitimate subject of a valid exercise of the police power by the state particularly when their conduct affects either the execution of legitimate governmental functions, the preservation of the State, the public health and welfare and public morals. According to the maxim, sic utere tuo ut alienum non laedas, it must of course be within the legitimate range of legislative action to define the mode and manner in which every one may so use his own property so as not to pose injury to himself or others. 4.ID.; ID.; ID.; WHERE THE LIBERTY CURTAILED AFFECTS AT MOST THE RIGHT TO PROPERTY, THE PERMISSIBLE SCOPE OF REGULATORY MEASURES IS MUCH WIDER. In any case, where the liberty curtailed affects at most the rights of property, the permissible scope of regulatory measures is certainly much wider. To pretend that licensing or accreditation requirements violates the due process clause is to ignore the settled practice, under the mantle of the police power, of regulating entry to the practice of various trades or professions. Professionals leaving for abroad are required to pass rigid written and practical exams before they are deemed fit to practice their trade. Seamen are required to take tests determining their seamanship. Locally, the Professional Regulation Commission has began to require previously licensed doctors and other professionals to furnish documentary proof that they had either re-trained or had undertaken continuing education courses as a requirement for renewal of their licenses. It is not claimed that these requirements pose an unwarranted deprivation of a property right under the due process clause. So long as professionals and other workers meet reasonable regulatory standards no such deprivation exists. 5.CONSTITUTIONAL LAW; STATE POLICIES; THE STATE SHALL AFFORD FULL PROTECTION TO LABOR; ELUCIDATED. Protection to labor does not indicate promotion of employment alone. Under the welfare and social justice provisions of the Constitution, the promotion of full employment, while desirable, cannot take a backseat to the government's constitutional duty to provide mechanisms for the protection of our work-force, local or overseas. As this Court explained in Philippine Association of Service Exporters (PASEI) v. Drilon, in reference to the recurring problems faced by our overseas workers: what concerns the Constitution more paramountly is that such an employment be above all, decent, just, and humane. It is bad enough that the country has to send its sons and daughters to strange lands because it cannot satisfy their employment needs at home. Under these circumstances, the Government is duty-bound to insure that our toiling expatriates have adequate protection, personally and economically, while away from home. A profession, trade or calling is a property right within the meaning of our constitutional guarantees. One cannot be deprived of the right to work and the right to make a living because these rights are property rights, the arbitrary and unwarranted deprivation of which normally constitutes an actionable wrong.

FIRST DIVISION [G.R. No. 120095. August 5, 1996.] JMM PROMOTION AND MANAGEMENT, INC., and KARY INTERNATIONAL, INC., petitioners, vs. HON. COURT OF APPEALS, HON. MA. NIEVES CONFESSOR, then Secretary of the Department of Labor and Employment, HON. JOSE BRILLANTES, in his capacity as acting Secretary of the Department of Labor and Employment and HON. FELICISIMO JOSON, in his capacity as Administrator of the Philippine Overseas Employment Administration, respondents.

Don P. Porciuncula for petitioner. Ma. Bezen Ringpis Liban/Solicitor General for respondents.

SYLLABUS 1.POLITICAL LAW; INHERENT POWERS OF THE STATE; POLICE POWER; NATURE AND SCOPE. The latin maximsalus populi est suprema lex embodies the character of the entire spectrum of public laws aimed at promoting the general welfare of the people under the State's police power. As an inherent attribute of sovereignty which virtually "extends to

21

6.ID.; BILL OF RIGHTS; NON-IMPAIRMENT OF OBLIGATIONS OF CONTRACTS; MUST YIELD TO THE STATE'S POLICE POWER. It is a futile gesture on the part of petitioners to invoke the non-impairment clause of the Constitution to support their argument that the government cannot enact the assailed regulatory measures because they abridge the freedom to contract. In Philippine Association of Service Exporters, Inc. vs. Drilon, we held that "(t)he non-impairment clause of the Constitution . . . must yield to the loftier purposes targeted by the government." Equally important, into every contract is read provisions of existing law, and always, a reservation of the police power for so long as the agreement deals with a subject impressed with the public welfare. 7.ID.; ID.; EQUAL PROTECTION CLAUSE; MERELY REQUIRES THAT ALL PERSONS BE TREATED ALIKE UNDER LIKE CONDITIONS. The equal protection clause is directed principally against undue favor and individual or class privilege. It is not intended to prohibit legislation which is limited to the object to which it is directed or by the territory in which it is to operate. It does not require absolute equality, but merely that all persons be treated alike under like conditions both as to privileges conferred and liabilities imposed. We have held, time and again, that the equal protection clause of the Constitution does not forbid classification for so long as such classification is based on real and substantial differences having a reasonable relation to the subject of the particular legislation. If classification is germane to the purpose of the law, concerns all members of the class, and applies equally to present and future conditions, the classification does not violate the equal protection guarantee. DECISION

2.Department Order No. 3-B, pertaining to the Artist Record Book (ARB) requirement, which could be processed only after the artist could show proof of academic and skills training and has passed the required tests. 3.Department Order No. 3-E, providing the minimum salary a performing artist ought to receive (not less than US$600.00 for those bound for Japan) and the authorized deductions therefrom. 4.Department Order No. 3-F, providing for the guidelines on the issuance and use of the ARB by returning performing artists who, unlike new artists, shall only undergo a Special Orientation Program (shorter than the basic program) although they must pass the academic test.

In Civil No. 95-72750, the Federation of Entertainment Talent Managers of the Philippines (FETMOP), on January 27, 1995 filed a class suit assailing these department orders, principally contending that said orders 1) violated the constitutional right to travel; 2) abridged existing contracts for employment; and 3) deprived individual artists of their licenses without due process of law. FETMOP, likewise, averred that the issuance of the Artist Record Book (ARB) was discriminatory and illegal and "in gross violation of the constitutional right . . . to life liberty and property." Said Federation consequently prayed for the issuance of a writ of preliminary injunction against the aforestated orders. On February 2, 1992, JMM Promotion and Management, Inc. and Kary International, Inc., herein petitioners, filed a Motion for Intervention in said civil case, which was granted by the trial court in an Order dated 15 February, 1995. However, on February 21, 1995, the trial court issued an Order denying petitioners' prayer for a writ of preliminary injunction and dismissed the complaint. On appeal from the trial court's Order, respondent court, in CA G.R. SP No. 36713 dismissed the same. Tracing the circumstances which led to the issuance of the ARB requirement and the assailed Department Order, respondent court concluded that the issuances constituted a valid exercise by the state of the police power. We agree. The latin maxim salus populi est suprema lex embodies the character of the entire spectrum of public laws aimed at promoting the general welfare of the people under the State's police power. As an inherent attribute of sovereignty which virtually "extends to all public needs," 2 this "least limitable" of governmental powers grants a wide panoply of instruments through which the state, as parens patriae gives effect to a host of its regulatory powers.
3

KAPUNAN, J :
p

This limits of government regulation under the State's police power are once again at the vortex of the instant controversy. Assailed is the government's power to control deployment of female entertainers to Japan by requiring an Artist Record Book (ARB) as a precondition to the processing by the POEA of any contract for overseas employment. By contending that the right to overseas employment is a property right within the meaning of the Constitution, petitioners vigorously aver that deprivation thereof allegedly through the onerous requirement of an ARB violates the due process clause and constitutes an invalid exercise of the police power. The factual antecedents are undisputed. Following the much-publicized death of Maricris Sioson in 1991, former President Corazon C. Aquino ordered a total ban against the deployment of performing artists to Japan and other foreign destinations. The ban was, however, rescinded after leaders of the overseas employment industry promised to extend full support for a program aimed at removing kinks in the system of deployment. In its place, the government, through the Secretary of Labor and Employment, subsequently issued Department Order No. 28 creating the Entertainment Industry Advisory Council (EIAC). which was tasked with issuing guidelines on the training, testing certification and deployment of performing artists abroad. Pursuant to the EIAC's recommendations, 1 the Secretary of Labor, on January 6, 1994, issued Department Order No. 3 establishing various procedures and requirements for screening performing artists under a new system of training, testing, certification and deployment of the former. Performing artists successfully hurdling the test, training and certification requirement were to be issued an Artist's Record Book (ARB), a necessary prerequisite to processing of any contract of employment by the POEA. Upon request of the industry, implementation of the process, originally scheduled for April 1, 1994, was moved to October 1, 1994. Thereafter, the Department of Labor, following the EIAC's recommendation, issued a series of orders fine-tuning and implementing the new system. Prominent among these orders were the following issuances:
1.Department Order No. 3-A, providing for additional guidelines on the training, testing, certification and deployment of performing artists.

Describing the nature and scope of the police power, Justice Malcolm, in the early case of Rubi v. Provincial Board of Mindoro wrote:
4

"The police power of the State," one court has said . . . 'is a power coextensive with self-protection, and is not inaptly termed 'the law of overruling necessity.' It may be said to be that inherent and plenary power in the state which enables it to prohibit all things hurtful to the comfort, safety and welfare of society." Carried onward by the current of legislature, the judiciary rarely attempts to dam the onrushing power of legislative discretion, provided the purposes of the law do not go beyond the great principles that mean security for the public welfare or do not arbitrarily interfere with the right of the individual."

Thus, police power concerns government enactments which precisely interfere with personal liberty or property in order to promote the general welfare or the common good. As the assailed Department Order enjoys a presumed validity, it follows that the burden rests upon petitioners to demonstrate that the said order, particularly, its ARB requirement, does not enhance the public welfare or was exercised arbitrarily or unreasonably.

22

A through review of the facts and circumstances leading to the issuance of the assailed orders compels us to rule that the Artist Record Book requirement and the questioned Department Order related to its issuance were issued by the Secretary of Labor pursuant to a valid exercise of the police power. In 1984, the Philippines emerged as the largest labor sending country in Asia dwarfing the labor export of countries with mammoth populations such as India and China. According to the National Statistics Office, this diaspora was augmented annually by over 450,000 documented and clandestine or illegal (undocumented) workers who left the country for various destinations abroad, lured by higher salaries, better work opportunities and sometimes better living conditions. Of the hundreds of thousands of workers who left the country for greener pastures in the last few years, women composed slightly close to half of those deployed, constituting 47% between 1987-1991, exceeding this proportion (58%) by the end of 1991, 6 the year former President Aquino instituted the ban on deployment of performing artists to Japan and other countries as a result of the gruesome death of Filipino entertainer Maricris Sioson. It was during the same period that this Court took judicial notice not only of the trend, but also of the fact that most of our women, a large number employed as domestic helpers and entertainers, worked under exploitative conditions "marked by physical and personal abuse." 7 Even then, we noted that "[t]he sordid tales of maltreatment suffered by migrant Filipina workers, even rape and various forms of torture, confirmed by testimonies of returning workers" compelled "urgent government action." 8 Pursuant to the alarming number of reports that a significant number of Filipina performing artists ended up as prostitutes abroad (many of whom were beaten, drugged and forced into prostitution), and following the deaths of a number of these women, the government began instituting measures aimed at deploying only those individuals who met set standards which would qualify them as legitimate performing artists. In spite of these measures, however, a number of our countrymen have nonetheless fallen victim to unscrupulous recruiters, ending up as virtual slaves controlled by foreign crime syndicates and forced into jobs other than those indicated in their employment contracts. Worse, some of our women have been forced into prostitution. Thus, after a number of inadequate and failed accreditation schemes, the Secretary of Labor issued on August 16, 1993,D.O. No. 28, establishing the Entertainment Industry Advisory Council (EIAC), the policy advisory body of DOLE on entertainment industry matters. 9 Acting on the recommendations of the said body, the Secretary of Labor, on January 6, 1994, issued the assailed orders. These orders embodied EIAC's Resolution No. 1, which called for guidelines on screening, testing and accrediting performing overseas Filipino artists. Significantly, as the respondent court noted, petitioners were duly represented in the EIAC, 10 which gave the recommendations on which the ARB and other requirements were based. Clearly, the welfare of Filipino performing artists, particularly the women was paramount in the issuance of Department Order No. 3. Short of a total and absolute ban against the deployment of performing artists to "high-risk" destinations, a measure which would only drive recruitment further underground, the new scheme at the very least rationalizes the method of screening performing artists by requiring reasonable educational and artistic skills from them and limits deployment to only those individuals adequately prepared for the unpredictable demands of employment as artists abroad. It cannot be gainsaid that this scheme at least lessens the room for exploitation by unscrupulous individuals and agencies. Moreover, here or abroad, selection of performing artists is usually accomplished by auditions, where those deemed unfit are usually weeded out through a process which is inherently subjective and vulnerable to bias and differences in taste. The ARB requirement goes one step further, however, attempting to minimize the subjectivity of the process by defining minimum skills required from entertainers and performing artists. As the Solicitor General observed, this should be easily met by experienced artists possessing merely basic skills. The tests are aimed at segregating real artists or performers

from those passing themselves off as such, eager to accept any available job and therefore exposing themselves to possible exploitation. As to the other provisions of Department Order No. 3 questioned by petitioners, we see nothing wrong with the requirement for document and booking confirmation (D.O. 3-C), a minimum salary scale (D.O. 3-E), or the requirement for registration of returning performers. The requirement for a venue certificate or other documents evidencing the place and nature of work allows the government closer monitoring of foreign employers and helps keep our entertainers away from prostitution fronts and other worksites associated with unsavory, immoral, illegal or exploitative practices. Parenthetically, none of these issuances appear to us, by any stretch of the imagination, even remotely unreasonable or arbitrary. They address a felt need of according greater protection for an oft-exploited segment of our OCW's. They respond to the industry's demand for clearer and more practicable rules and guidelines. Many of these provisions were fleshed out following recommendations by, and after consultations with, the affected sectors and non-government organizations. On the whole, they are aimed at enhancing the safety and security of entertainers and artists bound for Japan and other destinations, without stifling the industry's concerns for expansion and growth. In any event, apart from the State's police power, the Constitution itself mandates government to extend the fullest protection to our overseas workers. The basic constitutional statement on labor, embodied in Section 18 of Article II of the Constitution provides:

Sec. 18.The State affirms labor as a primary social economic force. It shall protect the rights of workers and promote their welfare.

More emphatically, the social justice provision on labor of the 1987 Constitution in its first paragraph states:
The State shall afford full protection to labor, local and overseas, organized and unorganized and promote full employment and equality of employment opportunities for all.

Obviously, protection to labor does not indicate promotion of employment alone. Under the welfare and social justice provisions of the Constitution, the promotion of full employment, while desirable, cannot take a backseat to the government's constitutional duty to provide mechanisms for the protection of our workforce, local or overseas. At this Court explained in Philippine Association of Service Exporters (PASEI) v. Drilon, 11 in reference to the recurring problems faced by our overseas workers:
What concerns the Constitution more paramountly is that such an employment be above all, decent, just, and humane. It is bad enough that the country has to send its sons and daughters to strange lands because it cannot satisfy their employment needs at home. Under these circumstances, the Government is duty-bound to insure that our toiling expatriates have adequate protection, personally and economically, while away from home.

We now go to petitioners' assertion that the police power cannot, nevertheless, abridge the right of our performing workers to return to work abroad after having earlier qualified under the old process, because, having previously been accredited, their accreditation became a "property right," protected by the due process clause. We find this contention untenable. A profession, trade or calling is a property right within the meaning of our constitutional guarantees. One cannot be deprived of the right to work and the right to make a living because these rights are property rights, the arbitrary and unwarranted deprivation of which normally constitutes an actionable wrong. 12

23

Nevertheless, no right is absolute, and the proper regulation of a profession, calling, business or trade has always been upheld as a legitimate subject of a valid exercise of the police power by the state particularly when their conduct affects either the execution of legitimate governmental functions, the preservation of the State, the public health and welfare and public morals. According to the maxim, sic utere tuo ut alienum non laedas, it must of course be within the legitimate range of legislative action to define the mode and manner in which every one may so use his own property so as not to pose injury to himself or others. 13 In any case, where the liberty curtailed affects at most the rights of property, the permissible scope of regulatory measures is certainly much wider. 14 To pretend that licensing or accreditation requirements violates the due process clause is to ignore the settled practice, under the mantle of the police power, of regulating entry to the practice of various trades or professions. Professionals leaving for abroad are required to pass rigid written and practical exams before they are deemed fit to practice their trade. Seamen are required to take tests determining their seamanship. Locally, the Professional Regulation Commission has began to require previously licensed doctors and other professionals to furnish documentary proof that they had either re-trained or had undertaken continuing education courses as a requirement for renewal of their licenses. It is not claimed that these requirements pose an unwarranted deprivation of a property right under the due process clause. So long as professionals and other workers meet reasonable regulatory standards no such deprivation exists. Finally, it is a futile gesture on the part of petitioners to invoke the non-impairment clause of the Constitution to support their argument that the government cannot enact the assailed regulatory measures because they abridge the freedom to contract. In Philippine Association of Service Exporters, Inc. vs. Drilon, we held that "[t]he non-impairment clause of the Constitution . . . must yield to the loftier purposes targeted by the government." 15 Equally important, into every contract is read provisions of existing law, and always, a reservation of the police power for so long as the agreement deals with a subject impressed with the public welfare. A last point. Petitioners suggest that the singling out of entertainers and performing artists under the assailed department orders constitutes class legislation which violates the equal protection clause of the Constitution. We do not agree. The equal protection clause is directed principally against undue favor and individual or class privilege. It is not intended to prohibit legislation which is limited to the object to which it is directed or by the territory in which it is to operate. It does not require absolute equality, but merely that all persons be treated alike under like conditions both as to privileges conferred and liabilities imposed. 16 We have held, time and again, that the equal protection clause of the Constitution does not forbid classification for so long as such classification is based on real and substantial differences having a reasonable relation to the subject of the particular legislation. 17 If classification is germane to the purpose of the law, concerns all members of the class, and applies equally to present and future conditions, the classification does not violate the equal protection guarantee. In the case at bar, the challenged Department Order clearly applies to all performing artists and entertainers destined for jobs abroad. These orders, we stressed hereinbefore, further the Constitutional mandate requiring government to protect our workforce, particularly those who may be prone to abuse and exploitation as they are beyond the physical reach of government regulatory agencies. The tragic incidents must somehow stop, but short of absolutely curtailing the right of these performers and entertainers to work abroad, the assailed measures enable our government to assume a measure of control. WHEREFORE, finding no reversible error in the decision sought to be reviewed, petition is hereby DENIED. SO ORDERED.

EN BANC [G.R. No. 118127. April 12, 2005.] CITY OF MANILA, HON. ALFREDO S. LIM as the Mayor of the City of Manila HON. JOSELITO L. ATIENZA, in his capacity as Vice-Mayor of the City of Manila and Presiding Officer of the City Council of Manila, HON. ERNESTO A. NIEVA, HON. GONZALO P. GONZALES, HON. AVELINO S. CAILIAN, HON. ROBERTO C. OCAMPO, HON. ALBERTO DOMINGO, HON. HONORIO U. LOPEZ, HON. FRANCISCO G. VARONA, JR., HON. ROMUALDO S. MARANAN, HON. NESTOR C. PONCE, JR., HON. HUMBERTO B. BASCO, HON. FLAVIANO F. CONCEPCION, JR., HON. ROMEO G. RIVERA, HON. MANUEL M. ZARCAL, HON. PEDRO S. DE JESUS, HON. BERNARDITO C. ANG, HON. MANUEL L. QUIN, HON. JHOSEP Y. LOPEZ, HON. CHIKA G. GO, HON. VICTORIANO A. MELENDEZ, HON. ERNESTO V.P. MACEDA, JR., HON. ROLANDO P. NIETO, HON. DANILO V. ROLEDA, HON. GERINO A. TOLENTINO, JR., HON. MA. PAZ E. HERRERA, HON. JOEY D. HIZON, HON. FELIXBERTO D. ESPIRITU, HON. KARLO Q. BUTIONG, HON. ROGELIO P. DELA PAZ, HON. BERNARDO D. RAGAZA, HON. MA. CORAZON R. CABALLES, HON. CASIMIRO C. SISON, HON. BIENVENIDO M. ABANTE, JR., HON. MA. LOURDES M. ISIP, HON. ALEXANDER S. RICAFORT, HON. ERNESTO F. RIVERA, HON. LEONARDO L. ANGAT, and HON. JOCELYN B. DAWIS, in their capacity as councilors of the City of Manila, petitioners, vs. HON. PERFECTO A.S. LAGUIO, JR., as Presiding Judge, RTC, Manila and MALATE TOURIST DEVELOPMENT CORPORATION, respondents.

DECISION

TINGA, J :
p

I know only that what is moral is what you feel good after and what is immoral is what you feel bad after.

Ernest Hemingway Death in the Afternoon, Ch. 1

It is a moral and political axiom that any dishonorable act, if performed by oneself, is less immoral than if performed by someone else, who would be well-intentioned in his dishonesty.

J. Christopher Gerald Bonaparte in Egypt, Ch. I

Padilla, Bellosillo, Vitug and Hermosisima, Jr., JJ ., concur.

The Court's commitment to the protection of morals is secondary to its fealty to the fundamental law of the land. It is foremost a guardian of the Constitution but not the conscience of individuals. And if it need be, the Court will not hesitate

24

to "make the hammer fall, and heavily" in the words of Justice Laurel, and uphold the constitutional guarantees when faced with laws that, though not lacking in zeal to promote morality, nevertheless fail to pass the test of constitutionality. The pivotal issue in this Petition 1 under Rule 45 (then Rule 42) of the Revised Rules on Civil Procedure seeking the reversal of the Decision 2 in Civil Case No. 93-66511 of the Regional Trial Court (RTC) of Manila, Branch 18 (lower court), 3 is the validity of Ordinance No. 7783 (the Ordinance) of the City of Manila. 4 The antecedents are as follows: Private respondent Malate Tourist Development Corporation (MTDC) is a corporation engaged in the business of operating hotels, motels, hostels and lodging houses. 5 It built and opened Victoria Court in Malate which was licensed as a motel although duly accredited with the Department of Tourism as a hotel. 6 On 28 June 1993, MTDC filed aPetition for

SEC. 3.Owners and/or operator of establishments engaged in, or devoted to, the businesses enumerated in Section 1 hereof are hereby given three (3) months from the date of approval of this ordinance within which to

wind up business operations or to transfer to any place outside of the Ermita-Malate area or convert said businesses to other kinds of business allowable within the area, such as but not limited to:

Declaratory Relief with Prayer for a Writ of Preliminary Injunction and/or Temporary Restraining Order 7(RTC Petition) with the lower court impleading as defendants, herein petitioners City of Manila, Hon. Alfredo S. Lim (Lim), Hon. Joselito L. Atienza, and the members of the City Council of Manila (City Council). MTDC prayed that theOrdinance, insofar
as it includes motels and inns as among its prohibited establishments, be declared invalid and unconstitutional. 8 Enacted by the City Council 9 on 9 March 1993 and approved by petitioner City Mayor on 30 March 1993, the saidOrdinance is entitled
AN ORDINANCE PROHIBITING THE ESTABLISHMENT OR OPERATION OF BUSINESSES PROVIDING CERTAIN FORMS OF AMUSEMENT, ENTERTAINMENT, SERVICES AND FACILITIES IN THE ERMITA-MALATE AREA, PRESCRIBING PENALTIES FOR VIOLATION THEREOF, AND FOR OTHER PURPOSES.

1.Curio or antique shop 2.Souvenir Shops 3.Handicrafts display centers 4.Art galleries 5.Records and music shops 6.Restaurants 7.Coffee shops 8.Flower shops 9.Music lounge and sing-along restaurants, with well-defined activities for wholesome family entertainment that cater to both local and foreign clientele. 10.Theaters engaged in the exhibition, not only of motion pictures but also of cultural shows, stage and theatrical plays, art exhibitions, concerts and the like. 11.Businesses allowable within the law and medium intensity districts as provided for in the zoning ordinances for Metropolitan Manila, except new warehouse or open-storage depot, dock or yard, motor repair shop, gasoline service station, light industry with any machinery, or funeral establishments. SEC. 4.Any person violating any provisions of this ordinance, shall upon conviction, be punished by imprisonment of one (1) year or fine of FIVE THOUSAND (P5,000.00) PESOS, or both, at the discretion of the Court, PROVIDED, that in case of juridical person, the President, the General Manager, or person-in-charge of operation shall be liable thereof; PROVIDED FURTHER, that in case of subsequent violation and conviction, the premises of the erring establishment shall be closed and padlocked permanently. SEC. 5.This ordinance shall take effect upon approval. Enacted by the City Council of Manila at its regular session today, March 9, 1993. Approved by His Honor, the Mayor on March 30, 1993. (Emphasis supplied)

10

The Ordinance is reproduced in full, hereunder:

SECTION 1.Any provision of existing laws and ordinances to the contrary notwithstanding, no person, partnership, corporation or entity shall, in the Ermita-Malate area bounded by Teodoro M. Kalaw Sr. Street in the North, Taft Avenue in the East, Vito Cruz Street in the South and Roxas Boulevard in the West, pursuant to P.D. 499 be allowed or authorized to contract and engage in, any business providing certain forms of amusement,

entertainment, services and facilities where women are used as tools in entertainment and which tend to disturb the community, annoy the inhabitants, and adversely affect the social and moral welfare of the community , such
as but not limited to:

1.Sauna Parlors 2.Massage Parlors 3.Karaoke Bars 4.Beerhouses 5.Night Clubs 6.Day Clubs 7.Super Clubs 8.Discotheques 9.Cabarets 10.Dance Halls 11.Motels 12.Inns
EDSAac

In the RTC Petition, MTDC argued that the Ordinance erroneously and improperly included in its enumeration of prohibited establishments, motels and inns such as MTDC's Victoria Court considering that these were not establishments for "amusement" or "entertainment" and they were not "services or facilities for entertainment," nor did they use women as "tools for entertainment," and neither did they "disturb the community," "annoy the inhabitants" or "adversely affect the social and moral welfare of the community." 11 MTDC further advanced that the Ordinance was invalid and unconstitutional for the following reasons: (1) The City Council has no power to prohibit the operation of motels as Section 458 (a) 4 (iv) 12 of the Local Government Code of 1991 (the Code) grants to the City Council only the power to regulate the establishment, operation and maintenance of hotels, motels, inns, pension houses, lodging houses and other similar establishments; (2) The Ordinance is void as it is violative of Presidential Decree (P.D.) No. 499 13 which specifically declared portions of the Ermita-Malate area as a commercial zone with certain restrictions; (3) The Ordinance does not constitute a proper exercise of police power as the compulsory closure of the motel business has no reasonable relation to the legitimate municipal interests sought to be protected; (4) The Ordinance constitutes an ex post facto law by punishing the operation of Victoria Court which was a legitimate business prior to its enactment; (5) The Ordinance violates MTDC's constitutional rights in that: (a) it is confiscatory and constitutes an invasion of plaintiff's property rights; (b) the City Council has no power to find as a fact

SEC. 2.The City Mayor, the City Treasurer or any person acting in behalf of the said officials are prohibited from

issuing permits, temporary or otherwise, or from granting licenses and accepting payments for the operation of business enumerated in the preceding section.

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that a particular thing is a nuisance per se nor does it have the power to extrajudicially destroy it; and (6) TheOrdinance constitutes a denial of equal protection under the law as no reasonable basis exists for prohibiting the operation of motels and inns, but not pension houses, hotels, lodging houses or other similar establishments, and for prohibiting said business in the Ermita-Malate area but not outside of this area. 14 In their Answer 15 dated 23 July 1993, petitioners City of Manila and Lim maintained that the City Council had the power to "prohibit certain forms of entertainment in order to protect the social and moral welfare of the community" as provided for in Section 458 (a) 4 (vii) of the Local Government Code, 16 which reads, thus:
Section 458.Powers, Duties, Functions and Compensation. (a) The sangguniang panlungsod, as the legislative body of the city, shall enact ordinances, approve resolutions and appropriate funds for the general welfare of the city and its inhabitants pursuant to Section 16 of this Code and in the proper exercise of the corporate powers of the city as provided for under Section 22 of this Code, and shall: xxx xxx xxx

of the city and its inhabitants, and such others as may be necessary to carry into effect and discharge the powers and duties conferred by this chapter; and to fix penalties for the violation of ordinances which shall not exceed two hundred pesos fine or six months' imprisonment, or both such fine and imprisonment, for a single offense.

Further, the petitioners noted, the Ordinance had the presumption of validity; hence, private respondent had the burden to prove its illegality or unconstitutionality. 21 Petitioners also maintained that there was no inconsistency between P.D. 499 and the Ordinance as the latter simply disauthorized certain forms of businesses and allowed the Ermita-Malate area to remain a commercial zone. 22 TheOrdinance, the petitioners likewise claimed, cannot be assailed as ex post facto as it was prospective in operation. 23The Ordinance also did not infringe the equal protection clause and cannot be denounced as class legislation as there existed substantial and real differences between the Ermita-Malate area and other places in the City of Manila. 24 On 28 June 1993, respondent Judge Perfecto A.S. Laguio, Jr. (Judge Laguio) issued an ex-parte temporary restraining order against the enforcement of the Ordinance. 25 And on 16 July 1993, again in an intrepid gesture, he granted the writ of preliminary injunction prayed for by MTDC. 26

(4)Regulate activities relative to the use of land, buildings and structures within the city in order to promote the general welfare and for said purpose shall: xxx xxx xxx (vii)Regulate the establishment, operation, and maintenance of any entertainment or amusement facilities, including theatrical performances, circuses, billiard pools, public dancing schools, public dance halls, sauna baths, massage parlors, and other places for entertainment or amusement; regulate such other events or activities for amusement or entertainment, particularly those which tend to disturb the community or annoy the inhabitants, or require the suspension or suppression of the same; or, prohibit certain forms of amusement or entertainment in order to protect the social and moral welfare of the community.
c DIaA S

After trial, on 25 November 1994, Judge Laguio rendered the assailed Decision, enjoining the petitioners from implementing the Ordinance. The dispositive portion of said Decision reads: 27
WHEREFORE, judgment is hereby rendered declaring Ordinance No. 778[3], Series of 1993, of the City of Manila null and void, and making permanent the writ of preliminary injunction that had been issued by this Court against the defendant. No costs. SO ORDERED.

28

Citing Kwong Sing v. City of Manila, 17 petitioners insisted that the power of regulation spoken of in the above-quoted provision included the power to control, to govern and to restrain places of exhibition and amusement. 18 Petitioners likewise asserted that the Ordinance was enacted by the City Council of Manila to protect the social and moral welfare of the community in conjunction with its police power as found in Article III, Section 18(kk) of Republic Act No. 409, 19 otherwise known as the Revised Charter of the City of Manila (Revised Charter of Manila) 20 which reads, thus:
ARTICLE III THE MUNICIPAL BOARD xxx xxx xxx Section 18.Legislative powers. The Municipal Board shall have the following legislative powers: xxx xxx xxx (kk)To enact all ordinances it may deem necessary and proper for the sanitation and safety, the furtherance of the prosperity, and the promotion of the morality, peace, good order, comfort, convenience, and general welfare

Petitioners filed with the lower court a Notice of Appeal 29 on 12 December 1994, manifesting that they are elevating the case to this Court under then Rule 42 on pure questions of law. 30 On 11 January 1995, petitioners filed the present Petition, alleging that the following errors were committed by the lower court in its ruling: (1) It erred in concluding that the subject ordinance is ultra vires, or otherwise, unfair, unreasonable and oppressive exercise of police power; (2) It erred in holding that the questioned Ordinance contravenes P.D. 499 31which allows operators of all kinds of commercial establishments, except those specified therein; and (3) It erred in declaring the Ordinance void and unconstitutional. 32 In the Petition and in its Memorandum, 33 petitioners in essence repeat the assertions they made before the lower court. They contend that the assailed Ordinance was enacted in the exercise of the inherent and plenary power of the State and the general welfare clause exercised by local government units provided for in Art. 3, Sec. 18 (kk) of the Revised Charter of Manila and conjunctively, Section 458 (a) 4 (vii) of the Code. 34 They allege that the Ordinance is a valid exercise of police power; it does not contravene P.D. 499; and that it enjoys the presumption of validity. 35 In its Memorandum 36 dated 27 May 1996, private respondent maintains that the Ordinance is ultra vires and that it is void for being repugnant to the general law. It reiterates that the questioned Ordinance is not a valid exercise of police power; that it is violative of due process, confiscatory and amounts to an arbitrary interference with its lawful business; that it is violative of the equal protection clause; and that it confers on petitioner City Mayor or any officer unregulated discretion in the execution of the Ordinance absent rules to guide and control his actions.

26

This is an opportune time to express the Court's deep sentiment and tenderness for the Ermita-Malate area being its home for several decades. A long-time resident, the Court witnessed the area's many turn of events. It relished its glory days and endured its days of infamy. Much as the Court harks back to the resplendant era of the Old Manila and yearns to restore its lost grandeur, it believes that the Ordinance is not the fitting means to that end. The Court is of the opinion, and so holds, that the lower court did not err in declaring the Ordinance, as it did, ultra vires and therefore null and void. The Ordinance is so replete with constitutional infirmities that almost every sentence thereof violates a constitutional provision. The prohibitions and sanctions therein transgress the cardinal rights of persons enshrined by the Constitution. The Court is called upon to shelter these rights from attempts at rendering them worthless. The tests of a valid ordinance are well established. A long line of decisions has held that for an ordinance to be valid, it must not only be within the corporate powers of the local government unit to enact and must be passed according to the procedure prescribed by law, it must also conform to the following substantive requirements: (1) must not contravene the Constitution or any statute; (2) must not be unfair or oppressive; (3) must not be partial or discriminatory; (4) must not prohibit but may regulate trade; (5) must be general and consistent with public policy; and (6) must not be unreasonable. 37 Anent the first criterion, ordinances shall only be valid when they are not contrary to the Constitution and to the laws. 38The Ordinance must satisfy two requirements: it must pass muster under the test of constitutionality and the test of consistency with the prevailing laws. That ordinances should be constitutional uphold the principle of the supremacy of the Constitution. The requirement that the enactment must not violate existing law gives stress to the precept that local government units are able to legislate only by virtue of their derivative legislative power, a delegation of legislative power from the national legislature. The delegate cannot be superior to the principal or exercise powers higher than those of the latter. 39 This relationship between the national legislature and the local government units has not been enfeebled by the new provisions in the Constitution strengthening the policy of local autonomy. The national legislature is still the principal of the local government units, which cannot defy its will or modify or violate it. 40 The Ordinance was passed by the City Council in the exercise of its police power, an enactment of the City Council acting as agent of Congress. Local government units, as agencies of the State, are endowed with police power in order to effectively accomplish and carry out the declared objects of their creation. 41 This delegated police power is found in Section 16 of the Code, known as the general welfare clause, viz:
SECTION 16.General Welfare. Every local government unit shall exercise the powers expressly granted, those necessarily implied therefrom, as well as powers necessary, appropriate, or incidental for its efficient and effective governance, and those which are essential to the promotion of the general welfare. Within their respective territorial jurisdictions, local government units shall ensure and support, among other things, the preservation and enrichment of culture, promote health and safety, enhance the right of the people to a balanced ecology, encourage and support the development of appropriate and self-reliant scientific and technological capabilities, improve public morals, enhance economic prosperity and social justice, promote full employment among their residents, maintain peace and order, and preserve the comfort and convenience of their inhabitants.
STCDaI

The Ordinance contravenes the Constitution

The police power of the City Council, however broad and far-reaching, is subordinate to the constitutional limitations thereon; and is subject to the limitation that its exercise must be reasonable and for the public good. 43 In the case at bar, the enactment of the Ordinance was an invalid exercise of delegated power as it is unconstitutional and repugnant to general laws. The relevant constitutional provisions are the following:
SEC. 5.The maintenance of peace and order, the protection of life, liberty, and property, and the promotion of the general welfare are essential for the enjoyment by all the people of the blessings of democracy.

44

SEC. 14.The State recognizes the role of women in nation-building, and shall ensure the fundamental equality before the law of women and men. 45 SEC. 1.No person shall be deprived of life, liberty or property without due process of law, nor shall any person be denied the equal protection of laws. 46 SEC. 9.Private property shall not be taken for public use without just compensation.

47

A.The Ordinance infringes the Due Process Clause The constitutional safeguard of due process is embodied in the fiat "(N)o person shall be deprived of life, liberty or property without due process of law. . . ." 48 There is no controlling and precise definition of due process. It furnishes though a standard to which governmental action should conform in order that deprivation of life, liberty or property, in each appropriate case, be valid. This standard is aptly described as a responsiveness to the supremacy of reason, obedience to the dictates of justice, 49 and as such it is a limitation upon the exercise of the police power. 50 The purpose of the guaranty is to prevent governmental encroachment against the life, liberty and property of individuals; to secure the individual from the arbitrary exercise of the powers of the government, unrestrained by the established principles of private rights and distributive justice; to protect property from confiscation by legislative enactments, from seizure, forfeiture, and destruction without a trial and conviction by the ordinary mode of judicial procedure; and to secure to all persons equal and impartial justice and the benefit of the general law. 51 The guaranty serves as a protection against arbitrary regulation, and private corporations and partnerships are "persons" within the scope of the guaranty insofar as their property is concerned. 52 This clause has been interpreted as imposing two separate limits on government, usually called "procedural due process" and "substantive due process." Procedural due process, as the phrase implies, refers to the procedures that the government must follow before it deprives a person of life, liberty, or property. Classic procedural due process issues are concerned with what kind of notice and what form of hearing the government must provide when it takes a particular action. 53

Local government units exercise police power through their respective legislative bodies; in this case, the sangguniang panlungsod or the city council. The Code empowers the legislative bodies to "enact ordinances, approve resolutions and appropriate funds for the general welfare of the province/city/municipality and its inhabitants pursuant to Section 16 of the Code and in the proper exercise of the corporate powers of the province/city/municipality provided under the Code."42 The inquiry in this Petition is concerned with the validity of the exercise of such delegated power.

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Substantive due process, as that phrase connotes, asks whether the government has an adequate reason for taking away a person's life, liberty, or property. In other words, substantive due process looks to whether there is a sufficient justification for the government's action. 54 Case law in the United States (U.S.) tells us that whether there is such a justification depends very much on the level of scrutiny used. 55 For example, if a law is in an area where only rational basis review is applied, substantive due process is met so long as the law is rationally related to a legitimate government purpose. But if it is an area where strict scrutiny is used, such as for protecting fundamental rights, then the government will meet substantive due process only if it can prove that the law is necessary to achieve a compelling government purpose. 56 The police power granted to local government units must always be exercised with utmost observance of the rights of the people to due process and equal protection of the law. Such power cannot be exercised whimsically, arbitrarily or despotically 57 as its exercise is subject to a qualification, limitation or restriction demanded by the respect and regard due to the prescription of the fundamental law, particularly those forming part of the Bill of Rights. Individual rights, it bears emphasis, may be adversely affected only to the extent that may fairly be required by the legitimate demands of public interest or public welfare. 58 Due process requires the intrinsic validity of the law in interfering with the rights of the person to his life, liberty and property. 59

purposes. Otherwise stated, the prohibition of the enumerated establishments will not per se protect and promote the social and moral welfare of the community; it will not in itself eradicate the alluded social ills of prostitution, adultery, fornication nor will it arrest the spread of sexual disease in Manila. Conceding for the nonce that the Ermita-Malate area teems with houses of ill-repute and establishments of the like which the City Council may lawfully prohibit, 65 it is baseless and insupportable to bring within that classification sauna parlors, massage parlors, karaoke bars, night clubs, day clubs, super clubs, discotheques, cabarets, dance halls, motels and inns. This is not warranted under the accepted definitions of these terms. The enumerated establishments are lawful pursuits which are not per se offensive to the moral welfare of the community. That these are used as arenas to consummate illicit sexual affairs and as venues to further the illegal prostitution is of no moment. We lay stress on the acrid truth that sexual immorality, being a human frailty, may take place in the most innocent of places that it may even take place in the substitute establishments enumerated under Section 3 of the Ordinance. If the flawed logic of the Ordinance were to be followed, in the remote instance that an immoral sexual act transpires in a church cloister or a court chamber, we would behold the spectacle of the City of Manila ordering the closure of the church or court concerned. Every house, building, park, curb, street or even vehicles for that matter will not be exempt from the prohibition. Simply because there are no "pure" places where there are impure men. Indeed, even the Scripture and the Tradition of Christians churches continually recall the presence and universality of sin in man's history. (Catechism of the Catholic Church, Definitive Edition, p. 101; ECCE and Word & Life Publications, Don Bosco Compound, Makati) The problem, it needs to be pointed out, is not the establishment, which by its nature cannot be said to be injurious to the health or comfort of the community and which in itself is amoral, but the deplorable human activity that may occur within its premises. While a motel may be used as a venue for immoral sexual activity, it cannot for that reason alone be punished. It cannot be classified as a house of ill-repute or as a nuisance per se on a mere likelihood or a naked assumption. If that were so and if that were allowed, then the Ermita-Malate area would not only be purged of its supposed social ills, it would be extinguished of its soul as well as every human activity, reprehensible or not, in its every nook and cranny would be laid bare to the estimation of the authorities.

Requisites for the valid exercise of Police Power are not met
To successfully invoke the exercise of police power as the rationale for the enactment of the Ordinance, and to free it from the imputation of constitutional infirmity, not only must it appear that the interests of the public generally, as distinguished from those of a particular class, require an interference with private rights, but the means adopted must be reasonably necessary for the accomplishment of the purpose and not unduly oppressive upon individuals. 60 It must be evident that no other alternative for the accomplishment of the purpose less intrusive of private rights can work. A reasonable relation must exist between the purposes of the police measure and the means employed for its accomplishment, for even under the guise of protecting the public interest, personal rights and those pertaining to private property will not be permitted to be arbitrarily invaded. 61 Lacking a concurrence of these two requisites, the police measure shall be struck down as an arbitrary intrusion into private rights 62 a violation of the due process clause.
aSDHCT

The Ordinance was enacted to address and arrest the social ills purportedly spawned by the establishments in the ErmitaMalate area which are allegedly operated under the deceptive veneer of legitimate, licensed and tax-paying nightclubs, bars, karaoke bars, girlie houses, cocktail lounges, hotels and motels. Petitioners insist that even the Court in the case of Ermita-Malate Hotel and Motel Operators Association, Inc. v. City Mayor of Manila 63 had already taken judicial notice of the "alarming increase in the rate of prostitution, adultery and fornication in Manila traceable in great part to existence of motels, which provide a necessary atmosphere for clandestine entry, presence and exit and thus become the ideal haven for prostitutes and thrill-seekers." 64 The object of the Ordinance was, accordingly, the promotion and protection of the social and moral values of the community. Granting for the sake of argument that the objectives of the Ordinance are within the scope of the City Council's police powers, the means employed for the accomplishment thereof were unreasonable and unduly oppressive. It is undoubtedly one of the fundamental duties of the City of Manila to make all reasonable regulations looking to the promotion of the moral and social values of the community. However, the worthy aim of fostering public morals and the eradication of the community's social ills can be achieved through means less restrictive of private rights; it can be attained by reasonable restrictions rather than by an absolute prohibition. The closing down and transfer of businesses or their conversion into businesses "allowed" under the Ordinance have no reasonable relation to the accomplishment of its

The Ordinance seeks to legislate morality but fails to address the core issues of morality. Try as the Ordinance may to shape morality, it should not foster the illusion that it can make a moral man out of it because immorality is not a thing, a building or establishment; it is in the hearts of men. The City Council instead should regulate human conduct that occurs inside the establishments, but not to the detriment of liberty and privacy which are covenants, premiums and blessings of democracy. While petitioners' earnestness at curbing clearly objectionable social ills is commendable, they unwittingly punish even the proprietors and operators of "wholesome," "innocent" establishments. In the instant case, there is a clear invasion of personal or property rights, personal in the case of those individuals desirous of owning, operating and patronizing those motels and property in terms of the investments made and the salaries to be paid to those therein employed. If the City of Manila so desires to put an end to prostitution, fornication and other social ills, it can instead impose reasonable regulations such as daily inspections of the establishments for any violation of the conditions of their licenses or permits; it may exercise its authority to suspend or revoke their licenses for these violations; 66 and it may even impose increased license fees. In other words, there are other means to reasonably accomplish the desired end.

Means employed are constitutionally infirm

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The Ordinance disallows the operation of sauna parlors, massage parlors, karaoke bars, beerhouses, night clubs, day clubs, super clubs, discotheques, cabarets, dance halls, motels and inns in the Ermita-Malate area. In Section 3 thereof, owners and/or operators of the enumerated establishments are given three (3) months from the date of approval of theOrdinance within which "to wind up business operations or to transfer to any place outside the Ermita-Malate area or convert said businesses to other kinds of business allowable within the area." Further, it states in Section 4 that in cases of subsequent violations of the provisions of the Ordinance, the "premises of the erring establishment shall be closed and padlocked permanently." It is readily apparent that the means employed by the Ordinance for the achievement of its purposes, the governmental interference itself, infringes on the constitutional guarantees of a person's fundamental right to liberty and property.
HC EcAa

Liberty in the constitutional sense not only means freedom from unlawful government restraint; it must include privacy as well, if it is to be a repository of freedom. The right to be let alone is the beginning of all freedom it is the most comprehensive of rights and the right most valued by civilized men. 73 The concept of liberty compels respect for the individual whose claim to privacy and interference demands respect. As the case of Morfe v. Mutuc, 74 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.

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 faculties with which he has been endowed by his Creator, subject only to such restraint as are necessary for the common welfare." 67 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.68 The U.S. Supreme Court in the case of Roth v. Board of Regents, 69 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.

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. 75 There is a great temptation to have an extended discussion on these civil liberties but the Court chooses to exercise restraint and restrict itself to the issues presented when it should. The previous pronouncements of the Court are not to be interpreted as a license for adults to engage in criminal conduct. The reprehensibility of such conduct is not diminished. The Court only reaffirms and guarantees their right to make this choice. Should they be prosecuted for their illegal conduct, they should suffer the consequences of the choice they have made. That, ultimately, is their choice.

Modality employed is unlawful taking

In addition, the Ordinance is unreasonable and oppressive as it substantially divests the respondent of the beneficial use of its property. 76 The Ordinance in Section 1 thereof forbids the running of the enumerated businesses in the ErmitaMalate area and in Section 3 instructs its owners/operators to wind up business operations or to transfer outside the area or convert said businesses into allowed businesses. An ordinance which permanently restricts the use of property that it can not be used for any reasonable purpose goes beyond regulation and must be recognized as a taking of the property without just compensation. 77 It is intrusive and violative of the private property rights of individuals.
EHTCA a

In another case, it also confirmed that liberty protected by the due process clause includes personal decisions relating to marriage, procreation, contraception, family relationships, child rearing, and education. In explaining the respect the Constitution demands for the autonomy of the person in making these choices, the U.S. Supreme Court explained:
These matters, involving the most intimate and personal choices a person may make in a lifetime, choices central to personal dignity and autonomy, are central to the liberty protected by the Fourteenth Amendment. At the heart of liberty is the right to define one's own concept of existence, of meaning, of universe, and of the mystery of human life. Beliefs about these matters could not define the attributes of personhood where they formed under compulsion of the State.

70

Persons desirous to own, operate and patronize the enumerated establishments under Section 1 of the Ordinance may seek autonomy for these purposes. Motel patrons who are single and unmarried may invoke this right to autonomy to consummate their bonds in intimate sexual conduct within the motel's premises be it stressed that their consensual sexual behavior does not contravene any fundamental state policy as contained in the Constitution. 71 Adults have a right to choose to forge such relationships with others in the confines of their own private lives and still retain their dignity as free persons. The liberty protected by the Constitution allows persons the right to make this choice. 72 Their right to liberty under the due process clause gives them the full right to engage in their conduct without intervention of the government, as long as they do not run afoul of the law. Liberty should be the rule and restraint the exception.

The Constitution expressly provides in Article III, Section 9, that "private property shall not be taken for public use without just compensation." The provision is the most important protection of property rights in the Constitution. This is a restriction on the general power of the government to take property. The constitutional provision is about ensuring that the government does not confiscate the property of some to give it to others. In part too, it is about loss spreading. If the government takes away a person's property to benefit society, then society should pay. The principal purpose of the guarantee is "to bar the Government from forcing some people alone to bear public burdens which, in all fairness and justice, should be borne by the public as a whole. 78 There are two different types of taking that can be identified. A "possessory" taking occurs when the government confiscates or physically occupies property. A "regulatory" taking occurs when the government's regulation leaves no reasonable economically viable use of the property. 79 In the landmark case of Pennsylvania Coal v. Mahon, 80 it was held that a taking also could be found if government regulation of the use of property went "too far." When regulation reaches a certain magnitude, in most if not in all cases

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there must be an exercise of eminent domain and compensation to support the act. While property may be regulated to a certain extent, if regulation goes too far it will be recognized as a taking. 81

enterprises is just as ridiculous. How may the respondent convert a motel into a restaurant or a coffee shop, art gallery or music lounge without essentially destroying its property? This is a taking of private property without due process of law, nay, even without compensation. The penalty of closure likewise constitutes unlawful taking that should be compensated by the government. The burden on the owner to convert or transfer his business, otherwise it will be closed permanently after a subsequent violation should be borne by the public as this end benefits them as a whole. Petitioners cannot take refuge in classifying the measure as a zoning ordinance. A zoning ordinance, although a valid exercise of police power, which limits a "wholesome" property to a use which can not reasonably be made of it constitutes the taking of such property without just compensation. Private property which is not noxious nor intended for noxious purposes may not, by zoning, be destroyed without compensation. Such principle finds no support in the principles of justice as we know them. The police powers of local government units which have always received broad and liberal interpretation cannot be stretched to cover this particular taking. Distinction should be made between destruction from necessity and eminent domain. It needs restating that the property taken in the exercise of police power is destroyed because it is noxious or intended for a noxious purpose while the property taken under the power of eminent domain is intended for a public use or purpose and is therefore "wholesome." 88 If it be of public benefit that a "wholesome" property remain unused or relegated to a particular purpose, then certainly the public should bear the cost of reasonable compensation for the condemnation of private property for public use. 89 Further, the Ordinance fails to set up any standard to guide or limit the petitioners' actions. It in no way controls or guides the discretion vested in them. It provides no definition of the establishments covered by it and it fails to set forth the conditions when the establishments come within its ambit of prohibition. The Ordinance confers upon the mayor arbitrary and unrestricted power to close down establishments. Ordinances such as this, which make possible abuses in its execution, depending upon no conditions or qualifications whatsoever other than the unregulated arbitrary will of the city authorities as the touchstone by which its validity is to be tested, are unreasonable and invalid. The Ordinanceshould have established a rule by which its impartial enforcement could be secured. 90 Ordinances placing restrictions upon the lawful use of property must, in order to be valid and constitutional, specify the rules and conditions to be observed and conduct to avoid; and must not admit of the exercise, or of an opportunity for the exercise, of unbridled discretion by the law enforcers in carrying out its provisions. 91 Thus, in Coates v. City of Cincinnati, 92 as cited in People v. Nazario, 93 the U.S. Supreme Court struck down an ordinance that had made it illegal for "three or more persons to assemble on any sidewalk and there conduct themselves in a manner annoying to persons passing by." The ordinance was nullified as it imposed no standard at all "because one may never know in advance what 'annoys some people but does not annoy others.'" Similarly, the Ordinance does not specify the standards to ascertain which establishments "tend to disturb the community," "annoy the inhabitants," and "adversely affect the social and moral welfare of the community." The cited case supports the nullification of the Ordinance for lack of comprehensible standards to guide the law enforcers in carrying out its provisions.
EATCcI

No formula or rule can be devised to answer the questions of what is too far and when regulation becomes a taking. InMahon, Justice Holmes recognized that it was "a question of degree and therefore cannot be disposed of by general propositions." On many other occasions as well, the U.S. Supreme Court has said that the issue of when regulation constitutes a taking is a matter of considering the facts in each case. The Court asks whether justice and fairness require that the economic loss caused by public action must be compensated by the government and thus borne by the public as a whole, or whether the loss should remain concentrated on those few persons subject to the public action. 82 What is crucial in judicial consideration of regulatory takings is that government regulation is a taking if it leaves no reasonable economically viable use of property in a manner that interferes with reasonable expectations for use. 83 A regulation that permanently denies all economically beneficial or productive use of land is, from the owner's point of view, equivalent to a "taking" unless principles of nuisance or property law that existed when the owner acquired the land make the use prohibitable. 84 When the owner of real property has been called upon to sacrifice all economically beneficial uses in the name of the common good, that is, to leave his property economically idle, he has suffered a taking. 85 A regulation which denies all economically beneficial or productive use of land will require compensation under the takings clause. Where a regulation places limitations on land that fall short of eliminating all economically beneficial use, a taking nonetheless may have occurred, depending on a complex of factors including the regulation's economic effect on the landowner, the extent to which the regulation interferes with reasonable investment-backed expectations and the character of government action. These inquiries are informed by the purpose of the takings clause which is to prevent the government from forcing some people alone to bear public burdens which, in all fairness and justice, should be borne by the public as a whole. 86 A restriction on use of property may also constitute a "taking" if not reasonably necessary to the effectuation of a substantial public purpose or if it has an unduly harsh impact on the distinct investment-backed expectations of the owner. 87 The Ordinance gives the owners and operators of the "prohibited" establishments three (3) months from its approval within which to "wind up business operations or to transfer to any place outside of the Ermita-Malate area or convert said businesses to other kinds of business allowable within the area." The directive to "wind up business operations" amounts to a closure of the establishment, a permanent deprivation of property, and is practically confiscatory. Unless the owner converts his establishment to accommodate an "allowed" business, the structure which housed the previous business will be left empty and gathering dust. Suppose he transfers it to another area, he will likewise leave the entire establishment idle. Consideration must be given to the substantial amount of money invested to build the edifices which the owner reasonably expects to be returned within a period of time. It is apparent that the Ordinance leaves no reasonable economically viable use of property in a manner that interferes with reasonable expectations for use. The second and third options to transfer to any place outside of the Ermita-Malate area or to convert into allowed businesses are confiscatory as well. The penalty of permanent closure in cases of subsequent violations found in Section 4 of the Ordinance is also equivalent to a "taking" of private property. The second option instructs the owners to abandon their property and build another one outside the Ermita-Malate area. In every sense, it qualifies as a taking without just compensation with an additional burden imposed on the owner to build another establishment solely from his coffers. The proffered solution does not put an end to the "problem," it merely relocates it. Not only is this impractical, it is unreasonable, onerous and oppressive. The conversion into allowed

Petitioners cannot therefore order the closure of the enumerated establishments without infringing the due process clause. These lawful establishments may be regulated, but not prevented from carrying on their business. This is a sweeping exercise of police power that is a result of a lack of imagination on the part of the City Council and which amounts to an interference into personal and private rights which the Court will not countenance. In this regard, we take a resolute stand to uphold the constitutional guarantee of the right to liberty and property.

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Worthy of note is an example derived from the U.S. of a reasonable regulation which is a far cry from the illconsideredOrdinance enacted by the City Council. In FW/PBS, INC. v. Dallas, 94 the city of Dallas adopted a comprehensive ordinance regulating "sexually oriented businesses," which are defined to include adult arcades, bookstores, video stores, cabarets, motels, and theaters as well as escort agencies, nude model studio and sexual encounter centers. Among other things, the ordinance required that such businesses be licensed. A group of motel owners were among the three groups of businesses that filed separate suits challenging the ordinance. The motel owners asserted that the city violated the due process clause by failing to produce adequate support for its supposition that renting room for fewer than ten (10) hours resulted in increased crime and other secondary effects. They likewise argued than the ten (10)-hour limitation on the rental of motel rooms placed an unconstitutional burden on the right to freedom of association. Anent the first contention, the U.S. Supreme Court held that the reasonableness of the legislative judgment combined with a study which the city considered, was adequate to support the city's determination that motels permitting room rentals for fewer than ten (10) hours should be included within the licensing scheme. As regards the second point, the Court held that limiting motel room rentals to ten (10) hours will have no discernible effect on personal bonds as those bonds that are formed from the use of a motel room for fewer than ten (10) hours are not those that have played a critical role in the culture and traditions of the nation by cultivating and transmitting shared ideals and beliefs.

exists "cannot approximate the ideal. Nor is the law susceptible to the reproach that it does not take into account the realities of the situation. The constitutional guarantee then is not to be given a meaning that disregards what is, what does in fact exist. To assure that the general welfare be promoted, which is the end of law, a regulatory measure may cut into the rights to liberty and property. Those adversely affected may under such circumstances invoke the equal protection clause only if they can show that the governmental act assailed, far from being inspired by the attainment of the common weal was prompted by the spirit of hostility, or at the very least, discrimination that finds no support in reason." Classification is thus not ruled out, it being sufficient to quote from the Tuason decision anew "that the laws operate equally and uniformly on all persons under similar circumstances or that all persons must be treated in the same manner, the conditions not being different, both in the privileges conferred and the liabilities imposed. Favoritism and undue preference cannot be allowed. For the principle is that equal protection and security shall be given to every person under circumstances which, if not identical, are analogous. If law be looked upon in terms of burden or charges, those that fall within a class should be treated in the same fashion, whatever restrictions cast on some in the group equally binding on the rest. 101

Legislative bodies are allowed to classify the subjects of legislation. If the classification is reasonable, the law may operate only on some and not all of the people without violating the equal protection clause. 102 The classification must, as an indispensable requisite, not be arbitrary. To be valid, it must conform to the following requirements: 1)It must be based on substantial distinctions. 2)It must be germane to the purposes of the law. 3)It must not be limited to existing conditions only.
I EAac S

The ordinance challenged in the above-cited case merely regulated the targeted businesses. It imposed reasonable restrictions; hence, its validity was upheld. The case of Ermita Malate Hotel and Motel Operators Association, Inc. v. City Mayor of Manila, 95 it needs pointing out, is also different from this case in that what was involved therein was a measure which regulated the mode in which motels may conduct business in order to put an end to practices which could encourage vice and immorality. Necessarily, there was no valid objection on due process or equal protection grounds as the ordinance did not prohibit motels. The Ordinance in this case however is not a regulatory measure but is an exercise of an assumed power to prohibit. 96 The foregoing premises show that the Ordinance is an unwarranted and unlawful curtailment of property and personal rights of citizens. For being unreasonable and an undue restraint of trade, it cannot, even under the guise of exercising police power, be upheld as valid. B.The Ordinance violates Equal

4)It must apply equally to all members of the class. 103 In the Court's view, there are no substantial distinctions between motels, inns, pension houses, hotels, lodging houses or other similar establishments. By definition, all are commercial establishments providing lodging and usually meals and other services for the public. No reason exists for prohibiting motels and inns but not pension houses, hotels, lodging houses or other similar establishments. The classification in the instant case is invalid as similar subjects are not similarly treated, both as to rights conferred and obligations imposed. It is arbitrary as it does not rest on substantial distinctions bearing a just and fair relation to the purpose of the Ordinance. The Court likewise cannot see the logic for prohibiting the business and operation of motels in the Ermita-Malate area but not outside of this area. A noxious establishment does not become any less noxious if located outside the area. The standard "where women are used as tools for entertainment" is also discriminatory as prostitution one of the hinted ills the Ordinance aims to banish is not a profession exclusive to women. Both men and women have an equal propensity to engage in prostitution. It is not any less grave a sin when men engage in it. And why would the assumption that there is an ongoing immoral activity apply only when women are employed and be inapposite when men are in harness? This discrimination based on gender violates equal protection as it is not substantially related to important government objectives. 104 Thus, the discrimination is invalid. Failing the test of constitutionality, the Ordinance likewise failed to pass the test of consistency with prevailing laws. C.The Ordinance is repugnant

Protection Clause

Equal protection requires that all persons or things similarly situated should be treated alike, both as to rights conferred and responsibilities imposed. Similar subjects, in other words, should not be treated differently, so as to give undue favor to some and unjustly discriminate against others. 97 The guarantee means that no person or class of persons shall be denied the same protection of laws which is enjoyed by other persons or other classes in like circumstances. 98 The "equal protection of the laws is a pledge of the protection of equal laws." 99 It limits governmental discrimination. The equal protection clause extends to artificial persons but only insofar as their property is concerned. 100 The Court has explained the scope of the equal protection clause in this wise:
. . . What does it signify? To quote from J.M. Tuason & Co. v. Land Tenure Administration: "The ideal situation is for the law's benefits to be available to all, that none be placed outside the sphere of its coverage. Only thus could chance and favor be excluded and the affairs of men governed by that serene and impartial uniformity, which is of the very essence of the idea of law." There is recognition, however, in the opinion that what in fact

to general laws; it is ultra vires

The Ordinance is in contravention of the Code as the latter merely empowers local government units to regulate, and not prohibit, the establishments enumerated in Section 1 thereof. The power of the City Council to regulate by ordinances the establishment, operation, and maintenance of motels, hotels and other similar establishments is found in Section 458 (a) 4 (iv), which provides that:

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Section 458.Powers, Duties, Functions and Compensation. (a) The sangguniang panlungsod, as the legislative body of the city, shall enact ordinances, approve resolutions and appropriate funds for the general welfare of the city and its inhabitants pursuant to Section 16 of this Code and in the proper exercise of the corporate powers of the city as provided for under Section 22 of this Code, and shall: xxx xxx xxx (4)Regulate activities relative to the use of land, buildings and structures within the city in order to promote the general welfare and for said purpose shall: xxx xxx xxx (iv)Regulate the establishment, operation and maintenance of cafes, restaurants, beerhouses, hotels, motels, inns, pension houses, lodging houses, and other similar establishments, including tourist guides and transports. . . .

(A)s a general rule when a municipal corporation is specifically given authority or power to regulate or to license and regulate the liquor traffic, power to prohibit is impliedly withheld.

108

These doctrines still hold contrary to petitioners' assertion 109 that they were modified by the Code vesting upon City Councils prohibitory powers. Similarly, the City Council exercises regulatory powers over public dancing schools, public dance halls, sauna baths, massage parlors, and other places for entertainment or amusement as found in the first clause of Section 458 (a) 4 (vii). Its powers to regulate, suppress and suspend "such other events or activities for amusement or entertainment, particularly those which tend to disturb the community or annoy the inhabitants" and to "prohibit certain forms of amusement or entertainment in order to protect the social and moral welfare of the community" are stated in the second and third clauses, respectively of the same Section. The several powers of the City Council as provided in Section 458 (a) 4 (vii) of the Code, it is pertinent to emphasize, are separated by semi-colons (;), the use of which indicates that the clauses in which these powers are set forth are independent of each other albeit closely related to justify being put together in a single enumeration or paragraph. 110 These powers, therefore, should not be confused, commingled or consolidated as to create a conglomerated and unified power of regulation, suppression and prohibition. 111 The Congress unequivocably specified the establishments and forms of amusement or entertainment subject to regulation among which are beerhouses, hotels, motels, inns, pension houses, lodging houses, and other similar establishments (Section 458 (a) 4 (iv)), public dancing schools, public dance halls, sauna baths, massage parlors, and other places for entertainment or amusement (Section 458 (a) 4 (vii)). This enumeration therefore cannot be included as among "other events or activities for amusement or entertainment, particularly those which tend to disturb the community or annoy the inhabitants" or "certain forms of amusement or entertainment" which the City Council may suspend, suppress or prohibit.
A EDcI H

While its power to regulate the establishment, operation and maintenance of any entertainment or amusement facilities, and to prohibit certain forms of amusement or entertainment is provided under Section 458 (a) 4 (vii) of the Code, which reads as follows:
Section 458.Powers, Duties, Functions and Compensation. (a) The sangguniang panlungsod, as the legislative body of the city, shall enact ordinances, approve resolutions and appropriate funds for the general welfare of the city and its inhabitants pursuant to Section 16 of this Code and in the proper exercise of the corporate powers of the city as provided for under Section 22 of this Code, and shall: xxx xxx xxx (4)Regulate activities relative to the use of land, buildings and structures within the city in order to promote the general welfare and for said purpose shall: xxx xxx xxx (vii)Regulate the establishment, operation, and maintenance of any entertainment or amusement facilities, including theatrical performances, circuses, billiard pools, public dancing schools, public dance halls, sauna baths, massage parlors, and other places for entertainment or amusement; regulate such other events or activities for amusement or entertainment, particularly those which tend to disturb the community or annoy the inhabitants, or require the suspension or suppression of the same; or, prohibit certain forms of amusement or entertainment in order to protect the social and moral welfare of the community.

Clearly, with respect to cafes, restaurants, beerhouses, hotels, motels, inns, pension houses, lodging houses, and other similar establishments, the only power of the City Council to legislate relative thereto is to regulate them to promote the general welfare. The Code still withholds from cities the power to suppress and prohibit altogether the establishment, operation and maintenance of such establishments. It is well to recall the rulings of the Court in Kwong Sing v. City of Manila 105 that:
The word "regulate," as used in subsection (l), section 2444 of the Administrative Code, means and includes the power to control, to govern, and to restrain; but "regulate" should not be construed as synonymous with "suppress" or "prohibit." Consequently, under the power to regulate laundries, the municipal authorities could make proper police regulations as to the mode in which the employment or business shall be exercised.

The rule is that the City Council has only such powers as are expressly granted to it and those which are necessarily implied or incidental to the exercise thereof. By reason of its limited powers and the nature thereof, said powers are to be construed strictissimi juris and any doubt or ambiguity arising out of the terms used in granting said powers must be construed against the City Council. 112 Moreover, it is a general rule in statutory construction that the express mention of one person, thing, or consequence is tantamount to an express exclusion of all others. Expressio unius est exclusio alterium. This maxim is based upon the rules of logic and the natural workings of human mind. It is particularly applicable in the construction of such statutes as create new rights or remedies, impose penalties or punishments, or otherwise come under the rule of strict construction. 113 The argument that the City Council is empowered to enact the Ordinance by virtue of the general welfare clause of the Code and of Art. 3, Sec. 18 (kk) of the Revised Charter of Manila is likewise without merit. On the first point, the ruling of the Court in People v. Esguerra, 114 is instructive. It held that:
The powers conferred upon a municipal council in the general welfare clause, or section 2238 of the Revised Administrative Code, refers to matters not covered by the other provisions of the same Code, and therefore it can not be applied to intoxicating liquors, for the power to regulate the selling, giving away and dispensing thereof is granted specifically by section 2242 (g) to municipal councils. To hold that, under the general power granted by section 2238, a municipal council may enact the ordinance in question, notwithstanding the provision of section 2242 (g), would be to make the latter superfluous and nugatory, because the power to prohibit, includes the power to regulate, the selling, giving away and dispensing of intoxicating liquors.

106

And in People v. Esguerra, 107 wherein the Court nullified an ordinance of the Municipality of Tacloban which prohibited the selling, giving and dispensing of liquor ratiocinating that the municipality is empowered only to regulate the same and not prohibit. The Court therein declared that:

On the second point, it suffices to say that the Code being a later expression of the legislative will must necessarily prevail and override the earlier law, the Revised Charter of Manila. Legis posteriores priores contrarias abrogant, or later statute

32

repeals prior ones which are repugnant thereto. As between two laws on the same subject matter, which are irreconcilably inconsistent, that which is passed later prevails, since it is the latest expression of legislative will. 115 If there is an inconsistency or repugnance between two statutes, both relating to the same subject matter, which cannot be removed by any fair and reasonable method of interpretation, it is the latest expression of the legislative will which must prevail and override the earlier. 116 Implied repeals are those which take place when a subsequently enacted law contains provisions contrary to those of an existing law but no provisions expressly repealing them. Such repeals have been divided into two general classes: those which occur where an act is so inconsistent or irreconcilable with an existing prior act that only one of the two can remain in force and those which occur when an act covers the whole subject of an earlier act and is intended to be a substitute therefor. The validity of such a repeal is sustained on the ground that the latest expression of the legislative will should prevail. 117 In addition, Section 534(f) of the Code states that "All general and special laws, acts, city charters, decrees, executive orders, proclamations and administrative regulations, or part or parts thereof which are inconsistent with any of the provisions of this Code are hereby repealed or modified accordingly." Thus, submitting to petitioners' interpretation that the Revised Charter of Manila empowers the City Council to prohibit motels, that portion of the Charter stating such must be considered repealed by the Code as it is at variance with the latter's provisions granting the City Council mere regulatory powers.
ESCacI

It is important to distinguish the punishable activities from the establishments themselves. That these establishments are recognized legitimate enterprises can be gleaned from another Section of the Code. Section 131 under the Title on Local Government Taxation expressly mentioned proprietors or operators of massage clinics, sauna, Turkish and Swedish baths, hotels, motels and lodging houses as among the "contractors" defined in paragraph (h) thereof. The same Section also defined "amusement" as a "pleasurable diversion and entertainment," "synonymous to relaxation, avocation, pastime or fun;" and "amusement places" to include "theaters, cinemas, concert halls, circuses and other places of amusement where one seeks admission to entertain oneself by seeing or viewing the show or performances." Thus, it can be inferred that the Code considers these establishments as legitimate enterprises and activities. It is well to recall the maxim reddendo singula singulis which means that words in different parts of a statute must be referred to their appropriate connection, giving to each in its place, its proper force and effect, and, if possible, rendering none of them useless or superfluous, even if strict grammatical construction demands otherwise. Likewise, where words under consideration appear in different sections or are widely dispersed throughout an act the same principle applies. 119

It is well to point out that petitioners also cannot seek cover under the general welfare clause authorizing the abatement of nuisances without judicial proceedings. That tenet applies to a nuisance per se, or one which affects the immediate safety of persons and property and may be summarily abated under the undefined law of necessity. It can not be said that motels are injurious to the rights of property, health or comfort of the community. It is a legitimate business. If it be a nuisance per accidens it may be so proven in a hearing conducted for that purpose. A motel is not per se a nuisance warranting its summary abatement without judicial intervention. 118 Notably, the City Council was conferred powers to prevent and prohibit certain activities and establishments in another section of the Code which is reproduced as follows:
Section 458.Powers, Duties, Functions and Compensation. (a) The sangguniang panlungsod, as the legislative body of the city, shall enact ordinances, approve resolutions and appropriate funds for the general welfare of the city and its inhabitants pursuant to Section 16 of this Code and in the proper exercise of the corporate powers of the city as provided for under Section 22 of this Code, and shall: (1)Approve ordinances and pass resolutions necessary for an efficient and effective city government, and in this connection, shall: xxx xxx xxx (v)Enact ordinances intended to prevent, suppress and impose appropriate penalties for habitual drunkenness in public places, vagrancy, mendicancy, prostitution, establishment and maintenance of houses of ill repute, gambling and other prohibited games of chance, fraudulent devices and ways to obtain money or property, drug addiction, maintenance of drug dens, drug pushing, juvenile delinquency, the printing, distribution or exhibition of obscene or pornographic materials or publications, and such other activities inimical to the welfare and morals of the inhabitants of the city; xxx xxx xxx

Not only does the Ordinance contravene the Code, it likewise runs counter to the provisions of P.D. 499. As correctly argued by MTDC, the statute had already converted the residential Ermita-Malate area into a commercial area. The decree allowed the establishment and operation of all kinds of commercial establishments except warehouse or open storage depot, dump or yard, motor repair shop, gasoline service station, light industry with any machinery or funeral establishment. The rule is that for an ordinance to be valid and to have force and effect, it must not only be within the powers of the council to enact but the same must not be in conflict with or repugnant to the general law. 120 As succinctly illustrated in Solicitor General v. Metropolitan Manila Authority: 121
The requirement that the enactment must not violate existing law explains itself. Local political subdivisions are able to legislate only by virtue of a valid delegation of legislative power from the national legislature (except only that the power to create their own sources of revenue and to levy taxes is conferred by the Constitution itself). They are mere agents vested with what is called the power of subordinate legislation. As delegates of the Congress, the local government units cannot contravene but must obey at all times the will of their principal. In the case before us, the enactment in question, which are merely local in origin cannot prevail against the decree, which has the force and effect of a statute. 122

Petitioners contend that the Ordinance enjoys the presumption of validity. While this may be the rule, it has already been held that although the presumption is always in favor of the validity or reasonableness of the ordinance, such presumption must nevertheless be set aside when the invalidity or unreasonableness appears on the face of the ordinance itself or is established by proper evidence. The exercise of police power by the local government is valid unless it contravenes the fundamental law of the land, or an act of the legislature, or unless it is against public policy or is unreasonable, oppressive, partial, discriminating or in derogation of a common right. 123

Conclusion
All considered, the Ordinance invades fundamental personal and property rights and impairs personal privileges. It is constitutionally infirm. The Ordinance contravenes statutes; it is discriminatory and unreasonable in its operation; it is not sufficiently detailed and explicit that abuses may attend the enforcement of its sanctions. And not to be forgotten, the City Council under the Code had no power to enact the Ordinance and is therefore ultra vires, null and void.
cHCSDa

If it were the intention of Congress to confer upon the City Council the power to prohibit the establishments enumerated in Section 1 of the Ordinance, it would have so declared in uncertain terms by adding them to the list of the matters it may prohibit under the above-quoted Section. The Ordinance now vainly attempts to lump these establishments with houses of ill-repute and expand the City Council's powers in the second and third clauses of Section 458 (a) 4 (vii) of the Code in an effort to overreach its prohibitory powers. It is evident that these establishments may only be regulated in their establishment, operation and maintenance.

Concededly, the challenged Ordinance was enacted with the best of motives and shares the concern of the public for the cleansing of the Ermita-Malate area of its social sins. Police power legislation of such character deserves the full endorsement of the judiciary we reiterate our support for it. But inspite of its virtuous aims, the enactment of theOrdinance has no statutory or constitutional authority to stand on. Local legislative bodies, in this case, the City Council, cannot prohibit the operation of the enumerated establishments under Section 1 thereof or order their transfer or

33

conversion without infringing the constitutional guarantees of due process and equal protection of laws not even under the guise of police power. WHEREFORE, the Petition is hereby DENIED and the decision of the Regional Trial Court declaring the Ordinance void is AFFIRMED. Costs against petitioners. SO ORDERED.

law; promulgate the implementing rules and regulations for the effective implementation of the law; and prosecute and revoke the licenses of erring drugstore establishments. The antecedents are as follows: On February 26, 2004, R.A. No. 9257, amending R.A. No. 7432, 3 was signed into law by President Gloria MacapagalArroyo and it became effective on March 21, 2004. Section 4 (a) of the Act states:
SEC. 4.Privileges for the Senior Citizens . The senior citizens shall be entitled to the following: (a)the grant of twenty percent (20%) discount from all establishments relative to the utilization of services in hotels and similar lodging establishments, restaurants and recreation centers, and purchase of medicines in all establishments for the exclusive use or enjoyment of senior citizens, including funeral and burial services for the death of senior citizens; xxx xxx xxx

Davide, Jr., C.J., Puno, Quisumbing, Sandoval-Gutierrez, Carpio, Austria-Martinez, Corona, Carpio-Morales, Callejo, Sr., Azcuna, Chico-Nazario and Garcia, JJ., concur. Panganiban, J., concurs in the result. Ynares-Santiago, J., concurs in the result only.

EN BANC [G.R. No. 166494. June 29, 2007.] CARLOS SUPERDRUG CORP., doing business under the name and style "Carlos Superdrug", ELSIE M. CANO, doing business under the name and style "Advance Drug", Dr. SIMPLICIO L. YAP, JR., doing business under the name and style "City Pharmacy", MELVIN S. DELA SERNA, doing business under the name and style "Botica dela Serna", and LEYTE SERV-WELL CORP., doing business under the name and style "Leyte ServWell Drugstore",petitioners, vs. DEPARTMENT OF SOCIAL WELFARE and DEVELOPMENT (DSWD), DEPARTMENT OF HEALTH (DOH), DEPARTMENT OF FINANCE (DOF), DEPARTMENT OF JUSTICE (DOJ), and DEPARTMENT OF INTERIOR and LOCAL GOVERNMENT (DILG), respondents.

The establishment may claim the discounts granted under (a), (f), (g) and (h) as tax deduction based on the net cost of the goods sold or services rendered: Provided, That the cost of the discount shall be allowed as deduction from gross income for the same taxable year that the discount is granted. Provided, further, That the total amount of the claimed tax deduction net of value added tax if applicable, shall be included in their gross sales receipts for tax purposes and shall be subject to proper documentation and to the provisions of the National Internal Revenue Code, as amended.

On May 28, 2004, the DSWD approved and adopted the Implementing Rules and Regulations of R.A. No. 9257, Rule VI, Article 8 of which states:
Article 8.Tax Deduction of Establishments. The establishment may claim the discounts granted underRule V, Section 4 Discounts for Establishments; 5 Section 9, Medical and Dental Services in Private Facilities[,] 6 and Sections 10 7 and 11 8 Air, Sea and Land Transportation as tax deduction based on the net cost of the goods sold or services rendered. Provided, That the cost of the discount shall be allowed as deduction from gross income for the same taxable year that the discount is granted; Provided, further, That the total amount of the claimed tax deduction net of value added tax if applicable, shall be included in their gross sales receipts for tax purposes and shall be subject to proper documentation and to the provisions of the National Internal Revenue Code, as amended; Provided, finally, that the implementation of the tax deduction shall be subject to the Revenue Regulations to be issued by the Bureau of Internal Revenue (BIR) and approved by the Department of Finance (DOF).

DECISION

DSIT EH

AZCUNA, J :
p

On July 10, 2004, in reference to the query of the Drug Stores Association of the Philippines (DSAP) concerning the meaning of a tax deduction under the Expanded Senior Citizens Act, the DOF, through Director IV Ma. Lourdes B. Recente, clarified as follows:
1)The difference between the Tax Credit (under the Old Senior Citizens Act) and Tax Deduction (under the Expanded Senior Citizens Act). 1.1.The provision of Section 4 of R.A. No. 7432 (the old Senior Citizens Act) grants twenty percent (20%) discount from all establishments relative to the utilization of transportation services, hotels and similar lodging establishment, restaurants and recreation centers and purchase of medicines anywhere in the country, the costs of which may be claimed by the private establishments concerned as tax credit.

This is a petition 1 for Prohibition with Prayer for Preliminary Injunction assailing the constitutionality of Section 4 (a) of Republic Act (R.A.) No. 9257, 2 otherwise known as the "Expanded Senior Citizens Act of 2003". Petitioners are domestic corporations and proprietors operating drugstores in the Philippines.

TCcSDE

Public respondents, on the other hand, include the Department of Social Welfare and Development (DSWD), the Department of Health (DOH), the Department of Finance (DOF), the Department of Justice (DOJ), and the Department of Interior and Local Government (DILG) which have been specifically tasked to monitor the drugstores' compliance with the

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Effectively, a tax credit is a peso-for-peso deduction from a taxpayer's tax liability due to the government of the amount of discounts such establishment has granted to a senior citizen. The establishment recovers the full amount of discount given to a senior citizen and hence, the government shoulders 100% of the discounts granted. It must be noted, however, that conceptually, a tax credit scheme under the Philippine tax system, necessitates that prior payments of taxes have been made and the taxpayer is attempting to recover this tax payment from his/her income tax due. The tax credit scheme under R.A. No. 7432 is, therefore, inapplicable since no tax payments have previously occurred. 1.2.The provision under R.A. No. 9257, on the other hand, provides that the establishment concerned may claim the discounts under Section 4 (a), (f), (g) and (h) as tax deduction from gross income, based on the net cost of goods sold or services rendered. Under this scheme, the establishment concerned is allowed to deduct from gross income, in computing for its tax liability, the amount of discounts granted to senior citizens. Effectively, the government loses in terms of foregone revenues an amount equivalent to the marginal tax rate the said establishment is liable to pay the government. This will be an amount equivalent to 32% of the twenty percent (20%) discounts so granted. The establishment shoulders the remaining portion of the granted discounts. It may be necessary to note that while the burden on [the] government is slightly diminished in terms of its percentage share on the discounts granted to senior citizens, the number of potential establishments that may claim tax deductions, have however, been broadened. Aside from the establishments that may claim tax credits under the old law, more establishments were added under the new law such as: establishments providing medical and dental services, diagnostic and laboratory services, including professional fees of attending doctors in all private hospitals and medical facilities, operators of domestic air and sea transport services, public railways and skyways and bus transport services.
cDaEA S

Net Tax Due--x x As shown above, under a tax deduction scheme, the tax deduction on discounts was subtracted from Net Sales together with other deductions which are considered as operating expenses before the Tax Due was computed based on the Net Taxable Income. On the other hand, under a tax credit scheme, the amount of discounts which is the tax credit item, was deducted directly from the tax due amount. 10

Meanwhile, on October 1, 2004, Administrative Order (A.O.) No. 171 or the Policies and Guidelines to Implement the Relevant Provisions of Republic Act 9257, otherwise known as the "Expanded Senior Citizens Act of 2003" 11 was issued by the DOH, providing the grant of twenty percent (20%) discount in the purchase of unbranded generic medicines from all establishments dispensing medicines for the exclusive use of the senior citizens. On November 12, 2004, the DOH issued Administrative Order No. 177 12 amending A.O. No. 171. Under A.O. No. 177, the twenty percent discount shall not be limited to the purchase of unbranded generic medicines only, but shall extend to both prescription and non-prescription medicines whether branded or generic. Thus, it stated that "[t]he grant of twenty percent (20%) discount shall be provided in the purchase of medicines from all establishments dispensing medicines for the exclusive use of the senior citizens". Petitioners assail the constitutionality of Section 4 (a) of the Expanded Senior Citizens Act based on the following grounds: 13
1)The law is confiscatory because it infringes Art. III, Sec. 9 of the Constitution which provides that private property shall not be taken for public use without just compensation;
EAcHCI

A simple illustration might help amplify the points discussed above, as follows: Tax DeductionTax Credit Gross Salesx x x x x xx x x x x x Less: Cost of goods soldx x x x xx x x x x Net Salesx x x x x xx x x x x x Less: Operating Expenses: Tax Deduction on Discountsx x x x-Other deductions:x x x xx x x x Net Taxable Incomex x x x xx x x x x Tax Duex x xx x x Less: Tax Credit--x x

2)It violates the equal protection clause (Art. III, Sec. 1) enshrined in our Constitution which states that "no person shall be deprived of life, liberty or property without due process of law, nor shall any person be denied of the equal protection of the laws;" and 3)The 20% discount on medicines violates the constitutional guarantee in Article XIII, Section 11 that makes "essential goods, health and other social services available to all people at affordable cost."

14

Petitioners assert that Section 4 (a) of the law is unconstitutional because it constitutes deprivation of private property. Compelling drugstore owners and establishments to grant the discount will result in a loss of profit and capital because 1) drugstores impose a mark-up of only 5% to 10% on branded medicines; and 2) the law failed to provide a scheme whereby drugstores will be justly compensated for the discount.

Examining petitioners' arguments, it is apparent that what petitioners are ultimately questioning is the validity of the tax deduction scheme as a reimbursement mechanism for the twenty percent (20%) discount that they extend to senior citizens. Based on the afore-stated DOF Opinion, the tax deduction scheme does not fully reimburse petitioners for the discount privilege accorded to senior citizens. This is because the discount is treated as a deduction, a tax-deductible expense that is subtracted from the gross income and results in a lower taxable income. Stated otherwise, it is an amount that is allowed by law 15 to reduce the income prior to the application of the tax rate to compute the amount of tax which is

35

due. 16 Being a tax deduction, the discount does not reduce taxes owed on a peso for peso basis but merely offers a fractional reduction in taxes owed. Theoretically, the treatment of the discount as a deduction reduces the net income of the private establishments concerned. The discounts given would have entered the coffers and formed part of the gross sales of the private establishments, were it not for R.A. No. 9257. The permanent reduction in their total revenues is a forced subsidy corresponding to the taking of private property for public use or benefit. 17 This constitutes compensable taking for which petitioners would ordinarily become entitled to a just compensation.
TIcAaH

other similar places of culture, leisure and amusement; fares for domestic land, air and sea travel; utilization of services in hotels and similar lodging establishments, restaurants and recreation centers; and purchases of medicines for the exclusive use or enjoyment of senior citizens. As a form of reimbursement, the law provides that business establishments extending the twenty percent discount to senior citizens may claim the discount as a tax deduction. The law is a legitimate exercise of police power which, similar to the power of eminent domain, has general welfare for its object. Police power is not capable of an exact definition, but 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 to conditions and circumstances, thus assuring the greatest benefits. 22 Accordingly, it has been described as "the most essential, insistent and the least limitable of powers, extending as it does to all the great public needs." 23 It is "[t]he power vested in the legislature by the constitution to make, ordain, and establish all manner of wholesome and reasonable laws, statutes, and ordinances, either with penalties or without, not repugnant to the constitution, as they shall judge to be for the good and welfare of the commonwealth, and of the subjects of the same." 24 For this reason, when the conditions so demand as determined by the legislature, property rights must bow to the primacy of police power because property rights, though sheltered by due process, must yield to general welfare. 25 Police power as an attribute to promote the common good would be diluted considerably if on the mere plea of petitioners that they will suffer loss of earnings and capital, the questioned provision is invalidated. Moreover, in the absence of evidence demonstrating the alleged confiscatory effect of the provision in question, there is no basis for its nullification in view of the presumption of validity which every law has in its favor. 26 Given these, it is incorrect for petitioners to insist that the grant of the senior citizen discount is unduly oppressive to their business, because petitioners have not taken time to calculate correctly and come up with a financial report, so that they have not been able to show properly whether or not the tax deduction scheme really works greatly to their disadvantage. 27 In treating the discount as a tax deduction, petitioners insist that they will incur losses because, referring to the DOF Opinion, for every P1.00 senior citizen discount that petitioners would give, P0.68 will be shouldered by them as only P0.32 will be refunded by the government by way of a tax deduction.
cIDHSC

Just compensation is defined as the full and fair equivalent of the property taken from its owner by the expropriator. The measure is not the taker's gain but the owner's loss. The word just is used to intensify the meaning of the wordcompensation, and to convey the idea that the equivalent to be rendered for the property to be taken shall be real, substantial, full and ample. 18 A tax deduction does not offer full reimbursement of the senior citizen discount. As such, it would not meet the definition of just compensation. 19 Having said that, this raises the question of whether the State, in promoting the health and welfare of a special group of citizens, can impose upon private establishments the burden of partly subsidizing a government program. The Court believes so. The Senior Citizens Act was enacted primarily to maximize the contribution of senior citizens to nation-building, and to grant benefits and privileges to them for their improvement and well-being as the State considers them an integral part of our society. 20 The priority given to senior citizens finds its basis in the Constitution as set forth in the law itself. Thus, the Act provides:
SEC. 2.Republic Act No. 7432 is hereby amended to read as follows: SECTION 1. Declaration of Policies and Objectives. Pursuant to Article XV, Section 4 of the Constitution, it is the duty of the family to take care of its elderly members while the State may design programs of social security for them. In addition to this, Section 10 in the Declaration of Principles and State Policies provides: "The State shall provide social justice in all phases of national development." Further, Article XIII, Section 11, provides: "The State shall adopt an integrated and comprehensive approach to health development which shall endeavor to make essential goods, health and other social services available to all the people at affordable cost. There shall be priority for the needs of the underprivileged sick, elderly, disabled, women and children." Consonant with these constitutional principles the following are the declared policies of this Act: xxx xxx xxx (f)To recognize the important role of the private sector in the improvement of the welfare of senior citizens and to actively seek their partnership .

To illustrate this point, petitioner Carlos Super Drug cited the anti-hypertensive maintenance drug Norvasc as an example. According to the latter, it acquires Norvasc from the distributors at P37.57 per tablet, and retails it at P39.60 (or at a margin of 5%). If it grants a 20% discount to senior citizens or an amount equivalent to P7.92, then it would have to sell Norvasc at P31.68 which translates to a loss from capital of P5.89 per tablet. Even if the government will allow a tax deduction, only P2.53 per tablet will be refunded and not the full amount of the discount which is P7.92. In short, only 32% of the 20% discount will be reimbursed to the drugstores. 28 Petitioners' computation is flawed. For purposes of reimbursement, the law states that the cost of the discount shall be deducted from gross income, 29 the amount of income derived from all sources before deducting allowable expenses, which will result in net income. Here, petitioners tried to show a loss on a per transaction basis, which should not be the case. An income statement, showing an accounting of petitioners' sales, expenses, and net profit (or loss) for a given period could have accurately reflected the effect of the discount on their income. Absent any financial statement, petitioners cannot substantiate their claim that they will be operating at a loss should they give the discount. In addition, the computation was erroneously based on the assumption that their customers consisted wholly of senior citizens. Lastly, the 32% tax rate is to be imposed on income, not on the amount of the discount. Furthermore, it is unfair for petitioners to criticize the law because they cannot raise the prices of their medicines given the cutthroat nature of the players in the industry. It is a business decision on the part of petitioners to peg the mark-up

21

DAEI HT

To implement the above policy, the law grants a twenty percent discount to senior citizens for medical and dental services, and diagnostic and laboratory fees; admission fees charged by theaters, concert halls, circuses, carnivals, and

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at 5%. Selling the medicines below acquisition cost, as alleged by petitioners, is merely a result of this decision. Inasmuch as pricing is a property right, petitioners cannot reproach the law for being oppressive, simply because they cannot afford to raise their prices for fear of losing their customers to competition. The Court is not oblivious of the retail side of the pharmaceutical industry and the competitive pricing component of the business. While the Constitution protects property rights, petitioners must accept the realities of business and the State, in the exercise of police power, can intervene in the operations of a business which may result in an impairment of property rights in the process. Moreover, the right to property has a social dimension. While Article XIII of the Constitution provides the precept for the protection of property, various laws and jurisprudence, particularly on agrarian reform and the regulation of contracts and public utilities, continuously serve as a reminder that the right to property can be relinquished upon the command of the State for the promotion of public good. 30 Undeniably, the success of the senior citizens program rests largely on the support imparted by petitioners and the other private establishments concerned. This being the case, the means employed in invoking the active participation of the private sector, in order to achieve the purpose or objective of the law, is reasonably and directly related. Without sufficient proof that Section 4 (a) of R.A. No. 9257 is arbitrary, and that the continued implementation of the same would be unconscionably detrimental to petitioners, the Court will refrain from quashing a legislative act. 31

TINGA, J :
p

DECISION

The instant petition for review on certiorari seeks the reversal of the Resolution 1 dated 13 May 1996 and the Order 2dated 21 March 1997, both issued by the Office of the Ombudsman. The Resolution dismissed the complaintaffidavit filed by petitioner against respondents and the Order denied her motion for reconsideration. The instant petition originated from a Complaint-Affidavit 3 filed in November 1995 by petitioner Amelia M. Cabrera with the Office of the Ombudsman ("Ombudsman"). Named respondents were Manuel Lapid, Fernando Baltazar, Reynaldo F. Cabrera and Superintendent Diony Ventura, respectively, in their capacities as Governor of Pampanga, Mayor of Sasmuan, Pampanga, Vice-Mayor of Sasmuan, Pampanga and Superintendent of the Philippine National Police (PNP)Region 3, Pampanga. In her three(3)-page affidavit, petitioner accused respondents of violating Section 3(e) of the AntiGraft and Corrupt Practices Act and Article 324 of the Revised Penal Code. In her Complaint-Affidavit, petitioner stated that she entered into a lease agreement with the Municipality of Sasmuan over a tract of land for the purpose of devoting it to fishpond operations. According to petitioner, she had spent approximately P5,000,000.00 for its construction before the fishpond operations commenced in August 1995. A month later, petitioner learned from newspaper reports of the impending demolition of her fishpond as it was purportedly illegal and blocked the flow of the Pasak River. Thus, petitioner sent the fishpond administrator to dissuade respondents from destroying her property. 4 Despite pleas from petitioner, respondents ordered the destruction of petitioner's fishpond. The property was demolished on 10 October 1995 by dynamite blasting. Petitioner alleged that the demolition was purposely carried out in the presence of media representatives and other government officials to gain media mileage. Petitioner imputed evident bad faith on respondents Mayor Baltazar and Vice-Mayor Cabrera in allowing the destruction of the fishpond despite their prior knowledge of the existence of the lease agreement. She also charged respondents Governor Lapid and Senior Superintendent Ventura with gross inexcusable negligence for ordering the destruction of the fishpond without first verifying its legality. 5 At the preliminary investigation, respondents, except Senior Superintendent Ventura, submitted counter-affidavits, denying the accusations against them. In the counter-affidavit jointly filed by Mayor Baltazar and Vice-Mayor Cabrera, they insisted that contrary to petitioner's claim, the fishpond was an illegal structure because it was erected on the seashore, at the mouth of the Pasak River, and sat on an inalienable land. They claimed that the demolition was done by the Task Force Bilis Daloy upon the directive of then President Fidel V. Ramos. 6 In his Counter-Affidavit, 7 Governor Lapid averred that the contract of lease between petitioner and the Municipality of Sasmuan, represented by then Mayor Abelardo Panlaqui, was executed two weeks before respondent Mayor Baltazar took his oath of office in 1995. Governor Lapid also argued that under the law, the Department of Agriculture (DA) is the government agency authorized to enter into licensing agreements for fishpond operations, and as per certification by the DA Regional Director, petitioner's fishpond operation was not covered by a fishpond lease agreement or application. Governor Lapid also referred to the certification by the Municipal Health Officer of Sasmuan issued before the actual demolition of the fishpond, describing it as a nuisance per se and recommending its abatement. 8 On 13 May 1996, the Ombudsman issued the assailed Resolution, dismissing petitioner's complaint. The dismissal was based on the declaration that the fishpond was a nuisance per se and, thus, may be abated by respondents in the exercise of the police power of the State. 9 Petitioner sought reconsideration of the Resolution, arguing that under Sec. 149 of Republic Act (R.A.) No. 7160, otherwise known as the Local Government Code of 1991, the exclusive authority to grant fishery privileges is vested in

WHEREFORE, the petition is DISMISSED for lack of merit. No costs. SO ORDERED.

I DEScC

Puno, C.J., Ynares-Santiago, Carpio, Austria-Martinez, Corona, Carpio-Morales, Tinga, Chico-Nazario, Garcia, Velasco, Jr.and Nachura, JJ., concur. Quisumbing, J., is on official leave. Sandoval-Gutierrez, J., is on leave.

THIRD DIVISION [G.R. No. 129098. December 6, 2006.] AMELIA CABRERA, petitioner, vs. MANUEL LAPID, FERNANDO BALTAZAR, REYNALDO F. CABRERA and DIONY VENTURA, respondents.

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the municipalities. Petitioner also questioned the certification by the Municipal Health Officer, alleging that the same was issued before the ocular inspection of the property which took place only on the day of the demolition. Petitioner also contended that a judicial proceeding was necessary to determine whether the property indeed had caused the flooding.10 Respondents filed separate oppositions to petitioner's motion for reconsideration. 11 Petitioner filed a reply to the opposition 12 and respondent Governor Lapid filed a rejoinder to the reply. 13 In the Order dated 21 March 1997, the Ombudsman affirmed its 13 May 1996 Resolution. It ruled that the repealing clause of R.A. No. 7160 expressly repealed only Sec. 2, 6 and 29 of Presidential Decree (P.D.) No. 704 so that in harmonizing the remaining provisions of P.D. No. 704 and the provisions of R.A. No. 7160 applicable to the grant of fishery privileges, the Bureau of Fisheries and Aquatic Resources (BFAR) is the government agency authorized to grant fishpond license or permit in areas not identified as municipal waters or not declared as alienable or disposable by the Department of Environment and Natural Resources (DENR). Since it appears from DENR records that the subject property has not been declared disposable or included in areas devoted for fishpond development, the Ombudsman concluded that the lease agreement entered into by petitioner was void ab initio. In view of the illegality of the lease agreement, the Ombudsman ruled that its demolition was justified. The Ombudsman described the demolition as a valid exercise of police power and in accordance with the provision of Sec. 28 of P.D. No. 704 directing the removal of any fishpen or fishpond that obstructed the free navigation of a stream or lake. It also upheld the authority of the district health officer to determine the abatement of a nuisance without need of judicial proceedings. 14 Petitioner elevated the matter to this Court via a petition for review on certiorari under Rule 45 of the Rules of Court to assail the 13 May 1996 Resolution and 21 March 1997 Order of the Ombudsman. Petitioner subsequently filed an amended petition for review on certiorari to implead the Ombudsman as respondent, although in a petition for review oncertiorari, the tribunal whose issuance is assailed need not be impleaded as respondent.
acEHSI

However, an aggrieved party in criminal actions is not without any recourse. Where grave abuse of discretion amounting to lack or excess of jurisdiction taints the findings of the Ombudsman on the existence of probable cause, the aggrieved party may file a petition for certiorari under Rule 65. 19 The remedy from resolutions of the Ombudsman in preliminary investigations of criminal cases is a petition for certiorari under Rule 65, not a petition for review on certiorari under Rule 45. 20 But in this case, petitioner has taken the position that the Ombudsman has decided questions of substance contrary to law and the applicable decisions of the Supreme Court. That is a ground under a Rule 45 petition. Indeed, from a reading of the assignment of errors, it is clear that petitioner does not impute grave abuse of discretion to the Ombudsman in issuing the assailed Resolution and Order. Rather, she merely questions his findings and conclusions. As stated earlier, direct appeal to the Supreme Court via a petition for review on certiorari is not sanctioned by any rule of procedure. By availing of a wrong remedy, the petition should be dismissed outright.
TAIDHa

Even if the Court treats the instant appeal as a petition for certiorari under Rule 65, its dismissal is nevertheless warranted because petitioner failed to present, much more substantiate, any grave abuse of discretion on the part of the Ombudsman. A careful reading of the questioned Resolution reveals that the Ombudsman dismissed petitioner's criminal complaint because respondents had validly resorted to the police power of the State when they effected the demolition of the illegal fishpond in question following the declaration thereof as a nuisance per se. Thus, the Ombudsman was of the opinion that no violation of Section 3(e) 21 of the Anti-Graft and Corrupt Practices Act or of Article 324 22 of the Revised Penal Code was committed by respondents. In the words of the Ombudsman, "those who participated in the blasting of the subject fishpond were only impelled by their desire to serve the best interest of the general public; for the good and the highest good." 23

The petition imputes the following errors on the Ombudsman:

I. THE OFFICE OF THE OMBUDSMAN ERRED AND EXCEEDED ITS AUTHORITY IN RULING THAT THE LEASE CONTRACT BETWEEN THE MUNICIPALITY OF SASMUAN AND PETITIONER IS NULL AND VOID. II. THE OFFICE OF THE OMBUDSMAN ERRED IN RULING THAT THE DEMOLITION OF THE FISHPOND WAS VALIDLY MADE BY VIRTUE OF THE DECLARATION BY THE HEALTH OFFICER THAT IT WAS A NUISANCE PER SE. III. THE OFFICE OF THE OMBUDSMAN ERRED IN RULING THAT THE DEMOLITION IS PART OF THE PROPER EXERCISE OF THE POLICE POWER OF THE STATE. IV. THE OFFICE OF THE OMBUDSMAN ERRED IN RULING THAT PETITIONER WAS GIVEN DUE NOTICE AND HEARING BEFORE THE FISHPOND WAS BLASTED. V. THE OFFICE OF THE OMBUDSMAN ERRED IN RULING THAT PROBABLE CAUSE DOES NOT EXIST TO INDICT RESPONDENTS FOR VIOLATION OF THE SUBJECT OFFENSES. 15

By grave abuse of discretion is meant capricious and whimsical exercise of judgment as is equivalent to lack of jurisdiction. Mere abuse of discretion is not enough. It must be grave abuse of discretion as when the power is exercised in an arbitrary or despotic manner by reason of passion or personal hostility, and must be so patent and so gross as to amount to an evasion of a positive duty or to a virtual refusal to perform the duty enjoined or to act at all in contemplation of law. 24 Grave abuse of discretion should be differentiated from an error in judgment. An error of judgment is one which the court may commit in the exercise of its jurisdiction, and which error is reversible only by an appeal. As long as the court acts within its jurisdiction, any alleged errors committed in the exercise of its discretion will amount to nothing more than mere errors of judgment, correctible by an appeal or a petition for review under Rule 45 of the Rules of Court. An error of jurisdiction is one where the act complained of was issued by the court without or in excess of jurisdiction and which error is correctible only by the extraordinary writ of certiorari. 25 The other errors raised by petitioner pertain to the Ombudsman's opinion on the lack of probable cause to indict respondents. These are purported errors in judgment which can be corrected by an appeal, although not via a direct appeal to this Court. Direct resort to this Court may be had only through the extraordinary writ of certiorari and upon showing that the Ombudsman committed grave abuse of discretion, which petitioner failed to demonstrate. Absent any grave abuse of discretion tainting it, the courts will not interfere with the Ombudsman's supervision and control over the preliminary investigation conducted by him. 26 It is beyond the ambit of this Court to review the exercise of discretion of the Ombudsman in prosecuting or dismissing a complaint filed before it. 27 The rule is based not only upon respect for the investigatory and prosecutory powers granted by the Constitution to the Office of the

Clearly, this is an appeal from the questioned issuances of the Ombudsman. However, such direct resort to this Court from a resolution or order of the Ombudsman is not sanctioned by any rule of procedure. Neither can petitioner avail of Sec. 27 16 of R.A. No. 6770, otherwise known as The Ombudsman Act of 1989. The provision allowed direct appeals in administrative disciplinary cases from the Office of the Ombudsman to the Supreme Court. The right to appeal is granted only in respect to orders or decisions of the Ombudsman in administrative cases. 17The provision does not cover resolutions of the Ombudsman in criminal cases. More importantly, Sec. 27 of R.A. No. 6770 insofar as it allowed a direct appeal to this Court was declared unconstitutional in Fabian v. Hon. Desierto. 18

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Ombudsman but upon practicality as well. Otherwise, the functions of the courts will be grievously hampered by innumerable petitions assailing the dismissal of investigatory proceedings conducted by the Office of the Ombudsman with regard to complaints filed before it, in much the same way that the courts would be extremely swamped if they would be compelled to review the exercise of discretion on the part of the fiscals or prosecuting attorneys each time they decide to file an information in court or dismiss a complaint by a private complainant. 28 WHEREFORE, the instant petition for review on certiorari is DENIED. No costs. SO ORDERED.

telegraph wires and telegraph posts, or those of any other system, and, in general, by using any other agency or means of destruction as effective as those above enumerated, shall be punished by reclusion temporal if the commission has endangered the safety of any person; otherwise, the penalty of prision mayor shall be imposed.

ICTaEH

Quisumbing, Carpio, Carpio Morales and Velasco, Jr., JJ., concur.

Footnotes
16.R.A. No. 6770 (1989), Sect. 27 provides: Effectivity and Finality of Decisions . (1) All provisionary orders of the Office of the Ombudsman are immediately effective and executory. A motion for reconsideration of any order, directive or decision of the Office of the Ombudsman must be filed within five (5) days after receipt of written notice and shall be entertained only on any of the following grounds: (1)New evidence has been discovered which materially affects the order, directive or decision; (2)Errors of law or irregularities have been committed prejudicial to the interest of the movant. The motion for reconsideration shall be resolved within three (3) days from filing: Provided, That only one motion for reconsideration shall be entertained. Findings of fact by the Officer of the Ombudsman when supported by substantial evidence are conclusive. Any order, directive or decision imposing the penalty of public censure or reprimand, suspension of not more than one (1) month's salary shall be final and unappealable. In all administrative disciplinary cases, orders, directives, or decisions of the Office of the Ombudsman may be appealed to the Supreme Court by filing a petition for certiorari within ten (10) days from receipt of the written notice of the order, directive or decision or denial of the motion for reconsideration in accordance with Rule 45 of the Rules of Court. The above rules may be amended or modified by the Office of the Ombudsman as the interest of justice may require. 21.Republic Act No. 3019 (1960), Sec. 3(e) provides: SEC. 3. Corrupt practices of public officials. xxx xxx xxx (e)Causing any undue injury to any party, including the Government, or giving any private party any unwarranted benefits, advantage or preference in the discharge of his official administrative or judicial functions through manifest partiality, evident bad faith or gross inexcusable negligence. This provision shall apply to officers and employees of offices or government corporations charged with the grant of licenses or permits or other concessions. 22.REVISED PENAL CODE, Art. 324. Crimes involving destruction. Any person who shall cause destruction by means of explosion, discharge of electric current, inundation, sinking or stranding of a vessel, intentional damaging of the engine of said vessel, taking up the rails from a railway track, maliciously changing railway signals for the safety of moving trains, destroying

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