Dartmouth College v. Woodward (17 U. S.

518, 1819)
Contract Clause, Limitations on the Powers of the States
The Issue
Under the Constitution, can a state legislature change the charter of a college?
What's at Stake?
Whether Dartmouth College would remain private or become a state school. More broadly,
what is protected by the Constitution's "contract" clause?
Facts and Background
In 1769 the King of England granted a charter to Dartmouth College. This document spelled
out the purpose of the school, set up the structure to govern it, and gave land to the college. In
1816, the state legislature of New Hampshire passed laws that revised the charter. These laws
changed the school from private to public. They changed the duties of the trustees. They
changed how the trustees were selected.
The existing trustees filed suit. They claimed that the legislature violated the Constitution. They
said that Article 1, Section 10, of the Constitution prevented a state from "impairing" (that is,
weakening or canceling) a contract.
The Decision
By a 5-1 margin, the Court agreed with Dartmouth. The Court struck down the law, so
Dartmouth continued as a private college. Chief Justice Marshall wrote the majority opinion.
He said that the charter was, in essence, a contract between the King and the trustees. Even
though we were no longer a royal colony, the contract is still valid because the Constitution
says that a state cannot pass laws to impair a contract.
The Impact of the Decision
Historians believe that the decision greatly encouraged business investment and growth.
Corporations are also chartered by states. It states can't pass laws to impair those charters,
then businesses are more secure. They are also more apt to attract investors, employ workers,
and to add to the national prosperity.

G.R. No. L-29646 November 10, 1978

MAYOR ANTONIO J. VILLEGAS, petitioner,
vs.
HIU CHIONG TSAI PAO HO and JUDGE FRANCISCO ARCA, respondents.
Angel C. Cruz, Gregorio A. Ejercito, Felix C. Chaves & Jose Laureta for petitioner.

Sotero H. Laurel for respondents.

FERNANDEZ, J.:
This is a petition for certiorari to review tile decision dated September 17, 1968 of respondent Judge
Francisco Arca of the Court of First Instance of Manila, Branch I, in Civil Case No. 72797, the
dispositive portion of winch reads.
Wherefore, judgment is hereby rendered in favor of the petitioner and against the
respondents, declaring Ordinance No. 6 37 of the City of Manila null and void. The
preliminary injunction is made permanent. No pronouncement as to cost.
SO ORDERED.
Manila, Philippines, September 17, 1968.
(SGD.)
FRAN
CISCO
ARCA
Judge 1
The controverted Ordinance No. 6537 was passed by the Municipal Board of Manila on February 22,
1968 and signed by the herein petitioner Mayor Antonio J. Villegas of Manila on March 27, 1968. 2
City Ordinance No. 6537 is entitled:
AN ORDINANCE MAKING IT UNLAWFUL FOR ANY PERSON NOT A CITIZEN OF
THE PHILIPPINES TO BE EMPLOYED IN ANY PLACE OF EMPLOYMENT OR TO
BE ENGAGED IN ANY KIND OF TRADE, BUSINESS OR OCCUPATION WITHIN
THE CITY OF MANILA WITHOUT FIRST SECURING AN EMPLOYMENT PERMIT
FROM THE MAYOR OF MANILA; AND FOR OTHER PURPOSES. 3
Section 1 of said Ordinance No. 6537 4 prohibits aliens from being employed or to engage or participate
in any position or occupation or business enumerated therein, whether permanent, temporary or casual,
without first securing an employment permit from the Mayor of Manila and paying the permit fee of P50.00
except persons employed in the diplomatic or consular missions of foreign countries, or in the technical
assistance programs of both the Philippine Government and any foreign government, and those working
in their respective households, and members of religious orders or congregations, sect or denomination,
who are not paid monetarily or in kind.

Violations of this ordinance is punishable by an imprisonment of not less than three (3) months to six
(6) months or fine of not less than P100.00 but not more than P200.00 or both such fine and
imprisonment, upon conviction. 5
On May 4, 1968, private respondent Hiu Chiong Tsai Pao Ho who was employed in Manila, filed a
petition with the Court of First Instance of Manila, Branch I, denominated as Civil Case No. 72797,
praying for the issuance of the writ of preliminary injunction and restraining order to stop the
enforcement of Ordinance No. 6537 as well as for a judgment declaring said Ordinance No. 6537
null and void. 6
In this petition, Hiu Chiong Tsai Pao Ho assigned the following as his grounds for wanting the
ordinance declared null and void:
1) As a revenue measure imposed on aliens employed in the City of Manila,
Ordinance No. 6537 is discriminatory and violative of the rule of the uniformity in
taxation;
2) As a police power measure, it makes no distinction between useful and non-useful
occupations, imposing a fixed P50.00 employment permit, which is out of proportion
to the cost of registration and that it fails to prescribe any standard to guide and/or
limit the action of the Mayor, thus, violating the fundamental principle on illegal
delegation of legislative powers:
3) It is arbitrary, oppressive and unreasonable, being applied only to aliens who are
thus, deprived of their rights to life, liberty and property and therefore, violates the
due process and equal protection clauses of the Constitution. 7
On May 24, 1968, respondent Judge issued the writ of preliminary injunction and on September 17,
1968 rendered judgment declaring Ordinance No. 6537 null and void and making permanent the writ
of preliminary injunction. 8
Contesting the aforecited decision of respondent Judge, then Mayor Antonio J. Villegas filed the
present petition on March 27, 1969. Petitioner assigned the following as errors allegedly committed
by respondent Judge in the latter's decision of September 17,1968: 9
I
THE RESPONDENT JUDGE COMMITTED A SERIOUS AND PATENT ERROR OF
LAW IN RULING THAT ORDINANCE NO. 6537 VIOLATED THE CARDINAL RULE
OF UNIFORMITY OF TAXATION.
II
RESPONDENT JUDGE LIKEWISE COMMITTED A GRAVE AND PATENT ERROR
OF LAW IN RULING THAT ORDINANCE NO. 6537 VIOLATED THE PRINCIPLE
AGAINST UNDUE DESIGNATION OF LEGISLATIVE POWER.

III
RESPONDENT JUDGE FURTHER COMMITTED A SERIOUS AND PATENT
ERROR OF LAW IN RULING THAT ORDINANCE NO. 6537 VIOLATED THE DUE
PROCESS AND EQUAL PROTECTION CLAUSES OF THE CONSTITUTION.
Petitioner Mayor Villegas argues that Ordinance No. 6537 cannot be declared null and void on the
ground that it violated the rule on uniformity of taxation because the rule on uniformity of taxation
applies only to purely tax or revenue measures and that Ordinance No. 6537 is not a tax or revenue
measure but is an exercise of the police power of the state, it being principally a regulatory measure
in nature.
The contention that Ordinance No. 6537 is not a purely tax or revenue measure because its principal
purpose is regulatory in nature has no merit. While it is true that the first part which requires that the
alien shall secure an employment permit from the Mayor involves the exercise of discretion and
judgment in the processing and approval or disapproval of applications for employment permits and
therefore is regulatory in character the second part which requires the payment of P50.00 as
employee's fee is not regulatory but a revenue measure. There is no logic or justification in exacting
P50.00 from aliens who have been cleared for employment. It is obvious that the purpose of the
ordinance is to raise money under the guise of regulation.
The P50.00 fee is unreasonable not only because it is excessive but because it fails to consider valid
substantial differences in situation among individual aliens who are required to pay it. Although the
equal protection clause of the Constitution does not forbid classification, it is imperative that the
classification should be based on real and substantial differences having a reasonable relation to the
subject of the particular legislation. The same amount of P50.00 is being collected from every
employed alien whether he is casual or permanent, part time or full time or whether he is a lowly
employee or a highly paid executive
Ordinance No. 6537 does not lay down any criterion or standard to guide the Mayor in the exercise
of his discretion. It has been held that where an ordinance of a municipality 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 per se lawful. 10
In Chinese Flour Importers Association vs. Price Stabilization Board, 11 where a law granted a
government agency power to determine the allocation of wheat flour among importers, the Supreme
Court ruled against the interpretation of uncontrolled power as it vested in the administrative officer an
arbitrary discretion to be exercised without a policy, rule, or standard from which it can be measured or
controlled.
It was also held in Primicias vs. Fugoso 12 that the authority and discretion to grant and refuse permits of
all classes conferred upon the Mayor of Manila by the Revised Charter of Manila is not uncontrolled
discretion but legal discretion to be exercised within the limits of the law.

Ordinance No. 6537 is void because it does not contain or suggest any standard or criterion to guide
the mayor in the exercise of the power which has been granted to him by the ordinance.
The ordinance in question violates the due process of law and equal protection rule of the
Constitution.
Requiring a person before he can be employed to get a permit from the City Mayor of Manila who
may withhold or refuse it at will is tantamount to denying him the basic right of the people in the
Philippines to engage in a means of livelihood. While it is true that the Philippines as a State is not
obliged to admit aliens within its territory, once an alien is admitted, he cannot be deprived of life
without due process of law. This guarantee includes the means of livelihood. The shelter of
protection under the due process and equal protection clause is given to all persons, both aliens and
citizens. 13
The trial court did not commit the errors assigned.
WHEREFORE, the decision appealed from is hereby affirmed, without pronouncement as to costs.
SO ORDERED.

Buck v. Bell, 274 U.S. 200 (1927)

Buck v. Bell
No. 292
Argued April 22, 1927
Decided May 2, 1927
274 U.S. 200
ERROR TO THE SUPREME COURT OF APPEALS
OF THE STATE OF VIRGINIA
Syllabus
1. The Virginia statute providing for the sexual sterilization of inmates of institutions
supported by the State who shall be found to be afflicted with an hereditary form of
insanity or imbecility, is within the power of the State under the Fourteenth
Amendment. P. 274 U. S. 207.

2. Failure to extend the provision to persons outside the institutions named does not
render it obnoxious to the Equal Protection Clause. P. 274 U. S. 208.
143 Va. 310, affirmed.
ERROR to a judgment of the Supreme Court of Appeals of the State of Virginia
which affirmed a judgment ordering
Page 274 U. S. 201
the Superintendent of the State Colony of Epileptics and Feeble Minded to perform
the operation of salpingectomy on Carrie Buck, the plaintiff in error.
Page 274 U. S. 205
Mr. JUSTICE HOLMES delivered the opinion of the Court.
This is a writ of error to review a judgment of the Supreme Court of Appeals of the
State of Virginia affirming a judgment of the Circuit Court of Amherst County by
which the defendant in error, the superintendent of the State Colony for Epileptics
and Feeble Minded, was ordered to perform the operation of salpingectomy upon
Carrie Buck, the plaintiff in error, for the purpose of making her sterile. 143 Va. 310.
The case comes here upon the contention that the statute authorizing the judgment
is void under the Fourteenth Amendment as denying to the plaintiff in error due
process of law and the equal protection of the laws.
Carrie Buck is a feeble minded white woman who was committed to the State
Colony above mentioned in due form. She is the daughter of a feeble minded mother
in the same institution, and the mother of an illegitimate feeble minded child. She
was eighteen years old at the time of the trial of her case in the Circuit Court, in the
latter part of 1924. An Act of Virginia, approved March 20, 1924, recites that the
health of the patient and the welfare of society may be promoted in certain cases by
the sterilization of mental defectives, under careful safeguard, &c.; that the
sterilization may be effected in males by vasectomy and in females by
salpingectomy, without serious pain or substantial danger to life; that the
Commonwealth is supporting in various institutions many defective persons who, if
now discharged, would become

Page 274 U. S. 206

a menace, but, if incapable of procreating, might be discharged with safety and
become self-supporting with benefit to themselves and to society, and that
experience has shown that heredity plays an important part in the transmission of
insanity, imbecility, &c. The statute then enacts that, whenever the superintendent of
certain institutions, including the above-named State Colony, shall be of opinion that
it is for the best interests of the patients and of society that an inmate under his care
should be sexually sterilized, he may have the operation performed upon any patient
afflicted with hereditary forms of insanity, imbecility, &c., on complying with the very
careful provisions by which the act protects the patients from possible abuse.
The superintendent first presents a petition to the special board of directors of his
hospital or colony, stating the facts and the grounds for his opinion, verified by
affidavit. Notice of the petition and of the time and place of the hearing in the
institution is to be served upon the inmate, and also upon his guardian, and if there
is no guardian, the superintendent is to apply to the Circuit Court of the County to
appoint one. If the inmate is a minor, notice also is to be given to his parents, if any,
with a copy of the petition. The board is to see to it that the inmate may attend the
hearings if desired by him or his guardian. The evidence is all to be reduced to
writing, and, after the board has made its order for or against the operation, the
superintendent, or the inmate, or his guardian, may appeal to the Circuit Court of the
County. The Circuit Court may consider the record of the board and the evidence
before it and such other admissible evidence as may be offered, and may affirm,
revise, or reverse the order of the board and enter such order as it deems just.
Finally any party may apply to the Supreme Court of Appeals, which, if it grants the
appeal, is to hear the case upon the record of the trial
Page 274 U. S. 207
in the Circuit Court, and may enter such order as it thinks the Circuit Court should
have entered. There can be no doubt that, so far as procedure is concerned, the
rights of the patient are most carefully considered, and, as every step in this case
was taken in scrupulous compliance with the statute and after months of

observation, there is no doubt that, in that respect, the plaintiff in error has had due
process of law.
The attack is not upon the procedure, but upon the substantive law. It seems to be
contended that in no circumstances could such an order be justified. It certainly is
contended that the order cannot be justified upon the existing grounds. The
judgment finds the facts that have been recited, and that Carrie Buck
"is the probable potential parent of socially inadequate offspring, likewise afflicted,
that she may be sexually sterilized without detriment to her general health, and that
her welfare and that of society will be promoted by her sterilization,"
and thereupon makes the order. In view of the general declarations of the legislature
and the specific findings of the Court, obviously we cannot say as matter of law that
the grounds do not exist, and, if they exist, they justify the result. We have seen more
than once that the public welfare may call upon the best citizens for their lives. It
would be strange if it could not call upon those who already sap the strength of the
State for these lesser sacrifices, often not felt to be such by those concerned, in
order to prevent our being swamped with incompetence. It is better for all the world
if, instead of waiting to execute degenerate offspring for crime or to let them starve
for their imbecility, society can prevent those who are manifestly unfit from continuing
their kind. The principle that sustains compulsory vaccination is broad enough to
cover cutting the Fallopian tubes. Jacobson v. Massachusetts, 197 U. S. 11. Three
generations of imbeciles are enough.
Page 274 U. S. 208
But, it is said, however it might be if this reasoning were applied generally, it fails
when it is confined to the small number who are in the institutions named and is not
applied to the multitudes outside. It is the usual last resort of constitutional
arguments to point out shortcomings of this sort. But the answer is that the law does
all that is needed when it does all that it can, indicates a policy, applies it to all within
the lines, and seeks to bring within the lines all similarly situated so far and so fast as
its means allow. Of course, so far as the operations enable those who otherwise
must be kept confined to be returned to the world, and thus open the asylum to
others, the equality aimed at will be more nearly reached.

Judgment affirmed.
IMBONG VS OCHOA
G.R. No. 204819

April 8, 2014

JAMES M. IMBONG and LOVELY-ANN C. IMBONG, for themselves and in behalf of their minor
children, LUCIA CARLOS IMBONG and BERNADETTE CARLOS IMBONG and MAGNIFICAT
CHILD DEVELOPMENT CENTER, INC., Petitioners,
vs.
HON. PAQUITO N. OCHOA, JR., Executive Secretary, HON. FLORENCIO B. ABAD, Secretary,
Department of Budget and Management, HON. ENRIQUE T. ONA, Secretary, Department of Health,
HON. ARMIN A. LUISTRO, Secretary, Department of Education, Culture and Sports and HON.
MANUELA. ROXAS II, Secretary, Department of Interior and Local Government, Respondents.
Facts:
Republic Act (R.A.) No. 10354, otherwise known as the Responsible Parenthood and Reproductive
Health Act of 2012 (RH Law), was enacted by Congress on December 21, 2012.
Challengers from various sectors of society are questioning the constitutionality of the said Act. The
petitioners are assailing the constitutionality of RH Law on the following grounds:
SUBSTANTIAL ISSUES:
1.
2.

The RH Law violates the right to life of the unborn.

The RH Law violates the right to health and the right to protection against hazardous
products.

3.

The RH Law violates the right to religious freedom.

4.

The RH Law violates the constitutional provision on involuntary servitude.

5.

The RH Law violates the right to equal protection of the law.

6.

The RH Law violates the right to free speech.

7.

8.

The RH Law is void-for-vagueness in violation of the due process clause of the

Constitution.
The RH Law intrudes into the zone of privacy of ones family protected by the Constitution

PROCEDURAL: Whether the Court may exercise its power of judicial review over the controversy.
1.

Power of Judicial Review

2.

Actual Case or Controversy

3.

Facial Challenge

4.

Locus Standi

5.

Declaratory Relief

6.

One Subject/One Title Rule

Issue/s:
SUBSTANTIAL ISSUES:
Whether or not (WON) RA 10354/Reproductive Health (RH) Law is unconstitutional for violating the:
1.

Right to life

2.

Right to health

3.

Freedom of religion and right to free speech

4.

Right to privacy (marital privacy and autonomy)

5.

Freedom of expression and academic freedom

6.

Due process clause

7.

Equal protection clause

8.

Prohibition against involuntary servitude

PROCEDURAL:
Whether the Court can exercise its power of judicial review over the controversy.
1.

Actual Case or Controversy

2.

Facial Challenge

3.

Locus Standi

4.

Declaratory Relief

5.

One Subject/One Title Rule

Discussions:
PROCEDURAL
Judicial Review Jurisprudence is replete with the rule that the power of judicial review is limited by
four exacting requisites: (a) there must be an actual case or controversy; (b) the petitioners must
possess locus standi; (c) the question of constitutionality must be raised at the earliest opportunity;
and (d) the issue of constitutionality must be the lis mota of the case.
Actual Controversy: An actual case or controversy means an existing case or controversy that is
appropriate or ripe for determination, not conjectural or anticipatory, lest the decision of the court
would amount to an advisory opinion. It must concern a real, tangible and not merely a theoretical
question or issue. There ought to be an actual and substantial controversy admitting of specific relief
through a decree conclusive in nature, as distinguished from an opinion advising what the law would
be upon a hypothetical state of facts. Corollary to the requirement of an actual case or controversy is
the requirement of ripeness. A question is ripe for adjudication when the act being challenged has
had a direct adverse effect on the individual challenging it. For a case to be considered ripe for
adjudication, it is a prerequisite that something has then been accomplished or performed by either
branch before a court may come into the picture, and the petitioner must allege the existence of an
immediate or threatened injury to himself as a result of the challenged action. He must show that he
has sustained or is immediately in danger of sustaining some direct injury as a result of the act
complained of
Facial Challenge: A facial challenge, also known as a First Amendment Challenge, is one that is
launched to assail the validity of statutes concerning not only protected speech, but also all other
rights in the First Amendment. These include religious freedom, freedom of the press, and the right
of the people to peaceably assemble, and to petition the Government for a redress of grievances.
After all, the fundamental right to religious freedom, freedom of the press and peaceful assembly are
but component rights of the right to ones freedom of expression, as they are modes which ones
thoughts are externalized.
Locus Standi: Locus standi or legal standing is defined as a personal and substantial interest in a
case such that the party has sustained or will sustain direct injury as a result of the challenged
governmental act. It requires a personal stake in the outcome of the controversy as to assure the
concrete adverseness which sharpens the presentation of issues upon which the court so largely
depends for illumination of difficult constitutional questions.

Transcendental Importance: the Court leans on the doctrine that the rule on standing is a matter
of procedure, hence, can be relaxed for non-traditional plaintiffs like ordinary citizens, taxpayers, and
legislators when the public interest so requires, such as when the matter is of transcendental
importance, of overreaching significance to society, or of paramount public interest.
One Subject-One Title: The one title-one subject rule does not require the Congress to employ in
the title of the enactment language of such precision as to mirror, fully index or catalogue all the
contents and the minute details therein. The rule is sufficiently complied with if the title is
comprehensive enough as to include the general object which the statute seeks to effect, and where,
as here, the persons interested are informed of the nature, scope and consequences of the
proposed law and its operation. Moreover, this Court has invariably adopted a liberal rather than
technical construction of the rule so as not to cripple or impede legislation. The one subject/one title
rule expresses the principle that the title of a law must not be so uncertain that the average person
reading it would not be informed of the purpose of the enactment or put on inquiry as to its contents,
or which is misleading, either in referring to or indicating one subject where another or different one
is really embraced in the act, or in omitting any expression or indication of the real subject or scope
of the act.
Declaration of Unconstitutionality: Orthodox view: An unconstitutional act is not a law; it confers
no rights; it imposes no duties; it affords no protection; it creates no office; it is, in legal
contemplation, as inoperative as though it had never been passed. Modern view: Under this view, the
court in passing upon the question of constitutionality does not annul or repeal the statute if it finds it
in conflict with the Constitution. It simply refuses to recognize it and determines the rights of the
parties just as if such statute had no existence. But certain legal effects of the statute prior to its
declaration of unconstitutionality may be recognized. Requisites for partial unconstitutionality: (1) The
Legislature must be willing to retain the valid portion(s), usually shown by the presence of a
separability clause in the law; and (2) The valid portion can stand independently as law.

Ruling/s:
SUBSTANTIAL
1.

Majority of the Members of the Court believe that the question of when life begins is a
scientific and medical issue that should not be decided, at this stage, without proper hearing and
evidence. However, they agreed that individual Members could express their own views on this
matter.

Article II, Section 12 of the Constitution states: The State recognizes the sanctity of family life and
shall protect and strengthen the family as a basic autonomous social institution. It shall equally
protect the life of the mother and the life of the unborn from conception.
In its plain and ordinary meaning (a canon in statutory construction), the traditional meaning of
conception according to reputable dictionaries cited by the ponente is that life begins at fertilization.
Medical sources also support the view that conception begins at fertilization.

The framers of the Constitution also intended for (a) conception to refer to the moment of
fertilization and (b) the protection of the unborn child upon fertilization. In addition, they did not
intend to ban all contraceptives for being unconstitutional; only those that kill or destroy the fertilized
ovum would be prohibited. Contraceptives that actually prevent the union of the male sperm and
female ovum, and those that similarly take action before fertilization should be deemed non-abortive,
and thus constitutionally permissible.
The intent of the framers of the Constitution for protecting the life of the unborn child was to prevent
the Legislature from passing a measure prevent abortion. The Court cannot interpret this otherwise.
The RH Law is in line with this intent and actually prohibits abortion. By using the word or in
defining abortifacient (Section 4(a)), the RH Law prohibits not only drugs or devices that prevent
implantation but also those that induce abortion and induce the destruction of a fetus inside the
mothers womb. The RH Law recognizes that the fertilized ovum already has life and that the State
has a bounded duty to protect it.
However, the authors of the IRR gravely abused their office when they redefined the meaning of
abortifacient by using the term primarily. Recognizing as abortifacients only those that
primarily induce abortion or the destruction of a fetus inside the mothers womb or the prevention of
the fertilized ovum to reach and be implanted in the mothers womb (Sec. 3.01(a) of the IRR) would
pave the way for the approval of contraceptives that may harm or destroy the life of the unborn from
conception/fertilization. This violates Section 12, Article II of the Constitution. For the same reason,
the definition of contraceptives under the IRR (Sec 3.01(j)), which also uses the term primarily,
must be struck down.
2.

The RH Law does not intend to do away with RA 4729 (1966). With RA 4729 in place, the
Court believes adequate safeguards exist to ensure that only safe contraceptives are made
available to the public. In fulfilling its mandate under Sec. 10 of the RH Law, the DOH must keep
in mind the provisions of RA 4729: the contraceptives it will procure shall be from a duly licensed
drug store or pharmaceutical company and that the actual distribution of these contraceptive
drugs and devices will be done following a prescription of a qualified medical practitioner.

Meanwhile, the requirement of Section 9 of the RH Law is to be considered mandatory only after
these devices and materials have been tested, evaluated and approved by the FDA. Congress
cannot determine that contraceptives are safe, legal, non-abortificient and effective.
3.

The Court cannot determine whether or not the use of contraceptives or participation in
support of modern RH measures (a) is moral from a religious standpoint; or, (b) right or wrong
according to ones dogma or belief. However, the Court has the authority to determine whether or
not the RH Law contravenes the Constitutional guarantee of religious freedom.

The State may pursue its legitimate secular objectives without being dictated upon the policies of any
one religion. To allow religious sects to dictate policy or restrict other groups would violate Article III,
Section 5 of the Constitution or the Establishment Clause. This would cause the State to adhere to a
particular religion, and thus, establishes a state religion. Thus, the State can enhance its population

control program through the RH Law even if the promotion of contraceptive use is contrary to the
religious beliefs of e.g. the petitioners.
4.

Section 23A (2)(i) of the RH Law, which permits RH procedures even with only the consent of
the spouse undergoing the provision (disregarding spousal content), intrudes into martial privacy
and autonomy and goes against the constitutional safeguards for the family as the basic social
institution. Particularly, Section 3, Article XV of the Constitution mandates the State to defend:
(a) the right of spouses to found a family in accordance with their religious convictions and the
demands of responsible parenthood and (b) the right of families or family associations to
participate in the planning and implementation of policies and programs that affect them. The RH
Law cannot infringe upon this mutual decision-making, and endanger the institutions of marriage
and the family.

The exclusion of parental consent in cases where a minor undergoing a procedure is already a
parent or has had a miscarriage (Section 7 of the RH Law) is also anti-family and violates Article II,
Section 12 of the Constitution, which states: The natural and primary right and duty of parents in the
rearing of the youth for civic efficiency and the development of moral character shall receive the
support of the Government. In addition, the portion of Section 23(a)(ii) which reads in the case of
minors, the written consent of parents or legal guardian or, in their absence, persons exercising
parental authority or next-of-kin shall be required only in elective surgical procedures is invalid as it
denies the right of parental authority in cases where what is involved is non-surgical procedures.
However, a minor may receive information (as opposed to procedures) about family planning
services. Parents are not deprived of parental guidance and control over their minor child in this
situation and may assist her in deciding whether to accept or reject the information received. In
addition, an exception may be made in life-threatening procedures.
5.

The Court declined to rule on the constitutionality of Section 14 of the RH Law, which
mandates the State to provide Age-and Development-Appropriate Reproductive Health
Education. Although educators might raise their objection to their participation in the RH
education program, the Court reserves its judgment should an actual case be filed before it.

Any attack on its constitutionality is premature because the Department of Education has not yet
formulated a curriculum on age-appropriate reproductive health education.
Section 12, Article II of the Constitution places more importance on the role of parents in the
development of their children with the use of the term primary. The right of parents in upbringing
their youth is superior to that of the State.
The provisions of Section 14 of the RH Law and corresponding provisions of the IRR supplement
(rather than supplant) the right and duties of the parents in the moral development of their children.
By incorporating parent-teacher-community associations, school officials, and other interest groups
in developing the mandatory RH program, it could very well be said that the program will be in line
with the religious beliefs of the petitioners.

6.

The RH Law does not violate the due process clause of the Constitution as the definitions of
several terms as observed by the petitioners are not vague.

The definition of private health care service provider must be seen in relation to Section 4(n) of the
RH Law which defines a public health service provider. The private health care institution cited
under Section 7 should be seen as synonymous to private health care service provider.
The terms service and methods are also broad enough to include providing of information and
rendering of medical procedures. Thus, hospitals operated by religious groups are exempted from
rendering RH service and modern family planning methods (as provided for by Section 7 of the RH
Law) as well as from giving RH information and procedures.
The RH Law also defines incorrect information. Used together in relation to Section 23 (a)(1), the
terms incorrect and knowingly connote a sense of malice and ill motive to mislead or misrepresent
the public as to the nature and effect of programs and services on reproductive health.
7.

To provide that the poor are to be given priority in the governments RH program is not a
violation of the equal protection clause. In fact, it is pursuant to Section 11, Article XIII of the
Constitution, which states that the State shall prioritize the needs of the underprivileged, sick
elderly, disabled, women, and children and that it shall endeavor to provide medical care to
paupers.

The RH Law does not only seek to target the poor to reduce their number, since Section 7 of the RH
Law prioritizes poor and marginalized couples who are suffering from fertility issues and desire to
have children. In addition, the RH Law does not prescribe the number of children a couple may have
and does not impose conditions upon couples who intend to have children. The RH Law only seeks
to provide priority to the poor.
The exclusion of private educational institutions from the mandatory RH education program under
Section 14 is valid. There is a need to recognize the academic freedom of private educational
institutions especially with respect to religious instruction and to consider their sensitivity towards the
teaching of reproductive health education
8.

The requirement under Sec. 17 of the RH Law for private and non-government health care
service providers to render 48 hours of pro bonoRH services does not amount to involuntary
servitude, for two reasons. First, the practice of medicine is undeniably imbued with public
interest that it is both the power and a duty of the State to control and regulate it in order to
protect and promote the public welfare. Second, Section 17 only encourages private and nongovernment RH service providers to render pro bono Besides the PhilHealth accreditation, no
penalty is imposed should they do otherwise.

However, conscientious objectors are exempt from Sec. 17 as long as their religious beliefs do not
allow them to render RH service, pro bono or otherwise

PROCEDURAL

1.

In this case, the Court is of the view that an actual case or controversy exists and that the
same is ripe for judicial determination. Considering that the RH Law and its implementing rules
have already taken effect and that budgetary measures to carry out the law have already been
passed, it is evident that the subject petitions present a justiciable controversy. As stated earlier,
when an action of the legislative branch is seriously alleged to have infringed the Constitution, it
not only becomes a right, but also a duty of the Judiciary to settle the dispute.

Moreover, the petitioners have shown that the case is so because medical practitioners or medical
providers are in danger of being criminally prosecuted under the RH Law for vague violations
thereof, particularly public health officers who are threatened to be dismissed from the service with
forfeiture of retirement and other benefits. They must, at least, be heard on the matter now.
2.

In this jurisdiction, the application of doctrines originating from the U.S. has been generally
maintained, albeit with some modifications. While the Court has withheld the application of facial
challenges to strictly penal statues, it has expanded its scope to cover statutes not only
regulating free speech, but also those involving religious freedom, and other fundamental rights.
The underlying reason for this modification is simple. For unlike its counterpart in the U.S., this
Court, under its expanded jurisdiction, is mandated by the Fundamental Law not only to settle
actual controversies involving rights which are legally demandable and enforceable, but also to
determine whether or not there has been a grave abuse of discretion amounting to lack or
excess of jurisdiction on the part of any branch or instrumentality of the Government. Verily, the
framers of Our Constitution envisioned a proactive Judiciary, ever vigilant with its duty to
maintain the supremacy of the Constitution.

Consequently, considering that the foregoing petitions have seriously alleged that the constitutional
human rights to life, speech and religion and other fundamental rights mentioned above have been
violated by the assailed legislation, the Court has authority to take cognizance of these kindred
petitions and to determine if the RH Law can indeed pass constitutional scrutiny. To dismiss these
petitions on the simple expedient that there exist no actual case or controversy, would diminish this
Court as a reactive branch of government, acting only when the Fundamental Law has been
transgressed, to the detriment of the Filipino people.
3.

Even if the constitutionality of the RH Law may not be assailed through an as-applied
challenge, still, the Court has time and again acted liberally on the locus standi requirement. It
has accorded certain individuals standing to sue, not otherwise directly injured or with material
interest affected by a Government act, provided a constitutional issue of transcendental
importance is invoked. The rule on locus standi is, after all, a procedural technicality which the
Court has, on more than one occasion, waived or relaxed, thus allowing non-traditional plaintiffs,

such as concerned citizens, taxpayers, voters or legislators, to sue in the public interest, albeit
they may not have been directly injured by the operation of a law or any other government act.
The present action cannot be properly treated as a petition for prohibition, the transcendental
importance of the issues involved in this case warrants that the Court set aside the technical defects
and take primary jurisdiction over the petition at bar. One cannot deny that the issues raised herein
have potentially pervasive influence on the social and moral well being of this nation, specially the
youth; hence, their proper and just determination is an imperative need. This is in accordance with
the well-entrenched principle that rules of procedure are not inflexible tools designed to hinder or
delay, but to facilitate and promote the administration of justice. Their strict and rigid application,
which would result in technicalities that tend to frustrate, rather than promote substantial justice, must
always be eschewed.
4.

Most of the petitions are praying for injunctive reliefs and so the Court would just consider
them as petitions for prohibition under Rule 65, over which it has original jurisdiction. Where the
case has far-reaching implications and prays for injunctive reliefs, the Court may consider them
as petitions for prohibition under Rule 65.

5.

The RH Law does not violate the one subject/one bill rule. In this case, a textual analysis of
the various provisions of the law shows that both reproductive health and responsible
parenthood are interrelated and germane to the overriding objective to control the population
growth. As expressed in the first paragraph of Section 2 of the RH Law:

SEC. 2. Declaration of Policy. The State recognizes and guarantees the human rights of all
persons including their right to equality and nondiscrimination of these rights, the right to sustainable
human development, the right to health which includes reproductive health, the right to education
and information, and the right to choose and make decisions for themselves in accordance with their
religious convictions, ethics, cultural beliefs, and the demands of responsible parenthood.
Considering the close intimacy between reproductive health and responsible parenthood which
bears to the attainment of the goal of achieving sustainable human development as stated under its
terms, the Court finds no reason to believe that Congress intentionally sought to deceive the public
as to the contents of the assailed legislation.
Accordingly, the Court declares R.A. No. 10354 as NOT UNCONSTITUTIONAL except with respect
to the following provisions which are declared UNCONSTITUTIONAL:
1) Section 7 and the corresponding provision in the RH-IRR insofar as they: a) require private health
facilities and non-maternity specialty hospitals and hospitals owned and operated by a religious
group to refer patients, not in an emergency or life-threatening case, as defined under Republic Act
No. 8344, to another health facility which is conveniently accessible; and b) allow minor-parents or
minors who have suffered a miscarriage access to modem methods of family planning without written
consent from their parents or guardian/s;

2) Section 23(a)(l) and the corresponding provision in the RH-IRR, particularly Section 5 .24 thereof,
insofar as they punish any healthcare service provider who fails and or refuses to disseminate
information regarding programs and services on reproductive health regardless of his or her religious
beliefs.
3) Section 23(a)(2)(i) and the corresponding provision in the RH-IRR insofar as they allow a married
individual, not in an emergency or life-threatening case, as defined under Republic Act No. 8344, to
undergo reproductive health procedures without the consent of the spouse;
4) Section 23(a)(2)(ii) and the corresponding provision in the RH-IRR insofar as they limit the
requirement of parental consent only to elective surgical procedures.
5) Section 23(a)(3) and the corresponding provision in the RH-IRR, particularly Section 5.24 thereof,
insofar as they punish any healthcare service provider who fails and/or refuses to refer a patient not
in an emergency or life-threatening case, as defined under Republic Act No. 8344, to another health
care service provider within the same facility or one which is conveniently accessible regardless of
his or her religious beliefs;
6) Section 23(b) and the corresponding provision in the RH-IRR, particularly Section 5 .24 thereof,
insofar as they punish any public officer who refuses to support reproductive health programs or
shall do any act that hinders the full implementation of a reproductive health program, regardless of
his or her religious beliefs;
7) Section 17 and the corresponding prov1s10n in the RH-IRR regarding the rendering of pro bona
reproductive health service in so far as they affect the conscientious objector in securing PhilHealth
accreditation; and
8) Section 3.0l(a) and Section 3.01 G) of the RH-IRR, which added the qualifier primarily in defining
abortifacients and contraceptives, as they are ultra vires and, therefore, null and void for
contravening Section 4(a) of the RH Law and violating Section 12, Article II of the Constitution.
291 U.S. 502
Nebbia v. New York (No. 531)
Argued: December 4, 5, 1933
Decided: March 5, 1934
262 N.Y. 259; 186 N.E. 694, affirmed.

Syllabus

Opinion, Roberts

Separate, Mcreynolds

Syllabus

1. As a basis for attacking a discriminatory regulation of prices, under the equal

protection clause of the Fourteenth Amendment, the party complaining must show that
he himself is adversely affected by it. P. 520.
2. A regulation fixing the price at which storekeepers may buy milk from milk dealers at
a higher figure than that allowed dealers in buying from producers, and allowing dealers
a higher price than it allows storekeepers in sales to consumers, held consistent with
the equal protection clause of the Fourteenth Amendment because of the distinctions
between the two classes of merchants. P. 521.
3. As part of a plan to remedy evils in the milk industry which reduced the income of
the producer below cost of production and threatened to deprive the community of an
assured supply of milk, a New York statute sought to prevent destructive price-cutting
by stores which, under the peculiar circumstances, were able to buy at much lower
prices than the larger distributors and to sell without incurring delivery costs, and, to
that end, an order of a state board acting under the statute fixed a minimum price of
ten cents per quart for sales by distributors to consumers and of nine cents per quart
for sales by stores to consumers. Held that, as applied to a storekeeper, the regulation
could not be adjudged in conflict with the due process clause of the Fourteenth
Amendment, since, in view of the facts set forth in the opinion, it appeared not to be
unreasonable or arbitrary or without relation to the purpose of the legislation. Pp.
530 et seq.
4. The use of private property and the making of private contracts are, as a general
rule, free from governmental interference; but they are subject to public regulation
when the public need requires. P. 523.
5. The due process clause of the Fourteenth Amendment conditions the exertion of
regulatory power by requiring that the end shall be accomplished by methods
consistent with due process, that the regulation shall not be unreasonable, arbitrary or
capricious, and that the means selected shall have a real and substantial relation to the
object sought to be attained. P. 525. [p503]
6. It results that a regulation valid for one sort of business, or in given circumstances,
may be invalid for another sort, or for the same business under other circumstances,
because the reasonableness of each regulation depends upon the relevant facts. P. 525.
7. The power of a State to regulate business in the public interest extends to the
control and regulation of prices for which commodities may be sold, where price
regulation is a reasonable and appropriate means of rectifying the evil calling for the
regulation. Pp. 531 et seq.

8. There is no principle limiting price regulation to businesses which are public utilities,
or which have a monopoly or enjoy a public grant or franchise. Munn v. Illinois, 94 U.S.
113. P. 531.
9. To say that property is "clothed with a public interest," or an industry is "affected
with a public interest," means that the property or the industry, for adequate reason, is
subject to control for the public good. Pp. 531-536.
10. There is no closed class or category of businesses affected with a public interest,
and the function of courts in the application of the Fifth and Fourteenth Amendments is
to determine in each case whether circumstances vindicate the challenged regulation as
a reasonable exertion of governmental authority or condemn it as arbitrary or
discriminatory. P. 536.
11. Decisions denying the power to control prices in businesses found not to be
"affected with a public interest" or "clothed with a public use" must rest finally upon the
basis that the requirements of due process were not met because the laws were found
arbitrary in their operation and effect. P. 536.
12. So far as the requirement of due process is concerned, and in the absence of other
constitutional restriction, a State is free to adopt whatever economic policy may
reasonably be deemed to promote public welfare, and to enforce that policy by
legislation adapted to its purpose. The courts are without authority either to declare
such policy, or, when it is declared by the legislature, to override it. If the laws passed
are seen to have a reasonable relation to a proper legislative purpose, and are neither
arbitrary nor discriminatory, the requirements of due process are satisfied, and judicial
determination to that effect renders a court functus officio. P. 503.
13. The legislature is primarily the judge of the necessity of such an enactment; every
possible presumption is in favor of its validity, and though the court may think the
enactment unwise, it may not be annulled unless palpably in excess of legislative power.
P. 537. [p504]
14. If the lawmaking body, within its sphere of government, concludes that the
conditions or practices in an industry make unrestricted competition an inadequate
safeguard of the consumer's interests, produce waste harmful to the public, threaten
ultimately to cut off the supply of a commodity needed by the public, or portend the
destruction of the industry itself, appropriate statutes passed in an honest effort to
correct the threatened consequences may not be set aside because the regulation
adopted fixes prices -- reasonably deemed by the legislature to be fair to those
engaged in the industry and to the consuming public. P. 538.

15. This is especially clear where the economic maladjustment is one of price, which
threatens harm to the producer at one end of the series, and the consumer, at the
other. P. 538.
16. The Constitution does not secure to anyone liberty to conduct his business in such
fashion as to inflict injury upon the public at large, or upon any substantial group of
people. P. 539.
17. Price control, like any other form of regulation, is unconstitutional only if arbitrary,
discriminatory, or demonstrably irrelevant to the policy the legislature is free to adopt,
and hence an unnecessary and unwarranted interference with individual liberty. P. 539.
The New York Court of Appeals affirmed the conviction of a storekeeper for selling milk
at a price below that allowed by an order promulgated by a state board pursuant to
statutory authority. The appeal here is from the judgment of the County Court entered
on remittitur. [p515]

TOP
Opinion
ROBERTS, J., Opinion of the Court
MR. JUSTICE ROBERTS delivered the opinion of the Court.
The Legislature of New York established, by Chapter 158 of the Laws of 1933, a Milk
Control Board with power, among other things, to "fix minimum and maximum . . .
retail prices to be charged by . . . stores to consumers for consumption off the premises
where sold." The Board fixed nine cents as the price to be charged by a store for a
quart of milk. Nebbia, the proprietor of a grocery store in Rochester, sold two quarts
and a five cent loaf of bread for eighteen cents, and was convicted for violating the
Board's order. At his trial, he asserted the statute and order contravene the equal
protection clause and the due process clause of the Fourteenth Amendment, and
renewed the contention in successive appeals to the county court and the Court of
Appeals. Both overruled his claim and affirmed the conviction. [n1]
The question for decision is whether the Federal Constitution prohibits a state from so
fixing the selling price of milk. We first inquire as to the occasion for the legislation, and
its history.
During 1932, the prices received by farmers for milk were much below the cost of
production. The decline in prices during 1931 and 1932 was much greater than that of
prices generally. The situation of the families of dairy producers had become desperate,

and called for state aid similar to that afforded the unemployed, if conditions should not
improve. [p516]
On March 10, 1932, the senate and assembly resolved
That a joint Legislative committee is hereby created . . . to investigate the causes of the
decline of the price of milk to producers and the resultant effect of the low prices upon
the dairy industry and the future supply of milk to the cities of the State; to investigate
the cost of distribution of milk and its relation to prices paid to milk producers, to the
end that the consumer may be assured of an adequate supply of milk at a reasonable
price, both to producer and consumer.
The committee organized May 6, 1932, and its activities lasted nearly a year. It held 13
public hearings at which 254 witnesses testified and 2,350 typewritten pages of
testimony were taken. Numerous exhibits were submitted. Under its direction, an
extensive research program was prosecuted by experts and official bodies and
employees of the state and municipalities, which resulted in the assembling of much
pertinent information. Detailed reports were received from over 100 distributors of milk,
and these were collated, and the information obtained analyzed. As a result of the
study of this material, a report covering 473 closely printed pages, embracing the
conclusions and recommendations of the committee, was presented to the legislature
April 10, 1933. This document included detailed findings, with copious references to the
supporting evidence; appendices outlining the nature and results of prior investigations
of the milk industry of the state, briefs upon the legal questions involved, and forms of
bills recommended for passage. The conscientious effort and thoroughness exhibited by
the report lend weight to the committee's conclusions.
In part, those conclusions are:
Milk is an essential item of diet. It cannot long be stored. It is an excellent medium for
growth of bacteria. These facts necessitate safeguards in its production and handling for
human consumption which greatly increase[p517] the cost of the business. Failure of
producers to receive a reasonable return for their labor and investment over an
extended period threaten a relaxation of vigilance against contamination.
The production and distribution of milk is a paramount industry of the state, and largely
affects the health and prosperity of its people. Dairying yields fully one-half of the total
income from all farm products. Dairy farm investment amounts to approximately
$1,000,000,000. Curtailment or destruction of the dairy industry would cause a serious
economic loss to the people of the state.
In addition to the general price decline, other causes for the low price of milk include: a
periodic increase in the number of cows and in milk production; the prevalence of unfair
and destructive trade practices in the distribution of milk, leading to a demoralization of

prices in the metropolitan area and other markets, and the failure of transportation and
distribution charges to be reduced in proportion to the reduction in retail prices for milk
and cream.
The fluid milk industry is affected by factors of instability peculiar to itself which call for
special methods of control. Under the best practicable adjustment of supply to demand,
the industry must carry a surplus of about 20 percent, because milk, an essential food,
must be available as demanded by consumers every day in the year, and demand and
supply vary from day to day and according to the season; but milk is perishable, and
cannot be stored. Close adjustment of supply to demand is hindered by several factors
difficult to control. Thus, surplus milk presents a serious problem, as the prices which
can be realized for it for other uses are much less than those obtainable for milk sold
for consumption in fluid form or as cream. A satisfactory stabilization of prices for fluid
milk requires that the burden of surplus milk be shared equally by all producers and all
distributors in the milkshed. [p518] So long as the surplus burden is unequally
distributed, the pressure to market surplus milk in fluid form will be a serious disturbing
factor. The fact that the larger distributors find it necessary to carry large quantities of
surplus milk, while the smaller distributors do not, leads to price-cutting and other
forms of destructive competition. Smaller distributors, who take no responsibility for the
surplus, by purchasing their milk at the blended prices (i.e., an average between the
price paid the producer for milk for sale as fluid milk, and the lower surplus milk price
paid by the larger organizations) can undersell the larger distributors. Indulgence in this
price-cutting often compels the larger dealer to cut the price, to his own and the
producer's detriment.
Various remedies were suggested, amongst them united action by producers, the fixing
of minimum prices for milk and cream by state authority, and the imposition of certain
graded taxes on milk dealers proportioned so as to equalize the cost of milk and cream
to all dealers, and so remove the cause of price-cutting.
The legislature adopted Chapter 158 as a method of correcting the evils, which the
report of the committee showed could not be expected to right themselves through the
ordinary play of the forces of supply and demand, owing to the peculiar and
uncontrollable factors affecting the industry. The provisions of the statute are
summarized in the margin. [n2] [p519]
Section 312(e), on which the prosecution in the present case is founded, provides:
After the board shall have fixed prices to be charged or paid for milk in any
form [p520] . . . , it shall be unlawful for a milk dealer to sell or buy or offer to sell or
buy milk at any price less or more than such price . . . , and no method or device shall
be lawful whereby milk is bought or sold . . . at a price less or more than such price . . .
, whether by any discount, or rebate, or free service, or advertising allowance, or a

combined price for such milk together with another commodity or commodities, or
service or services, which is less or more than the aggregate of the prices for the milk
and the price or prices for such other commodity or commodities, or service or services,
when sold or offered for sale separately or otherwise. . . .
First. The appellant urges that the order of the Milk Control Board denies him the equal
protection of the laws. It is shown that the order requires him, if he purchases his
supply from a dealer, to pay eight cents per quart and [p521] five cents per pint, and
to resell at not less than nine and six, whereas the same dealer may buy his supply
from a farmer at lower prices and deliver milk to consumers at ten cents the quart and
six cents the pint. We think the contention that the discrimination deprives the
appellant of equal protection is not well founded. For aught that appears, the appellant
purchased his supply of milk from a farmer as do distributors, or could have procured it
from a farmer, if he so desired. There is therefore no showing that the order placed him
at a disadvantage, or, in fact, affected him adversely, and this alone is fatal to the claim
of denial of equal protection. But if it were shown that the appellant is compelled to buy
from a distributor, the difference in the retail price he is required to charge his
customers, from that prescribed for sales by distributors, is not, on its face, arbitrary or
unreasonable, for there are obvious distinctions between the two sorts of merchants
which may well justify a difference of treatment, if the legislature possesses the power
to control the prices to be charged for fluid milk. Compare American Sugar Refining Co.
v. Louisiana, 179 U.S. 89; Brown-Forman Co. v. Kentucky, 217 U.S. 563; State Board
of Tax Commissioners v. Jackson, 283 U.S. 527.
Second. The more serious question is whether, in the light of the conditions disclosed,
the enforcement of 312(e) denied the appellant the due process secured to him by
the Fourteenth Amendment.
Save the conduct of railroads, no business has been so thoroughly regimented and
regulated by the State of New York as the milk industry. Legislation controlling it in the
interest of the public health was adopted in 1862,[n3] and subsequent statutes [n4] have
been carried into the general [p522] codification known as the Agriculture and Markets
Law. [n5] A perusal of these statutes discloses that the milk industry has been
progressively subjected to a larger measure of control. [n6] The producer or dairy farmer
is in certain circumstances liable to have his herd quarantined against bovine
tuberculosis; is limited in the importation of dairy cattle to those free from Bang's
disease; is subject to rules governing the care and feeding of his cows and the care of
the milk produced, the condition and surroundings of his barns and buildings used for
production of milk, the utensils used, and the persons employed in milking ( 46, 47,
55, 72-88). Proprietors of milk gathering stations or processing plants are subject to
regulation ( 54), and persons in charge must operate under license and give bond to
comply with the law and regulations; must keep records, pay promptly for milk

purchased, abstain from false or misleading statements and from combinations to fix
prices ( 57, 57a, 252). In addition, there is a large volume of legislation intended to
promote cleanliness and fair trade practices, affecting all who are engaged in the
industry. [n7] The challenged amendment [p523] of 1933 carried regulation much farther
than the prior enactments. Appellant insists that it went beyond the limits fixed by the
Constitution.
Under our form of government, the use of property and the making of contracts are
normally matters of private, and not of public, concern. The general rule is that both
shall be free of governmental interference. But neither property rights [n8] nor contract
rights [n9] are absolute, for government cannot exist if the citizen may at will use his
property to the detriment of his fellows, or exercise his freedom of contract to work
them harm. Equally fundamental with the private right is that of the public to regulate it
in the common interest. As Chief Justice Marshall said, speaking specifically of
inspection laws, such laws form
a portion of that immense mass of legislation which embraces every thing within the
territory of a State . . . , all which can be most advantageously exercised by the States
themselves. Inspection laws, quarantine laws, health laws of every description, as well
as laws for regulating the internal commerce of a State . . . are component parts of this
mass.

[n10]

Justice Barbour said for this court:

. . . it is not only the right, but the bounden and solemn duty, of a state to advance the
safety, happiness and prosperity of its people, and to provide for its general welfare by
any and every act of legislation which it may deem to be conducive to these ends where
the power over the particular subject, or the manner of its exercise, is not surrendered
or restrained, in the manner just stated. [p524] That all those powers which relate to
merely municipal legislation, or what may, perhaps, more properly be called internal
police, are not thus surrendered or restrained, and that, consequently, in relation to
these, the authority of a state is complete, unqualified, and exclusive. [n11]
And Chief Justice Taney said upon the same subject:
But what are the police powers of a State? They are nothing more or less than the
powers of government inherent in every sovereignty to the extent of its dominions. And
whether a State passes a quarantine law, or a law to punish offences, or to establish
courts of justice, or requiring certain instruments to be recorded, or to regulate
commerce within its own limits, in every case, it exercises the same powers -- that is to
say, the power of sovereignty, the power to govern men and things within the limits of
its dominion. It is by virtue of this power that it legislates, and its authority to make
regulations of commerce is as absolute as its power to pass health laws, except insofar
as it has been restricted by the constitution of the United States. [n12]

Thus has this court, from the early days, affirmed that the power to promote the
general welfare is inherent in government. Touching the matters committed to it by the
Constitution, the United States possesses the power, [n13] as do the states in their
sovereign capacity touching all subjects jurisdiction of which is not surrendered to the
federal government, as shown by the quotations above given. These correlative rights,
that of the citizen to exercise exclusive dominion over property and freely to contract
about his affairs and that of the state to regulate the use of property and the conduct of
business, are always in collision. No exercise of the private right can
be [p525] imagined which will not in some respect, however slight, affect the public;
no exercise of the legislative prerogative to regulate the conduct of the citizen which
will not to some extent abridge his liberty or affect his property. But, subject only to
constitutional restraint, the private right must yield to the public need.
The Fifth Amendment, in the field of federal activity, [n14] and the Fourteenth, as respects
state action, [n15]do not prohibit governmental regulation for the public welfare. They
merely condition the exertion of the admitted power by securing that the end shall be
accomplished by methods consistent with due process. And the guaranty of due
process, as has often been held, demands only that the law shall not be unreasonable,
arbitrary or capricious, and that the means selected shall have a real and substantial
relation to the object sought to be attained. It results that a regulation valid for one
sort of business, or in given circumstances, may be invalid for another sort or for the
same business under other circumstances, because the reasonableness of each
regulation depends upon the relevant facts.
The reports of our decisions abound with cases in which the citizen, individual or
corporate, has vainly invoked the Fourteenth Amendment in resistance to necessary
and appropriate exertion of the police power.
The court has repeatedly sustained curtailment of enjoyment of private property in the
public interest. The owner's rights may be subordinated to the needs of other private
owners whose pursuits are vital to the paramount interests of the community. [n16] The
state may control the [p526] use of property in various ways; may prohibit advertising
billboards except of a prescribed size and location, [n17] or their use for certain kinds of
advertising; [n18] may in certain circumstances authorize encroachments by party walls in
cities; [n19]may fix the height of buildings, the character of materials, and methods of
construction, the adjoining area which must be left open, and may exclude from
residential sections offensive trades, industries and structures likely injuriously to affect
the public health or safety; [n20] or may establish zones within which certain types of
buildings or businesses are permitted and others excluded. [n21] And although the
Fourteenth Amendment extends protection to aliens as well as citizens, [n22] a state may
for adequate reasons of policy exclude aliens altogether from the use and occupancy of
land.

[n23]

Laws passed for the suppression of immorality, in the interest of health, to secure fair
trade practices, and to safeguard the interests of depositors in banks, have been found
consistent with due process. [n24] These measures not [p527] only affected the use of
private property, but also interfered with the right of private contract. Other instances
are numerous where valid regulation has restricted the right of contract, while less
directly affecting property rights. [n25]
The Constitution does not guarantee the unrestricted privilege to engage in a business
or to conduct it as one[p528] pleases. Certain kinds of business may be
prohibited; [n26] and the right to conduct a business, or to pursue a calling, may be
conditioned. [n27] Regulation of a business to prevent waste of the state's resources may
be justified. [n28] And statutes prescribing the terms upon which those conducting certain
businesses may contract, or imposing terms if they do enter into agreements, are
within the state's competency.

[n29]

[p529]

Legislation concerning sales of goods, and incidentally affecting prices, has repeatedly
been held valid. In this class fall laws forbidding unfair competition by the charging of
lower prices in one locality than those exacted in another, [n30] by giving trade
inducement to purchasers, [n31] and by other forms of price discrimination. [n32]The public
policy with respect to free competition has engendered state and federal statutes
prohibiting monopolies, [n33] which have been upheld. On the other hand, where the
policy of the state dictate that a monopoly should be granted, statutes having that
effect have been held inoffensive to the constitutional guarantees. [n34] Moreover, the
state or a municipality may itself enter into business in competition with private
proprietor, and thus effectively [p530] although indirectly control the prices charged by
them. [n35]
The milk industry in New York has been the subject of longstanding and drastic
regulation in the public interest. The legislative investigation of 1932 was persuasive of
the fact that, for this and other reasons, unrestricted competition aggravated existing
evils, and the normal law of supply and demand was insufficient to correct
maladjustments detrimental to the community. The inquiry disclosed destructive and
demoralizing competitive conditions and unfair trade practices which resulted in retail
price-cutting and reduced the income of the farmer below the cost of production. We do
not understand the appellant to deny that, in these circumstances, the legislature might
reasonably consider further regulation and control desirable for protection of the
industry and the consuming public. That body believed conditions could be improved by
preventing destructive price-cutting by stores which, due to the flood of surplus milk,
were able to buy at much lower prices than the larger distributors and to sell without
incurring the delivery costs of the latter. In the order of which complaint is made, the
Milk Control Board fixed a price of ten cents per quart for sales by a distributor to a
consumer, and nine cents by a store to a consumer, thus recognizing the lower costs of

the store and endeavoring to establish a differential which would be just to both. In the
light of the facts, the order appears not to be unreasonable or arbitrary, or without
relation to the purpose to prevent ruthless competition from destroying the wholesale
price structure on which the farmer depends for his livelihood, and the community for
an assured supply of milk. [p531]
But we are told that, because the law essays to control prices, it denies due process.
Notwithstanding the admitted power to correct existing economic ills by appropriate
regulation of business, even though an indirect result may be a restriction of the
freedom of contract or a modification of charges for services or the price of
commodities, the appellant urges that direct fixation of prices is a type of regulation
absolutely forbidden. His position is that the Fourteenth Amendment requires us to hold
the challenged statute void for this reason alone. The argument runs that the public
control of rates or prices is per se unreasonable and unconstitutional, save as applied to
businesses affected with a public interest; that a business so affected is one in which
property is devoted to an enterprise of a sort which the public itself might appropriately
undertake, or one whose owner relies on a public grant or franchise for the right to
conduct the business, or in which he is bound to serve all who apply; in short, such as
is commonly called a public utility; or a business in its nature a monopoly. The milk
industry, it is said, possesses none of these characteristics, and, therefore, not being
affected with a public interest, its charges may not be controlled by the state. Upon the
soundness of this contention the appellant's case against the statute depends.
We may as well say at once that the dairy industry is not, in the accepted sense of the
phrase, a public utility. We think the appellant is also right in asserting that there is in
this case no suggestion of any monopoly or monopolistic practice. It goes without
saying that those engaged in the business are in no way dependent upon public grants
or franchises for the privilege of conducting their activities. But if, as must be conceded,
the industry is subject to regulation in the public interest, what constitutional principle
bars the state from correcting existing [p532] maladjustments by legislation touching
prices? We think there is no such principle. The due process clause makes no mention
of sales or of prices any more than it speaks of business or contracts or buildings or
other incidents of property. The thought seems nevertheless to have persisted that
there is something peculiarly sacrosanct about the price one may charge for what he
makes or sells, and that, however able to regulate other elements of manufacture or
trade, with incidental effect upon price, the state is incapable of directly controlling the
price itself. This view was negatived many years ago. Munn v. Illinois, 94 U.S. 113. The
appellant's claim is, however, that this court, in there sustaining a statutory prescription
of charges for storage by the proprietors of a grain elevator, limited permissible
legislation of that type to businesses affected with a public interest, and he says no
business is so affected except it have one or more of the characteristics he enumerates.
But this is a misconception. Munn and Scott held no franchise from the state. They

owned the property upon which their elevator was situated, and conducted their
business as private citizens. No doubt they felt at liberty to deal with whom they
pleased, and on such terms as they might deem just to themselves. Their enterprise
could not fairly be called a monopoly, although it was referred to in the decision as a
"virtual monopoly." This meant only that their elevator was strategically situated, and
that a large portion of the public found it highly inconvenient to deal with others. This
court concluded the circumstances justified the legislation as an exercise of the
governmental right to control the business in the public interest; that is, as an exercise
of the police power. It is true that the court cited a statement from Lord Hale's De
Portibus Maris, to the effect that, when private property is "affected with a public
interest, it ceases to be juris privati only"; but the court proceeded at once to define
what it understood by [p533] the expression, saying:
Property does become clothed with a public interest when used in a manner to make it
of public consequence, and affect the community at large.
(P. 126.) Thus, understood, "affected with a public interest" is the equivalent of "subject
to the exercise of the police power", and it is plain that nothing more was intended by
the expression. The court had been at pains to define that power (pp. 124, 125) ending
its discussion in these words:
From this, it is apparent that, down to the time of the adoption of the Fourteenth
Amendment, it was not supposed that statutes regulating the use, or even the price of
the use, of private property necessarily deprived an owner of his property without due
process of law. Under some circumstances, they may, but not under all. The
amendment does not change the law in this particular; it simply prevents the States
from doing that which will operate as such a deprivation. [n36]
In the further discussion of the principle, it is said that, when one devotes his property
to a use "in which the public has an interest," he, in effect, "grants to the public an
interest in that use," and must submit to be controlled for the common good. The
conclusion is that, if Munn and Scott wished to avoid having their business regulated,
they should not have embarked their property in an industry which is subject to
regulation in the public interest.
The true interpretation of the court's language is claimed to be that only property
voluntarily devoted to a known public use is subject to regulation as to rates. But
obviously Munn and Scott had not voluntarily dedicated their business to a public use.
They intended only [p534] to conduct it as private citizens, and they insisted that they
had done nothing which gave the public an interest in their transactions or conferred
any right of regulation. The statement that one has dedicated his property to a public
use is, therefore, merely another way of saying that, if one embarks in a business
which public interest demands shall be regulated, he must know regulation will ensue.

In the same volume, the court sustained regulation of railroad rates. [n37] After referring
to the fact that railroads are carriers for hire, are incorporated as such, and given
extraordinary powers in order that they may better serve the public, it was said that
they are engaged in employment " affecting the public interest," and therefore, under
the doctrine of the Munn case, subject to legislative control as to rates. And in another
of the group of railroad cases then heard, [n38] it was said that the property of railroads is
"clothed with a public interest" which permits legislative limitation of the charges for its
use. Plainly, the activities of railroads, their charges and practices, so nearly touch the
vital economic interests of society that the police power may be invoked to regulate
their charges, and no additional formula of affection or clothing with a public interest is
needed to justify the regulation. And this is evidently true of all business units
supplying transportation, light, heat, power and water to communities, irrespective of
how they obtain their powers.
The touchstone of public interest in any business, its practices and charges, clearly is
not the enjoyment of any franchise from the state, Munn v. Illinois, supra. Nor is it the
enjoyment of a monopoly; for in Brass v. [p535]North Dakota, 153 U.S. 391, a similar
control of prices of grain elevators was upheld in spite of overwhelming and
uncontradicted proof that about six hundred grain elevators existed along the line of the
Great Northern Railroad, in North Dakota; that, at the very station where the
defendant's elevator was located, two others operated, and that the business was
keenly competitive throughout the state.
In German Alliance Insurance Co. v. Lewis, 233 U.S. 389, a statute fixing the amount of
premiums for fire insurance was held not to deny due process. Though the business of
the insurers depended on no franchise or grant from the state, and there was no threat
of monopoly, two factors rendered the regulation reasonable. These were the almost
universal need of insurance protection and the fact that, while the insurers competed
for the business, they all fixed their premiums for similar risks according to an agreed
schedule of rates. The court was at pains to point out that it was impossible to lay down
any sweeping and general classification of businesses as to which price-regulation could
be adjudged arbitrary or the reverse.
Many other decisions show that the private character of a business does not necessarily
remove it from the realm of regulation of charges or prices. The usury laws fix the price
which may be exacted for the use of money, although no business more essentially
private in character can be imagined than that of loaning one's personal funds. Griffith
v. Connecticut, 218 U.S. 563. Insurance agents' compensation may be regulated,
though their contracts are private, because the business of insurance is considered one
properly subject to public control. O'Gorman & Young v. Hartford Fire Ins. Co., 282 U.S.
251. Statutes prescribing in the public interest the amounts to be charged by attorneys
for prosecuting certain claims, a matter ordinarily one of personal and private

nature, [p536] are not a deprivation of due process. Frisbie v. United States, 157 U.S.
160; Capital Trust Co. v. Calhoun, 250 U.S. 208; Calhoun v. Massie, 253 U.S.
170; Newman v. Moyers, 253 U.S. 182; Yeiser v. Dysart, 267 U.S. 540; Margolin v.
United States, 269 U.S. 93. A stockyards corporation, "while not a common carrier, nor
engaged in any distinctively public employment, is doing a work in which the public has
an interest," and its charges may be controlled. Cotting v. Kansas City Stockyards
Co., 183 U.S. 79, 85. Private contract carriers, who do not operate under a franchise,
and have no monopoly of the carriage of goods or passengers, may, since they use the
highways to compete with railroads, be compelled to charge rates not lower than those
of public carriers for corresponding services, if the state, in pursuance of a public policy
to protect the latter, so determines. Stephenson v. Binford, 287 U.S. 251, 274.
It is clear that there is no closed class or category of businesses affected with a public
interest, and the function of courts in the application of the Fifth and Fourteenth
Amendments is to determine in each case whether circumstances vindicate the
challenged regulation as a reasonable exertion of governmental authority or condemn it
as arbitrary or discriminatory. Wolff Packing Co. v. Industrial Court, 262 U.S. 522, 535.
The phrase "affected with a public interest " can, in the nature of things, mean no more
than that an industry, for adequate reason, is subject to control for the public good. In
several of the decisions of this court wherein the expressions "affected with a public
interest" and "clothed with a public use" have been brought forward as the criteria of
the validity of price control, it has been admitted that they are not susceptible of
definition and form an unsatisfactory test of the constitutionality of legislation directed
at business practices or prices. These decisions must rest, finally, upon the basis that
the requirements of due process were [p537] not met, because the laws were found
arbitrary in their operation and effect. [n39] But there can be no doubt that, upon proper
occasion and by appropriate measures, the state may regulate a business in any of its
aspects, including the prices to be charged for the products or commodities it sells.
So far as the requirement of due process is concerned, and in the absence of other
constitutional restriction, a state is free to adopt whatever economic policy may
reasonably be deemed to promote public welfare, and to enforce that policy by
legislation adapted to its purpose. The courts are without authority either to declare
such policy or, when it is declared by the legislature, to override it. If the laws passed
are seen to have a reasonable relation to a proper legislative purpose, and are neither
arbitrary nor discriminatory, the requirements of due process are satisfied, and judicial
determination to that effect renders a court functus officio.
Whether the free operation of the normal laws of competition is a wise and wholesome
rule for trade and commerce is an economic question which this court need not consider
or determine.

Northern Securities Co. v. United States, 193 U.S. 197, 337-338. And it is equally clear
that, if the legislative policy be to curb unrestrained and harmful competition by
measures which are not arbitrary or discriminatory, it does not lie with the courts to
determine that the rule is unwise. With the wisdom of the policy adopted, with the
adequacy or practicability of the law enacted to forward it, the courts are both
incompetent and unauthorized to deal. The course of decision in this court exhibits a
firm adherence to these principles. Times without number, we have said that the
legislature is primarily the judge of the necessity of such an enactment,[p538] that
every possible presumption is in favor of its validity, and that, though the court may
hold views inconsistent with the wisdom of the law, it may not be annulled unless
palpably in excess of legislative power.[n40]
The lawmaking bodies have in the past endeavored to promote free competition by laws
aimed at trusts and monopolies. The consequent interference with private property and
freedom of contract has not availed with the courts to set these enactments aside as
denying due process. [n41] Where the public interest was deemed to require the fixing of
minimum prices, that expedient has been sustained. [n42] If the lawmaking body, within
its sphere of government, concludes that the conditions or practices in an industry
make unrestricted competition an inadequate safeguard of the consumer's
interests, [n43] produce waste harmful to the public, threaten ultimately to cut off the
supply of a commodity needed by the public, or portend the destruction of the industry
itself, appropriate statutes passed in an honest effort to correct the threatened
consequences may not be set aside because the regulation adopted fixes prices
reasonably deemed by the legislature to be fair to those engaged in the industry and to
the consuming public. And this is especially so where, as here, the economic
maladjustment is one of price, which threatens harm to the producer at one end of the
series and the consumer at the other. The Constitution does [p539] not secure to
anyone liberty to conduct his business in such fashion as to inflict injury upon the pubic
at large, or upon any substantial group of the people. Price control, like any other form
of regulation, is unconstitutional only if arbitrary, discriminatory, or demonstrably
irrelevant to the policy the legislature is free to adopt, and hence an unnecessary and
unwarranted interference with individual liberty.
Tested by these considerations, we find no basis in the due process clause of the
Fourteenth Amendment for condemning the provisions of the Agriculture and Markets
Law here drawn into question.
The judgment is
Affirmed.

KWONG SING VS. CITY OF MANILA [41 Phil 103; G.R. No.
15972; 11 Oct 1920]

Friday, January 30, 2009 Posted by Coffeeholic Writes

Labels: Case Digests, Political Law

Facts:

Kwong Sing, in his own behalf and of other Chinese laundrymen who

has general and the same interest, filed a complaint for a preliminary injunction.
The Plaintiffs also questioned the validity of enforcing Ordinance No. 532 by the
city of Manila. Ordinance No. 532 requires that the receipt be in duplicate in
English and Spanish duly signed showing the kind and number of articles
delivered

by

laundries

and

dyeing

and

cleaning

establishments.

The

permanentinjunction was denied by the trial court. The appellants claim is that
Ordinance No. 532 savors of class legislation; putting in mind that they are
Chinese nationals. It unjustly discriminates between persons in similar
circumstances; and that it constitutes an arbitraryinfringement of property
rights. They also contest that the enforcement of the legislation is an act
beyond the scope of their police power. In view of the foregoing, this is an
appeal

with

the

Supreme

Court.

Issues:
(1) Whether or Not the enforcement of Ordinance no, 532 is an act beyond the
scope

of

police

power

(2) Whether or Not the enforcement of the same is a class legislationthat

infringes

Held:

property

rights.

Reasonable restraints of a lawful business for such purposes are

permissible under the police power. The police power of the City of Manila to
enact Ordinance No. 532 is based on Section 2444, paragraphs (l) and (ee) of
the Administrative Code, as amended by Act No. 2744, authorizes the municipal
board of the city of Manila, with the approval of the mayor of the city:
(l) To regulate and fix the amount of the license fees for the following: xxxx

xxxxxlaundries

xxxx.

(ee) To enact all ordinances it may deem necessary and proper for the
sanitation and safety, the furtherance of the prosperity, and the promotion of
the morality, peace, good order, comfort, convenience, and general welfare of
the

city

and

its

inhabitants.

The court held that the obvious purpose of Ordinance No. 532 was to
avoid disputes between laundrymen and their patrons and to protect customers
of laundries who are not able to decipher Chinese characters from being
defrauded. (Considering that in the year 1920s, people of Manila are more
familiar

with

Spanish

and

maybe

English.)

In whether the ordinance is class legislation, the court held that the ordinance
invades no fundamental right, and impairs no personal privilege. Under the
guise of police regulation, an attempt is not made to violate personal property
rights. The ordinance is neither discriminatory nor unreasonable in its operation.
It applies to all public laundries without distinction, whether they belong to
Americans, Filipinos, Chinese, or any other nationality. All, without exception,
and each every one of them without distinction, must comply with the
ordinance. The obvious objection for the implementation of the ordinance is
based in sec2444 (ee) of the Administrative Code. Although, an additional
burden will be imposed on the business and occupation affected by the
ordinance such as that of the appellant by learning even a few words in Spanish
or English, but mostly Arabic numbers in order to properly issue a receipt, it
seems that the same burdens are cast upon the them. Yet, even if private rights
of person or property are subjected to restraint, and even if loss will result to
individuals from the enforcement of the ordinance, this is not sufficient ground
for failing to uphold the power of the legislative body. The very foundation of
the police power is the control of private interests for the public welfare.
Finding that the ordinance is valid, judgment is affirmed, and the petition for a
preliminary injunction is denied, with costs against the appellants.

Yu Cong Eng vs. Trinidad

Yu Cong Eng et al vs. Trinidad
GR No. L-20479 | Feb. 6, 1925

History:
The sales tax has been in force in the Philippines for a number of years. Our law provides for privilege taxes to be
levied on certain businesses and occupations. These percentage taxes on business are payable at the end of each
calendar quarter in the amount lawfully due on the business transacted during the past quarter. It is made the duty
of every person conducting a business subject to such tax, within the same period as is allowed for the payment of
the quarterly installments of the fixed taxes without penalty, to make a true and complete return of the amount of
the receipts or earnings of his business during the preceding quarter and pay the tax due thereon. All merchants
not specifically exempted must pay a tax of one and one-half per cent on the gross value in money of the
commodities, goods, wares, merchandise sold, bartered, exchanged, or consigned abroad by them, such tax to be

based on the actual selling price or value of the things in question at the time they are disposed of or consigned
The income tax has also been established here for sometime, first pursuant to an Act of Congress and later
pursuant to an Act of the Philippine Legislature (Act No. 2833, as amended by Act No. 2926). The customary
returns are required from individuals and corporations. The tax is computed and the assessments are made by the

Collector of Internal Revenue and his agents.

The Spanish Code of Commerce, which was in force at that time, requires that merchants shall keep: A book of
inventories and balances; (2) a daybook; (3) a ledger; (4) a copying book for letters and telegrams; and (5) the

other books required by special laws. However, it was silent as to the language which the books must be kept
CIR issued a Circular Letter requiring that the record of sales of merchants subject to the merchants tax must
either be in English or Spanish

Challenged in the case of Young vs. Rafferty

SC: CIR is not empowered to designate the language which the entries in the books should be made. Such
initiative should not be taken by the CIR, arguing that it is to protect the govt against evasion

Facts:
On 1921, Act No. 2972 or the Chinese Bookkeeping Law was passed, regulating that the account books should not
be in any other language exc. English, Spanish or any dialect, otherwise a penalty of fine of not more than 10K or
imprisonment for not more than 2 years will be imposed

fiscal measure intended to facilitate the work of the government agents and to prevent fraud in the returns of

merchants, in conformity with the sales tax and the income tax
On March 1923, BIR inspected the books of account of Yu Cong Eng where it was found out that it is not in

accordance with Act 2972

A criminal case was filed against Yu Cong Eng before the CFI Manila for keeping his books of account in Chinese

Yus defense:

Yu Cong Eng et al are Chinese merchants, claiming that they represent the other 12K filed a petition for
prohibition and injunction against the CIR, questioning the constitutionality of Act No. 2972 or the Chinese
Bookkeeping Law
Issue: W/N Act No. 2972 is constitutional?
Ruling:

As a general rule, the question of constitutionality must be raised in the lower court and that court must be given

an opportunity to pass upon the question before it may be presented to the appellate court for resolution
Power of taxation

strongest of all the powers of government, practically absolute and unlimited

It is a legislative power. All its incidents are within the control of the legislature. It is the Legislature which must
questions of state necessarily involved in ordering a tax, which must make all the necessary rules and regulations
which are to be observed in order to produce the desired results, and which must decide upon the agencies by

means of which collections shall be made

The power to tax is not judicial power and that a strong case is required for the judiciary to declare a law relating
to taxation invalid. If, of course, so great an abuse is manifest as to destroy natural and fundamental rights, it is

the duty of the judiciary to hold such an Act unconstitutional

The Chinese petitioners are accorded treaty rights of the most favored nation

Their constitutional rights are those accorded all aliens, which means that the life, liberty, or property of these
persons cannot be taken without due process of law, and that they are entitled to the equal protection of the

laws, without regard to their race

Act No. 2972 is a fiscal measure which seeks to prohibit not only the Chinese but all merchants of whatever
nationality from making entries in the books of account or forms subject to inspection for taxation purposes in any

other language than either the English or Spanish language or a local dialect
the law only intended to require the keeping of such books as were necessary in order to facilitate governmental

inspection for tax purposes

The Chinese will not be singled out as a special subject for discriminating and hostile legislation since there are
other aliens doing business in the Phils. There will be no arbitrary deprivation of liberty or arbitrary spoliation of
property. There will be no unjust and illegal discrimination between persons in similar circumstances. The law will

prove oppressive to the extent that all tax laws are oppressive, but not oppressive to the extent of confiscation
Act No. 2972 as meaning that any person, company, partnership, or corporation, engaged in commerce, industry,
or any other activity for the purpose of profit in the Philippine Islands, shall keep its account books, consisting of
sales books and other records and returns required for taxation purposes by regulations of the Bureau of Internal
Revenue, in effect when this action was begun, in English, Spanish, or a local dialect, thus valid and constitutional