November 10, 1978

MAYOR ANTONIO J. VILLEGAS, petitioner,

vs.
HIU CHIONG TSAI PAO HO and JUDGE FRANCISCO ARCA, respondents.
Fernandez, J.:
SUMMARY: Hiu Chiong Tsai Pao Ho assailed a Manila City Ordinance which required
foreigners like him to pay 50 pesos and get a permit before they can legally work or do business
in the City of Manila, for violating the due process and equal protection clauses, the uniform
taxation rule, and the undue delegation rule. The CFI sided with him, so Mayor Villegas
appealed to the SC. SC upheld the CFI, holding that the ordinance gave the Mayor a blanket,
unqualified authority to grant employment permits to all foreign workers regardless of the nature
and conditions of their employment, thus running afoul of the Constitution. The SC also held that
the permit fee is actually a tax, since there can be no reason to impose a fee on alien
employees who are already admitted into the Philippines other than to generate revenue.
NATURE: Petition for writ of preliminary injunction, restraining order, and invalidity of ordinance
DOCTRINE: The imposition of taxes should be made in accordance with the equal protection
clause. A tax which does not take into account real and substantial qualifications within the class
being taxed may be invalidated for violating the equal protection clause.
FACTS
Feb. 22, 1968 The Manila Municipal Board passed Ordinance No. 6537. It was
signed into law by MAYOR Antonio VILLEGAS on March 27, 1968.
o Section 1 of the Ordinance required all aliens who wish to work or operate a
business in the City of Manila to secure an employment permit from the
Mayors Office and pay a PhP50.00 permit fee.
o The ordinance did not distinguish as to the class of employment, so both
permanent and temporary employees were covered.
o EXEMPTIONS:
alien employees of diplomatic or consular missions
alien employees of government technical assistance programs (both
Philippine and foreign)
aliens employed in the households of employees diplomatic or consular
missions or government technical assistance programs
alien employees of religious organizations.
o Penalty for violating the ordinance was imprisonment of 3-6 months, PhP100-200
fine, or both.
May 4, 1968 - Hiu Chiong Tsai Pao Ho, an employee working in Manila, assailed the
ordinance. He asked the Manila CFI Branch I to enjoin Mayor Villegas from enforcing the
ordinance and to declare the ordinance void.
May 24, 1968 Judge Francisco Arca of the CFI Branch I issued a preliminary
injunction.
September 17, 1968 CFI issued the assailed decision, declaring Ordinance No. 6537
null and void and making the injunction permanent.
March 27, 1969 Mayor Villegas filed this present petition.

ISSUES (HELD)
1) W/N the ordinance violated the rule of uniformity of taxation (YES)
2) W/N the ordinance was an undue delegation of legislative power (YES)
3) W/N the ordinance violated the due process and equal protection clauses of the
Constitution (YES)
RATIO
1) The ordinance is a revenue measure, and one which violates the rule of uniformity of
taxation.
Hiu Chiong: Ordinance is discriminatory and violates the rule of uniformity of taxation.
Mayor Villegas: The uniformity rule applies only to purely revenue-generating
measures. The ordinance is primarily an exercise of the police power and was designed
to regulate the employment of aliens.
SC: The permit requirement is regulatory, but the permit fee is revenue-generating.
There is no logic in exacting 50 pesos from foreigners who have already been cleared
for employment other than revenue generation.
2) The ordinance constitutes an undue delegation of the Municipal Boards legislative power.
Hiu Chiong: Ordinance fails to prescribe any standard or guideline to limit the Mayors
discretion; therefore it is an undue delegation of the legislative power.
SC: The contention must be upheld. Ordinance No. 6537 does not lay down any criteria
for the exercise of the permit-granting power. It is a blanket authority to impose fees on
all aliens who want to work in the City of Manila.
o People v. Fajardo: Where a municipal ordinance fails to state any policy or to
set up any standard to guide or limit the mayor's action, expresses no purpose to
be attained by requiring a permit, enumerates no conditions for its grant or
refusal, and entirely lacks standard, thus conferring upon the Mayor arbitrary and
unrestricted power to grant or deny the issuance of building permits, such
ordinance is invalid, being an undefined and unlimited delegation of power to
allow or prevent an activity which is lawful per se.
o Chinese Flour Importers Association v. Price Stabilization Board: A law granting
an agency the power to determine wheat flour import allocations was held invalid
as it gives the agency an arbitrary discretion without any guiding policy, rule or
standard.
o Primicias v. Fugoso: The power conferred upon the Mayor of Manila to grant or
refuse permits of all classes is not uncontrolled and must be exercised within the
bounds of the law granting such power the Revised Charter of Manila.
3) The ordinance fails to consider substantial differences within the class of all aliens employed
in the City of Manila, thus violating the equal protection clause.
Hiu Chiong: The ordinance fails to make a distinction between useful and non-useful
occupations and imposes a fixed permit fee which is not proportional to the cost of
registration. Furthermore, its application solely to aliens is arbitrary, oppressive, and
unreasonable.
SC: The constitutional guarantee of equal protection of the laws is not violated when the
classification is based on real and substantial differences which are reasonably related
to the purpose of the law.

o
o

CASE AT BAR: The same amount is collected from any alien, regardless of
whether his employment is permanent or casual, whether he is a lowly employee
or a highly paid executive. The ordinance did not consider these substantial
differences.
Placing the employment of aliens at the mercy of the Mayor of Manilas
unqualified permit-granting power is tantamount to a denial of the basic right to
engage in a means of livelihood.
While it is true that the Philippine State is not obliged to admit aliens into its
territory, aliens admitted into the Philippines are also entitled to the same
protections under the due process and equal protection clauses which are given
to Filipino citizens.

DISPOSITION: CFI decision affirmed.

Teehankee, J., with whom Fernando, J., concurs:
The regulation of alien employment is a matter of national policy which pertains to the
National Government and not to a municipal corporation like the City of Manila,
especially because it involves relations with foreign nationals admitted into the
Philippines.