Buck v. Bell, 274 U.S. 200 (1927) In 1924, the state of Virginia passed a law granting certain state hospitals the authority to sterilize patients deemed mentally defective. After becoming pregnant out of wedlock, possibly from being raped, seventeen-year-old Carrie Buck was institutionalized by her foster parents. While institutionalized, she, like her mother before her, was deemed ‘‘feeble minded,’’ and the hospital recommended sterilization pursuant to the new statute. This decision was upheld through a review process that included a special hospital review board, a hearing before the state trial court, and review by the state supreme court. Under the theories of eugenic sterilization that were popular during this era, the state argued that sterilizing those with unwanted mental deficiencies would lessen the presence of these traits in future generations, save government tax dollars spent on these individuals, and allow more patients to be released from state mental hospitals. Buck’s attorney argued that the statute violated her right of bodily integrity under the due process clause and cited equal protection concerns. Based on a very limited and possibly one-sided record from the lower court, the Supreme Court found the state’s arguments convincing. With only one justice dissenting without comment, the Court found that the statute provided for ample due process through the statute’s review procedures and it did not violate her rights to equal protection. Justice Oliver Wendell Holmes, writing the Court’s opinion, noted that since the best citizens are often required to give up their lives for the good of society, ‘‘it would be strange if [the State] could not call upon those who already sap the strength of the State for these lesser
Transcript
Buck v. Bell, 274 U.S. 200 (1927)
In 1924, the state of Virginia passed a law granting certain state hospitals the authority to sterilize patients deemed mentally defective. After becoming pregnant out of wedlock, possibly from being raped, seventeen-year-old Carrie Buck was institutionalized by her foster parents. While institutionalized, she, like her mother before her, was deemed ‘‘feeble minded,’’ and the hospital recommended sterilization pursuant to the new statute. This decision was upheld through a review process that included a special hospital review board, a hearing before the state trial court, and review by the state supreme court.
Under the theories of eugenic sterilization that were popular during this era, the state argued that sterilizing those with unwanted mental deficiencies would lessen the presence of these traits in future generations, save government tax dollars spent on these individuals, and allow more patients to be released from state mental hospitals. Buck’s attorney argued that the statute violated her right of bodily integrity under the due process clause and cited equal protection concerns.
Based on a very limited and possibly one-sided record from the lower court, the Supreme Court found the state’s arguments convincing. With only one justice dissenting without comment, the Court found that the statute provided for ample due process through the statute’s review procedures and it did not violate her rights to equal protection.
Justice Oliver Wendell Holmes, writing the Court’s opinion, noted that since the best citizens are often required to give up their lives for the good of society, ‘‘it would be strange if [the State] could not call upon those who already sap the strength of the State for these lesser sacrifices . . . in order to prevent our being swamped with incompetence.’’
Acknowledging that other mandatory medical procedures were considered acceptable, Holmes noted, ‘‘The principle that sustains compulsory vaccination is broad enough to cover cutting the Fallopian tubes.’’ Referring to Carrie Buck, her mother, and her newborn daughter, Holmes noted, ‘‘Three generations of imbeciles are enough.’’
Following the decision, several states passed similar sterilization laws and the number of sterilization procedures grew dramatically. While involuntary
sterilization and the eugenics movements lost much of their support in the 1940s and 1950s, including the repeal of many states’ sterilization statutes, the decision itself has never been overturned. The case has been used as valid precedent in state courts to uphold sterilization laws and was cited by the Court in Roe v. Wade as an example of the states’ ability to limit privacy rights. However, the Court has taken some steps back from Buck v. Bell, such as striking down mandatory sterilization laws aimed at habitual criminals in Skinner v. Oklahoma and suggesting that the Buck decision upheld a ‘‘harsh measure’’ in Board of Trustees of the University of Alabama v. Garrett. Concurring in the 2004 case of Tennessee v. Lane, Justice David Souter went even further by citing Buck as an example of past judicial endorsement of disability discrimination. Debates over related issues, such as the sterilization of welfare recipients and criminals, whether voluntarily or involuntarily, have brought further attention to the legacy of Buck v. Bell, with many viewing it as one of the most intrusive encroachments into personal liberties.
SUMMARY OF BUCK VS BELL
Relevant Facts: Carrie Buck, a resident of the State of Virginia,
was a “feeble-minded” eighteen year old woman, whose mother was similarly feeble-minded. Ms. Buck, who was not married, was also the mother of a child likewise described by the State of Virginia as feeble-minded. In 1924, Virginia passed a statute authorizing the superintendents of institutions for certain classes of persons afflicted with hereditary conditions causing insanity of imbecility to order the sterilization of such persons. In order for the sterilization procedure to proceed, superintendents were required to present a petition to the board of directors for their institutions, notify the inmate and their guardian, and convene a hearing to present evidence for and against conducting the procedure. In this case, Dr. John Hendren Bell conducted the proceedings against Ms. Buck after her first physician passed away during the pendency of her case. Dr. Bell similarly pushed for sterilization under the statute, based on the same justification.
Issue: May a State, consistent with due process and equal protection, order the sterilization of a woman deemed mentally deficient by a state agency and review board?
Holding: Yes, states can require the sterilization of certain citizens without breaching constitutional rights. The statute in question provided adequate safeguards, and appropriate opportunity for notification and review, to comport with due process requirements.
Reasoning: Justice Holmes delivered a short majority opinion on behalf of the Court. He pointed out that the challenge to the law before the Court was properly considered a challenge to the law itself, not to compliance with the safeguards contained therein. He then argued that as the State can require sacrifices from citizens, up to and including their very lives, it is not unusual to require something less than the sacrifice of their life on behalf of the public good. Making a policy case, Justice Holmes opined that society would be better served by preventing reproduction by members of society most likely to produce progeny dependent on the government. The Court also made clear that the process for review of a sterilization order properly considered the rights of those whom the State targeted for such procedures.
Finally, Justice Holmes dismissed concerns regarding equal protection. Here he reasoned that while not all citizens were equally subject to the potential to
have their reproductive capacity forfeited, the State could reasonably direct its attention to those deemed unfit to reproduce and thereby conserve necessary resources for other prerogatives. Comparing forced sterilization to mandatory vaccination, Justice Holmes argued that both were for the overall benefit of society. Noting the sad history of Ms. Buck, her mother, and her child, Justice Holmes suggested that “[t]hree generations of imbeciles are enough.”
Dissent: Justice Butler dissented, but did not file a dissenting opinion.
Conclusion: While subsequently overturned as public opinion on eugenics changed, the Court here concluded that sterilization was not only a legitimate policy aim for the states, but entirely consistent with the Constitution.
G.R. No. L-24693 July 31, 1967
ERMITA-MALATE HOTEL AND MOTEL OPERATORS ASSOCIATION, INC., HOTEL DEL MAR INC. and GO CHIU, petitioners-appellees, vs.THE HONORABLE CITY MAYOR OF MANILA, respondent-appellant. VICTOR ALABANZA, intervenor-appellee.
Panganiban, Abad and Associates Law Office for respondent-appellant.J. M. Aruego, Tenchavez and Associates for intervenor-appellee.
FERNANDO, J.:
The principal question in this appeal from a judgment of the lower court in an action for prohibition is whether Ordinance No. 4760 of the City of Manila is violative of the due process clause. The lower court held that it is and adjudged it "unconstitutional, and, therefore, null and void." For reasons to be more specifically set forth, such judgment must be reversed, there being a failure of the requisite showing to sustain an attack against its validity.
The petition for prohibition against Ordinance No. 4760 was filed on July 5, 1963 by the petitioners, Ermita-Malate Hotel and Motel Operators Association,
one of its members, Hotel del Mar Inc., and a certain Go Chiu, who is "the president and general manager of the second petitioner" against the respondent Mayor of the City of Manila who was sued in his capacity as such "charged with the general power and duty to enforce ordinances of the City of Manila and to give the necessary orders for the faithful execution and enforcement of such ordinances." (par. 1). It was alleged that the petitioner non-stock corporation is dedicated to the promotion and protection of the interest of its eighteen (18) members "operating hotels and motels, characterized as legitimate businesses duly licensed by both national and city authorities, regularly paying taxes, employing and giving livelihood to not less than 2,500 person and representing an investment of more than P3 million."1 (par. 2).
It was then alleged that on June 13, 1963, the Municipal Board of the City of Manila enacted Ordinance No. 4760, approved on June 14, 1963 by the then Vice-Mayor Herminio Astorga, who was at the time acting as Mayor of the City of Manila. (par. 3).
After which the alleged grievances against the ordinance were set forth in detail. There was the assertion of its being beyond the powers of the Municipal Board
of the City of Manila to enact insofar as it would regulate motels, on the ground that in the revised charter of the City of Manila or in any other law, no reference is made to motels; that Section 1 of the challenged ordinance is unconstitutional and void for being unreasonable and violative of due process insofar as it would impose P6,000.00 fee per annum for first class motels and P4,500.00 for second class motels; that the provision in the same section which would require the owner, manager, keeper or duly authorized representative of a hotel, motel, or lodging house to refrain from entertaining or accepting any guest or customer or letting any room or other quarter to any person or persons without his filling up the prescribed form in a lobby open to public view at all times and in his presence, wherein the surname, given name and middle name, the date of birth, the address, the occupation, the sex, the nationality, the length of stay and the number of companions in the room, if any, with the name, relationship, age and sex would be specified, with data furnished as to his residence certificate as well as his passport number, if any, coupled with a certification that a person signing such form has personally filled it up and affixed his signature in the presence of such owner, manager,
keeper or duly authorized representative, with such registration forms and records kept and bound together, it also being provided that the premises and facilities of such hotels, motels and lodging houses would be open for inspection either by the City Mayor, or the Chief of Police, or their duly authorized representatives is unconstitutional and void again on due process grounds, not only for being arbitrary, unreasonable or oppressive but also for being vague, indefinite and uncertain, and likewise for the alleged invasion of the right to privacy and the guaranty against self-incrimination;
that Section 2 of the challenged ordinance classifying motels into two classes and requiring the maintenance of certain minimum facilities in first class motels such as a telephone in each room, a dining room or, restaurant and laundry similarly offends against the due process clause for being arbitrary, unreasonable and oppressive, a conclusion which applies to the portion of the ordinance requiring second class motels to have a dining room; that the provision of Section 2 of the challenged ordinance prohibiting a person less than 18 years old from being accepted in such hotels, motels, lodging houses, tavern or common inn
unless accompanied by parents or a lawful guardian and making it unlawful for the owner, manager, keeper or duly authorized representative of such establishments to lease any room or portion thereof more than twice every 24 hours, runs counter to the due process guaranty for lack of certainty and for its unreasonable, arbitrary and oppressive character;
and that insofar as the penalty provided for in Section 4 of the challenged ordinance for a subsequent conviction would, cause the automatic cancellation of the license of the offended party, in effect causing the destruction of the business and loss of its investments, there is once again a transgression of the due process clause.
There was a plea for the issuance of preliminary injunction and for a final judgment declaring the above ordinance null and void and unenforceable. The lower court on July 6, 1963 issued a writ of preliminary injunction ordering respondent Mayor to refrain from enforcing said Ordinance No. 4760 from and after July 8, 1963.
In the a answer filed on August 3, 1963, there was an admission of the personal circumstances regarding the respondent Mayor and of the fact that petitioners are licensed to engage in the hotel or
motel business in the City of Manila, of the provisions of the cited Ordinance but a denial of its alleged nullity, whether on statutory or constitutional grounds. After setting forth that the petition did fail to state a cause of action and that the challenged ordinance bears a reasonable relation, to a proper purpose, which is to curb immorality, a valid and proper exercise of the police power and that only the guests or customers not before the court could complain of the alleged invasion of the right to privacy and the guaranty against self incrimination, with the assertion that the issuance of the preliminary injunction ex parte was contrary to law, respondent Mayor prayed for, its dissolution and the dismissal of the petition.
Instead of evidence being offered by both parties, there was submitted a stipulation of facts dated September 28, 1964, which reads:
1. That the petitioners Ermita-Malate Hotel and Motel Operators Association, Inc. and Hotel del Mar Inc. are duly organized and existing under the laws of the Philippines, both with offices in the City of Manila, while the petitioner Go Chin is the president and general manager of Hotel del Mar Inc., and the intervenor Victor
Alabanza is a resident of Baguio City, all having the capacity to sue and be sued;
2. That the respondent Mayor is the duly elected and incumbent City Mayor and chief executive of the City of Manila charged with the general power and duty to enforce ordinances of the City of Manila and to give the necessary orders for the faithful execution and enforcement of such ordinances;
3. That the petitioners are duly licensed to engage in the business of operating hotels and motels in Malate and Ermita districts in Manila;
4. That on June 13, 1963, the Municipal Board of the City of Manila enacted Ordinance No. 4760, which was approved on June 14, 1963, by Vice-Mayor Herminio Astorga, then the acting City Mayor of Manila, in the absence of the respondent regular City Mayor, amending sections 661, 662, 668-a, 668-b and 669 of the compilation of the ordinances of the City of Manila besides inserting therein three new sections. This ordinance is similar to the one vetoed by the respondent Mayor (Annex A) for the reasons stated in its 4th Indorsement dated February 15, 1963 (Annex B);
5. That the explanatory note signed by then Councilor Herminio
Astorga was submitted with the proposed ordinance (now Ordinance 4760) to the Municipal Board, copy of which is attached hereto as Annex C;
6. That the City of Manila derived in 1963 an annual income of P101,904.05 from license fees paid by the 105 hotels and motels (including herein petitioners) operating in the City of Manila.
Thereafter came a memorandum for respondent on January 22, 1965, wherein stress was laid on the presumption of the validity of the challenged ordinance, the burden of showing its lack of conformity to the Constitution resting on the party who assails it, citing not only U.S. v. Salaveria, but likewise applicable American authorities. Such a memorandum likewise refuted point by point the arguments advanced by petitioners against its validity. Then barely two weeks later, on February 4, 1965, the memorandum for petitioners was filed reiterating in detail what was set forth in the petition, with citations of what they considered to be applicable American authorities and praying for a judgment declaring the challenged ordinance "null and void and unenforceable" and making permanent the writ of preliminary injunction issued.
After referring to the motels and hotels, which are members of the petitioners association, and referring to the alleged constitutional questions raised by the party, the lower court observed: "The only remaining issue here being purely a question of law, the parties, with the nod of the Court, agreed to file memoranda and thereafter, to submit the case for decision of the Court." It does appear obvious then that without any evidence submitted by the parties, the decision passed upon the alleged infirmity on constitutional grounds of the challenged ordinance, dismissing as is undoubtedly right and proper the untenable objection on the alleged lack of authority of the City of Manila to regulate motels, and came to the conclusion that "the challenged Ordinance No. 4760 of the City of Manila, would be unconstitutional and, therefore, null and void." It made permanent the preliminary injunction issued against respondent Mayor and his agents "to restrain him from enforcing the ordinance in question." Hence this appeal.
As noted at the outset, the judgment must be reversed. A decent regard for constitutional doctrines of a fundamental character ought to have admonished the lower court against such a sweeping
condemnation of the challenged ordinance. Its decision cannot be allowed to stand, consistently with what has hitherto been the accepted standards of constitutional adjudication, in both procedural and substantive aspects.
Primarily what calls for a reversal of such a decision is the absence of any evidence to offset the presumption of validity that attaches to a challenged statute or ordinance. As was expressed categorically by
Justice Malcolm:
"The presumption is all in favor of validity x x x . The action of the elected representatives of the people cannot be lightly set aside. The councilors must, in the very nature of things, be familiar with the necessities of their particular municipality and with all the facts and circumstances which surround the subject and necessitate action. The local legislative body, by enacting the ordinance, has in effect given notice that the regulations are essential to the well being of the people x x x .
The Judiciary should not lightly set aside legislative action when there is not a clear invasion of personal or property rights under the guise of police regulation.2
It admits of no doubt therefore that there being a presumption of validity, the necessity for evidence to rebut it is unavoidable, unless the statute or ordinance is void on its face which is not the case here. The principle has been nowhere better expressed than in the leading case of O'Gorman & Young v. Hartford Fire Insurance Co.,3 where the American Supreme Court through Justice Brandeis tersely and succinctly summed up the matter thus:
The statute here questioned deals with a subject clearly within the scope of the police power. We are asked to declare it void on the ground that the specific method of regulation prescribed is unreasonable and hence deprives the plaintiff of due process of law. As underlying questions of fact may condition the constitutionality of legislation of this character, the resumption of constitutionality must prevail in the absence of some factual foundation of record for overthrowing the statute." No such factual foundation being laid in the present case, the lower court deciding the matter on the pleadings and the stipulation of facts, the presumption of validity must prevail and the judgment against the ordinance set aside.
Nor may petitioners assert with plausibility that on its face the
ordinance is fatally defective as being repugnant to the due process clause of the Constitution. The mantle of protection associated with the due process guaranty does not cover petitioners. This particular manifestation of a police power measure being specifically aimed to safeguard public morals is immune from such imputation of nullity resting purely on conjecture and unsupported by anything of substance. To hold otherwise would be to unduly restrict and narrow the scope of police power which has been properly characterized as the most essential, insistent and the least limitable of powers,4extending as it does "to all the great public needs."5 It would be, to paraphrase another leading decision, to destroy the very purpose of the state if it could be deprived or allowed itself to be deprived of its competence to promote public health, public morals, public safety and the genera welfare.6 Negatively put, police power is "that inherent and plenary power in the State which enables it to prohibit all that is hurt full to the comfort, safety, and welfare of society.7
There is no question but that the challenged ordinance was precisely enacted to minimize certain practices hurtful to public morals. The explanatory note of
the Councilor Herminio Astorga included as annex to the stipulation of facts, speaks of the alarming increase in the rate of prostitution, adultery and fornication in Manila traceable in great part to the existence of motels, which "provide a necessary atmosphere for clandestine entry, presence and exit" and thus become the "ideal haven for prostitutes and thrill-seekers."
The challenged ordinance then proposes to check the clandestine harboring of transients and guests of these establishments by requiring these transients and guests to fill up a registration form, prepared for the purpose, in a lobby open to public view at all times, and by introducing several other amendatory provisions calculated to shatter the privacy that characterizes the registration of transients and guests."
Moreover, the increase in the licensed fees was intended to discourage "establishments of the kind from operating for purpose other than legal" and at the same time, to increase "the income of the city government."
It would appear therefore that the stipulation of facts, far from sustaining any attack against the validity of the ordinance, argues eloquently for it.
It is a fact worth noting that this Court has invariably stamped with the seal of its approval, ordinances punishing vagrancy and classifying a pimp or procurer as a vagrant;8 provide a license tax for and regulating the maintenance or operation of public dance halls;9 prohibiting gambling;10 prohibiting jueteng;11 and monte;12prohibiting playing of panguingui on days other than Sundays or legal holidays;13 prohibiting the operation of pinball machines;14 and prohibiting any person from keeping, conducting or maintaining an opium joint or visiting a place where opium is smoked or otherwise used,15 all of which are intended to protect public morals.
On the legislative organs of the government, whether national or local, primarily rest the exercise of the police power, which, it cannot be too often emphasized, is the power to prescribe regulations to promote the health, morals, peace, good order, safety and general welfare of the people.
In view of the requirements of due process, equal protection and other applicable constitutional guaranties however, the exercise of such police power insofar as it may affect the life, liberty or property of any person is subject to judicial inquiry.
Where such exercise of police power may be considered as either capricious, whimsical, unjust or unreasonable, a denial of due process or a violation of any other applicable constitutional guaranty may call for correction by the courts.
We are thus led to considering the insistent, almost shrill tone, in which the objection is raised to the question of due process.16
There is no controlling and precise definition of Due Process. It furnishes though a standard to which the governmental action should conform in order that deprivation of life, liberty or property, in each appropriate case, be valid.
What then is the standard of due process which must exist both as a procedural and a substantive requisite to free the challenged ordinance, or any governmental action for that matter, from the imputation of legal infirmity sufficient to spell its doom?
It is responsiveness to the supremacy of reason, obedience to the dictates of justice. Negatively put, arbitrariness is ruled out and unfairness avoided. To satisfy the due process requirement, official action, to paraphrase Cardozo, must not outrun the bounds of reason and
result in sheer oppression. Due process is thus hostile to any official action marred by lack of reasonableness. Correctly it has been identified as freedom from arbitrariness. It is the embodiment of the sporting idea of fair play. 17 It exacts fealty "to those strivings for justice" and judges the act of officialdom of whatever branch "in the light of reason drawn from considerations of fairness that reflect [democratic] traditions of legal and political thought."18 It is not a narrow or "technical conception with fixed content unrelated to time, place and circumstances,"19 decisions based on such a clause requiring a "close and perceptive inquiry into fundamental principles of our society."20 Questions of due process are not to be treated narrowly or pedantically in slavery to form or phrases.21
It would thus be an affront to reason to stigmatize an ordinance enacted precisely to meet what a municipal lawmaking body considers an evil of rather serious proportion an arbitrary and capricious exercise of authority. It would seem that what should be deemed unreasonable and what would amount to an abdication of the power to govern is inaction in the face of an admitted deterioration of the state of public morals. To be more specific, the
Municipal Board of the City of Manila felt the need for a remedial measure. It provided it with the enactment of the challenged ordinance. A strong case must be found in the records, and, as has been set forth, none is even attempted here to attach to an ordinance of such character the taint of nullity for an alleged failure to meet the due process requirement. Nor does it lend any semblance even of deceptive plausibility to petitioners' indictment of Ordinance No. 4760 on due process grounds to single out such features as the increased fees for motels and hotels, the curtailment of the area of freedom to contract, and, in certain particulars, its alleged vagueness.
Admittedly there was a decided increase of the annual license fees provided for by the challenged ordinance for hotels and motels, 150% for the former and over 200% for the latter, first-class motels being required to pay a P6,000 annual fee and second-class motels, P4,500 yearly. It has been the settled law however, as far back as 1922 that municipal license fees could be classified into those imposed for regulating occupations or regular enterprises, for the regulation or restriction of non-useful occupations or enterprises and for revenue purposes only.22 As was explained more in detail in the
above Cu Unjieng case: (2) Licenses for non-useful occupations are also incidental to the police power and the right to exact a fee may be implied from the power to license and regulate, but in fixing amount of the license fees the municipal corporations are allowed a much wider discretion in this class of cases than in the former, and aside from applying the well-known legal principle that municipal ordinances must not be unreasonable, oppressive, or tyrannical, courts have, as a general rule, declined to interfere with such discretion. The desirability of imposing restraint upon the number of persons who might otherwise engage in non-useful enterprises is, of course, generally an important factor in the determination of the amount of this kind of license fee. Hence license fees clearly in the nature of privilege taxes for revenue have frequently been upheld, especially in of licenses for the sale of liquors. In fact, in the latter cases the fees have rarely been declared unreasonable.23
Moreover in the equally leading case of Lutz v. Araneta24 this Court affirmed the doctrine earlier announced by the American Supreme Court that taxation may be made to implement the state's police power. Only the other day, this Court had occasion to affirm
that the broad taxing authority conferred by the Local Autonomy Act of 1959 to cities and municipalities is sufficiently plenary to cover a wide range of subjects with the only limitation that the tax so levied is for public purposes, just and uniform.25
As a matter of fact, even without reference to the wide latitude enjoyed by the City of Manila in imposing licenses for revenue, it has been explicitly held in one case that "much discretion is given to municipal corporations in determining the amount," here the license fee of the operator of a massage clinic, even if it were viewed purely as a police power measure.26 The discussion of this particular matter may fitly close with this pertinent citation from another decision of significance: "It is urged on behalf of the plaintiffs-appellees that the enforcement of the ordinance could deprive them of their lawful occupation and means of livelihood because they can not rent stalls in the public markets. But it appears that plaintiffs are also dealers in refrigerated or cold storage meat, the sale of which outside the city markets under certain conditions is permitted x x x . And surely, the mere fact, that some individuals in the community may be deprived of their present business or a particular mode of earning a living
cannot prevent the exercise of the police power. As was said in a case, persons licensed to pursue occupations which may in the public need and interest be affected by the exercise of the police power embark in these occupations subject to the disadvantages which may result from the legal exercise of that power."27
Nor does the restriction on the freedom to contract, insofar as the challenged ordinance makes it unlawful for the owner, manager, keeper or duly authorized representative of any hotel, motel, lodging house, tavern, common inn or the like, to lease or rent room or portion thereof more than twice every 24 hours, with a proviso that in all cases full payment shall be charged, call for a different conclusion. Again, such a limitation cannot be viewed as a transgression against the command of due process. It is neither unreasonable nor arbitrary. Precisely it was intended to curb the opportunity for the immoral or illegitimate use to which such premises could be, and, according to the explanatory note, are being devoted. How could it then be arbitrary or oppressive when there appears a correspondence between the undeniable existence of an undesirable situation and the legislative attempt at correction.
Moreover, petitioners cannot be unaware that every regulation of conduct amounts to curtailment of liberty which as pointed out by Justice Malcolm cannot be absolute. Thus: "One thought which runs through all these different conceptions of liberty is plainly apparent. It is this: 'Liberty' as understood in democracies, is not license; it is 'liberty regulated by law.' Implied in the term is restraint by law for the good of the individual and for the greater good of the peace and order of society and the general well-being. No man can do exactly as he pleases. Every man must renounce unbridled license. The right of the individual is necessarily subject to reasonable restraint by general law for the common good x x x The liberty of the citizen may be restrained in the interest of the public health, or of the public order and safety, or otherwise within the proper scope of the police power."28
A similar observation was made by Justice Laurel: "Public welfare, then, lies at the bottom of the enactment of said law, and the state in order to promote the general welfare may interfere with personal liberty, with property, and with business and occupations. Persons and property may be subjected to all kinds of restraints and burdens, in order to
secure the general comfort, health, and prosperity of the state x x x To this fundamental aim of our Government the rights of the individual are subordinated. Liberty is a blessing without which life is a misery, but liberty should not be made to prevail over authority because then society will fall into anarchy. Neither should authority be made to prevail over liberty because then the individual will fall into slavery. The citizen should achieve the required balance of liberty and authority in his mind through education and personal discipline, so that there may be established the resultant equilibrium, which means peace and order and happiness for all.29
It is noteworthy that the only decision of this Court nullifying legislation because of undue deprivation of freedom to contract, People v. Pomar,30 no longer "retains its virtuality as a living principle. The policy of laissez faire has to some extent given way to the assumption by the government of the right of intervention even in contractual relations affected with public interest.31 What may be stressed sufficiently is that if the liberty involved were freedom of the mind or the person, the standard for the validity of governmental acts is much more rigorous and exacting, but where the liberty
curtailed affects at the most rights of property, the permissible scope of regulatory measure is wider.32 How justify then the allegation of a denial of due process?
Lastly, there is the attempt to impugn the ordinance on another due process ground by invoking the principles of vagueness or uncertainty. It would appear from a recital in the petition itself that what seems to be the gravamen of the alleged grievance is that the provisions are too detailed and specific rather than vague or uncertain. Petitioners, however, point to the requirement that a guest should give the name, relationship, age and sex of the companion or companions as indefinite and uncertain in view of the necessity for determining whether the companion or companions referred to are those arriving with the customer or guest at the time of the registry or entering the room With him at about the same time or coming at any indefinite time later to join him; a proviso in one of its sections which cast doubt as to whether the maintenance of a restaurant in a motel is dependent upon the discretion of its owners or operators; another proviso which from their standpoint would require a guess as to whether the "full rate of payment" to be charged for every
such lease thereof means a full day's or merely a half-day's rate. It may be asked, do these allegations suffice to render the ordinance void on its face for alleged vagueness or uncertainty? To ask the question is to answer it. From Connally v. General Construction Co.33 toAdderley v. Florida,34 the principle has been consistently upheld that what makes a statute susceptible to such a charge is an enactment either forbidding or requiring the doing of an act that men of common intelligence must necessarily guess at its meaning and differ as to its application. Is this the situation before us? A citation from Justice Holmes would prove illuminating: "We agree to all the generalities about not supplying criminal laws with what they omit but there is no canon against using common sense in construing laws as saying what they obviously mean."35
That is all then that this case presents. As it stands, with all due allowance for the arguments pressed with such vigor and determination, the attack against the validity of the challenged ordinance cannot be considered a success. Far from it. Respect for constitutional law principles so uniformly held and so uninterruptedly adhered to by this Court compels a reversal of the appealed decision.
Wherefore, the judgment of the lower court is reversed and the injunction issued lifted forthwith. With costs.
G.R. No. L-59234 September 30, 1982
TAXICAB OPERATORS OF METRO MANILA, INC., FELICISIMO CABIGAO and ACE TRANSPORTATION CORPORATION, petitioners, vs.THE BOARD OF TRANSPORTATION and THE DIRECTOR OF THE BUREAU OF LAND TRANSPORTATION,respondents.
MELENCIO-HERRERA, J.:
This Petition for "Certiorari, Prohibition and mandamus with Preliminary Injunction and Temporary Restraining Order" filed by the Taxicab Operators of Metro Manila, Inc., Felicisimo Cabigao and Ace Transportation, seeks to declare the nullity of Memorandum Circular No. 77-42, dated October 10, 1977, of the Board of Transportation, and Memorandum Circular No. 52, dated August 15, 1980, of the Bureau of Land Transportation.
Petitioner Taxicab Operators of Metro Manila, Inc. (TOMMI) is a domestic corporation composed of taxicab operators, who are
grantees of Certificates of Public Convenience to operate taxicabs within the City of Manila and to any other place in Luzon accessible to vehicular traffic. Petitioners Ace Transportation Corporation and Felicisimo Cabigao are two of the members of TOMMI, each being an operator and grantee of such certificate of public convenience.
On October 10, 1977, respondent Board of Transportation (BOT) issued Memorandum Circular No. 77-42 which reads:
SUBJECT: Phasing out and Replacement of
Old and Dilapidated Taxis
WHEREAS, it is the policy of the government to insure that only safe and comfortable units are used as public conveyances;
WHEREAS, the riding public, particularly in Metro-Manila, has, time and again, complained against, and condemned, the continued operation of old and dilapidated taxis;
WHEREAS, in order that the commuting public may be assured of comfort, convenience, and safety, a program of phasing out of old and dilapidated taxis should be adopted;
WHEREAS, after studies and inquiries made by the Board of
Transportation, the latter believes that in six years of operation, a taxi operator has not only covered the cost of his taxis, but has made reasonable profit for his investments;
NOW, THEREFORE, pursuant to this policy, the Board hereby declares that no car beyond six years shall be operated as taxi, and in implementation of the same hereby promulgates the following rules and regulations:
1. As of December 31, 1977, all taxis of Model 1971 and earlier are ordered withdrawn from public service and thereafter may no longer be registered and operated as taxis. In the registration of cards for 1978, only taxis of Model 1972 and later shall be accepted for registration and allowed for operation;
2. As of December 31, 1978, all taxis of Model 1972 are ordered withdrawn from public service and thereafter may no longer be registered and operated as taxis. In the registration of cars for 1979, only taxis of Model 1973 and later shall be accepted for registration and allowed for operation; and every year thereafter, there shall be a six-year lifetime of taxi, to wit:
1980 — Model 1974
1981 — Model 1975, etc.
All taxis of earlier models than those provided above are hereby ordered withdrawn from public service as of the last day of registration of each particular year and their respective plates shall be surrendered directly to the Board of Transportation for subsequent turnover to the Land Transportation Commission.
For an orderly implementation of this Memorandum Circular, the rules herein shall immediately be effective in Metro-Manila. Its implementation outside Metro- Manila shall be carried out only after the project has been implemented in Metro-Manila and only after the date has been determined by the Board. 1
Pursuant to the above BOT circular, respondent Director of the Bureau of Land Transportation (BLT) issued Implementing Circular No. 52, dated August 15, 1980, instructing the Regional Director, the MV Registrars and other personnel of BLT, all within the National Capitol Region, to implement said Circular, and formulating a schedule of phase-out of vehicles to be allowed and accepted for registration as public conveyances. To quote said Circular:
Pursuant to BOT Memo-Circular No. 77-42, taxi units with year models over six (6) years old are now banned from operating as
public utilities in Metro Manila. As such the units involved should be considered as automatically dropped as public utilities and, therefore, do not require any further dropping order from the BOT.
Henceforth, taxi units within the National Capitol Region having year models over 6 years old shall be refused registration. The following schedule of phase-out is herewith prescribed for the guidance of all concerned:
Year Model Automatic Phase-Out Year
1980
1974 1981
1975 1982
1976 1983
1977
etc. etc.
Strict compliance here is desired. 2
In accordance therewith, cabs of model 1971 were phase-out in registration year 1978; those of model 1972, in 1979; those of model 1973, in 1980; and those of model 1974, in 1981.
On January 27, 1981, petitioners filed a Petition with the BOT, docketed as Case No. 80-7553, seeking to nullify MC No. 77-42 or to stop its implementation; to allow the registration and operation in 1981 and subsequent years of taxicabs of model 1974, as well as those of earlier models which were phased-out, provided that, at the time of registration, they are roadworthy and fit for operation.
On February 16, 1981, petitioners filed before the BOT a "Manifestation and Urgent Motion", praying for an early hearing of their petition. The case was heard on February 20, 1981. Petitioners presented testimonial and documentary evidence, offered the same, and manifested that they would submit additional documentary proofs. Said proofs were submitted on March 27, 1981 attached to petitioners' pleading entitled, "Manifestation, Presentation of Additional Evidence and Submission of the Case for Resolution." 3
On November 28, 1981, petitioners filed before the same Board a "Manifestation and Urgent Motion to Resolve or Decide Main Petition" praying that the case be resolved or decided not later than December 10, 1981 to enable them, in case of denial, to avail of whatever remedy they may have under the law for the protection of
their interests before their 1975 model cabs are phased-out on January 1, 1982.
Petitioners, through its President, allegedly made personal follow-ups of the case, but was later informed that the records of the case could not be located.
On December 29, 1981, the present Petition was instituted wherein the following queries were posed for consideration by this Court:
A. Did BOT and BLT promulgate the questioned memorandum circulars in accord with the manner required by Presidential Decree No. 101, thereby safeguarding the petitioners' constitutional right to procedural due process?
B. Granting, arguendo, that respondents did comply with the procedural requirements imposed by Presidential Decree No. 101, would the implementation and enforcement of the assailed memorandum circulars violate the petitioners' constitutional rights to.
(1) Equal protection of the law;
(2) Substantive due process; and
(3) Protection against arbitrary and unreasonable classification and standard?
On Procedural and Substantive Due Process:
Presidential Decree No. 101 grants to the Board of Transportation the power
4. To fix just and reasonable standards, classification, regulations, practices, measurements, or service to be furnished, imposed, observed, and followed by operators of public utility motor vehicles.
Section 2 of said Decree provides procedural guidelines for said agency to follow in the exercise of its powers:
Sec. 2. Exercise of powers. — In the exercise of the powers granted in the preceding section, the Board shag proceed promptly along the method of legislative inquiry.
Apart from its own investigation and studies, the Board, in its discretion, may require the cooperation and assistance of the Bureau of Transportation, the Philippine Constabulary, particularly the Highway Patrol Group, the support agencies within the Department of Public Works, Transportation and Communications, or any other government office or agency that may be able to furnish useful information or data in the formulation of the Board of any policy, plan or program in the implementation of this Decree.
The Board may also can conferences, require the submission of position papers or other documents, information, or data by operators or other persons that may be affected by the implementation of this Decree, or employ any other suitable means of inquiry.
In support of their submission that they were denied procedural due process, petitioners contend that they were not caged upon to submit their position papers, nor were they ever summoned to attend any conference prior to the issuance of the questioned BOT Circular.
It is clear from the provision aforequoted, however, that the leeway accorded the Board gives it a wide range of choice in gathering necessary information or data in the formulation of any policy, plan or program. It is not mandatory that it should first call a conference or require the submission of position papers or other documents from operators or persons who may be affected, this being only one of the options open to the Board, which is given wide discretionary authority. Petitioners cannot justifiably claim, therefore, that they were deprived of procedural due process. Neither can they state with certainty that public respondents had not availed of other sources of inquiry prior to
issuing the challenged Circulars. operators of public conveyances are not the only primary sources of the data and information that may be desired by the BOT.
Dispensing with a public hearing prior to the issuance of the Circulars is neither violative of procedural due process. As held in Central Bank vs. Hon. Cloribel and Banco Filipino, 44 SCRA 307 (1972):
Pevious notice and hearing as elements of due process, are constitutionally required for the protection of life or vested property rights, as well as of liberty, when its limitation or loss takes place in consequence of a judicial or quasi-judicial proceeding, generally dependent upon a past act or event which has to be established or ascertained. It is not essential to the validity of general rules or regulations promulgated to govern future conduct of a class or persons or enterprises, unless the law provides otherwise. (Emphasis supplied)
Petitioners further take the position that fixing the ceiling at six (6) years is arbitrary and oppressive because the roadworthiness of taxicabs depends upon their kind of maintenance and the use to which they are subjected, and, therefore, their actual physical
condition should be taken into consideration at the time of registration. As public contend, however, it is impractical to subject every taxicab to constant and recurring evaluation, not to speak of the fact that it can open the door to the adoption of multiple standards, possible collusion, and even graft and corruption. A reasonable standard must be adopted to apply to an vehicles affected uniformly, fairly, and justly. The span of six years supplies that reasonable standard. The product of experience shows that by that time taxis have fully depreciated, their cost recovered, and a fair return on investment obtained. They are also generally dilapidated and no longer fit for safe and comfortable service to the public specially considering that they are in continuous operation practically 24 hours everyday in three shifts of eight hours per shift. With that standard of reasonableness and absence of arbitrariness, the requirement of due process has been met.
On Equal Protection of the Law:
Petitioners alleged that the Circular in question violates their right to equal protection of the law because the same is being enforced in Metro Manila only and is directed solely towards the taxi industry. At the outset it should
be pointed out that implementation outside Metro Manila is also envisioned in Memorandum Circular No. 77-42. To repeat the pertinent portion:
For an orderly implementation of this Memorandum Circular, the rules herein shall immediately be effective in Metro Manila. Its implementation outside Metro Manila shall be carried out only after the project has been implemented in Metro Manila and only after the date has been determined by the Board. 4
In fact, it is the understanding of the Court that implementation of the Circulars in Cebu City is already being effected, with the BOT in the process of conducting studies regarding the operation of taxicabs in other cities.
The Board's reason for enforcing the Circular initially in Metro Manila is that taxicabs in this city, compared to those of other places, are subjected to heavier traffic pressure and more constant use. This is of common knowledge. Considering that traffic conditions are not the same in every city, a substantial distinction exists so that infringement of the equal protection clause can hardly be successfully claimed.
As enunciated in the preambular clauses of the challenged BOT Circular, the overriding consideration is the safety and comfort of the riding public from the dangers posed by old and dilapidated taxis. The State, in the exercise, of its police power, can prescribe regulations to promote the health, morals, peace, good order, safety and general welfare of the people. It can prohibit all things hurtful to comfort, safety and welfare of society. 5 It may also regulate property rights. 6 In the language of Chief Justice Enrique M. Fernando "the necessities imposed by public welfare may justify the exercise of governmental authority to regulate even if thereby certain groups may plausibly assert that their interests are disregarded". 7
In so far as the non-application of the assailed Circulars to other transportation services is concerned, it need only be recalled that the equal protection clause does not imply that the same treatment be accorded all and sundry. It applies to things or persons Identically or similarly situated. It permits of classification of the object or subject of the law provided classification is reasonable or based on substantial distinction, which make for
real differences, and that it must apply equally to each member of the class. 8 What is required under the equal protection clause is the uniform operation by legal means so that all persons under Identical or similar circumstance would be accorded the same treatment both in privilege conferred and the liabilities imposed. 9 The challenged Circulars satisfy the foregoing criteria.
Evident then is the conclusion that the questioned Circulars do not suffer from any constitutional infirmity. To declare a law unconstitutional, the infringement of constitutional right must be clear, categorical and undeniable.10
WHEREFORE, the Writs prayed for are denied and this Petition is hereby dismissed. No costs.
SO ORDERED.
G.R. No. L-7995 May 31, 1957
LAO H. ICHONG, in his own behalf and in behalf of other alien residents, corporations and partnerships adversely affected. by Republic Act No. 1180, petitioner, vs.JAIME HERNANDEZ, Secretary of Finance, and MARCELINO
SARMIENTO, City Treasurer of Manila,respondents.
Ozaeta, Lichauco and Picazo and Sycip, Quisumbing, Salazar and Associates for petitioner.Office of the Solicitor General Ambrosio Padilla and Solicitor Pacifico P. de Castro for respondent Secretary of Finance.City Fiscal Eugenio Angeles and Assistant City Fiscal Eulogio S. Serrano for respondent City Treasurer.Dionisio Reyes as Amicus Curiae.Marcial G. Mendiola as Amicus Curiae.Emiliano R. Navarro as Amicus Curiae.
LABRADOR, J.:
I. The case and issue, in general
This Court has before it the delicate task of passing upon the validity and constitutionality of a legislative enactment, fundamental and far-reaching in significance. The enactment poses questions of due process, police power and equal protection of the laws. It also poses an important issue of fact, that is whether the conditions which the disputed law purports to remedy really or actually exist. Admittedly springing from a deep, militant, and positive nationalistic impulse, the law purports to protect citizen and country from the alien retailer. Through it, and within the field of economy it regulates,
Congress attempts to translate national aspirations for economic independence and national security, rooted in the drive and urge for national survival and welfare, into a concrete and tangible measures designed to free the national retailer from the competing dominance of the alien, so that the country and the nation may be free from a supposed economic dependence and bondage. Do the facts and circumstances justify the enactment?
II. Pertinent provisions of Republic Act No. 1180
Republic Act No. 1180 is entitled "An Act to Regulate the Retail Business." In effect it nationalizes the retail trade business. The main provisions of the Act are: (1) a prohibition against persons, not citizens of the Philippines, and against associations, partnerships, or corporations the capital of which are not wholly owned by citizens of the Philippines, from engaging directly or indirectly in the retail trade; (2) an exception from the above prohibition in favor of aliens actually engaged in said business on May 15, 1954, who are allowed to continue to engaged therein, unless their licenses are forfeited in accordance with the law, until their death or voluntary retirement in case of natural persons, and for ten years after
the approval of the Act or until the expiration of term in case of juridical persons; (3) an exception therefrom in favor of citizens and juridical entities of the United States; (4) a provision for the forfeiture of licenses (to engage in the retail business) for violation of the laws on nationalization, control weights and measures and labor and other laws relating to trade, commerce and industry; (5) a prohibition against the establishment or opening by aliens actually engaged in the retail business of additional stores or branches of retail business, (6) a provision requiring aliens actually engaged in the retail business to present for registration with the proper authorities a verified statement concerning their businesses, giving, among other matters, the nature of the business, their assets and liabilities and their offices and principal offices of judicial entities; and (7) a provision allowing the heirs of aliens now engaged in the retail business who die, to continue such business for a period of six months for purposes of liquidation.
III. Grounds upon which petition is based-Answer thereto
Petitioner, for and in his own behalf and on behalf of other alien residents corporations and partnerships adversely affected
by the provisions of Republic Act. No. 1180, brought this action to obtain a judicial declaration that said Act is unconstitutional, and to enjoin the Secretary of Finance and all other persons acting under him, particularly city and municipal treasurers, from enforcing its provisions. Petitioner attacks the constitutionality of the Act, contending that: (1) it denies to alien residents the equal protection of the laws and deprives of their liberty and property without due process of law ; (2) the subject of the Act is not expressed or comprehended in the title thereof; (3) the Act violates international and treaty obligations of the Republic of the Philippines; (4) the provisions of the Act against the transmission by aliens of their retail business thru hereditary succession, and those requiring 100% Filipino capitalization for a corporation or entity to entitle it to engage in the retail business, violate the spirit of Sections 1 and 5, Article XIII and Section 8 of Article XIV of the Constitution.
In answer, the Solicitor-General and the Fiscal of the City of Manila contend that: (1) the Act was passed in the valid exercise of the police power of the State, which exercise is authorized in the Constitution in the interest of national economic survival; (2) the Act has only one subject
embraced in the title; (3) no treaty or international obligations are infringed; (4) as regards hereditary succession, only the form is affected but the value of the property is not impaired, and the institution of inheritance is only of statutory origin.
IV. Preliminary consideration of legal principles involved
a. The police power. —
There is no question that the Act was approved in the exercise of the police power, but petitioner claims that its exercise in this instance is attended by a violation of the constitutional requirements of due process and equal protection of the laws. But before proceeding to the consideration and resolution of the ultimate issue involved, it would be well to bear in mind certain basic and fundamental, albeit preliminary, considerations in the determination of the ever recurrent conflict between police power and the guarantees of due process and equal protection of the laws. What is the scope of police power, and how are the due process and equal protection clauses related to it? What is the province and power of the legislature, and what is the function and duty of the courts? These consideration must be clearly and correctly understood that their application to the facts
of the case may be brought forth with clarity and the issue accordingly resolved.
It has been said the police power is so far - reaching in scope, that it has become almost impossible to limit its sweep. As it derives its existence from the very existence of the State itself, it does not need to be expressed or defined in its scope; it is said to be co-extensive with self-protection and survival, and as such it is the most positive and active of all governmental processes, the most essential, insistent and illimitable. Especially is it so under a modern democratic framework where the demands of society and of nations have multiplied to almost unimaginable proportions; the field and scope of police power has become almost boundless, just as the fields of public interest and public welfare have become almost all-embracing and have transcended human foresight. Otherwise stated, as we cannot foresee the needs and demands of public interest and welfare in this constantly changing and progressive world, so we cannot delimit beforehand the extent or scope of police power by which and through which the State seeks to attain or achieve interest or welfare. So it is that Constitutions do not define the scope or extent of the police
power of the State; what they do is to set forth the limitations thereof. The most important of these are the due process clause and the equal protection clause.
b. Limitations on police power. —
The basic limitations of due process and equal protection are found in the following provisions of our Constitution:
SECTION 1.(1) No person shall be deprived of life, liberty or property without due process of law, nor any person be denied the equal protection of the laws. (Article III, Phil. Constitution)
These constitutional guarantees which embody the essence of individual liberty and freedom in democracies, are not limited to citizens alone but are admittedly universal in their application, without regard to any differences of race, of color, or of nationality. (Yick Wo vs. Hopkins, 30, L. ed. 220, 226.)
c. The, equal protection clause. —
The equal protection of the law clause is against undue favor and individual or class privilege, as well as hostile discrimination or the oppression of inequality. It is not intended to prohibit legislation, which is limited either in the object to which it is directed or by territory within which is to operate. It does not demand absolute equality among
residents; it merely requires that all persons shall be treated alike, under like circumstances and conditions both as to privileges conferred and liabilities enforced. The equal protection clause is not infringed by legislation which applies only to those persons falling within a specified class, if it applies alike to all persons within such class, and reasonable grounds exists for making a distinction between those who fall within such class and those who do not. (2 Cooley, Constitutional Limitations, 824-825.)
d. The due process clause. —
The due process clause has to do with the reasonableness of legislation enacted in pursuance of the police power. Is there public interest, a public purpose; is public welfare involved? Is the Act reasonably necessary for the accomplishment of the legislature's purpose; is it not unreasonable, arbitrary or oppressive? Is there sufficient foundation or reason in connection with the matter involved; or has there not been a capricious use of the legislative power? Can the aims conceived be achieved by the means used, or is it not merely an unjustified interference with private interest? These are the questions that we ask when the due process test is applied.
The conflict, therefore, between police power and the guarantees of due process and equal protection of the laws is more apparent than real. Properly related, the power and the guarantees are supposed to coexist. The balancing is the essence or, shall it be said, the indispensable means for the attainment of legitimate aspirations of any democratic society. There can be no absolute power, whoever exercise it, for that would be tyranny. Yet there can neither be absolute liberty, for that would mean license and anarchy. So the State can deprive persons of life, liberty and property, provided there is due process of law; and persons may be classified into classes and groups, provided everyone is given the equal protection of the law. The test or standard, as always, is reason. The police power legislation must be firmly grounded on public interest and welfare, and a reasonable relation must exist between purposes and means. And if distinction and classification has been made, there must be a reasonable basis for said distinction.
e. Legislative discretion not subject to judicial review. —
Now, in this matter of equitable balancing, what is the proper place and role of the courts? It must not be overlooked, in the
first place, that the legislature, which is the constitutional repository of police power and exercises the prerogative of determining the policy of the State, is by force of circumstances primarily the judge of necessity, adequacy or reasonableness and wisdom, of any law promulgated in the exercise of the police power, or of the measures adopted to implement the public policy or to achieve public interest. On the other hand, courts, although zealous guardians of individual liberty and right, have nevertheless evinced a reluctance to interfere with the exercise of the legislative prerogative. They have done so early where there has been a clear, patent or palpable arbitrary and unreasonable abuse of the legislative prerogative. Moreover, courts are not supposed to override legitimate policy, and courts never inquire into the wisdom of the law.
V. Economic problems sought to be remedied
With the above considerations in mind, we will now proceed to delve directly into the issue involved. If the disputed legislation were merely a regulation, as its title indicates, there would be no question that it falls within the legitimate scope of legislative power. But it goes further and prohibits a group of
residents, the aliens, from engaging therein. The problem becomes more complex because its subject is a common, trade or occupation, as old as society itself, which from the immemorial has always been open to residents, irrespective of race, color or citizenship.
a. Importance of retail trade in the economy of the nation. —
In a primitive economy where families produce all that they consume and consume all that they produce, the dealer, of course, is unknown. But as group life develops and families begin to live in communities producing more than what they consume and needing an infinite number of things they do not produce, the dealer comes into existence. As villages develop into big communities and specialization in production begins, the dealer's importance is enhanced. Under modern conditions and standards of living, in which man's needs have multiplied and diversified to unlimited extents and proportions, the retailer comes as essential as the producer, because thru him the infinite variety of articles, goods and needed for daily life are placed within the easy reach of consumers. Retail dealers perform the functions of capillaries in the human body, thru which all the needed food and supplies are ministered to
members of the communities comprising the nation.
There cannot be any question about the importance of the retailer in the life of the community. He ministers to the resident's daily needs, food in all its increasing forms, and the various little gadgets and things needed for home and daily life. He provides his customers around his store with the rice or corn, the fish, the salt, the vinegar, the spices needed for the daily cooking. He has cloths to sell, even the needle and the thread to sew them or darn the clothes that wear out. The retailer, therefore, from the lowly peddler, the owner of a small sari-sari store, to the operator of a department store or, a supermarket is so much a part of day-to-day existence.
b. The alien retailer's trait. —
The alien retailer must have started plying his trades in this country in the bigger centers of population (Time there was when he was unknown in provincial towns and villages). Slowly but gradually be invaded towns and villages; now he predominates in the cities and big centers of population. He even pioneers, in far away nooks where the beginnings of community life appear, ministering to the daily needs of the residents and purchasing their agricultural
produce for sale in the towns. It is an undeniable fact that in many communities the alien has replaced the native retailer. He has shown in this trade, industry without limit, and the patience and forbearance of a slave.
Derogatory epithets are hurled at him, but he laughs these off without murmur; insults of ill-bred and insolent neighbors and customers are made in his face, but he heeds them not, and he forgets and forgives. The community takes note of him, as he appears to be harmless and extremely useful.
c. Alleged alien control and dominance. —
There is a general feeling on the part of the public, which appears to be true to fact, about the controlling and dominant position that the alien retailer holds in the nation's economy. Food and other essentials, clothing, almost all articles of daily life reach the residents mostly through him. In big cities and centers of population he has acquired not only predominance, but apparent control over distribution of almost all kinds of goods, such as lumber, hardware, textiles, groceries, drugs, sugar, flour, garlic, and scores of other goods and articles. And were it not for some national corporations like the Naric, the Namarco, the Facomas and the
Acefa, his control over principal foods and products would easily become full and complete.
Petitioner denies that there is alien predominance and control in the retail trade. In one breath it is said that the fear is unfounded and the threat is imagined; in another, it is charged that the law is merely the result of radicalism and pure and unabashed nationalism. Alienage, it is said, is not an element of control; also so many unmanageable factors in the retail business make control virtually impossible. The first argument which brings up an issue of fact merits serious consideration. The others are matters of opinion within the exclusive competence of the legislature and beyond our prerogative to pass upon and decide.
The best evidence are the statistics on the retail trade, which put down the figures in black and white. Between the constitutional convention year (1935), when the fear of alien domination and control of the retail trade already filled the minds of our leaders with fears and misgivings, and the year of the enactment of the nationalization of the retail trade act (1954), official statistics unmistakably point out to the ever-increasing dominance and control by the alien of the retail
(Estimated Assets and Gross Sales of Retail Establishments, By Year and Nationality of Owners, Benchmark: 1948 Census, issued by the Bureau of Census and Statistics, Department of
Commerce and Industry; pp. 18-19 of Answer.)
The above statistics do not include corporations and partnerships, while the figures on Filipino establishments already include mere market vendors, whose capital is necessarily small..
The above figures reveal that in percentage distribution of assests and gross sales, alien participation has steadily increased during the years. It is true, of course, that Filipinos have the edge in the number of retailers, but aliens more than make up for the numerical gap through their assests and gross sales which average between six and seven times those of the very many Filipino retailers. Numbers in retailers, here, do not imply superiority; the alien invests more capital, buys and sells six to seven times more, and gains much more. The same official report, pointing out to the known predominance of foreign elements in the retail trade, remarks that the Filipino retailers were largely engaged in minor retailer enterprises. As observed by respondents, the native investment is thinly spread, and the Filipino retailer is practically helpless in matters of capital, credit, price and supply.
d. Alien control and threat, subject of apprehension in Constitutional convention. —
It is this domination and control, which we believe has been sufficiently shown to exist, that is the legislature's target in the enactment of the disputed nationalization would never have been adopted. The framers of our Constitution also believed in the existence of this alien dominance and control when they approved a resolution categorically declaring among other things, that "it is the sense of the Convention that the public interest requires the nationalization of the retail trade; . . . ." (II Aruego, The Framing of the Philippine Constitution, 662-663, quoted on page 67 of Petitioner.) That was twenty-two years ago; and the events since then have not been either pleasant or comforting. Dean Sinco of the University of the Philippines College of Law, commenting on the patrimony clause of the Preamble opines that the fathers of our Constitution were merely translating the general preoccupation of Filipinos "of the dangers from alien interests that had already brought under their control the commercial and other economic activities of the country" (Sinco, Phil. Political Law, 10th ed., p. 114); and analyzing the concern of the members of
the constitutional convention for the economic life of the citizens, in connection with the nationalistic provisions of the Constitution, he says:
But there has been a general feeling that alien dominance over the economic life of the country is not desirable and that if such a situation should remain, political independence alone is no guarantee to national stability and strength. Filipino private capital is not big enough to wrest from alien hands the control of the national economy. Moreover, it is but of recent formation and hence, largely inexperienced, timid and hesitant. Under such conditions, the government as the instrumentality of the national will, has to step in and assume the initiative, if not the leadership, in the struggle for the economic freedom of the nation in somewhat the same way that it did in the crusade for political freedom. Thus . . . it (the Constitution) envisages an organized movement for the protection of the nation not only against the possibilities of armed invasion but also against its economic subjugation by alien interests in the economic field. (Phil. Political Law by Sinco, 10th ed., p. 476.)
Belief in the existence of alien control and predominance is felt in other quarters. Filipino
businessmen, manufacturers and producers believe so; they fear the dangers coming from alien control, and they express sentiments of economic independence. Witness thereto is Resolution No. 1, approved on July 18, 1953, of the Fifth National convention of Filipino Businessmen, and a similar resolution, approved on March 20, 1954, of the Second National Convention of Manufacturers and Producers. The man in the street also believes, and fears, alien predominance and control; so our newspapers, which have editorially pointed out not only to control but to alien stranglehold. We, therefore, find alien domination and control to be a fact, a reality proved by official statistics, and felt by all the sections and groups that compose the Filipino community.
e. Dangers of alien control and dominance in retail. —
But the dangers arising from alien participation in the retail trade does not seem to lie in the predominance alone; there is a prevailing feeling that such predominance may truly endanger the national interest. With ample capital, unity of purpose and action and thorough organization, alien retailers and merchants can act in such complete unison and concert on such vital matters as the fixing of
prices, the determination of the amount of goods or articles to be made available in the market, and even the choice of the goods or articles they would or would not patronize or distribute, that fears of dislocation of the national economy and of the complete subservience of national economy and of the consuming public are not entirely unfounded. Nationals, producers and consumers alike can be placed completely at their mercy. This is easily illustrated. Suppose an article of daily use is desired to be prescribed by the aliens, because the producer or importer does not offer them sufficient profits, or because a new competing article offers bigger profits for its introduction. All that aliens would do is to agree to refuse to sell the first article, eliminating it from their stocks, offering the new one as a substitute. Hence, the producers or importers of the prescribed article, or its consumers, find the article suddenly out of the prescribed article, or its consumers, find the article suddenly out of circulation. Freedom of trade is thus curtailed and free enterprise correspondingly suppressed.
We can even go farther than theoretical illustrations to show the pernicious influences of alien domination. Grave abuses have characterized the exercise of the
retail trade by aliens. It is a fact within judicial notice, which courts of justice may not properly overlook or ignore in the interests of truth and justice, that there exists a general feeling on the part of the public that alien participation in the retail trade has been attended by a pernicious and intolerable practices, the mention of a few of which would suffice for our purposes; that at some time or other they have cornered the market of essential commodities, like corn and rice, creating artificial scarcities to justify and enhance profits to unreasonable proportions; that they have hoarded essential foods to the inconvenience and prejudice of the consuming public, so much so that the Government has had to establish the National Rice and Corn Corporation to save the public from their continuous hoarding practices and tendencies; that they have violated price control laws, especially on foods and essential commodities, such that the legislature had to enact a law (Sec. 9, Republic Act No. 1168), authorizing their immediate and automatic deportation for price control convictions; that they have secret combinations among themselves to control prices, cheating the operation of the law of supply and demand; that they have connived to boycott honest merchants and traders who would
not cater or yield to their demands, in unlawful restraint of freedom of trade and enterprise. They are believed by the public to have evaded tax laws, smuggled goods and money into and out of the land, violated import and export prohibitions, control laws and the like, in derision and contempt of lawful authority. It is also believed that they have engaged in corrupting public officials with fabulous bribes, indirectly causing the prevalence of graft and corruption in the Government. As a matter of fact appeals to unscrupulous aliens have been made both by the Government and by their own lawful diplomatic representatives, action which impliedly admits a prevailing feeling about the existence of many of the above practices.
The circumstances above set forth create well founded fears that worse things may come in the future. The present dominance of the alien retailer, especially in the big centers of population, therefore, becomes a potential source of danger on occasions of war or other calamity. We do not have here in this country isolated groups of harmless aliens retailing goods among nationals; what we have are well organized and powerful groups that dominate the distribution of goods and commodities in the communities
and big centers of population. They owe no allegiance or loyalty to the State, and the State cannot rely upon them in times of crisis or emergency. While the national holds his life, his person and his property subject to the needs of his country, the alien may even become the potential enemy of the State.
f. Law enacted in interest of national economic survival and security. —
We are fully satisfied upon a consideration of all the facts and circumstances that the disputed law is not the product of racial hostility, prejudice or discrimination, but the expression of the legitimate desire and determination of the people, thru their authorized representatives, to free the nation from the economic situation that has unfortunately been saddled upon it rightly or wrongly, to its disadvantage. The law is clearly in the interest of the public, nay of the national security itself, and indisputably falls within the scope of police power, thru which and by which the State insures its existence and security and the supreme welfare of its citizens.
VI. The Equal Protection Limitation
a. Objections to alien participation in retail trade. — The next question that now poses solution is, Does the law deny the equal
protection of the laws? As pointed out above, the mere fact of alienage is the root and cause of the distinction between the alien and the national as a trader. The alien resident owes allegiance to the country of his birth or his adopted country; his stay here is for personal convenience; he is attracted by the lure of gain and profit. His aim or purpose of stay, we admit, is neither illegitimate nor immoral, but he is naturally lacking in that spirit of loyalty and enthusiasm for this country where he temporarily stays and makes his living, or of that spirit of regard, sympathy and consideration for his Filipino customers as would prevent him from taking advantage of their weakness and exploiting them. The faster he makes his pile, the earlier can the alien go back to his beloved country and his beloved kin and countrymen. The experience of the country is that the alien retailer has shown such utter disregard for his customers and the people on whom he makes his profit, that it has been found necessary to adopt the legislation, radical as it may seem.
Another objection to the alien retailer in this country is that he never really makes a genuine contribution to national income and wealth. He undoubtedly contributes to general
distribution, but the gains and profits he makes are not invested in industries that would help the country's economy and increase national wealth. The alien's interest in this country being merely transient and temporary, it would indeed be ill-advised to continue entrusting the very important function of retail distribution to his hands.
The practices resorted to by aliens in the control of distribution, as already pointed out above, their secret manipulations of stocks of commodities and prices, their utter disregard of the welfare of their customers and of the ultimate happiness of the people of the nation of which they are mere guests, which practices, manipulations and disregard do not attend the exercise of the trade by the nationals, show the existence of real and actual, positive and fundamental differences between an alien and a national which fully justify the legislative classification adopted in the retail trade measure. These differences are certainly a valid reason for the State to prefer the national over the alien in the retail trade. We would be doing violence to fact and reality were we to hold that no reason or ground for a legitimate distinction can be found between one and the other.
b. Difference in alien aims and purposes sufficient basis for distinction. —
The above objectionable characteristics of the exercise of the retail trade by the aliens, which are actual and real, furnish sufficient grounds for legislative classification of retail traders into nationals and aliens. Some may disagree with the wisdom of the legislature's classification. To this we answer, that this is the prerogative of the law-making power. Since the Court finds that the classification is actual, real and reasonable, and all persons of one class are treated alike, and as it cannot be said that the classification is patently unreasonable and unfounded, it is in duty bound to declare that the legislature acted within its legitimate prerogative and it can not declare that the act transcends the limit of equal protection established by the Constitution.
Broadly speaking, the power of the legislature to make distinctions and classifications among persons is not curtailed or denied by the equal protection of the laws clause. The legislative power admits of a wide scope of discretion, and a law can be violative of the constitutional limitation only when the classification is without reasonable basis. In addition to
the authorities we have earlier cited, we can also refer to the case of Linsey vs. Natural Carbonic Fas Co. (1911), 55 L. ed., 369, which clearly and succinctly defined the application of equal protection clause to a law sought to be voided as contrary thereto:
. . . . "1. The equal protection clause of the Fourteenth Amendment does not take from the state the power to classify in the adoption of police laws, but admits of the exercise of the wide scope of discretion in that regard, and avoids what is done only when it is without any reasonable basis, and therefore is purely arbitrary. 2. A classification having some reasonable basis does not offend against that clause merely because it is not made with mathematical nicety, or because in practice it results in some inequality. 3. When the classification in such a law is called in question, if any state of facts reasonably can be conceived that would sustain it, the existence of that state of facts at the time the law was enacted must be assumed. 4. One who assails the classification in such a law must carry the burden of showing that it does not rest upon any reasonable basis but is essentially arbitrary."
c. Authorities recognizing citizenship as basis for classification. —
The question as to whether or not citizenship is a legal and valid ground for classification has already been affirmatively decided in this jurisdiction as well as in various courts in the United States. In the case of Smith Bell & Co. vs. Natividad, 40 Phil. 136, where the validity of Act No. 2761 of the Philippine Legislature was in issue, because of a condition therein limiting the ownership of vessels engaged in coastwise trade to corporations formed by citizens of the Philippine Islands or the United States, thus denying the right to aliens, it was held that the Philippine Legislature did not violate the equal protection clause of the Philippine Bill of Rights. The legislature in enacting the law had as ultimate purpose the encouragement of Philippine shipbuilding and the safety for these Islands from foreign interlopers. We held that this was a valid exercise of the police power, and all presumptions are in favor of its constitutionality. In substance, we held that the limitation of domestic ownership of vessels engaged in coastwise trade to citizens of the Philippines does not violate the equal protection of the law and due process or law clauses of the Philippine Bill of Rights. In rendering said decision we quoted with approval the concurring opinion of Justice Johnson in the
case of Gibbons vs. Ogden, 9 Wheat., I, as follows:
"Licensing acts, in fact, in legislation, are universally restraining acts; as, for example, acts licensing gaming houses, retailers of spirituous liquors, etc. The act, in this instance, is distinctly of that character, and forms part of an extensive system, the object of which is to encourage American shipping, and place them on an equal footing with the shipping of other nations. Almost every commercial nation reserves to its own subjects a monopoly of its coasting trade; and a countervailing privilege in favor of American shipping is contemplated, in the whole legislation of the United States on this subject. It is not to give the vessel an American character, that the license is granted; that effect has been correctly attributed to the act of her enrollment. But it is to confer on her American privileges, as contra distinguished from foreign; and to preserve the Government from fraud by foreigners; in surreptitiously intruding themselves into the American commercial marine, as well as frauds upon the revenue in the trade coastwise, that this whole system is projected."
The rule in general is as follows:
Aliens are under no special constitutional protection which forbids a classification otherwise justified simply because the limitation of the class falls along the lines of nationality. That would be requiring a higher degree of protection for aliens as a class than for similar classes than for similar classes of American citizens. Broadly speaking, the difference in status between citizens and aliens constitutes a basis for reasonable classification in the exercise of police power. (2 Am., Jur. 468-469.)
In Commonwealth vs. Hana, 81 N. E. 149 (Massachusetts, 1907), a statute on the licensing of hawkers and peddlers, which provided that no one can obtain a license unless he is, or has declared his intention, to become a citizen of the United States, was held valid, for the following reason: It may seem wise to the legislature to limit the business of those who are supposed to have regard for the welfare, good order and happiness of the community, and the court cannot question this judgment and conclusion. In Bloomfield vs. State, 99 N. E. 309 (Ohio, 1912), a statute which prevented certain persons, among them aliens, from engaging in the traffic of liquors, was found not to be the result of race hatred, or in hospitality, or a deliberate purpose to discriminate, but was
based on the belief that an alien cannot be sufficiently acquainted with "our institutions and our life as to enable him to appreciate the relation of this particular business to our entire social fabric", and was not, therefore, invalid. In Ohio ex rel. Clarke vs. Deckebach, 274 U. S. 392, 71 L. ed. 115 (1926), the U.S. Supreme Court had under consideration an ordinance of the city of Cincinnati prohibiting the issuance of licenses (pools and billiard rooms) to aliens. It held that plainly irrational discrimination against aliens is prohibited, but it does not follow that alien race and allegiance may not bear in some instances such a relation to a legitimate object of legislation as to be made the basis of permitted classification, and that it could not state that the legislation is clearly wrong; and that latitude must be allowed for the legislative appraisement of local conditions and for the legislative choice of methods for controlling an apprehended evil. The case of State vs. Carrol, 124 N. E. 129 (Ohio, 1919) is a parallel case to the one at bar. In Asakura vs. City of Seattle, 210 P. 30 (Washington, 1922), the business of pawn brooking was considered as having tendencies injuring public interest, and limiting it to citizens is within the scope of police power. A similar statute denying aliens the right to engage in auctioneering was also
sustained in Wright vs. May, L.R.A., 1915 P. 151 (Minnesota, 1914). So also in Anton vs. Van Winkle, 297 F. 340 (Oregon, 1924), the court said that aliens are judicially known to have different interests, knowledge, attitude, psychology and loyalty, hence the prohibitions of issuance of licenses to them for the business of pawnbroker, pool, billiard, card room, dance hall, is not an infringement of constitutional rights. In Templar vs. Michigan State Board of Examiners, 90 N.W. 1058 (Michigan, 1902), a law prohibiting the licensing of aliens as barbers was held void, but the reason for the decision was the court's findings that the exercise of the business by the aliens does not in any way affect the morals, the health, or even the convenience of the community. In Takahashi vs. Fish and Game Commission, 92 L. ed. 1479 (1947), a California statute banning the issuance of commercial fishing licenses to person ineligible to citizenship was held void, because the law conflicts with Federal power over immigration, and because there is no public interest in the mere claim of ownership of the waters and the fish in them, so there was no adequate justification for the discrimination. It further added that the law was the outgrowth of antagonism toward the persons of
Japanese ancestry. However, two Justices dissented on the theory that fishing rights have been treated traditionally as natural resources. In Fraser vs. McConway & Tarley Co., 82 Fed. 257 (Pennsylvania, 1897), a state law which imposed a tax on every employer of foreign-born unnaturalized male persons over 21 years of age, was declared void because the court found that there was no reason for the classification and the tax was an arbitrary deduction from the daily wage of an employee.
d. Authorities contra explained. —
It is true that some decisions of the Federal court and of the State courts in the United States hold that the distinction between aliens and citizens is not a valid ground for classification. But in this decision the laws declared invalid were found to be either arbitrary, unreasonable or capricious, or were the result or product of racial antagonism and hostility, and there was no question of public interest involved or pursued. In Yu Cong Eng vs. Trinidad, 70 L. ed. 1059 (1925), the United States Supreme Court declared invalid a Philippine law making unlawful the keeping of books of account in any language other than English, Spanish or any other local dialect, but the main reasons for the decisions are: (1) that if Chinese
were driven out of business there would be no other system of distribution, and (2) that the Chinese would fall prey to all kinds of fraud, because they would be deprived of their right to be advised of their business and to direct its conduct. The real reason for the decision, therefore, is the court's belief that no public benefit would be derived from the operations of the law and on the other hand it would deprive Chinese of something indispensable for carrying on their business. In Yick Wo vs. Hopkins, 30 L. ed 220 (1885) an ordinance conferring powers on officials to withhold consent in the operation of laundries both as to persons and place, was declared invalid, but the court said that the power granted was arbitrary, that there was no reason for the discrimination which attended the administration and implementation of the law, and that the motive thereof was mere racial hostility. In State vs. Montgomery, 47 A. 165 (Maine, 1900), a law prohibiting aliens to engage as hawkers and peddlers was declared void, because the discrimination bore no reasonable and just relation to the act in respect to which the classification was proposed.
The case at bar is radically different, and the facts make them so. As we already have said,
aliens do not naturally possess the sympathetic consideration and regard for the customers with whom they come in daily contact, nor the patriotic desire to help bolster the nation's economy, except in so far as it enhances their profit, nor the loyalty and allegiance which the national owes to the land. These limitations on the qualifications of the aliens have been shown on many occasions and instances, especially in times of crisis and emergency. We can do no better than borrow the language of Anton vs. Van Winkle, 297 F. 340, 342, to drive home the reality and significance of the distinction between the alien and the national, thus:
. . . . It may be judicially known, however, that alien coming into this country are without the intimate knowledge of our laws, customs, and usages that our own people have. So it is likewise known that certain classes of aliens are of different psychology from our fellow countrymen. Furthermore, it is natural and reasonable to suppose that the foreign born, whose allegiance is first to their own country, and whose ideals of governmental environment and control have been engendered and formed under entirely different regimes and political systems, have not the same inspiration for the public
weal, nor are they as well disposed toward the United States, as those who by citizenship, are a part of the government itself. Further enlargement, is unnecessary. I have said enough so that obviously it cannot be affirmed with absolute confidence that the Legislature was without plausible reason for making the classification, and therefore appropriate discriminations against aliens as it relates to the subject of legislation. . . . .
VII. The Due Process of Law Limitation.
a. Reasonability, the test of the limitation; determination by legislature decisive. —
We now come to due process as a limitation on the exercise of the police power. It has been stated by the highest authority in the United States that:
. . . . 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 subject sought to be attained. . . . .
x x x x x x x x x
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. . . . (Nebbia vs. New York, 78 L. ed. 940, 950, 957.)
Another authority states the principle thus:
. . . . Too much significance cannot be given to the word "reasonable" in considering the scope of the police power in a constitutional sense, for the test used to determine the constitutionality of the means employed by the legislature is to inquire whether the restriction it imposes on rights secured to individuals by the Bill of Rights are unreasonable, and not whether it imposes any restrictions on such rights. . . .
x x x x x x x x x
. . . . A statute to be within this power must also be reasonable in its operation upon the persons whom it affects, must not be for
the annoyance of a particular class, and must not be unduly oppressive. (11 Am. Jur. Sec. 302., 1:1)- 1074-1075.)
In the case of Lawton vs. Steele, 38 L. ed. 385, 388. it was also held:
. . . . To justify the state in thus interposing its authority in behalf of the public, it must appear, first, that the interests of the public generally, as distinguished from those of a particular class, require such interference; and second, that the means are reasonably necessary for the accomplishment of the purpose, and not unduly oppressive upon individuals. . . .
Prata Undertaking Co. vs. State Board of Embalming, 104 ALR, 389, 395, fixes this test of constitutionality:
In determining whether a given act of the Legislature, passed in the exercise of the police power to regulate the operation of a business, is or is not constitutional, one of the first questions to be considered by the court is whether the power as exercised has a sufficient foundation in reason in connection with the matter involved, or is an arbitrary, oppressive, and capricious use of that power, without substantial relation to the health, safety, morals, comfort, and general welfare of the public.
b. Petitioner's argument considered. —
Petitioner's main argument is that retail is a common, ordinary occupation, one of those privileges long ago recognized as essential to the orderly pursuant of happiness by free men; that it is a gainful and honest occupation and therefore beyond the power of the legislature to prohibit and penalized. This arguments overlooks fact and reality and rests on an incorrect assumption and premise, i.e., that in this country where the occupation is engaged in by petitioner, it has been so engaged by him, by the alien in an honest creditable and unimpeachable manner, without harm or injury to the citizens and without ultimate danger to their economic peace, tranquility and welfare. But the Legislature has found, as we have also found and indicated, that the privilege has been so grossly abused by the alien, thru the illegitimate use of pernicious designs and practices, that he now enjoys a monopolistic control of the occupation and threatens a deadly stranglehold on the nation's economy endangering the national security in times of crisis and emergency.
The real question at issue, therefore, is not that posed by petitioner, which overlooks and ignores the facts and circumstances, but this, Is the
exclusion in the future of aliens from the retail trade unreasonable. Arbitrary capricious, taking into account the illegitimate and pernicious form and manner in which the aliens have heretofore engaged therein? As thus correctly stated the answer is clear. The law in question is deemed absolutely necessary to bring about the desired legislative objective, i.e., to free national economy from alien control and dominance. It is not necessarily unreasonable because it affects private rights and privileges (11 Am. Jur. pp. 1080-1081.) The test of reasonableness of a law is the appropriateness or adequacy under all circumstances of the means adopted to carry out its purpose into effect (Id.) Judged by this test, disputed legislation, which is not merely reasonable but actually necessary, must be considered not to have infringed the constitutional limitation of reasonableness.
The necessity of the law in question is explained in the explanatory note that accompanied the bill, which later was enacted into law:
This bill proposes to regulate the retail business. Its purpose is to prevent persons who are not citizens of the Philippines from having a strangle hold upon our economic life. If the persons who
control this vital artery of our economic life are the ones who owe no allegiance to this Republic, who have no profound devotion to our free institutions, and who have no permanent stake in our people's welfare, we are not really the masters of our destiny. All aspects of our life, even our national security, will be at the mercy of other people.
In seeking to accomplish the foregoing purpose, we do not propose to deprive persons who are not citizens of the Philippines of their means of livelihood. While this bill seeks to take away from the hands of persons who are not citizens of the Philippines a power that can be wielded to paralyze all aspects of our national life and endanger our national security it respects existing rights.
The approval of this bill is necessary for our national survival.
If political independence is a legitimate aspiration of a people, then economic independence is none the less legitimate. Freedom and liberty are not real and positive if the people are subject to the economic control and domination of others, especially if not of their own race or country. The removal and eradication of the shackles of foreign economic control and domination, is one of the noblest motives that a
national legislature may pursue. It is impossible to conceive that legislation that seeks to bring it about can infringe the constitutional limitation of due process. The attainment of a legitimate aspiration of a people can never be beyond the limits of legislative authority.
c. Law expressly held by Constitutional Convention to be within the sphere of legislative action. —
The framers of the Constitution could not have intended to impose the constitutional restrictions of due process on the attainment of such a noble motive as freedom from economic control and domination, thru the exercise of the police power. The fathers of the Constitution must have given to the legislature full authority and power to enact legislation that would promote the supreme happiness of the people, their freedom and liberty. On the precise issue now before us, they expressly made their voice clear; they adopted a resolution expressing their belief that the legislation in question is within the scope of the legislative power. Thus they declared the their Resolution:
That it is the sense of the Convention that the public interest requires the nationalization of retail trade; but
it abstain from approving the amendment introduced by the Delegate for Manila, Mr. Araneta, and others on this matter because it is convinced that the National Assembly is authorized to promulgate a law which limits to Filipino and American citizens the privilege to engage in the retail trade. (11 Aruego, The Framing of the Philippine Constitution, quoted on pages 66 and 67 of the Memorandum for the Petitioner.)
It would do well to refer to the nationalistic tendency manifested in various provisions of the Constitution. Thus in the preamble, a principle objective is the conservation of the patrimony of the nation and as corollary the provision limiting to citizens of the Philippines the exploitation, development and utilization of its natural resources. And in Section 8 of Article XIV, it is provided that "no franchise, certificate, or any other form of authorization for the operation of the public utility shall be granted except to citizens of the Philippines." The nationalization of the retail trade is only a continuance of the nationalistic protective policy laid down as a primary objective of the Constitution. Can it be said that a law imbued with the same purpose and spirit underlying many of the provisions of the Constitution is unreasonable, invalid and unconstitutional?
The seriousness of the Legislature's concern for the plight of the nationals as manifested in the approval of the radical measures is, therefore, fully justified. It would have been recreant to its duties towards the country and its people would it view the sorry plight of the nationals with the complacency and refuse or neglect to adopt a remedy commensurate with the demands of public interest and national survival. As the repository of the sovereign power of legislation, the Legislature was in duty bound to face the problem and meet, through adequate measures, the danger and threat that alien domination of retail trade poses to national economy.
d. Provisions of law not unreasonable. —
A cursory study of the provisions of the law immediately reveals how tolerant, how reasonable the Legislature has been. The law is made prospective and recognizes the right and privilege of those already engaged in the occupation to continue therein during the rest of their lives; and similar recognition of the right to continue is accorded associations of aliens. The right or privilege is denied to those only upon conviction of certain offenses. In the deliberations of the Court on this case, attention was called to the fact that the privilege should
not have been denied to children and heirs of aliens now engaged in the retail trade. Such provision would defeat the law itself, its aims and purposes. Beside, the exercise of legislative discretion is not subject to judicial review. It is well settled that the Court will not inquire into the motives of the Legislature, nor pass upon general matters of legislative judgment. The Legislature is primarily the judge of the necessity of an enactment or of any of its provisions, and every presumption is in favor of its validity, and though the Court may hold views inconsistent with the wisdom of the law, it may not annul the legislation if not palpably in excess of the legislative power. Furthermore, the test of the validity of a law attacked as a violation of due process, is not its reasonableness, but its unreasonableness, and we find the provisions are not unreasonable. These principles also answer various other arguments raised against the law, some of which are: that the law does not promote general welfare; that thousands of aliens would be thrown out of employment; that prices will increase because of the elimination of competition; that there is no need for the legislation; that adequate replacement is problematical; that there may be general breakdown; that there would be repercussions
from foreigners; etc. Many of these arguments are directed against the supposed wisdom of the law which lies solely within the legislative prerogative; they do not import invalidity.
VIII. Alleged defect in the title of the law
A subordinate ground or reason for the alleged invalidity of the law is the claim that the title thereof is misleading or deceptive, as it conceals the real purpose of the bill which is to nationalize the retail business and prohibit aliens from engaging therein. The constitutional provision which is claimed to be violated in Section 21 (1) of Article VI, which reads:
No bill which may be enacted in the law shall embrace more than one subject which shall be expressed in the title of the bill.
What the above provision prohibits is duplicity, that is, if its title completely fails to appraise the legislators or the public of the nature, scope and consequences of the law or its operation (I Sutherland, Statutory Construction, Sec. 1707, p. 297.) A cursory consideration of the title and the provisions of the bill fails to show the presence of duplicity. It is true that the term "regulate" does not and may not readily and at first glance convey the idea of "nationalization" and
"prohibition", which terms express the two main purposes and objectives of the law. But "regulate" is a broader term than either prohibition or nationalization. Both of these have always been included within the term regulation.
Under the title of an act to "regulate", the sale of intoxicating liquors, the Legislature may prohibit the sale of intoxicating liquors. (Sweet vs. City of Wabash, 41 Ind., 7; quoted in page 41 of Answer.)
Within the meaning of the Constitution requiring that the subject of every act of the Legislature shall be stated in the tale, the title to regulate the sale of intoxicating liquors, etc." sufficiently expresses the subject of an act prohibiting the sale of such liquors to minors and to persons in the habit of getting intoxicated; such matters being properly included within the subject of regulating the sale. (Williams vs. State, 48 Ind. 306, 308, quoted in p. 42 of Answer.)
The word "regulate" is of broad import, and necessarily implies some degree of restraint and prohibition of acts usually done in connection with the thing to be regulated. While word regulate does not ordinarily convey meaning of prohibit, there is no absolute reason why it should not
have such meaning when used in delegating police power in connection with a thing the best or only efficacious regulation of which involves suppression. (State vs. Morton, 162 So. 718, 182 La. 887, quoted in p. 42 of Answer.)
The general rule is for the use of general terms in the title of a bill; it has also been said that the title need not be an index to the entire contents of the law (I Sutherland, Statutory Construction, See. 4803, p. 345.) The above rule was followed the title of the Act in question adopted the more general term "regulate" instead of "nationalize" or "prohibit". Furthermore, the law also contains other rules for the regulation of the retail trade which may not be included in the terms "nationalization" or "prohibition"; so were the title changed from "regulate" to "nationalize" or "prohibit", there would have been many provisions not falling within the scope of the title which would have made the Act invalid. The use of the term "regulate", therefore, is in accord with the principle governing the drafting of statutes, under which a simple or general term should be adopted in the title, which would include all other provisions found in the body of the Act.
One purpose of the constitutional directive that the subject of a bill should be embraced in its title is
to apprise the legislators of the purposes, the nature and scope of its provisions, and prevent the enactment into law of matters which have received the notice, action and study of the legislators or of the public. In the case at bar it cannot be claimed that the legislators have been appraised of the nature of the law, especially the nationalization and the prohibition provisions. The legislators took active interest in the discussion of the law, and a great many of the persons affected by the prohibitions in the law conducted a campaign against its approval. It cannot be claimed, therefore, that the reasons for declaring the law invalid ever existed. The objection must therefore, be overruled.
IX. Alleged violation of international treaties and obligations
Another subordinate argument against the validity of the law is the supposed violation thereby of the Charter of the United Nations and of the Declaration of the Human Rights adopted by the United Nations General Assembly. We find no merit in the Nations Charter imposes no strict or legal obligations regarding the rights and freedom of their subjects (Hans Kelsen, The Law of the United Nations, 1951 ed. pp. 29-32), and the Declaration of Human Rights contains nothing
more than a mere recommendation or a common standard of achievement for all peoples and all nations (Id. p. 39.) That such is the import of the United Nations Charter aid of the Declaration of Human Rights can be inferred the fact that members of the United Nations Organizations, such as Norway and Denmark, prohibit foreigners from engaging in retail trade, and in most nations of the world laws against foreigners engaged in domestic trade are adopted.
The Treaty of Amity between the Republic of the Philippines and the Republic of China of April 18, 1947 is also claimed to be violated by the law in question. All that the treaty guarantees is equality of treatment to the Chinese nationals "upon the same terms as the nationals of any other country." But the nationals of China are not discriminating against because nationals of all other countries, except those of the United States, who are granted special rights by the Constitution, are all prohibited from engaging in the retail trade. But even supposing that the law infringes upon the said treaty, the treaty is always subject to qualification or amendment by a subsequent law (U. S. vs. Thompson, 258, Fed. 257, 260), and the same may never curtail or restrict the scope of the police
power of the State (plaston vs. Pennsylvania, 58 L. ed. 539.)
X. Conclusion
Resuming what we have set forth above we hold that the disputed law was enacted to remedy a real actual threat and danger to national economy posed by alien dominance and control of the retail business and free citizens and country from dominance and control; that the enactment clearly falls within the scope of the police power of the State, thru which and by which it protects its own personality and insures its security and future; that the law does not violate the equal protection clause of the Constitution because sufficient grounds exist for the distinction between alien and citizen in the exercise of the occupation regulated, nor the due process of law clause, because the law is prospective in operation and recognizes the privilege of aliens already engaged in the occupation and reasonably protects their privilege; that the wisdom and efficacy of the law to carry out its objectives appear to us to be plainly evident — as a matter of fact it seems not only appropriate but actually necessary — and that in any case such matter falls within the prerogative of the Legislature, with whose power and discretion the Judicial department of the
Government may not interfere; that the provisions of the law are clearly embraced in the title, and this suffers from no duplicity and has not misled the legislators or the segment of the population affected; and that it cannot be said to be void for supposed conflict with treaty obligations because no treaty has actually been entered into on the subject and the police power may not be curtailed or surrendered by any treaty or any other conventional agreement.
Some members of the Court are of the opinion that the radical effects of the law could have been made less harsh in its impact on the aliens. Thus it is stated that the more time should have been given in the law for the liquidation of existing businesses when the time comes for them to close. Our legal duty, however, is merely to determine if the law falls within the scope of legislative authority and does not transcend the limitations of due process and equal protection guaranteed in the Constitution. Remedies against the harshness of the law should be addressed to the Legislature; they are beyond our power and jurisdiction.
The petition is hereby denied, with costs against petitioner.
Paras, C.J., Bengzon, Reyes, A., Bautista Angelo, Concepcion,
Reyes, J.B.L., Endencia and Felix, JJ., concur.
[G.R. No. L-7859. December 22, 1955.]
WALTER LUTZ, as Judicial Administrator of the Intestate Estate of the deceased Antonio Jayme Ledesma, Plaintiff-Appellant, v. J. ANTONIO ARANETA, as the Collector of Internal Revenue, Defendant-Appellee.
D E C I S I O N
REYES, J. B. L., J.:
This case was initiated in the Court of First Instance of Negros Occidental to test the legality of the taxes imposed by Commonwealth Act No. 567, otherwise known as the Sugar Adjustment Act.
Promulgated in 1940, the law in question opens (section 1) with a declaration of emergency, due to the threat to our industry by the imminent imposition of export taxes upon sugar as provided in the Tydings-McDuffie Act, and the "eventual loss of its preferential position in the United States
market" ; wherefore, the national policy was expressed "to obtain a readjustment of the benefits derived from the sugar industry by the component elements thereof" and "to stabilize the sugar industry so as to prepare it for the eventuality of the loss of its preferential position in the United States market and the imposition of the export taxes."cralaw virtua1aw library
In section 2, Commonwealth Act 567 provides for an increase of the existing tax on the manufacture of sugar, on a graduated basis, on each picul of sugar manufactures; while section 3 levies on owners or persons in control of lands devoted to the cultivation of sugar cane and ceded to others for a consideration, on lease or otherwise —
"a tax equivalent to the difference between the money value of the rental or consideration collected and the amount representing 12 per centum of the assessed value of such land."cralaw virtua1aw library
According to section 6 of the law —
SEC. 6. All collections made under this Act shall accrue to a special fund in the Philippine Treasury, to be known as the ’Sugar
Adjustment and Stabilization Fund,’
and shall be paid out only for any or all of the following purposes or to attain any or all of the following objectives, as may be provided by law.
First, to place the sugar industry in a position to maintain itself despite the gradual loss of the preferential position of the Philippine sugar in the United States market, and ultimately to insure its continued existence notwithstanding the loss of that market and the consequent necessity of meeting competition in the free markets of the world;
Second, to readjust the benefits derived from the sugar industry by all of the component elements thereof — the mill, the landowner, the planter of the sugar cane, and the laborers in the factory and in the field — so that all might continue profitably to engage therein;
Third, to limit the production of sugar to areas more economically suited to the production thereof; and
Fourth, to afford labor employed in the industry a living wage and to improve their living and working conditions: Provided, That
the President of the Philippines may, until the adjournment of the next regular session of the National Assembly, make the necessary disbursements from the fund herein created (1) for the establishment and operation of sugar experiment station or stations and the undertaking of researchers (a)to increase the recoveries of the centrifugal sugar factories with the view of reducing manufacturing costs, (b) to produce and propagate higher yielding varieties of sugar cane more adaptable to different distinct conditions in the Philippines, (c) to lower the costs of raising sugar cane, (d) to improve the buying quality of denatured alcohol from molasses for motor fuel, (e) to determine the possibility of utilizing the other by-products of the industry, (f) to determine what crop or crops are suitable for rotation and for the utilization of excess cane lands, and (g) on other problems the solution of which would help rehabilitated and stabilize the industry, and (2) for the improvement of living and working conditions in sugar mills and sugar plantations, authorizing him to organize the necessary agency or agencies to take charge of the expenditure and allocation of said funds to carry out the purpose hereinbefore enumerated, and, likewise, authorizing the disbursement
from the fund herein created of the necessary amount of amounts needed for salaries, wages, travelling expenses, equipment, and other sundry expenses or said agency or agencies."cralaw virtua1aw library
Plaintiff, Walter Lutz, in his capacity as Judicial Administrator of the Intestate Estate of Antonio Jayme Ledesma, seeks to recover from the Collector of Internal Revenue the sum of P14,666.40 paid by the estate as taxes, under section 3 of the Act, for the crop years 1948-1949 and 1949-1950; alleging that such tax is unconstitutional and void, being levied for the aid and support of the sugar industry exclusively, which in plaintiff’s opinion is not a public purpose for which a tax may be constitutionally levied. The action having been dismissed by the Court of First Instance, the plaintiffs appealed the case directly to this Court (Judiciary Act, section 17).
The basic defect in the plaintiff’s position is his assumption that the tax provided for in Commonwealth Act No. 567 is a pure exercise of the taxing power. Analysis of the Act, and particularly of section 6 (heretofore quoted in full), will show that the tax is levied with a regulatory purpose, to provide means for the rehabilitation and
stabilization of the threatened sugar industry. In other words, the act is primarily an exercise of the police power.
This Court can take judicial notice of the fact that sugar production in one of the great industries of our nation, sugar occupying a leading position among its export products; that it gives employment to thousands of laborers in fields and factories; that it is a great source of the state’s wealth, is one of the important sources of foreign exchange needed by our government, and is thus pivotal in the plans of a regime committed to a policy of currency stability. Its promotion, protection and advancement, therefore redounds greatly to the general welfare. Hence it was competent for the legislature to find that the general welfare demanded that the sugar industry should be stabilized in turn; and in the wide field of its police power, the law-making body could provide that the distribution of benefits therefrom be readjusted among its components to enable it to resist the added strain of the increase in taxes that it had to sustain (Sligh v. Kirkwood, 237 U. S. 52, 59 L. Ed. 835; Johnson v. State ex rel. Marey, 99 Fla. 1311, 128 So 853; Maxcy Inc. v. Mayo, 103 Fla. 552, 139 So. 121).
As stated in Johnson v. State ex rel. Marey, with reference to the citrus industry in Florida —
"The protection of a large industry constituting one of the great sources of the state’s wealth and therefore directly or indirectly affecting the welfare of so great a portion of the population of the State is affected to such an extent by public interests as to be within the police power of the sovereign." (128 So. 857)
Once it is conceded, as it must, that the protection and promotion of the sugar industry is a matter of public concern, it follows that the Legislature may determine within reasonable bounds what is necessary for its protection and expedient for its promotion. Here, the legislative discretion must be allowed full play, subject only to the test of reasonableness; and it is not contended that the means provided in section 6 of the law (above quoted) bear no relation to the objective pursued or are oppressive in character. If objective and methods are alike constitutionally valid, no reason is seen why the state may not be levy taxes to raise funds for their prosecution and attainment. Taxation may be made the implement of the state’s police power (Great Atl. & Pac. Tea Co. v. Grosjean, 301 U. S. 412, 81 L. Ed. 1193; U. S. v.
Butler, 297 U. S. 1, 80 L. Ed. 477; M’Culloch v. Maryland, 4 Wheat. 318, 4 L. Ed. 579).
That the tax to be levied should burden the sugar producers themselves can hardly be a ground of complaint; indeed, it appears rational that the tax be obtained precisely from those who are to be benefited from the expenditure of the funds derived from it. At any rate, it is inherent in the power to tax that a state be free to select the subjects of taxation, and it has been repeatedly held that "inequalities which result from a singling out of one particular class for taxation, or exemption infringe no constitutional limitation" (Carmichael v. Southern Coal & Coke Co., 301 U. S. 495, 81 L. Ed. 1245, citing numerous authorities, at p. 1251).
From the point of view we have taken it appears of no moment that the funds raised under the Sugar Stabilization Act, now in question, should be exclusively spent in aid of the sugar industry, since it is that very enterprise that is being protected. It may be that other industries are also in need of similar protection; but the legislature is not required by the Constitution to adhere to a policy of "all or none." As ruled in Minnesota ex rel. Pearson v.
Probate Court, 309 U. S. 270, 84 L. Ed. 744, "if the law presumably hits the evil where it is most felt, it is not to be overthrown because there are other instances to which it might have been applied;" and that the legislative authority, exerted within its proper field, need not embrace all the evils within its reach" (N. L. R. B. v. Jones & Laughlin Steel Corp. 301 U. S. 1, 81 L. Ed. 893).
Even from the standpoint that the Act is a pure tax measure, it cannot be said that the devotion of tax money to experimental stations to seek increase of efficiency in sugar production, utilization of by- products and solution of allied problems, as well as to the improvement of living and working conditions in sugar mills or plantations, without any part of such money being channeled directly to private persons, constitutes expenditure of tax money for private purposes, (compare Everson v. Board of Education, 91 L. Ed. 472, 168 ALR 1392, 1400).
The decision appealed from is affirmed, with costs against appellant. So ordered
MAYOR PABLO P. MAGTAJAS & THE CITY OF CAGAYAN DE ORO, petitioners,
vs.
PRYCE PROPERTIES CORPORATION, INC. & PHILIPPINE AMUSEMENT AND GAMING CORPORATION,
FACTS: There was instant opposition when PAGCOR announced the opening of a casino in Cagayan de Oro City. Civic organizations angrily denounced the project.The trouble arose when in 1992, flush with its tremendous success in several cities, PAGCOR decided to expand its operations to Cagayan de Oro City.he reaction of the Sangguniang Panlungsod of Cagayan de Oro City was swift and hostile. On December 7, 1992, it enacted Ordinance No. 3353.Nor was this all. On January 4, 1993, it adopted a sterner Ordinance No. 3375-93Pryce assailed the ordinances before the Court of Appeals, where it was joined by PAGCOR as intervenor and supplemental petitioner. Their challenge succeeded. On March 31, 1993, the Court of Appeals declared the ordinances invalid and issued the writ prayed for to prohibit their enforcement
ISSUE: WON Ordinance 3353 and 3375-93 valid
HELD: No
Local Government Code, local government units are authorized to prevent or suppress, among others, "gambling and other prohibited games of chance." Obviously, this provision excludes games of chance which are not prohibited but are in fact permitted by law.The rationale of the requirement that the ordinances should not contravene a statute is obvious.Casino gambling is authorized by P.D. 1869. This decree has the status of a statute that cannot be amended or nullified by a mere ordinance. Hence, it was not competent for the Sangguniang Panlungsod of Cagayan de Oro City to enact Ordinance No. 3353 prohibiting the use of buildings for the operation of a casino and Ordinance No. 3375-93 prohibiting the operation of casinos. For all their praiseworthy motives, these ordinances are contrary to P.D. 1869 and the public policy announced therein and are therefore ultra vires and void.
The proper resolution of the problem at hand is to hold that under the Local Government Code, local
government units may (and indeed must) prevent and suppress all kinds of gambling within their territories except only those allowed by statutes like P.D. 1869. The exception reserved in such laws must be read into the Code, to make both the Code and such laws equally effective and mutually complementary.
We find that the ordinances violate P.D. 1869, which has the character and force of a statute, as well as the public policy expressed in the decree allowing the playing of certain games of chance despite the prohibition of gambling in general.
The rationale of the requirement that the ordinances should not contravene a statute is obvious. Municipal governments are only agents of the national government. Local councils exercise only delegated legislative powers conferred on them by Congress as the national lawmaking body. The delegate cannot be superior to the principal or exercise powers higher
than those of the latter. It is a heresy to suggest that the local government units can undo the acts of Congress, from which they have derived their power in the first place, and negate by mere ordinance the mandate of the statute.
G.R. No. 93891 March 11, 1991
POLLUTION ADJUDICATION BOARD, petitionervs.COURT OF APPEALS and SOLAR TEXTILE FINISHING CORPORATION, respondents.
Oscar A. Pascua and Charemon Clio L. Borre for petitioner.
Leonardo A. Aurelio for respondent Solar Textile Finishing Corp.
R E S O L U T I O N
FELICIANO, J.:p
Petitioner Pollution Adjudication Board ("Board") asks us to review the Decision and Resolution promulgated on 7 February 1990 and 10 May 1990, respectively, by the Court of Appeals in C.A.-G R. No. SP 18821 entitled "Solar Textile Finishing Corporation v. Pollution Adjudication Board." In
that Decision and Resolution, the Court of Appeals reversed an order of the Regional Trial Court, Quezon City, Branch 77, in Civil Case No. Q-89-2287 dismissing private respondent Solar Textile Finishing Corporation's ("Solar") petition for certiorari and remanded the case to the trial court for further proceedings.
On 22 September 1988, petitioner Board issued an ex parte Order directing Solar immediately to cease and desist from utilizing its wastewater pollution source installations which were discharging untreated wastewater directly into a canal leading to the adjacent Tullahan-Tinejeros River. The Order signed by Hon. Fulgencio Factoran, Jr., as Board Chairman, reads in full as follows:
Respondent, Solar Textile Finishing Corporation with plant and place of business at 999 General Pascual Avenue, Malabon, Metro Manila is involved in bleaching, rinsing and dyeing textiles with wastewater of about 30 gpm. being directly discharged untreated into the sewer. Based on findings in the Inspections conducted on 05 November 1986 and 15 November 1986, the volume of untreated wastewater discharged in the final out fall outside of the plant's compound was even greater. The result of inspection conducted on 06 September 1988 showed that
respondent's Wastewater Treatment Plant was noted unoperational and the combined wastewater generated from its operation was about 30 gallons per minute and 80% of the wastewater was being directly discharged into a drainage canal leading to the Tullahan-Tinejeros River by means of a by-pass and the remaining 20% was channelled into the plant's existing Wastewater Treatment Plant (WTP). Result of the analyses of the sample taken from the by-pass showed that the wastewater is highly pollutive in terms of Color units, BOD and Suspended Solids, among others. These acts of respondent in spite of directives to comply with the requirements are clearly in violation of Section 8 of Presidential Decree No. 984 and Section 103 of its Implementing Rules and Regulations and the 1982 Effluent Regulations.
WHEREFORE, pursuant to Section 7 of P.D. 984 and Section 38 of its Implementing Rules and Regulations, respondent is hereby ordered to cease and desist from utilizing its wastewater pollution source installation and discharging its untreated wastewater directly into the canal leading to the Tullahan-Tinejeros River effective immediately upon receipt hereof and until such time when it has fully complied with all
the requirements and until further orders from this Board.
SO ORDERED. 1
We note that the above Order was based on findings of several inspections of Solar's plant:
a. inspections conducted on 5 November 1986 and 12 November 1986 by the National Pollution Control Commission ("NPCC"), the predecessor of the Board ; 2 and
b. the inspection conducted on 6 September 1988 by the Department of Environment and Natural Resources ("DENR").
The findings of these two (2) inspections were that Solar's wastewater treatment plant was non-operational and that its plant generated about 30 gallons per minute of wastewater, 80% of which was being directly discharged into a drainage canal leading to the Tullahan-Tinejeros River. The remaining 20% of the wastewater was being channeled through Solar's non-operational wastewater treatment plant. Chemical analysis of samples of Solar's effluents showed the presence of pollutants on a level in excess of what was permissible under P.D. No. 984 and its Implementing Regulations.
A copy of the above Order was received by Solar on 26 September 1988. A Writ of Execution issued by the Board
was received by Solar on 31 March 1989.
Meantime, Solar filed a motion for reconsideration/appeal with prayer for stay of execution of the Order dated 22 September 1988. Acting on this motion, the Board issued an Order dated 24 April 1989 allowing Solar to operate temporarily, to enable the Board to conduct another inspection and evaluation of Solar's wastewater treatment facilities. In the same Order, the Board directed the Regional Executive Director of the DENR/ NCR to conduct the inspection and evaluation within thirty (30) days.
On 21 April 1989, however, Solar went to the Regional Trial Court of Quezon City, Branch 77, on petition for certiorari with preliminary injunction against the Board, the petition being docketed as Civil Case No. Q-89-2287.
On 21 July 1989, the Regional Trial Court dismissed Solar's petition upon two (2) grounds, i.e., that appeal and not certiorari from the questioned Order of the Board as well as the Writ of Execution was the proper remedy, and that the Board's subsequent Order allowing Solar to operate temporarily had rendered Solar's petition moot and academic.
Dissatisfied, Solar went on appeal to the Court of Appeals which, in
the Decision here assailed, reversed the Order of dismissal of the trial court and remanded the case to that court for further proceedings. In addition, the Court of Appeals declared the Writ of Execution null and void. At the same time, the Court of Appeals said in the dispositive portion of its Decision that:
. . .. Still and all, this decision is without prejudice to whatever action the appellee [Board] may take relative to the projected 'inspection and evaluation' of appellant's [Solar's] water treatment facilities. 3
The Court of Appeals, in so ruling, held that certiorari was a proper remedy since the Orders of petitioner Board may result in great and irreparable injury to Solar; and that while the case might be moot and academic, "larger issues" demanded that the question of due process be settled. Petitioner Board moved for reconsideration, without success.
The Board is now before us on a Petition for Review basically arguing that:
1. its ex parte Order dated 22 September 1988 and the Writ of Execution were issued in accordance with law and were not violative of the requirements of due process; and
2. the ex parte Order and the Writ of Execution are not the proper subjects of a petition for certiorari.
The only issue before us at this time is whether or not the Court of Appeals erred in reversing the trial court on the ground that Solar had been denied due process by the Board.
Petitioner Board claims that under P.D. No. 984, Section 7(a), it has legal authority to issue ex parte orders to suspend the operations of an establishment when there is prima facie evidence that such establishment is discharging effluents or wastewater, the pollution level of which exceeds the maximum permissible standards set by the NPCC (now, the Board). Petitioner Board contends that the reports before it concerning the effluent discharges of Solar into the Tullahan-Tinejeros River provided prima facie evidence of violation by Solar of Section 5 of the 1982 Effluent Code.
Solar, on the other hand, contends that under the Board's own rules and regulations, an ex parte order may issue only if the effluents discharged pose an "immediate threat to life, public health, safety or
welfare, or to animal and plant life." In the instant case, according to Solar, the inspection reports before the Board made no finding that Solar's wastewater discharged posed such a threat.
The Court is not persuaded by Solar's contention. Section 7(a) of P.D. No. 984 authorized petitioner Board to issue ex parte cease and desist orders under the following circumstances:
P.D. 984, Section 7, paragraph (a), provides:
(a) Public Hearing. . . . Provided, That whenever the Commission finds prima facie evidence that the discharged sewage or wastes are of immediate threat to life, public health, safety or welfare, or to animal or plant life, or exceeds the allowable standards set by the Commission, the Commissioner may issue an ex-parte order directing the discontinuance of the same or the temporary suspension or cessation of operation of the establishment or person generating such sewage or wastes without the necessity of a prior public hearing. The said ex-parte order shall be immediately executory and shall remain in force until said establishment or person prevents or abates the said pollution within the allowable standards or modified or nullified by a competent court. (Emphasis supplied)
We note that under the above-quoted portion of Section 7(a) of P.D. No. 984, an ex parte cease and desist order may be issued by the Board (a) whenever the wastes discharged by an establishment pose an "immediate threat to life, public health, safety or welfare, or to animal or plant life," or (b) whenever such discharges or wastes exceed "the allowable standards set by the [NPCC]." On the one hand, it is not essential that the Board prove that an
"immediate threat to life, public health, safety or welfare, or to animal or plant life" exists before an ex parte cease and desist order may be issued. It is enough if the Board finds that the wastes discharged do exceed "the allowable standards set by the [NPCC]." In respect of discharges of wastes as to which allowable standards have been set by the Commission, the Board may issue an ex parte cease and desist order when there is prima facieevidence of an establishment exceeding such allowable standards. Where, however, the effluents or discharges have not yet been the subject matter of allowable standards set by the Commission, then the Board may act on an ex parte basis when it finds at least prima facie proof that the wastewater or material involved presents an "immediate threat to life, public health, safety or welfare or to animal or plant life." Since the applicable standards set by the Commission existing at any given time may well not cover every possible or imaginable kind of effluent or waste discharge, the general standard of an "immediate threat to life, public health, safety or welfare, or to animal and plant life" remains necessary.
Upon the other hand, the Court must assume that the extant allowable standards have been
set by the Commission or Board precisely in order to avoid or neutralize an "immediate threat to life, public health, safety or welfare, or to animal or plant life.''
Section 5 of the Effluent Regulations of 1982 4 sets out the maximum permissible levels of physical and chemical substances which effluents from domestic wastewater treatment plants and industrial plants" must not exceed "when discharged into bodies of water classified as Class A, B, C, D, SB and SC in accordance with the 1978 NPCC Rules and Regulations." The waters of Tullahan-Tinejeros River are classified as inland waters Class D under Section 68 of the 1978 NPCC Rules and Regulations 5 which in part provides that:
Sec. 68. Water Usage and Classification. — The quality of Philippine waters shall be maintained in a safe and satisfactory condition according to their best usages. For this purpose, all water shall be classified according to the following beneficial usages:
(a) Fresh Surface Water
Classification Best usage
xxx xxx xxx
Class D For agriculture, irrigation, livestock
watering and industrial cooling and
processing.
xxx xxx xxx
(Emphases supplied)
The reports on the inspections carried on Solar's wastewater treatment facilities on 5 and 12 November 1986 and 6 September 1988 set forth the following Identical finding:
a. For legal action in [view of] implementing rules and regulations of P.D. No. 984 and Section 5 of the Effluent Regulations of 1982. 6
Placing the maximum allowable standards set in Section 5 of the Effluent Regulations of 1982 alongside the findings of the November 1986 and September 1988 inspection reports, we get the following results:
"Inland November SeptemberWaters 1986 1988(Class C & D 7 Report 8 Report 9
Station 1 Station 1
a) Color in 100 a) Color units 250 125
platinum (Apparent
cobalt Color)
b) pH 6-8.5 b) pH 9.3 8.7
c) Tempera- 40 c) Temperature
ture in °C (°C)
d) Phenols in 0.1 d) Phenols in
mg./1. mg.1
e) Suspended 75 e) Suspended 340 80
solids in solids in
mg./1. mg./1.
f) BOD in 80 f) BOD (5-day) 1,100 152
mg./1. mg./1
g) oil/Grease 10 g) Oil/Grease
h) Detergents 5 h) Detergents 2.93
in mg./1/" mg./1. MBAS
i) Dissolved 0
oxygen, mg./1.
j) Settleable 0.4 1.5
Matter, mg./1.
k) Total Dis 800 610
solved Solids
mg./1.
l) Total Solids 1,400 690
mg./1.
m) Turbidity
NTU / ppm, SiO 3 70
The November 1986 inspections report concluded that:
Records of the Commission show that the plant under its previous
owner, Fine Touch Finishing Corporation, was issued a Notice of Violation on 20 December 1985 directing same to cease and desist from conducting dyeing operation until such time the waste treatment plant is already completed and operational. The new owner Solar Textile Corporation informed the Commission of the plant acquisition thru its letter dated March 1986 (sic).
The new owner was summoned to a hearing held on 13 October 1986 based on the adverse findings during the inspection/water sampling test conducted on 08 August 1986. As per instruction of the Legal Division a re- inspection/sampling text should be conducted first before an appropriate legal action is instituted; hence, this inspection.
Based on the above findings, it is clear that the new owner continuously violates the directive of the Commission by undertaking dyeing operation without completing first and operating its existing WTP. The analysis of results on water samples taken showed that the untreated wastewater from the firm pollutes our water resources. In this connection, it is recommended that appropriate legal action be instituted immediately against the firm. . . . 10
The September 1988 inspection report's conclusions were:
1. The plant was undertaking dyeing, bleaching and rinsing operations during the inspection. The combined wastewater generated from the said operations was estimated at about 30 gallons per minute. About 80% of the wastewater was traced directly discharged into a drainage canal leading to the Tullahan-Tinejeros river by means of a bypass. The remaining 20% was channeled into the plant's existing wastewater treatment plant (WTP).
2. The WTP was noted not yet fully operational- some accessories were not yet installed. Only the sump pit and the holding/collecting tank are functional but appeared seldom used. The wastewater mentioned channeled was noted held indefinitely into the collection tank for primary treatment. There was no effluent discharge [from such collection tank].
3. A sample from the bypass wastewater was collected for laboratory analyses. Result of the analyses show that the bypass wastewater is polluted in terms of color units, BOD and suspended solids, among others. (Please see attached laboratory resul .) 11
From the foregoing reports, it is clear to this Court that there
was at least prima facie evidence before the Board that the effluents emanating from Solar's plant exceeded the maximum allowable levels of physical and chemical substances set by the NPCC and that accordingly there was adequate basis supporting the ex parte cease and desist order issued by the Board. It is also well to note that the previous owner of the plant facility Fine Touch Finishing Corporation had been issued a Notice of Violation on 20 December 1985 directing it to cease and refrain from carrying out dyeing operations until the water treatment plant was completed and operational. Solar, the new owner, informed the NPCC of the acquisition of the plant on March 1986. Solar was summoned by the NPCC to a hearing on 13 October 1986 based on the results of the sampling test conducted by the NPCC on 8 August 1986. Petitioner Board refrained from issuing an ex parte cease and desist order until after the November 1986 and September 1988 re-inspections were conducted and the violation of applicable standards was confirmed. In other words, petitioner Board appears to have been remarkably forbearing in its efforts to enforce the applicable standards vis-a-vis Solar. Solar, on
the other hand, seemed very casual about its continued discharge of untreated, pollutive effluents into the Tullahan- Tinerejos River, presumably loath to spend the money necessary to put its Wastewater Treatment Plant ("WTP") in an operating condition.
In this connection, we note that in Technology Developers, Inc. v. Court of appeals, et al., 12 the Court very recently upheld the summary closure ordered by the Acting Mayor of Sta. Maria, Bulacan, of a pollution-causing establishment, after finding that the records showed that:
1. No mayor's permit had been secured. While it is true that the matter of determining whether there is a pollution of the environment that requires control if not prohibition of the operation of a business is essentially addressed to the then National Pollution Control Commission of the Ministry of Human Settlements, now the Environmental Management Bureau of the Department of Environment and Natural Resources, it must be recognized that the mayor of a town has as much responsibility to protect its inhabitants from pollution, and by virtue of his police power, he may deny the application for a permit to operate a business or otherwise close the same unless appropriate
measures are taken to control and/or avoid injury to the health of the residents of the community from the emission in the operation of the business.
2. The Acting Mayor, in a letter of February l6, 1989, called the attention of petitioner to the pollution emitted by the fumes of its plant whose offensive odor "not only pollute the air in the locality but also affect the health of the residents in the area," so that petitioner was ordered to stop its operation until further orders and it was required to bring the following:
xxx xxx xxx
(3) Region III-Department of Environment and Natural Resources Anti-Pollution permit. (Annex A-2, petition)
3. This action of the Acting Mayor was in response to the complaint of the residents of Barangay Guyong, Sta. Maria, Bulacan, directed to the Provincial Governor through channels (Annex A-B, petition).. . .
4. The closure order of the Acting Mayor was issued only after an investigation was made by Marivic Guina who in her report of December 8, 1988 observed that the fumes emitted by the plant of petitioner goes directly to the surrounding houses and that no proper air pollution device has
been installed. (Annex A-9, petition)
xxx xxx xxx
6. While petitioner was able to present a temporary permit to operate by the then National Pollution Control Commission on December 15,1987, the permit was good only up to May 25,1988 (Annex A-12, petition). Petitioner had not exerted any effort to extend or validate its permit much less to install any device to control the pollution and prevent any hazard to the health of the residents of the community."
In the instant case, the ex parte cease and desist Order was issued not by a local government official but by the Pollution Adjudication Board, the very agency of the Government charged with the task of determining whether the effluents of a particular industrial establishment comply with or violate applicable anti-pollution statutory and regulatory provisions.
Ex parte cease and desist orders are permitted by law and regulations in situations like that here presented precisely because stopping the continuous discharge of pollutive and untreated effluents into the rivers and other inland waters of the Philippines cannot be made to
wait until protracted litigation over the ultimate correctness or propriety of such orders has run its full course, including multiple and sequential appeals such as those which Solar has taken, which of course may take several years. The relevant pollution control statute and implementing regulations were enacted and promulgated in the exercise of that pervasive, sovereign power to protect the safety, health, and general welfare and comfort of the public, as well as the protection of plant and animal life, commonly designated as the police power. It is a constitutional commonplace that the ordinary requirements of procedural due process yield to the necessities of protecting vital public interests like those here involved, through the exercise of police power. The Board's ex parte Order and Writ of Execution would, of course, have compelled Solar temporarily to stop its plant operations, a state of affairs Solar could in any case have avoided by simply absorbing the bother and burden of putting its WTP on an operational basis. Industrial establishments are not constitutionally entitled to reduce their capitals costs and operating expenses and to increase their
profits by imposing upon the public threats and risks to its safety, health, general welfare and comfort, by disregarding the requirements of anti- pollution statutes and their implementing regulations.
It should perhaps be made clear the Court is not here saying that the correctness of the ex parte Order and Writ of Execution may not be contested by Solar in a hearing before the Board itself. Where the establishment affected by an ex parte cease and desist order contests the correctness of the prima facie findings of the Board, the Board must hold a public hearing where such establishment would have an opportunity to controvert the basis of such ex parte order. That such an opportunity is subsequently available is really all that is required by the due process clause of the Constitution in situations like that we have here. The Board's decision rendered after the public hearing may then be tested judicially by an appeal to the Court of Appeals in accordance with Section 7(c) of P.D. No. 984 and Section 42 of the Implementing Rules and Regulations. A subsequent public hearing is
precisely what Solar should have sought instead of going to court to seek nullification of the Board's Order and Writ of Execution and instead of appealing to the Court of Appeals. It will be recalled the at the Board in fact gave Solar authority temporarily to continue operations until still another inspection of its wastewater treatment facilities and then another analysis of effluent samples could be taken and evaluated.
Solar claims finally that the petition for certiorari was the proper remedy as the questioned Order and Writ of Execution issued by the Board were patent nullities. Since we have concluded that the Order and Writ of Execution were entirely within the lawful authority of petitioner Board, the trial court did not err when it dismissed Solar's petition for certiorari. It follows that the proper remedy was an appeal from the trial court to the Court of Appeals, as Solar did in fact appeal.
ACCORDINGLY, the Petition for Review is given DUE COURSE and the Decision of the Court of Appeals dated 7 February 1990 and its Resolution dated 10 May 1990 in A.C.-G.R. No. SP 18821 are hereby SET ASIDE. The Order of petitioner Board dated 22 September 1988 and the Writ of
Execution, as well as the decision of the trial court dated 21 July 1989, are hereby REINSTATED, without prejudice to the right of Solar to contest the correctness of the basis of the Board's Order and Writ of Execution at a public hearing before the Board.
G.R. No. L-75697 June 18, 1987
VALENTIN TIO doing business under the name and style of OMI ENTERPRISES, petitioner,
vs.VIDEOGRAM REGULATORY
BOARD, MINISTER OF FINANCE, METRO MANILA
COMMISSION, CITY MAYOR and CITY TREASURER OF
MANILA, respondents.
Nelson Y. Ng for petitioner.
The City Legal Officer for respondents City Mayor and City Treasurer.
MELENCIO-HERRERA, J.:
This petition was filed on September 1, 1986 by petitioner on his own behalf and purportedly on behalf of other videogram operators adversely affected. It assails the constitutionality of Presidential Decree No. 1987 entitled "An Act Creating the Videogram Regulatory Board" with broad powers to regulate and supervise the videogram
industry (hereinafter briefly referred to as the BOARD). The Decree was promulgated on October 5, 1985 and took effect on April 10, 1986, fifteen (15) days after completion of its publication in the Official Gazette.
On November 5, 1985, a month after the promulgation of the abovementioned decree, Presidential Decree No. 1994 amended the National Internal Revenue Code providing, inter alia:
SEC. 134. Video Tapes. — There shall be collected on each processed video-tape cassette, ready for playback, regardless of length, an annual tax of five pesos; Provided, That locally manufactured or imported blank video tapes shall be subject to sales tax.
On October 23, 1986, the Greater Manila Theaters Association, Integrated Movie Producers, Importers and Distributors Association of the Philippines, and Philippine Motion Pictures Producers Association, hereinafter collectively referred to as the Intervenors, were permitted by the Court to intervene in the case, over petitioner's opposition, upon the allegations that intervention was necessary for the complete protection of their rights and that their "survival and very existence is threatened by the unregulated proliferation of film piracy."
The Intervenors were thereafter allowed to file their Comment in Intervention.
The rationale behind the enactment of the DECREE, is set out in its preambular clauses as follows:
1. WHEREAS, the proliferation and unregulated circulation of videograms including, among others, videotapes, discs, cassettes or any technical improvement or variation thereof, have greatly prejudiced the operations of moviehouses and theaters, and have caused a sharp decline in theatrical attendance by at least forty percent (40%) and a tremendous drop in the collection of sales, contractor's specific, amusement and other taxes, thereby resulting
in substantial losses estimated at P450 Million annually in government revenues;
2. WHEREAS, videogram(s) establishments collectively earn around P600 Million per annum from rentals, sales and disposition of videograms, and such earnings have not been subjected to tax, thereby depriving the Government of approximately P180 Million in taxes each year;
3. WHEREAS, the unregulated activities of videogram establishments have also affected the viability of the movie industry, particularly the more than 1,200 movie houses and theaters throughout the country, and occasioned industry-wide displacement and unemployment due to the shutdown of numerous moviehouses and theaters;
4. "WHEREAS, in order to ensure national economic recovery, it is imperative for the Government to create an environment conducive to growth and development of all business industries, including the movie industry which has an accumulated investment of about P3 Billion;
5. WHEREAS, proper taxation of the activities of videogram establishments will not only alleviate the dire financial condition of the movie industry upon which more than 75,000 families and 500,000 workers
depend for their livelihood, but also provide an additional source of revenue for the Government, and at the same time rationalize the heretofore uncontrolled distribution of videograms;
6. WHEREAS, the rampant and unregulated showing of obscene videogram features constitutes a clear and present danger to the moral and spiritual well-being of the youth, and impairs the mandate of the Constitution for the State to support the rearing of the youth for civic efficiency and the development of moral character and promote their physical, intellectual, and social well-being;
7. WHEREAS, civic-minded citizens and groups have called for remedial measures to curb these blatant malpractices which have flaunted our censorship and copyright laws;
8. WHEREAS, in the face of these grave emergencies corroding the moral values of the people and betraying the national economic recovery program, bold emergency measures must be adopted with dispatch; ... (Numbering of paragraphs supplied).
Petitioner's attack on the constitutionality of the DECREE rests on the following grounds:
1. Section 10 thereof, which imposes a tax of 30% on the gross receipts payable to the local government is a RIDER and the same is not germane to the subject matter thereof;
2. The tax imposed is harsh, confiscatory, oppressive and/or in unlawful restraint of trade in violation of the due process clause of the Constitution;
3. There is no factual nor legal basis for the exercise by the President of the vast powers conferred upon him by Amendment No. 6;
4. There is undue delegation of power and authority;
5. The Decree is an ex-post facto law; and
6. There is over regulation of the video industry as if it were a nuisance, which it is not.
We shall consider the foregoing objections in seriatim.
1. The Constitutional requirement that "every bill shall embrace only one subject which shall be expressed in the title thereof" is sufficiently complied with if the title be comprehensive enough to include the general purpose which a statute seeks to achieve. It is not necessary that the title express each and every end that the statute wishes to accomplish. The requirement is satisfied if all
the parts of the statute are related, and are germane to the subject matter expressed in the title, or as long as they are not inconsistent with or foreign to the general subject and title.2 An act having a single general subject, indicated in the title, may contain any number of provisions, no matter how diverse they may be, so long as they are not inconsistent with or foreign to the general subject, and may be considered in furtherance of such subject by providing for the method and means of carrying out the general object." 3 The rule also is that the constitutional requirement as to the title of a bill should not be so narrowly construed as to cripple or impede the power of legislation. 4 It should be given practical rather than technical construction. 5
Tested by the foregoing criteria, petitioner's contention that the tax provision of the DECREE is a rider is without merit. That section reads, inter alia:
Section 10. Tax on Sale, Lease or Disposition of Videograms. — Notwithstanding any provision of law to the contrary, the province shall collect a tax of thirty percent (30%) of the purchase price or rental rate, as the case may be, for every sale, lease or disposition of a videogram containing a reproduction of any motion picture or audiovisual program.
Fifty percent (50%) of the proceeds of the tax collected shall accrue to the province, and the other fifty percent (50%) shall acrrue to the municipality where the tax is collected; PROVIDED, That in Metropolitan Manila, the tax shall be shared equally by the City/Municipality and the Metropolitan Manila Commission.
xxx xxx xxx
The foregoing provision is allied and germane to, and is reasonably necessary for the accomplishment of, the general object of the DECREE, which is the regulation of the video industry through the Videogram Regulatory Board as expressed in its title. The tax provision is not inconsistent with, nor foreign to that general subject and title. As a tool for regulation 6 it is simply one of the regulatory and control mechanisms scattered throughout the DECREE. The express purpose of the DECREE to include taxation of the video industry in order to regulate and rationalize the heretofore uncontrolled distribution of videograms is evident from Preambles 2 and 5, supra. Those preambles explain the motives of the lawmaker in presenting the measure. The title of the DECREE, which is the creation of the Videogram Regulatory Board, is comprehensive enough to include the purposes expressed in its
Preamble and reasonably covers all its provisions. It is unnecessary to express all those objectives in the title or that the latter be an index to the body of the DECREE. 7
2. Petitioner also submits that the thirty percent (30%) tax imposed is harsh and oppressive, confiscatory, and in restraint of trade. However, it is beyond serious question that a tax does not cease to be valid merely because it regulates, discourages, or even definitely deters the activities taxed. 8 The power to impose taxes is one so unlimited in force and so searching in extent, that the courts scarcely venture to declare that it is subject to any restrictions whatever, except such as rest in the discretion of the authority which exercises it. 9 In imposing a tax, the legislature acts upon its constituents. This is, in general, a sufficient security against erroneous and oppressive taxation. 10
The tax imposed by the DECREE is not only a regulatory but also a revenue measure prompted by the realization that earnings of videogram establishments of around P600 million per annum have not been subjected to tax, thereby depriving the Government of an additional source of revenue. It is an end-user tax, imposed on retailers for
every videogram they make available for public viewing. It is similar to the 30% amusement tax imposed or borne by the movie industry which the theater-owners pay to the government, but which is passed on to the entire cost of the admission ticket, thus shifting the tax burden on the buying or the viewing public. It is a tax that is imposed uniformly on all videogram operators.
The levy of the 30% tax is for a public purpose. It was imposed primarily to answer the need for regulating the video industry, particularly because of the rampant film piracy, the flagrant violation of intellectual property rights, and the proliferation of pornographic video tapes. And while it was also an objective of the DECREE to protect the movie industry, the tax remains a valid imposition.
The public purpose of a tax may legally exist even if the motive which impelled the legislature to impose the tax was to favor one industry over another.
It is inherent in the power to tax that a state be free to select the subjects of taxation, and it has been repeatedly held that "inequities which result from a singling out of one
particular class for taxation or exemption infringe no constitutional limitation". Taxation has been made the implement of the state's police power.
At bottom, the rate of tax is a matter better addressed to the taxing legislature.
3. Petitioner argues that there was no legal nor factual basis for the promulgation of the DECREE by the former President under Amendment No. 6 of the 1973 Constitution providing that "whenever in the judgment of the President ... , there exists a grave emergency or a threat or imminence thereof, or whenever the interim Batasang Pambansa or the regular National Assembly fails or is unable to act adequately on any matter for any reason that in his judgment requires immediate action, he may, in order to meet the exigency, issue the necessary decrees, orders, or letters of instructions, which shall form part of the law of the land."
In refutation, the Intervenors and the Solicitor General's Office aver that the 8th "whereas" clause sufficiently summarizes the justification in that grave emergencies corroding the moral values of the people and betraying the national economic recovery program necessitated bold emergency measures to be
adopted with dispatch. Whatever the reasons "in the judgment" of the then President, considering that the issue of the validity of the exercise of legislative power under the said Amendment still pends resolution in several other cases, we reserve resolution of the question raised at the proper time.
4. Neither can it be successfully argued that the DECREE contains an undue delegation of legislative power. The grant in Section 11 of the DECREE of authority to the BOARD to "solicit the direct assistance of other agencies and units of the government and deputize, for a fixed and limited period, the heads or personnel of such agencies and units to perform enforcement functions for the Board" is not a delegation of the power to legislate but merely a conferment of authority or discretion as to its execution, enforcement, and implementation. "The true distinction is between the delegation of power to make the law, which necessarily involves a discretion as to what it shall be, and conferring authority or discretion as to its execution to be exercised under and in pursuance of the law. The first cannot be done; to the latter, no valid objection can be made." 14 Besides, in the very language of the decree, the
authority of the BOARD to solicit such assistance is for a "fixed and limited period" with the deputized agencies concerned being "subject to the direction and control of the BOARD." That the grant of such authority might be the source of graft and corruption would not stigmatize the DECREE as unconstitutional. Should the eventuality occur, the aggrieved parties will not be without adequate remedy in law.
5. The DECREE is not violative of the ex post facto principle. An ex post facto law is, among other categories, one which "alters the legal rules of evidence, and authorizes conviction upon less or different testimony than the law required at the time of the commission of the offense." It is petitioner's position that Section 15 of the DECREE in providing that:
All videogram establishments in the Philippines are hereby given a period of forty-five (45) days after the effectivity of this Decree within which to register with and secure a permit from the BOARD to engage in the videogram business and to register with the BOARD all their inventories of videograms, including videotapes, discs, cassettes or other technical improvements or variations thereof, before they could be sold, leased, or otherwise disposed of. Thereafter any videogram found
in the possession of any person engaged in the videogram business without the required proof of registration by the BOARD, shall be prima facie evidence of violation of the Decree, whether the possession of such videogram be for private showing and/or public exhibition.
raises immediately a prima facie evidence of violation of the DECREE when the required proof of registration of any videogram cannot be presented and thus partakes of the nature of an ex post facto law.
The argument is untenable. As this Court held in the recent case of Vallarta vs. Court of Appeals, et al. 15
... it is now well settled that "there is no constitutional objection to the passage of a law providing that the presumption of innocence may be overcome by a contrary presumption founded upon the experience of human conduct, and enacting what evidence shall be sufficient to overcome such presumption of innocence" (People vs. Mingoa 92 Phil. 856 [1953] at 858-59, citing 1 COOLEY, A TREATISE ON THE CONSTITUTIONAL LIMITATIONS, 639-641). And the "legislature may enact that when certain facts have been proved that they shall be prima facie evidence of the existence of the guilt of the
accused and shift the burden of proof provided there be a rational connection between the facts proved and the ultimate facts presumed so that the inference of the one from proof of the others is not unreasonable and arbitrary because of lack of connection between the two in common experience". 16
Applied to the challenged provision, there is no question that there is a rational connection between the fact proved, which is non-registration, and the ultimate fact presumed which is violation of the DECREE, besides the fact that the prima facie presumption of violation of the DECREE attaches only after a forty-five-day period counted from its effectivity and is, therefore, neither retrospective in character.
6. We do not share petitioner's fears that the video industry is being over-regulated and being eased out of existence as if it were a nuisance. Being a relatively new industry, the need for its regulation was apparent. While the underlying objective of the DECREE is to protect the moribund movie industry, there is no question that public welfare is at bottom of its enactment, considering "the unfair competition posed by rampant film piracy; the erosion of the moral fiber of the viewing public brought about by the availability
of unclassified and unreviewed video tapes containing pornographic films and films with brutally violent sequences; and losses in government revenues due to the drop in theatrical attendance, not to mention the fact that the activities of video establishments are virtually untaxed since mere payment of Mayor's permit and municipal license fees are required to engage in business. 17
The enactment of the Decree since April 10, 1986 has not brought about the "demise" of the video industry. On the contrary, video establishments are seen to have proliferated in many places notwithstanding the 30% tax imposed.
In the last analysis, what petitioner basically questions is the necessity, wisdom and expediency of the DECREE. These considerations, however, are primarily and exclusively a matter of legislative concern.
Only congressional power or competence, not the wisdom of the action taken, may be the basis for declaring a statute invalid. This is as it ought to be. The principle of separation of powers has in the main wisely allocated the respective authority of each department and confined its jurisdiction to such a sphere. There would then be intrusion not
allowable under the Constitution if on a matter left to the discretion of a coordinate branch, the judiciary would substitute its own. If there be adherence to the rule of law, as there ought to be, the last offender should be courts of justice, to which rightly litigants submit their controversy precisely to maintain unimpaired the supremacy of legal norms and prescriptions. The attack on the validity of the challenged provision likewise insofar as there may be objections, even if valid and cogent on its wisdom cannot be sustained. 18
In fine, petitioner has not overcome the presumption of validity which attaches to a challenged statute. We find no clear violation of the Constitution which would justify us in pronouncing Presidential Decree No. 1987 as unconstitutional and void.
WHEREFORE, the instant Petition is hereby dismissed.
No costs.
SO ORDERED.
G.R. No. 74457 March 20, 1987
RESTITUTO YNOT, petitioner, vs.
INTERMEDIATE APPELLATE COURT, THE STATION
COMMANDER, INTEGRATED NATIONAL POLICE, BAROTAC
NUEVO, ILOILO and THE REGIONAL DIRECTOR, BUREAU
OF ANIMAL INDUSTRY, REGION IV, ILOILO CITY, respondents.
Ramon A. Gonzales for petitioner.
CRUZ, J.:
The essence of due process is distilled in the immortal cry of Themistocles to Alcibiades "Strike — but hear me first!" It is this cry that the petitioner in effect repeats here as he challenges the constitutionality of Executive Order No. 626-A.
The said executive order reads in full as follows:
WHEREAS, the President has given orders prohibiting the interprovincial movement of carabaos and the slaughtering of carabaos not complying with the requirements of Executive Order No. 626 particularly with respect to age;
WHEREAS, it has been observed that despite such orders the violators still manage to circumvent the prohibition against inter-provincial movement of carabaos by transporting carabeef instead; and
WHEREAS, in order to achieve the purposes and objectives of Executive Order No. 626 and the prohibition against interprovincial
movement of carabaos, it is necessary to strengthen the said Executive Order and provide for the disposition of the carabaos and carabeef subject of the violation;
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by virtue of the powers vested in me by the Constitution, do hereby promulgate the following:
SECTION 1. Executive Order No. 626 is hereby amended such that henceforth, no carabao regardless of age, sex, physical condition or purpose and no carabeef shall be transported from one province to another. The carabao or carabeef transported in violation of this Executive Order as amended shall be subject to confiscation and forfeiture by the government, to be distributed to charitable institutions and other similar institutions as the Chairman of the National Meat Inspection Commission may ay see fit, in the case of carabeef, and to deserving farmers through dispersal as the Director of Animal Industry may see fit, in the case of carabaos.
SECTION 2. This Executive Order shall take effect immediately.
Done in the City of Manila, this 25th day of October, in the year of Our Lord, nineteen hundred and eighty.
(SGD.) FERDINAND E. MARCOS
President
Republic of the Philippines
The petitioner had transported six carabaos in a pump boat from Masbate to Iloilo on January 13, 1984, when they were confiscated by the police station commander of Barotac Nuevo, Iloilo, for violation of the above measure. 1 The petitioner sued for recovery, and the Regional Trial Court of Iloilo City issued a writ of replevin upon his filing of a supersedeas bond of P12,000.00. After considering the merits of the case, the court sustained the confiscation of the carabaos and, since they could no longer be produced, ordered the confiscation of the bond. The court also declined to rule on the constitutionality of the executive order, as raise by the petitioner, for lack of authority and also for its presumed validity. 2
The petitioner appealed the decision to the Intermediate Appellate Court,* 3 which upheld the trial court, ** and he has now come before us in this petition for review on certiorari.
The thrust of his petition is that the executive order is unconstitutional insofar as it authorizes outright confiscation of the carabao or carabeef being transported across provincial
boundaries. His claim is that the penalty is invalid because it is imposed without according the owner a right to be heard before a competent and impartial court as guaranteed by due process. He complains that the measure should not have been presumed, and so sustained, as constitutional. There is also a challenge to the improper exercise of the legislative power by the former President under Amendment No. 6 of the 1973 Constitution. 4
While also involving the same executive order, the case of Pesigan v. Angeles 5 is not applicable here. The question raised there was the necessity of the previous publication of the measure in the Official Gazette before it could be considered enforceable. We imposed the requirement then on the basis of due process of law. In doing so, however, this Court did not, as contended by the Solicitor General, impliedly affirm the constitutionality of Executive Order No. 626-A. That is an entirely different matter.
This Court has declared that while lower courts should observe a becoming modesty in examining constitutional questions, they are nonetheless not prevented from resolving the same whenever warranted, subject only to review by the highest tribunal. 6 We have
jurisdiction under the Constitution to "review, revise, reverse, modify or affirm on appeal or certiorari, as the law or rules of court may provide," final judgments and orders of lower courts in, among others, all cases involving the constitutionality of certain measures. 7 This simply means that the resolution of such cases may be made in the first instance by these lower courts.
And while it is true that laws are presumed to be constitutional, that presumption is not by any means conclusive and in fact may be rebutted. Indeed, if there be a clear showing of their invalidity, and of the need to declare them so, then "will be the time to make the hammer fall, and heavily," 8 to recall Justice Laurel's trenchant warning. Stated otherwise, courts should not follow the path of least resistance by simply presuming the constitutionality of a law when it is questioned. On the contrary, they should probe the issue more deeply, to relieve the abscess, paraphrasing another distinguished jurist, 9 and so heal the wound or excise the affliction.
Judicial power authorizes this; and when the exercise is demanded, there should be no shirking of the task for fear of retaliation, or loss of favor, or popular censure, or any other similar inhibition unworthy of the bench, especially this Court.
The challenged measure is denominated an executive order but it is really presidential decree, promulgating a new rule instead of merely implementing an existing law. It was issued by President Marcos not for the purpose of taking care that the laws were faithfully executed but in the exercise of his legislative authority under Amendment No. 6.
It was provided thereunder that whenever in his judgment there existed a grave emergency or a threat or imminence thereof or
whenever the legislature failed or was unable to act adequately on any matter that in his judgment required immediate action, he
could, in order to meet the exigency, issue decrees, orders or letters of instruction that were to have the force and effect of law.
As there is no showing of any exigency to justify the exercise of that extraordinary power then, the petitioner has reason, indeed, to question the validity of the executive order. Nevertheless, since the determination of the grounds was supposed to have been made by the President "in his judgment, " a phrase that will lead to protracted discussion not really necessary at this time, we reserve resolution of this matter until a more appropriate occasion. For the nonce, we confine ourselves to the more
fundamental question of due process.
It is part of the art of constitution-making that the provisions of the charter be cast in precise and unmistakable language to avoid controversies that might arise on their correct interpretation. That is the Ideal. In the case of the due process clause, however, this rule was deliberately not followed and the wording was purposely kept ambiguous. In fact, a proposal to delineate it more clearly was submitted in the Constitutional Convention of 1934, but it was rejected by Delegate Jose P. Laurel, Chairman of the Committee on the Bill of Rights, who forcefully argued against it. He was sustained by the body. 10
The due process clause was kept intentionally vague so it would remain also conveniently resilient. This was felt necessary because due process is not, like some provisions of the fundamental law, an "iron rule" laying down an implacable and immutable command for all seasons and all persons. Flexibility must be the best virtue of the guaranty. The very elasticity of the due process clause was meant to make it adapt easily to every situation, enlarging or constricting its protection as
the changing times and circumstances may require.
Aware of this, the courts have also hesitated to adopt their own specific description of due process lest they confine themselves in a legal straitjacket that will deprive them of the elbow room they may need to vary the meaning of the clause whenever indicated. Instead, they have preferred to leave the import of the protection open-ended, as it were, to be "gradually ascertained by the process of inclusion and exclusion in the course of the decision of cases as they arise." 11 Thus, Justice Felix Frankfurter of the U.S. Supreme Court, for example, would go no farther than to define due process — and in so doing sums it all up — as nothing more and nothing less than "the embodiment of the sporting Idea of fair play."
When the barons of England extracted from their sovereign liege the reluctant promise that that Crown would thenceforth not proceed against the life liberty or property of any of its subjects except by the lawful judgment of his peers or the law of the land, they thereby won for themselves and their progeny that splendid guaranty of fairness that is now the hallmark of the free society. The solemn vow that King John made at Runnymede in 1215 has since then resounded through the
ages, as a ringing reminder to all rulers, benevolent or base, that every person, when confronted by the stern visage of the law, is entitled to have his say in a fair and open hearing of his cause.
The closed mind has no place in the open society. It is part of the sporting Idea of fair play to hear "the other side" before an opinion is formed or a decision is made by those who sit in judgment. Obviously, one side is only one-half of the question; the other half must also be considered if an impartial verdict is to be reached based on an informed appreciation of the issues in contention. It is indispensable that the two sides complement each other, as unto the bow the arrow, in leading to the correct ruling after examination of the problem not from one or the other perspective only but in its totality. A judgment based on less that this full appraisal, on the pretext that a hearing is unnecessary or useless, is tainted with the vice of bias or intolerance or ignorance, or worst of all, in repressive regimes, the insolence of power.
The minimum requirements of due process are notice and hearing which, generally speaking, may not be dispensed with because they are intended as a safeguard against official arbitrariness. It is a gratifying commentary on our judicial
system that the jurisprudence of this country is rich with applications of this guaranty as proof of our fealty to the rule of law and the ancient rudiments of fair play. We have consistently declared that every person, faced by the awesome power of the State, is entitled to "the law of the land," which Daniel Webster described almost two hundred years ago in the famous Dartmouth College Case, 14 as "the law which hears before it condemns, which proceeds upon inquiry and renders judgment only after trial." It has to be so if the rights of every person are to be secured beyond the reach of officials who, out of mistaken zeal or plain arrogance, would degrade the due process clause into a worn and empty catchword.
This is not to say that notice and hearing are imperative in every case for, to be sure, there are a number of admitted exceptions. The conclusive presumption, for example, bars the admission of contrary evidence as long as such presumption is based on human experience or there is a rational connection between the fact proved and the fact ultimately presumed therefrom. 15 There are instances when the need for expeditions action will justify omission of these requisites, as in the summary abatement of a
nuisance per se, like a mad dog on the loose, which may be killed on sight because of the immediate danger it poses to the safety and lives of the people. Pornographic materials, contaminated meat and narcotic drugs are inherently pernicious and may be summarily destroyed. The passport of a person sought for a criminal offense may be cancelled without hearing, to compel his return to the country he has fled. 16Filthy restaurants may be summarily padlocked in the interest of the public health and bawdy houses to protect the public morals.
In such instances, previous judicial hearing may be omitted without violation of due process in view of the nature of the property involved or the urgency of the need to protect the general welfare from a clear and present danger.
The protection of the general welfare is the particular function of the police power which both restraints and is restrained by due process. The police power is simply defined as the power inherent in the State to regulate liberty and property for the promotion of the general welfare.
By reason of its function, it extends to all the great public needs and is described as the most pervasive, the least limitable and the most demanding of the three inherent powers of the State, far outpacing taxation and eminent domain.
The individual, as a member of society, is hemmed in by the police power, which affects him even before he is born and follows him still after he is dead — from the womb to beyond the tomb — in practically everything he does or owns. Its reach is virtually limitless. It is a ubiquitous and often unwelcome intrusion. Even so, as long as the activity or the property has some relevance to the public welfare, its regulation under the police power is not only proper but necessary. And the justification is found in the venerable Latin maxims,
Salus populi est suprema lex and Sic utere tuo ut alienum non laedas, which call for the subordination of individual interests to the benefit of the greater number.
It is this power that is now invoked by the government to justify Executive Order No. 626-A, amending the basic rule in Executive Order No. 626, prohibiting the slaughter of carabaos except under certain
conditions. The original measure was issued for the reason, as expressed in one of its Whereases, that "present conditions demand that the carabaos and the buffaloes be conserved for the benefit of the small farmers who rely on them for energy needs." We affirm at the outset the need for such a measure. In the face of the worsening energy crisis and the increased dependence of our farms on these traditional beasts of burden, the government would have been remiss, indeed, if it had not taken steps to protect and preserve them.
A similar prohibition was challenged in United States v. Toribio, 19 where a law regulating the registration, branding and slaughter of large cattle was claimed to be a deprivation of property without due process of law. The defendant had been convicted thereunder for having slaughtered his own carabao without the required permit, and he appealed to the Supreme Court. The conviction was affirmed. The law was sustained as a valid police measure to prevent the indiscriminate killing of carabaos, which were then badly needed by farmers. An epidemic had stricken many of these animals and the reduction of their number had resulted in an acute decline in agricultural
output, which in turn had caused an incipient famine. Furthermore, because of the scarcity of the animals and the consequent increase in their price, cattle-rustling had spread alarmingly, necessitating more effective measures for the registration and branding of these animals. The Court held that the questioned statute was a valid exercise of the police power and declared in part as follows:
To justify the State in thus interposing its authority in behalf of the public, it must appear,
first, that the interests of the public generally, as distinguished from those of a particular class, require such interference;
and second, that the means are reasonably necessary for the accomplishment of the purpose, and not unduly oppressive upon individuals. ...
From what has been said, we think it is clear that the enactment of the provisions of the statute under consideration was required by "the interests of the public generally, as distinguished from those of a particular class" and that the prohibition
of the slaughter of carabaos for human consumption, so long as these animals are fit for agricultural work or draft purposes was a "reasonably necessary" limitation on private ownership, to protect the community from the loss of the services of such animals by their slaughter by improvident owners, tempted either by greed of momentary gain, or by a desire to enjoy the luxury of animal food, even when by so doing the productive power of the community may be measurably and dangerously affected.
In the light of the tests mentioned above, we hold with the Toribio Case that the carabao, as the poor man's tractor, so to speak, has a direct relevance to the public welfare and so is a lawful subject of Executive Order No. 626. The method chosen in the basic measure is also reasonably necessary for the purpose sought to be achieved and not unduly oppressive upon individuals, again following the above-cited doctrine. There is no doubt that by banning the slaughter of these animals except where they are at least seven years old if male and eleven years old if female upon issuance of the necessary permit, the executive order will be conserving those still fit for farm work or breeding and
preventing their improvident depletion.
But while conceding that the amendatory measure has the same lawful subject as the original executive order, we cannot say with equal certainty that it complies with the second requirement, viz., that there be a lawful method.
We note that to strengthen the original measure, Executive Order No. 626-A imposes an absolute ban not on the slaughter of the carabaos but on their movement, providing that "no carabao regardless of age, sex, physical condition or purpose (sic) and no carabeef shall be transported from one province to another." The object of the prohibition escapes us. The reasonable connection between the means employed and the purpose sought to be achieved by the questioned measure is missing
We do not see how the prohibition of the inter-provincial transport of carabaos can prevent their indiscriminate slaughter, considering that they can be killed anywhere, with no less difficulty in one province than in another. Obviously, retaining the carabaos in one province will not prevent their slaughter there, any more than moving them to another province will make it
easier to kill them there. As for the carabeef, the prohibition is made to apply to it as otherwise, so says executive order, it could be easily circumvented by simply killing the animal. Perhaps so. However, if the movement of the live animals for the purpose of preventing their slaughter cannot be prohibited, it should follow that there is no reason either to prohibit their transfer as, not to be flippant dead meat.
Even if a reasonable relation between the means and the end were to be assumed, we would still have to reckon with the sanction that the measure applies for violation of the prohibition. The penalty is outright confiscation of the carabao or carabeef being transported, to be meted out by the executive authorities, usually the police only. In the Toribio Case, the statute was sustained because the penalty prescribed was fine and imprisonment, to be imposed by the court after trial and conviction of the accused.
Under the challenged measure, significantly, no such trial is prescribed, and the property being transported is immediately impounded by the police and declared, by the measure itself, as forfeited to the government.
In the instant case, the carabaos were arbitrarily confiscated by the police station commander, were returned to the petitioner only after he had filed a complaint for recovery and given a supersedeas bond of P12,000.00, which was ordered confiscated upon his failure to produce the carabaos when ordered by the trial court. The executive order defined the prohibition, convicted the petitioner and immediately imposed punishment, which was carried out forthright. The measure struck at once and pounced upon the petitioner without giving him a chance to be heard, thus denying him the centuries-old guaranty of elementary fair play.
It has already been remarked that there are occasions when notice and hearing may be validly dispensed with notwithstanding the usual requirement for these minimum guarantees of due process. It is also conceded that summary action may be validly taken in administrative proceedings as procedural due process is not necessarily judicial only. 20 In the exceptional cases accepted, however. there is a justification for the omission of the right to a previous hearing, to wit, the immediacy of the problem sought to be corrected and
the urgency of the need to correct it.
In the case before us, there was no such pressure of time or action calling for the petitioner's peremptory treatment. The properties involved were not even inimical per se as to require their instant destruction. There certainly was no reason why the offense prohibited by the executive order should not have been proved first in a court of justice, with the accused being accorded all the rights safeguarded to him under the Constitution. Considering that, as we held in Pesigan v. Angeles, 21 Executive Order No. 626-A is penal in nature, the violation thereof should have been pronounced not by the police only but by a court of justice, which alone would have had the authority to impose the prescribed penalty, and only after trial and conviction of the accused.
We also mark, on top of all this, the questionable manner of the disposition of the confiscated property as prescribed in the questioned executive order. It is there authorized that the seized property shall "be distributed to charitable institutions and other similar institutions as the Chairman of the National Meat Inspection Commissionmay see
fit, in the case of carabeef, and to deserving farmers through dispersal as the Director of Animal Industrymay see fit, in the case of carabaos." (Emphasis supplied.) The phrase "may see fit" is an extremely generous and dangerous condition, if condition it is. It is laden with perilous opportunities for partiality and abuse, and even corruption. One searches in vain for the usual standard and the reasonable guidelines, or better still, the limitations that the said officers must observe when they make their distribution. There is none. Their options are apparently boundless. Who shall be the fortunate beneficiaries of their generosity and by what criteria shall they be chosen? Only the officers named can supply the answer, they and they alone may choose the grantee as they see fit, and in their own exclusive discretion. Definitely, there is here a "roving commission," a wide and sweeping authority that is not "canalized within banks that keep it from overflowing," in short, a clearly profligate and therefore invalid delegation of legislative powers.
To sum up then, we find that the challenged measure is an invalid exercise of the police power because the method employed to conserve the carabaos is not reasonably necessary to the
purpose of the law and, worse, is unduly oppressive.
Due process is violated because the owner of the property confiscated is denied the right to be heard in his defense and is immediately condemned and punished.
The conferment on the administrative authorities of the power to adjudge the guilt of the supposed offender is a clear encroachment on judicial functions and militates against the doctrine of separation of powers.
There is, finally, also an invalid delegation of legislative powers to the officers mentioned therein who are granted unlimited discretion in the distribution of the properties arbitrarily taken.
For these reasons, we hereby declare Executive Order No. 626-A unconstitutional.
We agree with the respondent court, however, that the police station commander who confiscated the petitioner's carabaos is not liable in damages for enforcing the executive order in accordance with its mandate. The law was at that time
presumptively valid, and it was his obligation, as a member of the police, to enforce it. It would have been impertinent of him, being a mere subordinate of the President, to declare the executive order unconstitutional and, on his own responsibility alone, refuse to execute it. Even the trial court, in fact, and the Court of Appeals itself did not feel they had the competence, for all their superior authority, to question the order we now annul.
The Court notes that if the petitioner had not seen fit to assert and protect his rights as he saw them, this case would never have reached us and the taking of his property under the challenged measure would have become afait accompli despite its invalidity. We commend him for his spirit. Without the present challenge, the matter would have ended in that pump boat in Masbate and another violation of the Constitution, for all its obviousness, would have been perpetrated, allowed without protest, and soon forgotten in the limbo of relinquished rights.
The strength of democracy lies not in the rights it guarantees but in the courage of the people to invoke them whenever they are ignored or violated. Rights are but weapons on the wall if, like expensive tapestry, all they do is embellish and impress. Rights, as
weapons, must be a promise of protection. They become truly meaningful, and fulfill the role assigned to them in the free society, if they are kept bright and sharp with use by those who are not afraid to assert them.
WHEREFORE, Executive Order No. 626-A is hereby declared unconstitutional. Except as affirmed above, the decision of the Court of Appeals is reversed. The supersedeas bond is cancelled and the amount thereof is ordered restored to the petitioner. No costs.
SO ORDERED.
G.R. No. L-63419 December 18, 1986
FLORENTINA A. LOZANO, petitioner,
vs.THE HONORABLE ANTONIO M. MARTINEZ, in his capacity as
Presiding Judge, Regional Trial Court, National Capital Judicial Region, Branch XX,
Manila, and the HONORABLE JOSE B. FLAMINIANO, in his
capacity as City Fiscal of Manila, respondents.
YAP, J.:
The constitutionality of Batas Pambansa Bilang 22 (BP 22 for short), popularly known as the Bouncing Check Law, which was approved on April 3, 1979, is the sole issue presented by these
petitions for decision. The question is definitely one of first impression in our jurisdiction.
These petitions arose from cases involving prosecution of offenses under the statute. The defendants in those cases moved seasonably to quash the informations on the ground that the acts charged did not constitute an offense, the statute being unconstitutional. The motions were denied by the respondent trial courts, except in one case, which is the subject of G. R. No. 75789, wherein the trial court declared the law unconstitutional and dismissed the case. The parties adversely affected have come to us for relief.
As a threshold issue the former Solicitor General in his comment on the petitions, maintained the posture that it was premature for the accused to elevate to this Court the orders denying their motions to quash, these orders being interlocutory. While this is correct as a general rule, we have in justifiable cases intervened to review the lower court's denial of a motion to quash. 1 In view of the importance of the issue involved here, there is no doubt in our mind that the instant petitions should be entertained and the constitutional challenge to BP 22 resolved promptly, one way or the other, in order to put to rest the doubts and uncertainty that exist
in legal and judicial circles and the general public which have unnecessarily caused a delay in the disposition of cases involving the enforcement of the statute.
For the purpose of resolving the constitutional issue presented here, we do not find it necessary to delve into the specifics of the informations involved in the cases which are the subject of the petitions before us. 2 The language of BP 22 is broad enough to cover all kinds of checks, whether present dated or postdated, or whether issued in payment of pre-existing obligations or given in mutual or simultaneous exchange for something of value.
I
BP 22 punishes a person "who makes or draws and issues any check on account or for value, knowing at the time of issue that he does not have sufficient funds in or credit with the drawee bank for the payment of said check in full upon presentment, which check is subsequently dishonored by the drawee bank for insufficiency of funds or credit or would have been dishonored for the same reason had not the drawer, without any valid reason, ordered the bank to stop payment."
The penalty prescribed for the offense is imprisonment of not
less than 30 days nor more than one year or a fine or not less than the amount of the check nor more than double said amount, but in no case to exceed P200,000.00, or both such fine and imprisonment at the discretion of the court. 3
The statute likewise imposes the same penalty on "any person who, having sufficient funds in or credit with the drawee bank when he makes or draws and issues a check, shall fail to keep sufficient funds or to maintain a credit to cover the full amount of the check if presented within a period of ninety (90) days from the date appearing thereon, for which reason it is dishonored by the drawee bank. 4
An essential element of the offense is "knowledge" on the part of the maker or drawer of the check of the insufficiency of his funds in or credit with the bank to cover the check upon its presentment. Since this involves a state of mind difficult to establish, the statute itself creates a prima facie presumption of such knowledge where payment of the check "is refused by the drawee because of insufficient funds in or credit with such bank when presented within ninety (90) days from the date of the check. 5 To mitigate the harshness of the law in its application, the statute provides that such presumption
shall not arise if within five (5) banking days from receipt of the notice of dishonor, the maker or drawer makes arrangements for payment of the check by the bank or pays the holder the amount of the check.
Another provision of the statute, also in the nature of a rule of evidence, provides that the introduction in evidence of the unpaid and dishonored check with the drawee bank's refusal to pay "stamped or written thereon or attached thereto, giving the reason therefor, "shall constitute prima facie proof of "the making or issuance of said check, and the due presentment to the drawee for payment and the dishonor thereof ... for the reason written, stamped or attached by the drawee on such dishonored check." 6
The presumptions being merely prima facie, it is open to the accused of course to present proof to the contrary to overcome the said presumptions.
II
BP 22 is aimed at putting a stop to or curbing the practice of issuing checks that are worthless, i.e. checks that end up being rejected or dishonored for payment. The practice, as discussed later, is proscribed by the state because
of the injury it causes to t public interests.
Before the enactment of BP 22, provisions already existed in our statute books which penalize the issuance of bouncing or rubber checks. Criminal law has dealth with the problem within the context of crimes against property punished as "estafa" or crimes involving fraud and deceit. The focus of these penal provisions is on the damage caused to the property rights of the victim.
The Penal Code of Spain, which was in force in the Philippines from 1887 until it was replaced by the Revised Penal Code in 1932, contained provisions penalizing, among others, the act of defrauding another through false pretenses. Art. 335 punished a person who defrauded another "by falsely pretending to possess any power, influence, qualification, property, credit, agency or business, or by means of similar deceit." Although no explicit mention was made therein regarding checks, this provision was deemed to cover within its ambit the issuance of worthless or bogus checks in exchange for money. 7
In 1926, an amendment was introduced by the Philippine Legislature, which added a new clause (paragraph 10) to Article 335 of the old Penal Code, this
time referring in explicit terms to the issuance of worthless checks. The amendment penalized any person who 1) issues a check in payment of a debt or for other valuable consideration, knowing at the time of its issuance that he does not have sufficient funds in the bank to cover its amount, or 2) maliciously signs the check differently from his authentic signature as registered at the bank in order that the latter would refuse to honor it; or 3) issues a postdated check and, at the date set for its payment, does not have sufficient deposit to cover the same. 8
In 1932, as already adverted to, the old Penal Code was superseded by the Revised Penal Code. 9 The above provisions, in amended form, were incorporated in Article 315 of the Revised Penal Code defining the crime of estafa. The revised text of the provision read as follows:
Art. 315. Swindling (estafa).—Any person who shall defraud another by any of the means mentioned hereinbelow shall be punished by:
xxx xxx xxx
2. By means of any of the following false pretenses or fraudulent acts executed prior to or simultaneously with the commis sion of the fraud:
(a) By using fictitious name, or falsely pretending to possess power, influence, qualifications, property, credit, agency, business or imaginary transactions, or by means of other similar deceits;
xxx xxx xxx
(d) By postdating a check, or issuing a check in payment of an obligation the offender knowing that at the time he had no funds in the bank, or the funds deposited by him were not sufficient to cover the amount of the cheek without informing the payee of such circumstances.
The scope of paragraph 2 (d), however, was deemed to exclude checks issued in payment of pre-existing obligations. 10 The rationale of this interpretation is that in estafa, the deceit causing the defraudation must be prior to or simultaneous with the commission of the fraud. In issuing a check as payment for a pre-existing debt, the drawer does not derive any material benefit in return or as consideration for its issuance. On the part of the payee, he had already parted with his money or property before the check is issued to him hence, he is not defrauded by means of any "prior" or "simultaneous" deceit perpetrated on him by the drawer of the check.
With the intention of remedying the situation and solving the
problem of how to bring checks issued in payment of pre-existing debts within the ambit of Art. 315, an amendment was introduced by the Congress of the Philippines in 1967, 11 which was enacted into law as Republic Act No. 4885, revising the aforesaid proviso to read as follows:
(d) By postdating a check, or issuing a check in payment of an obligation when the offender had no funds in the bank, or his funds deposited therein were not sufficient to cover the amount of the check. The failure of the drawer of the check to deposit the amount necessary to cover his check within three (3) days from receipt of notice from the bank and/or the payee or holder that said check has been dishonored for lack or insufficiency of funds shall be puma facie evidence of deceit constituting false pretense or fraudulent act.
However, the adoption of the amendment did not alter the situation materially. A divided Court held in People vs. Sabio, Jr. 12 that Article 315, as amended by Republic Act 4885, does not cover checks issued in payment of pre-existing obligations, again relying on the concept underlying the crime of estafa through false pretenses or deceit—which is, that the deceit or false pretense must be prior to or simultaneous with the commission of the fraud.
Since statistically it had been shown that the greater bulk of dishonored checks consisted of those issued in payment of pre-existing debts, 13 the amended provision evidently failed to cope with the real problem and to deal effectively with the evil that it was intended to eliminate or minimize.
With the foregoing factual and legal antecedents as a backdrop, the then Interim Batasan confronted the problem squarely. It opted to take a bold step and decided to enact a law dealing with the problem of bouncing or worthless checks, without attaching the law's umbilical cord to the existing penal provisions on estafa. BP 22 addresses the problem directly and frontally and makes the act of issuing a worthless check malum prohibitum. 14
The question now arises: Is B P 22 a valid law?
Previous efforts to deal with the problem of bouncing checks within the ambit of the law on estafa did not evoke any constitutional challenge. In contrast, BP 22 was challenged promptly.
Those who question the constitutionality of BP 22 insist that:
(1) it offends the constitutional provision forbidding imprisonment for debt;
(2) it impairs freedom of contract;
(3) it contravenes the equal protection clause;
(4) it unduly delegates legislative and executive powers;
and (5) its enactment is flawed in that during its passage the Interim Batasan violated the constitutional provision prohibiting amendments to a bill on Third Reading.
The constitutional challenge to BP 22 posed by petitioners deserves a searching and thorough scrutiny and the most deliberate consideration by the Court, involving as it does the exercise of what has been described as "the highest and most delicate function which belongs to the judicial department of the government." 15
As we enter upon the task of passing on the validity of an act of a co-equal and coordinate branch of the government, we need not be reminded of the time-honored principle, deeply ingrained in our jurisprudence, that a statute is presumed to be valid. Every presumption must be indulged in favor of its constitutionality. This is not to say that we approach our task with diffidence or timidity. Where it is clear that the
legislature has overstepped the limits of its authority under the constitution we should not hesitate to wield the axe and let it fall heavily, as fall it must, on the offending statute.
III
Among the constitutional objections raised against BP 22, the most serious is the alleged conflict between the statute and the constitutional provision forbidding imprisonment for debt. It is contended that the statute runs counter to the inhibition in the Bill of Rights which states, "No person shall be imprisoned for debt or non-payment of a poll tax." 16 Petitioners insist that, since the offense under BP 22 is consummated only upon the dishonor or non-payment of the check when it is presented to the drawee bank, the statute is really a "bad debt law" rather than a "bad check law." What it punishes is the non-payment of the check, not the act of issuing it. The statute, it is claimed, is nothing more than a veiled device to coerce payment of a debt under the threat of penal sanction.
First of all it is essential to grasp the essence and scope of the constitutional inhibition invoked by petitioners. Viewed in its historical context, the constitutional prohibition against imprisonment for debt is a
safeguard that evolved gradually during the early part of the nineteenth century in the various states of the American Union as a result of the people's revulsion at the cruel and inhumane practice, sanctioned by common law, which permitted creditors to cause the incarceration of debtors who could not pay their debts. At common law, money judgments arising from actions for the recovery of a debt or for damages from breach of a contract could be enforced against the person or body of the debtor by writ of capias ad satisfaciendum. By means of this writ, a debtor could be seized and imprisoned at the instance of the creditor until he makes the satisfaction awarded. As a consequence of the popular ground swell against such a barbarous practice, provisions forbidding imprisonment for debt came to be generally enshrined in the constitutions of various states of the Union. 17
This humanitarian provision was transported to our shores by the Americans at the turn of t0he century and embodied in our organic laws. 18 Later, our fundamental law outlawed not only imprisonment for debt, but also the infamous practice, native to our shore, of throwing people in jail for non-payment of the cedula or poll tax.
The reach and scope of this constitutional safeguard have been the subject of judicial definition, both by our Supreme Court 20 and by American State courts. 21 Mr. Justice Malcolm speaking for the Supreme Court in Ganaway vs. Queen, 22 stated:
"The 'debt' intended to be covered by the constitutional guaranty has a well-defined meaning. Organic provisions relieving from imprisonment for debt, were intended to prevent commitment of debtors to prison for liabilities arising from actions ex contractu The inhibition was never meant to include damages arising in actions ex delicto, for the reason that damages recoverable therein do not arise from any contract entered into between the parties but are imposed upon the defendant for the wrong he has done and are considered as punishment, nor to fines and penalties imposed by the courts in criminal proceedings as punishments for crime."
The law involved in Ganaway was not a criminal statute but the Code of Procedure in Civil Actions (1909) which authorized the arrest of the defendant in a civil case on grounds akin to those which justify the issuance of a writ of attachment under our present Rules of Court, such as imminent departure of the defendant from
the Philippines with intent to defraud his creditors, or concealment, removal or disposition of properties in fraud of creditors, etc. The Court, in that case, declared the detention of the defendant unlawful, being violative of the constitutional inhibition against imprisonment for debt, and ordered his release. The Court, however, refrained from declaring the statutory provision in question unconstitutional.
Closer to the case at bar is People v. Vera Reyes, 23 wherein a statutory provision which made illegal and punishable the refusal of an employer to pay, when he can do so, the salaries of his employees or laborers on the fifteenth or last day of every month or on Saturday every week, was challenged for being violative of the constitutional prohibition against imprisonment for debt. The constitutionality of the law in question was upheld by the Court, it being within the authority of the legislature to enact such a law in the exercise of the police power.
It was held that "one of the purposes of the law is to suppress possible abuses on the part of the employers who hire laborers or employees without paying them the salaries agreed upon for their services, thus causing them financial difficulties. "The law was viewed not as a measure to
coerce payment of an obligation, although obviously such could be its effect, but to banish a practice considered harmful to public welfare.
IV
Has BP 22 transgressed the constitutional inhibition against imprisonment for debt? To answer the question, it is necessary to examine what the statute prohibits and punishes as an offense. Is it the failure of the maker of the check to pay a debt? Or is it the making and issuance of a worthless check in payment of a debt? What is the gravamen of the offense? This question lies at the heart of the issue before us.
The gravamen of the offense punished by BP 22 is the act of making and issuing a worthless check or a check that is dishonored upon its presentation for payment. It is not the non-payment of an obligation which the law punishes.
The law is not intended or designed to coerce a debtor to pay his debt. The thrust of the law is to prohibit, under pain of penal sanctions, the making of worthless checks and putting them in circulation. Because of its deleterious effects on the public interest, the practice is proscribed by the law. The law
punishes the act not as an offense against property, but an offense against public order.
Admittedly, the distinction may seem at first blush to appear elusive and difficult to conceptualize. But precisely in the failure to perceive the vital distinction lies the error of those who challenge the validity of BP 22.
It may be constitutionally impermissible for the legislature to penalize a person for non-payment of a debt ex contractu But certainly it is within the prerogative of the lawmaking body to proscribe certain acts deemed pernicious and inimical to public welfare. Acts mala in se are not the only acts which the law can punish. An act may not be considered by society as inherently wrong, hence, not malum in se but because of the harm that it inflicts on the community, it can be outlawed and criminally punished as malum prohibitum. The state can do this in the exercise of its police power.
The POLICE POWER OF THE STATE has been described as "the most essential, insistent and illimitable of powers" which enables it to prohibit all things hurtful to the comfort, safety and welfare of
society. It is a power not emanating from or conferred by the constitution, but inherent in the state, plenary, "suitably vague and far from precisely defined, rooted in the conception that man in organizing the state and imposing upon the government limitations to safeguard constitutional rights did not intend thereby to enable individual citizens or group of citizens to obstruct unreasonably the enactment of such salutary measures to ensure communal peace, safety, good order and welfare." 25
The enactment of BP 22 is a declaration by the legislature that, as a matter of public policy, the making and issuance of a worthless check is deemed public nuisance to be abated by the imposition of penal sanctions.
It is not for us to question the wisdom or impolicy of the statute. It is sufficient that a reasonable nexus exists between means and end. Considering the factual and legal antecedents that led to the adoption of the statute, it is not difficult to understand the public concern which prompted its enactment. It had been reported that the approximate value of bouncing checks per day was close to 200 million pesos, and thereafter when overdrafts were
banned by the Central Bank, it averaged between 50 minion to 80 million pesos a day.
By definition, a check is a bill of exchange drawn on a bank and payable on demand. It is a written order on a bank, purporting to be drawn against a deposit of funds for the payment of all events, of a sum of money to a certain person therein named or to his order or to cash and payable on demand. 28 Unlike a promissory note, a check is not a mere undertaking to pay an amount of money. It is an order addressed to a bank and partakes of a representation that the drawer has funds on deposit against which the check is drawn, sufficient to ensure payment upon its presentation to the bank. There is therefore an element of certainty or assurance that the instrument wig be paid upon presentation. For this reason, checks have become widely accepted as a medium of payment in trade and commerce. Although not legal tender, checks have come to be perceived as convenient substitutes for currency in commercial and financial transactions. The basis or foundation of such perception is confidence. If such confidence is shakes the usefulness of checks as currency substitutes would be greatly diminished or may become nit Any practice therefore
tending to destroy that confidence should be deterred for the proliferation of worthless checks can only create havoc in trade circles and the banking community.
Recent statistics of the Central Bank show that one-third of the entire money supply of the country, roughly totalling P32.3 billion, consists of peso demand deposits; the remaining two. 29 These de deposit thirds consists of currency in circulation. ma deposits in the banks constitute the funds against which among others, commercial papers like checks, are drawn. The magnitude of the amount involved amply justifies the legitimate concern of the state in preserving the integrity of the banking system. Flooding the system with worthless checks is like pouring garbage into the bloodstream of the nation's economy.
The effects of the issuance of a worthless check transcends the private interests of the parties directly involved in the transaction and touches the interests of the community at large. The mischief it creates is not only a wrong to the payee or holder, but also an injury to the public. The harmful practice of putting valueless commercial papers in circulation, multiplied a thousand
fold, can very went pollute the channels of trade and commerce, injure the banking system and eventually hurt the welfare of society and the public interest. As aptly stated — 30
The 'check flasher' does a great deal more than contract a debt; he shakes the pillars of business; and to my mind, it is a mistaken charity of judgment to place him in the same category with the honest man who is unable to pay his debts, and for whom the constitutional inhibition against' imprisonment for debt, except in cases of fraud was intended as a shield and not a sword.
In sum, we find the enactment of BP 22 a valid exercise of the police power and is not repugnant to the constitutional inhibition against imprisonment for debt.
This Court is not unaware of the conflicting jurisprudence obtaining in the various states of the United States on the constitutionality of the "worthless check" acts. 31 It is needless to warn that foreign jurisprudence must be taken with abundant caution. A caveat to be observed is that substantial differences exist between our statute and the worthless check acts of those states where the jurisprudence have evolved. One thing to remember is that BP 22
was not lifted bodily from any existing statute. Furthermore, we have to consider that judicial decisions must be read in the context of the facts and the law involved and, in a broader sense, of the social economic and political environment—in short, the milieu—under which they were made. We recognize the wisdom of the old saying that what is sauce for the goose may not be sauce for the gander.
As stated elsewhere, police power is a dynamic force that enables the state to meet the exigencies of changing times. There are occasions when the police power of the state may even override a constitutional guaranty. For example, there have been cases wherein we held that the constitutional provision on non-impairment of contracts must yield to the police power of the state. 32 Whether the police power may override the constitutional inhibition against imprisonment for debt is an issue we do not have to address. This bridge has not been reached, so there is no occasion to cross it.
WE HOLD THAT BP 22 DOES NOT CONFLICT WITH THE CONSTITUTIONAL INHIBITION AGAINST IMPRISONMENT FOR DEBT.
V
We need not detain ourselves lengthily in the examination of the other constitutional objections raised by petitioners, some of which are rather flimsy.
We find no valid ground to sustain the contention that BP 22 impairs freedom of contract. The freedom of contract which is constitutionally protected is freedom to enter into "lawful" contracts. Contracts which contravene public policy are not lawful. 33 Besides, we must bear in mind that checks can not be categorized as mere contracts. It is a commercial instrument which, in this modem day and age, has become a convenient substitute for money; it forms part of the banking system and therefore not entirely free from the regulatory power of the state.
Neither do we find substance in the claim that the statute in question denies equal protection of the laws or is discriminatory, since it penalizes the drawer of the check, but not the payee. It is contended that the payee is just as responsible for the crime as the drawer of the check, since without the indispensable participation of the payee by his acceptance of the check there would be no crime. This argument is tantamount to saying that, to give equal protection, the law
should punish both the swindler and the swindled. The petitioners' posture ignores the well-accepted meaning of the clause
"EQUAL PROTECTION OF THE LAWS." The clause does not preclude classification of individuals, who may be accorded different treatment under the law as long as the classification is no unreasonable or arbitrary.
It is also suggested that BP 22 constitutes undue or improper delegation of legislative powers, on the theory that the offense is not completed by the sole act of the maker or drawer but is made to depend on the will of the payee. If the payee does not present the check to the bank for payment but instead keeps it, there would be no crime. The logic of the argument stretches to absurdity the meaning of "delegation of legislative power." What cannot be delegated is the power to legislate, or the power to make laws. 35 which means, as applied to the present case, the power to define the offense sought to be punished and to prescribe the penalty. By no stretch of logic or imagination can it be said that the power to define the crime and prescribe the penalty therefor has been in any manner delegated to the payee. Neither is there any provision in the statute that can be construed, no matter how remotely, as undue
delegation of executive power. The suggestion that the statute unlawfully delegates its enforcement to the offended party is farfetched.
Lastly, the objection has been raised that Section 9 (2) of Article VII of the 1973 Constitution was violated by the legislative body when it enacted BP 22 into law. This constitutional provision prohibits the introduction of amendments to a bill during the Third Reading. It is claimed that during its Third Reading, the bill which eventually became BP 22 was amended in that the text of the second paragraph of Section 1 of the bill as adopted on Second Reading was altered or changed in the printed text of the bill submitted for approval on Third Reading.
A careful review of the record of the proceedings of the Interim Batasan on this matter shows that, indeed, there was some confusion among Batasan Members on what was the exact text of the paragraph in question which the body approved on Second Reading. 36 Part of the confusion was due apparently to the fact that during the deliberations on Second Reading (the amendment period), amendments were proposed orally and approved by the body or accepted by the sponsor, hence, some members might not
have gotten the complete text of the provisions of the bill as amended and approved on Second Reading. However, it is clear from the records that the text of the second paragraph of Section 1 of BP 22 is the text which was actually approved by the body on Second Reading on February 7, 1979, as reflected in the approved Minutes for that day. In any event, before the bin was submitted for final approval on Third Reading, the Interim Batasan created a Special Committee to investigate the matter, and the Committee in its report, which was approved by the entire body on March 22, 1979, stated that "the clause in question was ... an authorized amendment of the bill and the printed copy thereof reflects accurately the provision in question as approved on Second Reading. 37 We therefore, find no merit in the petitioners' claim that in the enactment of BP 22 the provisions of Section 9 (2) of Article VIII of the 1973 Constitution were violated.
WHEREFORE, judgment is rendered granting the petition in G.R. No. 75789 and setting aside the order of the respondent Judge dated August 19, 1986. The petitions in G.R. Nos. 63419, 66839-42, 71654, 74524-25, 75122-49, 75812-13 and 75765-67 are hereby dismissed and the
temporary restraining order issued in G.R. Nos. 74524-25 is lifted. With costs against private petitioners.
SO ORDERED.
BUNTING v. STATE OF OREGON.
ERROR TO THE SUPREME COURT OF THE STATE OF OREGON.
No. 38.
Argued April 18, 1916; restored to docket for reargument June 12, 1916; reargued January 19, 1917. Decided April 9, 1917.
Section 2 of the General Laws of Oregon, 1913, c. 102, p. 169, providing that
"No person shall be employed in any mill, factory or manufacturing establishment in this State more than ten hours in any one day, except watchmen and employees when engaged in making necessary repairs, or in case of emergency, where life or property is in imminent danger; provided, however, employees may work overtime not to exceed three hours in any one day, conditioned that payment be made for said overtime at the rate of time and one-half of the regular wage,"
is construed as in purpose an hours of service law and as such is upheld as a valid health regulation. Whether the law could
be upheld as a regulation of wages is not considered or decided. While mere legislative declaration can not give character to a law or turn illegal into legal operation, the court will not ascribe to the legislature an intent to disguise an illegal purpose or the improvidence of effecting one thing while intending another when, as in this case, the purpose as declared in the act (§ 1) and confirmed by the state court is legal and the provisions of the act can be accommodated to it. The provision for overtime and extra pay is in nature a penalty to deter from excess of the ten-hour limit.
In sustaining a state law passed in the exercise of an admitted power *427427 of government the court need not be sure of the precise reasons for means adopted by the legislature, nor may it pass upon their adequacy or wisdom.
Upon the question whether a ten-hour law is necessary or useful for the preservation of the health of employees in "mills, factories, and manufacturing establishments" the court may accept the judgment of the state legislature and state supreme court, when the record contains no facts to support the contrary contention.
The Oregon law, supra, in limiting the hours of employees in "mills, factories, and manufacturing
establishments" does not unduly discriminate against their employers as compared with other employers not included in the classification.71 Or. 259, affirmed.
THE case is stated in the opinion.
Mr. W. Lair Thompson, with whom Mr. C.W. Fulton was on the briefs, for plaintiff in error:
When dealing with subjects which do not affect the public generally, legislation restricting private activities and the enjoyment of private property must be plainly necessary before it can be upheld under the police power. Hannibal St. Joseph Ry. Co. v. Husen, 95 U.S. 465.
It belongs to the judiciary to determine what are the proper subjects for the exercise of the police power and when the legislative discretion is reasonably employed. Ruhstrat v. People, 185 Ill. 133; Holden v. Hardy, 169 U.S. 366; Lochner v. New York, 198 U.S. 46.
It is not sufficient that the general purpose of the act shall be within the recognized limits of police power, but the means employed to accomplish that purpose must not invade private rights secured by the Federal
Constitution.Connelly v. Union Sewer Pipe Co., 184 U.S. 540; Jacobson v.Massachusetts,197 U.S. 11; Atchison, Topeka Santa Fe Ry. Co. v. Vosburg,238 U.S. 56.
Police regulations have not generally been extended to the restriction of the right of contract between employer and employee. Allgeyer v.Louisiana, 165 U.S. 579; Coppage v. Kansas, 236 U.S. 1. *428428
Laws regulating hours of employment have been seldom upheld and only in respect of employment directly affecting the welfare, health or safety of the public, or to which the State or one of its subdivisions is a party, or involving unusual danger to the health of the employee. People v. Erie R.R. Company, 198 N.Y. 369; Atkins v. Kansas, 191 U.S. 207; Holden v. Hardy,169 U.S. 366; State v. Muller, 208 U.S. 412.
Interference with private labor contracts not affecting the public can only be sustained when reasonably necessary to preserve health, and not unless the court can say that the place or nature of employment is of such unusual danger to health as to demand legislative interference. Lochner v. New
If legislative interference with property right is to be sanctioned in every case in which the court cannot say that beyond reasonable doubt such interference will not tend to benefit or protect the health or welfare of a laborer, then the Fourteenth Amendment means nothing in matters of this kind. It is only when the court can say that such regulation is reasonably necessary that the Fourteenth Amendment ceases to inhibit the regulation. Considering those matters of common knowledge, which the court should do ( Jacobson v.Massachusetts, 197 U.S. 11), it may seem hardly conceivable that a law with the broad scope of the Oregon act can be held to be necessary for the preservation of the health of employees in mills, factories and manufacturing establishments. The occupations affected are the ordinary employments of life, and involve only the ordinary dangers to health that accompany manual labor. It can hardly be contended that the man who wheels sacked flour from the mill to the warehouse, or who keeps the books, or deals with the farmer, receiving the grain, works in a position of unusual danger, or that his health will be impaired if he is permitted to work the number of
hours his own judgment *429429 dictates, or that he is not of sufficient intelligence to sell his labor without the paternal guidance of a legislative majority.
The law upon its face refutes the contention that it is a health law, or that the recitals of the act in § 1 thereof were deemed true by the legislature. The legislative declaration of necessity, even if the act followed such declaration, is not binding upon this court. Coppage v. Kansas, 236 U.S. 1;Minnesota v. Barber, 136 U.S. 313; Powell v. Pennsylvania, 127 U.S. 678; Yates v. Milwaukee, 10 Wall. 497. The law is not a ten-hour law; it is a thirteen-hour law designed solely for the purpose of compelling the employer of labor in mills, factories and manufacturing establishments to pay more for labor than the actual market value thereof. It is based upon economic grounds exclusively. The provision for overtime at time and one-half the regular wage robs the law of any argument that might be made to bring it within those grounds that justify an exercise of the police power. Freund, Police Power, §§ 316, 318.
The right of the legislature to regulate wages is denied inStreet v. Varney Electrical
Supply Co., 160 Ind. 338, and People v.Coler, 166 N.Y. 1. These decisions are not affected by Atkinv. Kansas, 191 U.S. 207, and Heim v. McCall,239 U.S. 175, which relate to hours of labor in public employments. See also Low v. Rees Printing Co., 41 Neb. 127, and Wheeling Bridge Terminal Ry. Co. v. Gilmore, 8 Ohio Cir. Ct. Rep. 858.
Insufficiency of wage does not justify legislative regulation. The wage has no bearing upon health. Society may not force the employer to pay wages sufficient to support the employee upon the scale of his desire. But this law goes further, fixing the amount arbitrarily. In this case the employee was receiving a regular wage of 40 cents per hour, on its face a living wage, and there was no basis for an arbitrary demand that he be paid 60 cents per *430430 hour for three hours of his time. The effect is to take money from the employer and give it to the laborer without due process or value in return. Although the terms of employment are more important than the selection of the employee, even the right to select cannot be invaded by state dictation. Adair v. United States, 208 U.S. 161; Coppage v. Kansas, 236 U.S. 1;Chicago, Burlington Quincy Ry. Co. v. McGuire, 219 U.S. 549.
The Oregon act discriminates against plaintiff in error, denying the equal protection of the laws. Atchison, Topeka Santa Fe. Ry. Co. v. Vosburg, 238 U.S. 56; Cooley Const. Lim., 7th ed., p. 560.
The provision for extra wages does not aid in the enforcement of the law as an hours-of-service law. The commingling of unlawful methods of execution with a lawful purpose may make an act unconstitutional as effectively as may an unlawful purpose. Coppage v. Kansas, 236 U.S. 1. The fixing and execution of the overtime pay is an unconstitutional means. Furthermore, it has no reasonable tendency to enforce the declared purpose (distinguishingCommonwealth v. Riley,210 Mass. 394; s.c., 232 U.S. 671).
The penalty theory is untenable. It involves penalizing an employer for doing the very thing the law authorizes, since the act itself permits employment beyond the ten hours. The purpose and scope are fixed by § 2 where the time and overtime provisions appear together. The penalty for violating that section is provided by § 3, is complete in itself, and uniform for every violation of the act. Penal laws should be strictly construed; a court has no province to superadd a penalty by mere
implication. Black on Interpretation of Laws, 2d ed., pp. 455, 471.
The act being unconstitutional in a vital part must fail as a whole. Low v. Rees Printing Co., 41 Neb. 127.
Mr. Felix Frankfurter, with whom Mr. George M. Brown, Attorney General of the State of Oregon, and Mr. J.O. *431431Bailey, Assistant Attorney General of the State of Oregon, were on the briefs, for defendant in error:
The law is an hours law, not a wage law; the provision for overtime work and extra pay being merely to allow a limited and reasonable flexibility in time of unusual business pressure. The conditions in Oregon, which must be considered in passing on the law, show that this must be so since over 93 per cent. of employers find it unprofitable to employ men beyond ten hours at normal pay. Such provisions for higher rates for overtime are common in the regulation of hours, as is shown by trade agreements in this country and in England. They are necessary to preserve the regulation.
The issue concerning the validity of the law presents the familiar case of application and delimitation of accepted principles. The liberty of the
Fourteenth Amendment is set up against the police power of a State. The boundaries must be drawn in each specific case, not by resort to theory and assumption, but in the light of experience, granting to the legislature the function of discerning, detecting and remedying the evils which may be obstacles to the "greater public welfare" ( Rast v. Van Deman Lewis Co., 240 U.S. 342) and upholding its judgment if in the light of experience the judgment seems not arbitrary or wanton. Experience in England most strikingly dispelled the old theoretical opposition to limitation of the hours of labor and the preference for unfettered individual competition as an economic principle. The matter has now come to be looked on no longer as a mere contest between capital and labor, but as a concern of the State as an organic whole.
ISSUE:
The question, therefore, is not whether the State can regulate hours of labor in modern industry, but what evils are manifest, and what tendencies are disclosed, that present a reasonable field for legislative repression; what remedies are available that present a reasonable field for legislative encouragement.
*432432This field of reasonable action is the State's police power. SeeHolden v. Hardy, 169 U.S. 366. In Lochner v. New York,198 U.S. 45, the state authority in the specific instance was denied because no reasonable relation was discernible to the majority between a ten hour law for bakers and the public welfare.
This judgment was based upon a view of the nature of the baker's employment beyond ten hours as known "to the common understanding" Id. 59. See Hours of Labor and Realism in Constitutional Law, 29 Harv. L. Rev. 353. It is now clear that "common understanding" is a treacherous criterion both as to the assumptions on which such understanding is based, and as to the evil consequences, if they are allowed to govern. Pound's Liberty of Contract, 18 Yale L.J. 454, 480, note 123; 2 Ely's Property and Contract, 662, 674-5. The subject is one for scientific scrutiny and critique, for authoritative interpretation of accredited facts. To this end science has been devoted all over the world. Particularly in the last decade science has been giving us the basis for judgment by experience to which, when furnished, judgment by speculation must yield. This is precisely what Holden v.Hardy, supra, looked forward to.
The insight expressed in that case has now been amply justified by experience. What in 1898 presented a specific, and apparently, exceptional instance — the poisoning of the human system through long hours of labor in mines, and the implications of this evil to the general welfare — is now disclosed to be of far wider and deeper application. It is now demonstrable that the considerations that were patent as to miners in 1898 are to-day operative, to a greater or less degree, throughout the industrial system.
It is to this body of experience that the court's attention is invited. It is a mass of data that, partly, was not presented in cases like Lochner v. New York, supra, but mostly could not have been before the court, because it *433433 was not heretofore in existence. Inasmuch as the application of the contending principles must vary with the facts to which they are sought to be applied, of course new facts are the indispensable basis to the determination of the validity of specific new legislation. People v. Schweinler Press,214 N.Y. 395, 412.
The knowledge obtained by the increasing study of industrial conditions is back of the State's policy, as expressed by the
legislature, and sustained by the courts of Oregon. These are facts of common knowledge of which this court will take judicial notice. These facts, we submit, conclusively establish that Oregon was exercising a reasonable judgment as to the public welfare in passing its ten-hour law; and so exercising a reasonable judgment it acted within its rightful and constitutional sphere. The place at which it chose to draw the line was peculiarly for the discretion of its legislature. It is sufficient for the present that the line as now drawn — ten hours a day — is not an unreasonable line. Miller v.Wilson,236 U.S. 373, 382; People v. Klinck Packing Co., 214 N.Y. 121,128; State v. Bunting, 71 Or. 259, 273.
[In support of the argument counsel's brief presented an extensive systematic review of facts and statistics dealing with the effects of overtime upon the physical and moral health of the worker and so upon the vitality, efficiency and prosperity of the nation, with additional references to experiences and results abroad since the outbreak of the European War. The good effects following regulation and the extent of regulation as shown in American and foreign legislation were also indicated.]
MR. JUSTICE McKENNA delivered the opinion of the court.
Indictment charging a violation of a statute of the State of Oregon, § 2 of which provides as follows:
"No person shall be employed in any mill, factory or *434434manufacturing establishment in this State more than ten hours in any one day, except watchmen and employees when engaged in making necessary repairs, or in case of emergency, where life or property is in imminent danger;provided, however, employees may work overtime not to exceed three hours in any one day, conditioned that payment be made for said overtime at the rate of time and one-half of the regular wage."
A violation of the act is made a misdemeanor, and in pursuance of this provision the indictment was found. It charges a violation of the act by plaintiff in error, Bunting, by employing and causing to work in a flour mill belonging to the Lakeview Flouring Mills, a corporation, one Hammersly for thirteen hours in one day, Hammersly not being within the excepted conditions, and not being paid the rate prescribed for overtime.
A demurrer was filed to the indictment, alleging against its sufficiency that the law upon
which it was based is invalid because it violates the Fourteenth Amendment of the Constitution of the United States and the Constitution of Oregon.
The demurrer was overruled; and the defendant, after arraignment, plea of not guilty and trial, was found guilty. A motion in arrest of judgment was denied and he was fined $50. The judgment was affirmed by the Supreme Court of the State. The Chief Justice of the court then allowed this writ of error.
The consonance of the Oregon law with the Fourteenth Amendment is the question in the case, and this depends upon whether it is a proper exercise of the police power of the State, as the Supreme Court of the State decided that it is.
That the police power extends to health regulations is not denied, but it is denied that the law has such purpose or justification. It is contended that it is a wage law, not a health regulation, and takes the property of plaintiff in *435435 error without due process. The contention presents two questions: (1) Is the law a wage law, or an hours of service law? And (2) if the latter, has it equality of operation?
Section 1 of the law expresses the policy that impelled its enactment to be the interest of the State in the physical well-being of its citizens and that it is injurious to their health for them to work "in any mill, factory or manufacturing establishment" more than ten hours in any one day; and § 2, as we have seen, forbids their employment in those places for a longer time. If, therefore, we take the law at its word there can be no doubt of its purpose, and the Supreme Court of the State has added the confirmation of its decision, by declaring that "the aim of the statute is to fix the maximum hours of service in certain industries. The act makes no attempt to fix the standard of wages. No maximum or minimum wage is named. That is left wholly to the contracting parties."
It is, however, urged that we are not bound by the declaration of the law or the decision of the court. In other words, and to use counsel's language, "the legislative declaration of necessity, even if the act followed such declaration, is not binding upon this court. Coppage v. Kansas, 236 U.S. 1." Of course, mere declaration cannot give character to a law nor turn illegal into legal operation, and when such attempt is palpable this court necessarily has the power of review.
But does either the declaration or the decision reach such extreme? Plaintiff in error, in contending for this and to establish it, makes paramount the provision for overtime; in other words, makes a limitation of the act the extent of the act — indeed, asserts that it gives, besides, character to the act, illegal character.
To assent to this is to ascribe to the legislation such improvidence of expression as to intend one thing and effect another, or artfulness of expression to disguise illegal purpose. We are reluctant to do either and we think all *436436the provisions of the law can be accommodated without doing either.
First, as to plaintiff in error's attack upon the law. He says: "The law is not a ten-hour law; it is a thirteen-hour law designed solely for the purpose of compelling the employer of labor in mills, factories and manufacturing establishments to pay more for labor than the actual market value thereof." And further: "It is a ten-hour law for the purpose of taking the employer's property from him and giving it to the employe; it is a thirteen-hour law for the purpose of protecting the health of the employe." To this plaintiff in error adds that he was convicted, not for working an employee during a busy season for more than ten
hours, but for not paying him more than the market value of his services.
The elements in this contention it is difficult to resolve or estimate. The charge of pretense against the legislation we, as we have already said, cannot assent to. The assumption that plaintiff in error was convicted for not paying more in a busy season than the market value of the services rendered him or that under the law he will have to do so, he gives us no evidence to support. If there was or should be an increase of demand for his products, there might have been or may be an increase of profits. However, these are circumstances that cannot be measured, and we prefer to consider with more exactness the overtime provision.
There is a certain verbal plausibility in the contention that it was intended to permit 13 hours' work if there be 15 1/2 hours' pay, but the plausibility disappears upon reflection. The provision for overtime is permissive, in the same sense that any penalty may be said to be permissive. Its purpose is to deter by its burden and its adequacy for this was a matter of legislative judgment under the particular circumstances. It may not achieve its end, but its insufficiency cannot change its character *437437 from penalty
to permission. Besides, it is to be borne in mind that the legislature was dealing with a matter in which many elements were to be considered. It might not have been possible, it might not have been wise, to make a rigid prohibition. We can easily realize that the legislature deemed it sufficient for its policy to give to the law an adaptation to occasions different from special cases of emergency for which it provided, occasions not of such imperative necessity, and yet which should have some accommodation — abuses prevented by the requirement of higher wages. Or even a broader contention might be made that the legislature considered it a proper policy to meet the conditions long existent by a tentative restraint of conduct rather than by an absolute restraint, and achieve its purpose through the interest of those affected rather than by the positive fiat of the law.
We cannot know all of the conditions that impelled the law or its particular form. The Supreme Court, nearer to them, describes the law as follows: "It is clear that the intent of the law is to make 10 hours a regular day's labor in the occupations to which reference is made. Apparently the provisions for permitting labor for the overtime on express
conditions were made in order to facilitate the enforcement of the law, and in the nature of a mild penalty for employing one not more than three hours overtime. It might be regarded as more difficult to detect violations of the law by an employment for a shorter time than for a longer time. This penalty also goes to the employee in case the employer avails himself of the overtime clause."
But we need not cast about for reasons for the legislative judgment. We are not required to be sure of the precise reasons for its exercise or be convinced to the wisdom of its exercise. Rast v. Van Deman Lewis Co., 240 U.S. 342, 365. It is enough for our decision if the legislation under review was passed in the exercise of an admitted power of government; and that it is not as complete as *438438 it might be, not as rigid in its prohibitions as it might be, gives perhaps evasion too much play, is lighter in its penalties than it might be, is no impeachment of its legality. This may be a blemish, giving opportunity for criticism and difference in characterization, but the constitutional validity of legislation cannot be determined by the degree of exactness of its provisions or remedies. New policies are usually tentative in
their beginnings, advance in firmness as they advance in acceptance. They do not at a particular moment of time spring full-perfect in extent or means from the legislative brain. Time may be necessary to fashion them to precedent customs and conditions and as they justify themselves or otherwise they pass from militancy to triumph or from question to repeal.
But passing general considerations and coming back to our immediate concern, which is the validity of the particular exertion of power in the Oregon law, our judgment of it is that it does not transcend constitutional limits.
This case is submitted by plaintiff in error upon the contention that the law is a wage law not an hours of service law, and he rests his case on that contention. To that contention we address our decision and do not discuss or consider the broader contentions of counsel for the State that would justify the law even as a regulation of wages.
There is a contention made that the law, even regarded as regulating hours of service, is not either necessary or useful "for preservation of the health of employes in mills, factories and manufacturing establishments." The record contains no facts to
support the contention, and against it is the judgment of the legislature and the Supreme Court, which said: "In view of the well-known fact that the custom in our industries does not sanction a longer service than 10 hours per day, it cannot be held, as a matter of law, that the legislative requirement is unreasonable or arbitrary as to hours of labor. Statistics *439439 show that the average daily working time among workingmen in different countries is, in Australia, 8 hours; in Great Britain, 9; in the United States, 9 3/4; in Denmark, 9 3/4; in Norway, 10; Sweden, France, and Switzerland, 10 1/2; Germany, 10 1/4; Belgium, Italy, and Austria, 11; and in Russia, 12 hours."
The next contention of plaintiff in error is that the law discriminates against mills, factories and manufacturing establishments in that it requires that a manufacturer, without reason other than the fiat of the legislature, shall pay for a commodity, meaning labor, one and one-half times the market value thereof while other people purchasing labor in like manner in the open market are not subjected to the same burden. But the basis of the contention is that which we have already disposed of, that is, that the law regulates wages, not hours of
service. Regarding it as the latter, there is a basis for the classification.
Further discussion we deem unnecessary.
Judgment affirmed.
G.R. No. 135962 March 27, 2000
METROPOLITAN MANILA DEVELOPMENT AUTHORITY, petitioner, vs.BEL-AIR VILLAGE ASSOCIATION, INC., respondent.
PUNO, J.:
Not infrequently, the government is tempted to take legal shortcuts solve urgent problems of the people. But even when government is armed with the best of intention, we cannot allow it to run roughshod over the rule of law. Again, we let the hammer fall and fall hard on the illegal attempt of the MMDA to open for public use a private road in a private subdivision. While we hold that the general welfare should be promoted, we stress that it should not be achieved at the expense of the rule of law.
Petitioner MMDA is a government agency tasked with the delivery of basic services in Metro Manila. Respondent Bel-Air Village Association, Inc. (BAVA) is a non-
stock, non-profit corporation whose members are homeowners in Bel-Air Village, a private subdivision in Makati City. Respondent BAVA is the registered owner of Neptune Street, a road inside Bel-Air Village.
On December 30, 1995, respondent received from petitioner, through its Chairman, a notice dated December 22, 1995 requesting respondent to open Neptune Street to public vehicular traffic starting January 2, 1996. The notice reads:
SUBJECT: NOTICE of the Opening of Neptune Street to Traffic.
Dear President Lindo,
Please be informed that pursuant to the mandate of the MMDA law or Republic Act No. 7924 which requires the Authority to rationalize the use of roads and/or thoroughfares for the safe and convenient movement of persons, Neptune Street shall be opened to vehicular traffic effective January 2, 1996.
In view whereof, the undersigned requests you to voluntarily open the points of entry and exit on said street.
Thank you for your cooperation and whatever assistance that may be extended by your association to the MMDA personnel who will be directing traffic in the area.
Finally, we are furnishing you with a copy of the handwritten instruction of the President on the matter.
Very truly yours,
PROSPERO I. ORETA
Chairman 1
On the same day, respondent was apprised that the perimeter wall separating the subdivision from the adjacent Kalayaan Avenue would be demolished.
On January 2, 1996, respondent instituted against petitioner before the Regional Trial Court, Branch 136, Makati City, Civil Case No. 96-001 for injunction. Respondent prayed for the issuance of a temporary restraining order and preliminary injunction enjoining the opening of Neptune Street and prohibiting the demolition of the perimeter wall. The trial court issued a temporary restraining order the following day.
On January 23, 1996, after due hearing, the trial court denied issuance of a preliminary injunction. 2 Respondent questioned the denial before the Court of Appeals in CA-G.R. SP No. 39549. The appellate court conducted an ocular inspection of Neptune Street 3 and on February 13, 1996, it issued a writ of preliminary injunction enjoining
the implementation of the MMDA's proposed action. 4
On January 28, 1997, the appellate court rendered a Decision on the merits of the case finding that the MMDA has no authority to order the opening of Neptune Street, a private subdivision road and cause the demolition of its perimeter walls. It held that the authority is lodged in the City Council of Makati by ordinance. The decision disposed of as follows:
WHEREFORE, the Petition is GRANTED; the challenged Order dated January 23, 1995, in Civil Case No. 96-001, is SET ASIDE and the Writ of Preliminary Injunction issued on February 13, 1996 is hereby made permanent.
For want of sustainable substantiation, the Motion to Cite Roberto L. del Rosario in contempt is denied. 5
No pronouncement as to costs.
SO ORDERED. 6
The Motion for Reconsideration of the decision was denied on September 28, 1998. Hence, this recourse.
(MMDA) THE MANDATE TO OPEN NEPTUNE STREET TO PUBLIC TRAFFIC PURSUANT TO ITS REGULATORY AND POLICE
POWERS?
II
IS THE PASSAGE OF AN ORDINANCE A CONDITION
PRECEDENT BEFORE THE MMDA MAY ORDER THE OPENING OF
SUBDIVISION ROADS TO PUBLIC TRAFFIC?
III
IS RESPONDENT BEL-AIR VILLAGE ASSOCIATION, INC. ESTOPPED FROM DENYING OR ASSAILING
THE AUTHORITY OF THE MMDA TO OPEN THE SUBJECT STREET?
IV
WAS RESPONDENT DEPRIVED OF DUE PROCESS DESPITE THE SEVERAL MEETINGS HELD BETWEEN MMDA AND THE
AFFECTED EEL-AIR RESIDENTS AND BAVA OFFICERS?
V
HAS RESPONDENT COME TO COURT WITH UNCLEAN HANDS?7
Neptune Street is owned by respondent BAVA. It is a private road inside Bel-Air Village, a private residential subdivision in the heart of the financial and commercial district of Makati City. It runs parallel to Kalayaan Avenue, a national road open to
the general public. Dividing the two (2) streets is a concrete perimeter wall approximately fifteen (15) feet high. The western end of Neptune Street intersects Nicanor Garcia, formerly Reposo Street, a subdivision road open to public vehicular traffic, while its eastern end intersects Makati Avenue, a national road. Both ends of Neptune Street are guarded by iron gates.
Petitioner MMDA claims that it has the authority to open Neptune Street to public traffic because it is an agent of the state endowed with police power in the delivery of basic services in Metro Manila. One of these basic services is traffic management which involves the regulation of the use of thoroughfares to insure the safety, convenience and welfare of the general public. It is alleged that the police power of MMDA was affirmed by this Court in the consolidated cases of Sangalang v. Intermediate Appellate Court. 8 From the premise that it has police power, it is now urged that there is no need for the City of Makati to enact an ordinance opening Neptune street to the public. 9
Police power is an inherent attribute of sovereignty. It has been defined as the power vested by the Constitution in the
legislature to make, ordain, and establish all manner of wholesome and reasonable laws, statutes and ordinances, either with penalties or without, not repugnant to the Constitution, as they shall judge to be for the good and welfare of the commonwealth, and for the subjects of the same. 10 The power is plenary and its scope is vast and pervasive, reaching and justifying measures for public health, public safety, public morals, and the general welfare. 11
It bears stressing that police power is lodged primarily in the National Legislature. 12 It cannot be exercised by any group or body of individuals not possessing legislative power. 13 The National Legislature, however, may delegate this power to the President and administrative boards as well as the lawmaking bodies of municipal corporations or local government units. 14 Once delegated, the agents can exercise only such legislative powers as are conferred on them by the national lawmaking body. 15
A local government is a "political subdivision of a nation or state which is constituted by law and has substantial control of local affairs." 16The Local Government Code of 1991 defines a local government unit as a "body politic and corporate." 17 — one endowed
with powers as a political subdivision of the National Government and as a corporate entity representing the inhabitants of its territory. 18 Local government units are the provinces, cities, municipalities and barangays. 19 They are also the territorial and political subdivisions of the state. 20
Our Congress delegated police power to the local government units in the Local Government Code of 1991. This delegation is found in Section 16 of the same Code, known as the general welfare clause, viz:
Sec. 16. General Welfare. — Every local government unit shall exercise the powers expressly granted, those necessarily implied therefrom, as well as powers necessary, appropriate, or incidental for its efficient and effective governance, and those which are essential to the promotion of the general welfare. Within their respective territorial jurisdictions, local government units shall ensure and support, among other things, the preservation and enrichment of culture, promote health and safety, enhance the right of the people to a balanced ecology, encourage and support the development of appropriate and self-reliant scientific and technological capabilities, improve public morals, enhance
economic prosperity and social justice, promote full employment among their residents, maintain peace and order, and preserve the comfort and convenience of their inhabitants. 21
Local government units exercise police power through their respective legislative bodies . The legislative body of the provincial government is the sangguniang panlalawigan, that of the city government is the sangguniang panlungsod, that of the municipal government is the sangguniang bayan, and that of the barangay is thesangguniang barangay. The Local Government Code of 1991 empowers the sangguniang panlalawigan,sangguniang panlungsod and sangguniang bayan to "enact ordinances, approve resolutions and appropriate funds for the general welfare of the [province, city or municipality, as the case may be], and its inhabitants pursuant to Section 16 of the Code and in the proper exercise of the corporate powers of the [province, city municipality] provided under the Code . . . " 22 The same Code gives the sangguniang barangay the power to "enact ordinances as may be necessary to discharge the responsibilities conferred upon it by law or ordinance and to promote the general welfare of the inhabitants thereon." 23
Metropolitan or Metro Manila is a body composed of several local government units — i.e., twelve (12) cities and five (5) municipalities, namely, the cities of Caloocan, Manila, Mandaluyong, Makati, Pasay, Pasig, Quezon, Muntinlupa, Las Pinas, Marikina, Paranaque and Valenzuela, and the municipalities of Malabon, Navotas, Pateros, San Juan and Taguig. With the passage of Republic Act (R. A.) No. 7924 24 in 1995, Metropolitan Manila was declared as a "special development and administrative region" and the Administration of "metro-wide" basic services affecting the region placed under "a development authority" referred to as the MMDA. 25
"Metro-wide services" are those "services which have metro-wide impact and transcend local political boundaries or entail huge expenditures such that it would not be viable for said services to be provided by the individual local government units comprising Metro Manila." 26 There are seven (7) basic metro-wide services and the scope of these services cover the following: (1) development planning; (2) transport and traffic management; (3) solid waste disposal and management; (4) flood control and sewerage management; (5) urban renewal, zoning and land use planning, and
shelter services; (6) health and sanitation, urban protection and pollution control; and (7) public safety. The basic service of transport and traffic management includes the following:
(b) Transport and traffic management which include the formulation, coordination, and monitoring of policies, standards, programs and projects to rationalize the existing transport operations, infrastructure requirements, the use of thoroughfares, and promotion of safe and convenient movement of persons and goods; provision for the mass transport system and the institution of a system to regulate road users;administration and implementation of all traffic enforcement operations, traffic engineering services and traffic education programs, including the institution of a single ticketing system in Metropolitan Manila;" 27
In the delivery of the seven (7) basic services, the MMDA has the following powers and functions:
Sec. 5. Functions and powers of the Metro Manila Development Authority. — The MMDA shall:
(a) Formulate, coordinate and regulate the implementation of medium and long-term plans and programs for the delivery of metro-wide services, land use and physical development within
Metropolitan Manila, consistent with national development objectives and priorities;
(b) Prepare, coordinate and regulate the implementation of medium-term investment programs for metro-wide services which shall indicate sources and uses of funds for priority programs and projects, and which shall include the packaging of projects and presentation to funding institutions;
(c) Undertake and manage on its own metro-wide programs and projects for the delivery of specific services under its jurisdiction, subject to the approval of the Council. For this purpose, MMDA can create appropriate project management offices;
(d) Coordinate and monitor the implementation of such plans, programs and projects in Metro Manila; identify bottlenecks and adopt solutions to problems of implementation;
(e) The MMDA shall set the policies concerning traffic in Metro Manila, and shall coordinate and regulate the implementation of all programs and projects concerning traffic management, specifically pertaining to enforcement, engineering and education. Upon request, it shall be extended assistance and cooperation,including but not limited to, assignment of
personnel, by all other government agencies and offices concerned;
(f) Install and administer a single ticketing system, fix, impose and collect fines and penalties for all kinds of violations of traffic rules and regulations, whether moving or non-moving in nature, and confiscate and suspend or revoke drivers' licenses in the enforcement of such traffic laws and regulations, the provisions of RA 4136 and PD 1605 to the contrary notwithstanding. For this purpose, the Authority shall impose all traffic laws and regulations in Metro Manila, through its traffic operation center, and may deputize members of the PNP, traffic enforcers of local government units, duly licensed security guards, or members of non-governmental organizations to whom may be delegated certain authority, subject to such conditions and requirements as the Authority may impose; and
(g) Perform other related functions required to achieve the objectives of the MMDA, including the undertaking of delivery of basic services to the local government units, when deemed necessary subject to prior coordination with and consent of the local government unit concerned.
The implementation of the MMDA's plans, programs and projects is undertaken by the local government units, national government agencies, accredited people's organizations, non-governmental organizations, and the private sector as well as by the MMDA itself. For this purpose, the MMDA has the power to enter into contracts, memoranda of agreement and other arrangements with these bodies for the delivery of the required services Metro Manila. 28
The governing board of the MMDA is the Metro Manila Council. The Council is composed of the mayors of the component 12 cities and 5 municipalities, the president of the Metro Manila Vice-Mayors' League and the president of the Metro Manila Councilors' League. 29 The Council is headed by Chairman who is appointed by the President and vested with the rank of cabinet member. As the policy-making body of the MMDA, the Metro Manila Council approves metro-wide plans, programs and projects, and issues the necessary rules and regulations for the implementation of said plans; it approves the annual budget of the MMDA and promulgate the rules and regulations for the delivery of basic services, collection of service and regulatory fees, fines and
penalties. These functions are particularly enumerated as follows:
Sec. 6. Functions of the Metro Manila Council. —
(a) The Council shall be the policy-making body of the MMDA;
(b) It shall approve metro-wide plans, programs and projects and issue rules and regulations deemed necessary by the MMDA to carry out the purposes of this Act;
(c) It may increase the rate of allowances and per diems of the members of the Council to be effective during the term of the succeeding Council. It shall fix the compensation of the officers and personnel of the MMDA, and approve the annual budget thereof for submission to the Department of Budget and Management (DBM);
(d) It shall promulgate rules and regulations and set policies and standards for metro-wide application governing the delivery of basic services, prescribe and collect service and regulatory fees, and impose and collect fines and penalties.
Clearly, the scope of the MMDA's function is limited to the delivery of the seven (7) basic services. One of these is transport and traffic management which includes the formulation and
monitoring of policies, standards and projects to rationalize the existing transport operations, infrastructure requirements, the use of thoroughfares and promotion of the safe movement of persons and goods. It also covers the mass transport system and the institution of a system of road regulation, the administration of all traffic enforcement operations, traffic engineering services and traffic education programs, including the institution of a single ticketing system in Metro Manila for traffic violations. Under the service, the MMDA is expressly authorized "to set the policies concerning traffic" and "coordinate and regulate the implementation of all traffic management programs." In addition, the MMDA may "install and administer a single ticketing system," fix, impose and collect fines and penalties for all traffic violations.
It will be noted that the powers of the MMDA are limited to the following acts: formulation, coordination, regulation, implementation, preparation, management, monitoring, setting of policies, installation of a system and administration. THERE IS NO SYLLABLE IN R . A . NO . 7924 THAT GRANTS THE MMDA POLICE POWER , LET ALONE LEGISLATIVE POWER . EVEN THE METRO MANILA COUNCIL
HAS NOT BEEN DELEGATED ANY LEGISLATIVE POWER . UNLIKE THE LEGISLATIVE BODIES OF THE LOCAL GOVERNMENT UNITS, THERE IS NO PROVISION IN R.A. NO. 7924 THAT EMPOWERS THE MMDA OR ITS COUNCIL TO "ENACT ORDINANCES, APPROVE RESOLUTIONS APPROPRIATE FUNDS FOR THE GENERAL WELFARE" of the inhabitants of Metro Manila. The MMDA is, as termed in the charter itself, "development authority." 30 It is an agency created for the purpose of laying down policies and coordinating with the various national government agencies, people's organizations, non-governmental organizations and the private sector for the efficient and expeditious delivery of basic services in the vast metropolitan area. All its functions are administrative in nature and these are actually summed up in the charter itself, viz:
Sec. 2. Creation of the Metropolitan Manila Development Authority. — . . . .
The MMDA shall perform planning, monitoring and coordinative functions, and in the process exerciseregulatory and supervisory authority over the delivery of metro-wide services within Metro Manila, without diminution of the autonomy of the
local government units concerning purely local matters. 31
Petitioner cannot seek refuge in the cases of Sangalang v. Intermediate Appellate Court 32 where we upheld a zoning ordinance issued by the Metro Manila Commission (MMC), the predecessor of the MMDA, as an exercise of police power. The first Sangalang decision was on the merits of the petition, 33 while the second decision denied reconsideration of the first case and in addition discussed the case of Yabut v. Court of Appeals. 34
Sangalang v. IAC involved five (5) consolidated petitions filed by respondent BAVA and three residents of Bel-Air Village against other residents of the Village and the Ayala Corporation, formerly the Makati Development Corporation, as the developer of the subdivision. The petitioners sought to enforce certain restrictive easements in the deeds of sale over their respective lots in the subdivision. These were the prohibition on the setting up of commercial and advertising signs on the lots, and the condition that the lots be used only for residential purposes. Petitioners alleged that respondents, who were residents along Jupiter Street of the subdivision, converted their residences into commercial establishments in violation of the "deed
restrictions," and that respondent Ayala Corporation ushered in the full commercialization" of Jupiter Street by tearing down the perimeter wall that separated the commercial from the residential section of the village. 35
The petitions were dismissed based on Ordinance No. 81 of the Municipal Council of Makati and Ordinance No. 81-01 of the Metro Manila Commission (MMC). Municipal Ordinance No. 81 classified Bel-Air Village as a Class A Residential Zone, with its boundary in the south extending to the center line of Jupiter Street. The Municipal Ordinance was adopted by the MMC under the Comprehensive Zoning Ordinance for the National Capital Region and promulgated as MMC Ordinance No. 81-01. Bel-Air Village was indicated therein as bounded by Jupiter Street and the block adjacent thereto was classified as a High Intensity Commercial Zone. 36
We ruled that since both Ordinances recognized Jupiter Street as the boundary between Bel-Air Village and the commercial district, Jupiter Street was not for the exclusive benefit of Bel-Air residents. We also held that the perimeter wall on said street was constructed not to separate the residential from the commercial blocks but simply for security reasons, hence, in tearing down
said wall, Ayala Corporation did not violate the "deed restrictions" in the deeds of sale.
We upheld the ordinances, specifically MMC Ordinance No. 81-01, as a legitimate exercise of police power. 37The power of the MMC and the Makati Municipal Council to enact zoning ordinances for the general welfare prevailed over the "deed restrictions".
In the second Sangalang/Yabut decision, we held that the opening of Jupiter Street was warranted by the demands of the common good in terms of "traffic decongestion and public convenience." Jupiter was opened by the Municipal Mayor to alleviate traffic congestion along the public streets adjacent to the Village. 38 The same reason was given for the opening to public vehicular traffic of Orbit Street, a road inside the same village. The destruction of the gate in Orbit Street was also made under the police power of the municipal government. The gate, like the perimeter wall along Jupiter, was a public nuisance because it hindered and impaired the use of property, hence, its summary abatement by the mayor was proper and legal. 39
Contrary to petitioner's claim, the two Sangalang cases do not apply
to the case at bar. Firstly, both involved zoning ordinances passed by the municipal council of Makati and the MMC. In the instant case, the basis for the proposed opening of Neptune Street is contained in the notice of December 22, 1995 sent by petitioner to respondent BAVA, through its president. The notice does not cite any ordinance or law, either by the Sangguniang Panlungsod of Makati City or by the MMDA, as the legal basis for the proposed opening of Neptune Street. Petitioner MMDA simply relied on its authority under its charter "to rationalize the use of roads and/or thoroughfares for the safe and convenient movement of persons." Rationalizing the use of roads and thoroughfares is one of the acts that fall within the scope of transport and traffic management. By no stretch of the imagination, however, can this be interpreted as an express or implied grant of ordinance-making power, much less police power.
Secondly, the MMDA is not the same entity as the MMC in Sangalang. Although the MMC is the forerunner of the present MMDA, an examination of Presidential Decree (P. D.) No. 824, the charter of the MMC, shows that the latter possessed
greater powers which were not bestowed on the present MMDA.
Metropolitan Manila was first created in 1975 by Presidential Decree (P.D.) No. 824. It comprised the Greater Manila Area composed of the contiguous four (4) cities of Manila, Quezon, Pasay and Caloocan, and the thirteen (13) municipalities of Makati, Mandaluyong, San Juan, Las Pinas, Malabon, Navotas, Pasig, Pateros, Paranaque, Marikina, Muntinlupa and Taguig in the province of Rizal, and Valenzuela in the province of Bulacan. 40Metropolitan Manila was created as a response to the finding that the rapid growth of population and the increase of social and economic requirements in these areas demand a call for simultaneous and unified development; that the public services rendered by the respective local governments could be administered more efficiently and economically if integrated under a system of central planning; and this coordination, "especially in the maintenance of peace and order and the eradication of social and economic ills that fanned the flames of rebellion and discontent [were] part of reform measures under Martial Law essential to the safety and security of the State." 41
Metropolitan Manila was established as a "public corporation" with the following powers:
Sec. 1. Creation of the Metropolitan Manila. — There is hereby created a public corporation, to be known as the Metropolitan Manila, vested with powers and attributes of a corporation including the power to make contracts, sue and be sued, acquire, purchase, expropriate, hold, transfer and dispose of property and such other powers as are necessary to carry out its purposes. The Corporation shall be administered by a Commission created under this Decree. 42
The administration of Metropolitan Manila was placed under the Metro Manila Commission (MMC) vested with the following powers:
Sec. 4. Powers and Functions of the Commission. — The Commission shall have the following powers and functions:
1. To act as a central government to establish and administer programs and provide services common to the area;
2. To levy and collect taxes and special assessments, borrow and expend money and issue bonds, revenue certificates, and other obligations of indebtedness. Existing tax measures should, however, continue to be operative
until otherwise modified or repealed by the Commission;
3. To charge and collect fees for the use of public service facilities;
4. To appropriate money for the operation of the metropolitan government and review appropriations for the city and municipal units within its jurisdiction with authority to disapprove the same if found to be not in accordance with the established policies of the Commission, without prejudice to any contractual obligation of the local government units involved existing at the time of approval of this Decree;
5. To review, amend, revise or repeal all ordinances, resolutions and acts of cities and municipalities within Metropolitan Manila;
6. To enact or approve ordinances, resolutions and to fix penalties for any violation thereof which shall not exceed a fine of P10,000.00 or imprisonment of six years or both such fine and imprisonment for a single offense;
7. To perform general administrative, executive and policy-making functions;
8. To establish a fire control operation center, which shall direct the fire services of the city and municipal governments in the metropolitan area;
9. To establish a garbage disposal operation center, which shall direct garbage collection and disposal in the metropolitan area;
10. To establish and operate a transport and traffic center, which shall direct traffic activities;
11. To coordinate and monitor governmental and private activities pertaining to essential services such as transportation, flood control and drainage, water supply and sewerage, social, health and environmental services, housing, park development, and others;
12. To insure and monitor the undertaking of a comprehensive social, economic and physical planning and development of the area;
13. To study the feasibility of increasing barangay participation in the affairs of their respective local governments and to propose to the President of the Philippines definite programs and policies for implementation;
14. To submit within thirty (30) days after the close of each fiscal year an annual report to the President of the Philippines and to submit a periodic report whenever deemed necessary; and
15. To perform such other tasks as may be assigned or directed by the President of the Philippines.
The MMC was the "central government" of Metro Manila for the purpose of establishing and administering programs providing services common to the area. As a "central government" it had the power to levy and collect taxes and special assessments, the power to charge and collect fees; the power to appropriate money for its operation, and at the same time, review appropriations for the city and municipal units within its jurisdiction. It was bestowed the power to enact or approve ordinances, resolutions and fix penalties for violation of such ordinances and resolutions. It also had the power to review, amend, revise or repeal all ordinances, resolutions and acts of any of the four (4) cities and thirteen (13) municipalities comprising Metro Manila.
P.D. No. 824 further provided:
Sec. 9. Until otherwise provided, the governments of the four cities and thirteen municipalities in the Metropolitan Manila shall continue to exist in their present form except as may be inconsistent with this Decree. The members of the existing city and municipal councils in Metropolitan Manila shall, upon promulgation of this Decree, and until December 31, 1975, become members of the Sangguniang Bayan which is hereby created for every
city and municipality of Metropolitan Manila.
In addition, the Sangguniang Bayan shall be composed of as many barangay captains as may be determined and chosen by the Commission, and such number of representatives from other sectors of the society as may be appointed by the President upon recommendation of the Commission.
x x x x x x x x x
The Sangguniang Bayan may recommend to the Commission ordinances, resolutions or such measures as it may adopt; Provided, that no such ordinance, resolution or measure shall become effective, until after its approval by the Commission; and Provided further, that the power to impose taxes and other levies, the power to appropriate money and the power to pass ordinances or resolutions with penal sanctions shall be vested exclusively in the Commission.
The creation of the MMC also carried with it the creation of the Sangguniang Bayan. This was composed of the members of the component city and municipal councils, barangay captains chosen by the MMC and sectoral representatives appointed by the President. The Sangguniang Bayan had the power to recommend to the MMC the
adoption of ordinances, resolutions or measures. IT WAS THE MMC ITSELF, HOWEVER, THAT POSSESSED LEGISLATIVE POWERS. All ordinances, resolutions and measures recommended by the Sangguniang Bayan were subject to the MMC's approval. Moreover, the power to impose taxes and other levies, the power to appropriate money, and the power to pass ordinances or resolutions with penal sanctions were vested exclusively in the MMC.
Thus, Metropolitan Manila had a "central government," i.e., the MMC which fully possessed legislative police powers. Whatever legislative powers the component cities and municipalities had were all subject to review and approval by the MMC.
After President Corazon Aquino assumed power, there was a clamor to restore the autonomy of the local government units in Metro Manila. Hence, Sections 1 and 2 of Article X of the 1987 Constitution provided:
Sec. 1. The territorial and political subdivisions of the Republic of the Philippines are the provinces, cities, municipalities and barangays. There shall be autonomous regions in Muslim
Mindanao and the Cordilleras as herein provided.
Sec. 2. The territorial and political subdivisions shall enjoy local autonomy.
The Constitution, however, recognized the necessity of creating metropolitan regions not only in the existing National Capital Region but also in potential equivalents in the Visayas and Mindanao. 43 Section 11 of the same Article X thus provided:
Sec. 11. The Congress may, by law, create special metropolitan political subdivisions, subject to a plebiscite as set forth in Section 10 hereof. The component cities and municipalities shall retain their basic autonomy and shall be entitled to their own local executives and legislative assemblies. The jurisdiction of the metropolitan authority that will thereby be created shall be limited to basic services requiring coordination.
Constitution itself expressly provides that Congress may, by law, create "special metropolitan political subdivisions" which shall be subject to approval by a majority of the votes cast in a plebiscite in the political units directly affected; the jurisdiction of this subdivision shall be limited to basic services requiring coordination; and the cities and
municipalities comprising this subdivision shall retain their basic services requiring coordination; and the cities and municipalities comprising this subdivision shall retain their basic autonomy and their own local executive and legislative assemblies. 44 Pending enactment of this law, the Transitory Provisions of the Constitution gave the President of the Philippines the power to constitute the Metropolitan Authority, viz:
Sec. 8. Until otherwise provided by Congress, the President may constitute the Metropolitan Authority to be composed of the heads of all local government units comprising the Metropolitan Manila area. 45
In 1990, President Aquino issued Executive Order (E. O.) No. 392 and constituted the Metropolitan Manila Authority (MMA). The powers and functions of the MMC were devolved to the MMA. 46 It ought to be stressed, however, that not all powers and functions of the MMC were passed to the MMA. The MMA's power was limited to the "delivery of basic urban services requiring coordination in Metropolitan Manila." 47 The MMA's governing body, the Metropolitan Manila Council, although composed of the mayors of the component cities and municipalities, was merely given power of: (1)
formulation of policies on the delivery of basic services requiring coordination and consolidation; and (2) promulgation resolutions and other issuances, approval of a code of basic services and the exercise of its rule-making power. 48
Under the 1987 Constitution, the local government units became primarily responsible for the governance of their respective political subdivisions. The MMA's jurisdiction was limited to addressing common problems involving basic services that transcended local boundaries. It did not have legislative power. Its power was merely to provide the local government units technical assistance in the preparation of local development plans. Any semblance of legislative power it had was confined to a "review [of] legislation proposed by the local legislative assemblies to ensure consistency among local governments and with the comprehensive development plan of Metro Manila," and to "advise the local governments accordingly." 49
When R.A. No. 7924 took effect, Metropolitan Manila became a "special development and administrative region" and the MMDA a "special development authority" whose functions were "without prejudice to the
autonomy of the affected local government units." The character of the MMDA was clearly defined in the legislative debates enacting its charter.
R.A. No. 7924 originated as House Bill No. 14170/11116 and was introduced by several legislators led by Dante Tinga, Roilo Golez and Feliciano Belmonte. It was presented to the House of Representatives by the Committee on Local Governments chaired by Congressman Ciriaco R. Alfelor. The bill was a product of Committee consultations with the local government units in the National Capital Region (NCR), with former Chairmen of the MMC and MMA, 50 and career officials of said agencies. When the bill was first taken up by the Committee on Local Governments, the following debate took place:
THE CHAIRMAN [Hon. Ciriaco Alfelor]: Okay, Let me explain. This has been debated a long time ago, you know. It's a special . . . we can create a special metropolitan political subdivision.
Actually, there are only six (6) political subdivisions provided for in the Constitution: barangay, municipality, city, province, and we have the Autonomous Region of Mindanao and we have the Cordillera. So we have 6. Now. . . . .
HON. [Elias] LOPEZ: May I interrupt, Mr. Chairman. In the case of the Autonomous Region, that is also specifically mandated by the Constitution.
THE CHAIRMAN: That's correct. But it is considered to be a political subdivision. What is the meaning of a political subdivision? Meaning to say, that it has its own government, it has its own political personality, it has the power to tax, and all governmental powers: police power and everything. All right. Authority is different; because it does not have its own government. It is only a council, it is an organization of political subdivision, powers, "no, which is not imbued with any political power.
If you go over Section 6, where the powers and functions of the Metro Manila Development Authority, it is purely coordinative. And it provides here that the council is policy-making. All right.
Under the Constitution is a Metropolitan Authority with coordinative power. Meaning to say, it coordinates all of the different basic services which have to be delivered to the constituency. All right.
There is now a problem. Each local government unit is given its respective . . . as a political subdivision. Kalookan has its
powers, as provided for and protected and guaranteed by the Constitution. All right, the exercise. However, in the exercise of that power, it might be deleterious and disadvantageous to other local government units. So, we are forming an authority where all of these will be members and then set up a policy in order that the basic services can be effectively coordinated. All right.
Of course, we cannot deny that the MMDA has to survive. We have to provide some funds, resources. But it does not possess any political power. We do not elect the Governor. We do not have the power to tax. As a matter of fact, I was trying to intimate to the author that it must have the power to sue and be sued because it coordinates. All right. It coordinates practically all these basic services so that the flow and the distribution of the basic services will be continuous. Like traffic, we cannot deny that. It's before our eyes. Sewerage, flood control, water system, peace and order, we cannot deny these. It's right on our face. We have to look for a solution. What would be the right solution? All right, we envision that there should be a coordinating agency and it is called an authority. All right, if you do not want to call it an authority, it's alright. We may call it a
council or maybe a management agency.
x x x x x x x x x 51
Clearly, the MMDA is not a political unit of government. The power delegated to the MMDA is that given to the Metro Manila Council to promulgate administrative rules and regulations in the implementation of the MMDA's functions. There is no grant of authority to enact ordinances and regulations for the general welfare of the inhabitants of the metropolis. This was explicitly stated in the last Committee deliberations prior to the bill's presentation to Congress. Thus:
THE CHAIRMAN: Yeah, but we have to go over the suggested revision. I think this was already approved before, but it was reconsidered in view of the proposals, set-up, to make the MMDA stronger. Okay, so if there is no objection to paragraph "f". . . And then next is paragraph "b," under Section 6. "It shall approve metro-wide plans, programs and projects and issue ordinances or resolutions deemed necessary by the MMDA to carry out the purposes of this Act." Do you have the powers? Does the MMDA... because that takes the form of a local government unit, a political subdivision.
HON. [Feliciano] BELMONTE: Yes, I believe so, your Honor. When we say that it has the policies, it's very clear that those policies must be followed. Otherwise, what's the use of empowering it to come out with policies. Now, the policies may be in the form of a resolution or it may be in the form of a ordinance. The term "ordinance" in this case really gives it more teeth, your honor. Otherwise, we are going to see a situation where you have the power to adopt the policy but you cannot really make it stick as in the case now, and I think here is Chairman Bunye. I think he will agree that that is the case now. You've got the power to set a policy, the body wants to follow your policy, then we say let's call it an ordinance and see if they will not follow it.
THE CHAIRMAN: That's very nice. I like that. However, there is a constitutional impediment.1âwphi1 You are making this MMDA a political subdivision. The creation of the MMDA would be subject to a plebiscite. That is what I'm trying to avoid. I've been trying to avoid this kind of predicament. Under the Constitution it states: if it is a political subdivision, once it is created it has to be subject to a plebiscite. I'm trying to make this as administrative. That's why we place the Chairman as a cabinet rank.
HON. BELMONTE: All right, Mr. Chairman, okay, what you are saying there is . . . . .
THE CHAIRMAN: In setting up ordinances, it is a political exercise, Believe me.
HON. [Elias] LOPEZ: Mr. Chairman, it can be changed into issuances of rules and regulations. That would be . . . it shall also be enforced.
HON. BELMONTE: Okay, I will . . . .
HON. LOPEZ: And you can also say that violation of such rule, you impose a sanction. But you know, ordinance has a different legal connotation.
HON. BELMONTE: All right, I defer to that opinion, your Honor.
THE CHAIRMAN: So instead of ordinances, say rules and regulations.
HON. BELMONTE: Or resolutions. Actually, they are actually considering resolutions now.
THE CHAIRMAN: Rules and resolutions.
HON. BELMONTE: Rules, regulations and resolutions. 52
The draft of H. B. No. 14170/11116 was presented by the Committee to the House of Representatives. The explanatory note to the bill stated that the proposed MMDA IS A
"DEVELOPMENT AUTHORITY" WHICH IS A "NATIONAL AGENCY, NOT A POLITICAL GOVERNMENT UNIT." 53 The explanatory note was adopted as the sponsorship speech of the Committee on Local Governments. No interpellations or debates were made on the floor and no amendments introduced. The bill was approved on second reading on the same day it was presented. 54
When the bill was forwarded to the Senate, several amendments were made.1âwphi1 These amendments, however, did not affect the nature of the MMDA as originally conceived in the House of Representatives. 55
It is thus beyond doubt that the MMDA is not a local government unit or a public corporation endowed with legislative power. It is not even a "special metropolitan political subdivision" as contemplated in Section 11, Article X of the Constitution. The creation of a "special metropolitan political subdivision" requires the approval by a majority of the votes cast in a plebiscite in the political units directly affected." 56 R. A. No. 7924 was not submitted to the inhabitants of Metro Manila in a plebiscite. The Chairman of the MMDA is not an official elected by the people, but appointed by the President with the rank and privileges of a
cabinet member. In fact, part of his function is to perform such other duties as may be assigned to him by the President, 57 whereas in local government units, the President merely exercises supervisory authority. This emphasizes the administrative character of the MMDA.
Clearly then, the MMC under P.D. No. 824 is not the same entity as the MMDA under R.A. No. 7924. Unlike the MMC, the MMDA has no power to enact ordinances for the welfare of the community. It is the local government units, acting through their respective legislative councils, that possess legislative power and police power. In the case at bar, the Sangguniang Panlungsod of Makati City did not pass any ordinance or resolution ordering the opening of Neptune Street, hence, its proposed opening by petitioner MMDA is illegal and the respondent Court of Appeals did not err in so ruling. We desist from ruling on the other issues as they are unnecessary.
We stress that this decision does not make light of the MMDA's noble efforts to solve the chaotic traffic condition in Metro Manila. Everyday, traffic jams and traffic bottlenecks plague the metropolis. Even our once sprawling boulevards and avenues are now crammed with
cars while city streets are clogged with motorists and pedestrians. Traffic has become a social malaise affecting our people's productivity and the efficient delivery of goods and services in the country. The MMDA was created to put some order in the metropolitan transportation system but unfortunately the powers granted by its charter are limited. Its good intentions cannot justify the opening for public use of a private street in a private subdivision without any legal warrant. The promotion of the general welfare is not antithetical to the preservation of the rule of law.
IN VIEW WHEREOF, the petition is denied. The Decision and Resolution of the Court of Appeals in CA-G.R. SP No. 39549 are affirmed.
SO ORDERED.
[G.R. NO. 177056 : September 18, 2009]
THE OFFICE OF THE SOLICITOR GENERAL, Petitioner, v. AYALA LAND INCORPORATED, ROBINSON'S LAND CORPORATION, SHANGRI-LA PLAZA CORPORATION and SM PRIME HOLDINGS, INC., Respondents.
Before this Court is a Petition for Review on Certiorari,1 under Rule 45 of the Revised Rules of Court, filed by petitioner Office of the Solicitor General (OSG), seeking the reversal and setting aside of the Decision2 dated 25 January 2007 of the Court of Appeals in CA-G.R. CV No. 76298, which affirmed in toto the Joint Decision3 dated 29 May 2002 of the Regional Trial Court (RTC) of Makati City, Branch 138, in Civil Cases No. 00-1208 and No. 00-1210; and (2) the Resolution4 dated 14 March 2007 of the appellate court in the same case which denied the Motion for Reconsideration of the OSG. The RTC adjudged that respondents Ayala Land Incorporated (Ayala Land), Robinsons Land Corporation (Robinsons), Shangri-la Plaza Corporation (Shangri-la), and SM Prime Holdings, Inc. (SM Prime) could not be obliged to provide free parking spaces in their malls to their patrons and the general public.
Respondents Ayala Land, Robinsons, and Shangri-la maintain and operate shopping malls in various locations in Metro Manila. Respondent SM Prime constructs, operates, and leases out commercial buildings and other structures, among which, are SM City, Manila; SM Centerpoint, Sta. Mesa, Manila;
SM City, North Avenue, Quezon City; and SM Southmall, Las Piñas.
The shopping malls operated or leased out by respondents have parking facilities for all kinds of motor vehicles, either by way of parking spaces inside the mall buildings or in separate buildings and/or adjacent lots that are solely devoted for use as parking spaces. Respondents Ayala Land, Robinsons, and SM Prime spent for the construction of their own parking facilities. Respondent Shangri-la is renting its parking facilities, consisting of land and building specifically used as parking spaces, which were constructed for the lessor's account.
Respondents expend for the maintenance and administration of their respective parking facilities. They provide security personnel to protect the vehicles parked in their parking facilities and maintain order within the area. In turn, they collect the following parking fees from the persons making use of their parking facilities, regardless of whether said persons are mall patrons or not:
Respondent Parking Fees
Ayala Land On weekdays, P25.00 for the first four hours and P10.00 for every succeeding hour; on weekends, flat
Robinsons P20.00 for the first three hours and P10.00 for every succeeding hour
Shangri-la Flat rate of P30.00 per day
SM Prime P10.00 to P20.00 (depending on whether the parking space is outdoors or indoors) for the first three hours and 59 minutes, and P10.00 for every succeeding hour or fraction thereof
The parking tickets or cards issued by respondents to vehicle owners contain the stipulation that respondents shall not be responsible for any loss or damage to the vehicles parked in respondents' parking facilities.
In 1999, the Senate Committees on Trade and Commerce and on Justice and Human Rights conducted a joint investigation for the following purposes: (1) to inquire into the legality of the prevalent practice of shopping malls of charging parking fees; (2) assuming arguendo that the collection of parking fees was legally authorized, to find out the basis and reasonableness of the parking rates charged by shopping malls; and (3) to determine the legality of the policy of shopping malls of denying liability in cases of theft, robbery, or carnapping, by invoking the waiver clause at the
back of the parking tickets. Said Senate Committees invited the top executives of respondents, who operate the major malls in the country; the officials from the Department of Trade and Industry (DTI), Department of Public Works and Highways (DPWH), Metro Manila Development Authority (MMDA), and other local government officials; and the Philippine Motorists Association (PMA) as representative of the consumers' group.
After three public hearings held on 30 September, 3 November, and 1 December 1999, the afore-mentioned Senate Committees jointly issued Senate Committee Report No. 2255 on 2 May 2000, in which they concluded:
In view of the foregoing, the Committees find that the collection of parking fees by shopping malls is contrary to the National Building Code and is therefor [sic] illegal. While it is true that the Code merely requires malls to provide parking spaces, without specifying whether it is free or not, both Committees believe that the reasonable and logical interpretation of the Code is that the parking spaces are for free. This interpretation is not only reasonable and logical but finds support in the actual practice in other countries like the United States of America where parking
spaces owned and operated by mall owners are free of charge.
Figuratively speaking, the Code has "expropriated" the land for parking - something similar to the subdivision law which require developers to devote so much of the land area for parks.
Moreover, Article II of R.A. No. 9734 (Consumer Act of the Philippines) provides that "it is the policy of the State to protect the interest of the consumers, promote the general welfare and establish standards of conduct for business and industry." Obviously, a contrary interpretation (i.e., justifying the collection of parking fees) would be going against the declared policy of R.A. 7394.
Section 201 of the National Building Code gives the responsibility for the administration and enforcement of the provisions of the Code, including the imposition of penalties for administrative violations thereof to the Secretary of Public Works. This set up, however, is not being carried out in reality.
In the position paper submitted by the Metropolitan Manila Development Authority (MMDA), its chairman, Jejomar C. Binay, accurately pointed out that the Secretary of the DPWH is responsible for the implementation/enforcement of
the National Building Code. After the enactment of the Local Government Code of 1991, the local government units (LGU's) were tasked to discharge the regulatory powers of the DPWH. Hence, in the local level, the Building Officials enforce all rules/ regulations formulated by the DPWH relative to all building plans, specifications and designs including parking space requirements. There is, however, no single national department or agency directly tasked to supervise the enforcement of the provisions of the Code on parking, notwithstanding the national character of the law.6
Senate Committee Report No. 225, thus, contained the following recommendations:
In light of the foregoing, the Committees on Trade and Commerce and Justice and Human Rights hereby recommend the following:
1. The Office of the Solicitor General should institute the necessary action to enjoin the collection of parking fees as well as to enforce the penal sanction provisions of the National Building Code. The Office of the Solicitor General should likewise study how refund can be exacted from mall owners who continue to collect parking fees.
2. The Department of Trade and Industry pursuant to the provisions of R.A. No. 7394, otherwise known as the Consumer Act of the Philippines should enforce the provisions of the Code relative to parking. Towards this end, the DTI should formulate the necessary implementing rules and regulations on parking in shopping malls, with prior consultations with the local government units where these are located. Furthermore, the DTI, in coordination with the DPWH, should be empowered to regulate and supervise the construction and maintenance of parking establishments.
3. Finally, Congress should amend and update the National Building Code to expressly prohibit shopping malls from collecting parking fees by at the same time, prohibit them from invoking the waiver of liability.7
Respondent SM Prime thereafter received information that, pursuant to Senate Committee Report No. 225, the DPWH Secretary and the local building officials of Manila, Quezon City, and Las Piñas intended to institute, through the OSG, an action to enjoin respondent SM Prime and similar establishments from collecting parking fees, and to impose upon said establishments penal sanctions under Presidential Decree No.
1096, otherwise known as the National Building Code of the Philippines (National Building Code), and its Implementing Rules and Regulations (IRR). With the threatened action against it, respondent SM Prime filed, on 3 October 2000, a Petition for Declaratory Relief8under Rule 63 of the Revised Rules of Court, against the DPWH Secretary and local building officials of Manila, Quezon City, and Las Piñas. Said Petition was docketed as Civil Case No. 00-1208 and assigned to the RTC of Makati City, Branch 138, presided over by Judge Sixto Marella, Jr. (Judge Marella). In its Petition, respondent SM Prime prayed for judgment:
a) Declaring Rule XIX of the Implementing Rules and Regulations of the National Building Code as ultra vires, hence, unconstitutional and void;
b) Declaring [herein respondent SM Prime]'s clear legal right to lease parking spaces appurtenant to its department stores, malls, shopping centers and other commercial establishments; andcralawlibrary
c) Declaring the National Building Code of the Philippines Implementing Rules and Regulations as ineffective, not having been published once a week for three (3) consecutive weeks in a newspaper of general
circulation, as prescribed by Section 211 of Presidential Decree No. 1096.
[Respondent SM Prime] further prays for such other reliefs as may be deemed just and equitable under the premises.9
The very next day, 4 October 2000, the OSG filed a Petition for Declaratory Relief and Injunction (with Prayer for Temporary Restraining Order and Writ of Preliminary Injunction)10 against respondents. This Petition was docketed as Civil Case No. 00-1210 and raffled to the RTC of Makati, Branch 135, presided over by Judge Francisco B. Ibay (Judge Ibay). Petitioner prayed that the RTC:
1. After summary hearing, a temporary restraining order and a writ of preliminary injunction be issued restraining respondents from collecting parking fees from their customers; andcralawlibrary
2. After hearing, judgment be rendered declaring that the practice of respondents in charging parking fees is violative of the National Building Code and its Implementing Rules and Regulations and is therefore invalid, and making permanent any injunctive writ issued in this case.
Other reliefs just and equitable under the premises are likewise prayed for.11
On 23 October 2000, Judge Ibay of the RTC of Makati City, Branch 135, issued an Order consolidating Civil Case No. 00-1210 with Civil Case No. 00-1208 pending before Judge Marella of RTC of Makati, Branch 138.
As a result of the pre-trial conference held on the morning of 8 August 2001, the RTC issued a Pre-Trial Order12 of even date which limited the issues to be resolved in Civil Cases No. 00-1208 and No. 00-1210 to the following:
1. Capacity of the plaintiff [OSG] in Civil Case No. 00-1210 to institute the present proceedings and relative thereto whether the controversy in the collection of parking fees by mall owners is a matter of public welfare.
2. Whether declaratory relief is proper.
3. Whether respondent Ayala Land, Robinsons, Shangri-La and SM Prime are obligated to provide parking spaces in their malls for the use of their patrons or the public in general, free of charge.
4. Entitlement of the parties of [sic] award of damages.13
On 29 May 2002, the RTC rendered its Joint Decision in Civil
The RTC resolved the first two issues affirmatively. It ruled that the OSG can initiate Civil Case No. 00-1210 under Presidential Decree No. 478 and the Administrative Code of 1987.14 It also found that all the requisites for an action for declaratory relief were present, to wit:
The requisites for an action for declaratory relief are: (a) there is a justiciable controversy; (b) the controversy is between persons whose interests are adverse; (c) the party seeking the relief has a legal interest in the controversy; and (d) the issue involved is ripe for judicial determination.
SM, the petitioner in Civil Case No. 001-1208 [sic] is a mall operator who stands to be affected directly by the position taken by the government officials sued namely the Secretary of Public Highways and the Building Officials of the local government units where it operates shopping malls. The OSG on the other hand acts on a matter of public interest and has taken a position adverse to that of the mall owners whom it sued. The construction of new and bigger malls has been announced, a matter which the Court can take judicial notice and the unsettled issue of whether mall operators should provide parking facilities,
free of charge needs to be resolved.15
As to the third and most contentious issue, the RTC pronounced that:
The Building Code, which is the enabling law and the Implementing Rules and Regulations do not impose that parking spaces shall be provided by the mall owners free of charge. Absent such directive[,] Ayala Land, Robinsons, Shangri-la and SM [Prime] are under no obligation to provide them for free. Article 1158 of the Civil Code is clear:
"Obligations derived from law are not presumed. Only those expressly determined in this Code or in special laws are demandable and shall be regulated by the precepts of the law which establishes them; and as to what has not been foreseen, by the provisions of this Book (1090).["]
x x x
The provision on ratios of parking slots to several variables, like shopping floor area or customer area found in Rule XIX of the Implementing Rules and Regulations cannot be construed as a directive to provide free parking spaces, because the enabling law, the Building Code does not so provide. x x x.
To compel Ayala Land, Robinsons, Shangri-La and SM [Prime] to provide parking spaces for free can be considered as an unlawful taking of property right without just compensation.
Parking spaces in shopping malls are privately owned and for their use, the mall operators collect fees. The legal relationship could be either lease or deposit. In either case[,] the mall owners have the right to collect money which translates into income. Should parking spaces be made free, this right of mall owners shall be gone. This, without just compensation. Further, loss of effective control over their property will ensue which is frowned upon by law.
The presence of parking spaces can be viewed in another light. They can be looked at as necessary facilities to entice the public to increase patronage of their malls because without parking spaces, going to their malls will be inconvenient. These are[,] however[,] business considerations which mall operators will have to decide for themselves. They are not sufficient to justify a legal conclusion, as the OSG would like the Court to adopt that it is the obligation of the mall owners to provide parking spaces for free.16
The RTC then held that there was no sufficient evidence to justify any award for damages.
The RTC finally decreed in its 29 May 2002 Joint Decision in Civil Cases No. 00-1208 and No. 00-1210 that:
FOR THE REASONS GIVEN, the Court declares that Ayala Land[,] Inc., Robinsons Land Corporation, Shangri-la Plaza Corporation and SM Prime Holdings[,] Inc. are not obligated to provide parking spaces in their malls for the use of their patrons or public in general, free of charge.
All counterclaims in Civil Case No. 00-1210 are dismissed.
No pronouncement as to costs.17
CA-G.R. CV No. 76298 involved the separate appeals of the OSG18 and respondent SM Prime19 filed with the Court of Appeals. The sole assignment of error of the OSG in its Appellant's Brief was:
THE TRIAL COURT ERRED IN HOLDING THAT THE NATIONAL BUILDING CODE DID NOT INTEND MALL PARKING SPACES TO BE FREE OF CHARGE[;]20
while the four errors assigned by respondent SM Prime in its Appellant's Brief were:
THE TRIAL COURT ERRED IN FAILING TO DECLARE RULE XIX OF THE IMPLEMENTING RULES AS HAVING BEEN ENACTED ULTRA VIRES, HENCE, UNCONSTITUTIONAL AND VOID.
II
THE TRIAL COURT ERRED IN FAILING TO DECLARE THE IMPLEMENTING RULES INEFFECTIVE FOR NOT HAVING BEEN PUBLISHED AS REQUIRED BY LAW.
III
THE TRIAL COURT ERRED IN FAILING TO DISMISS THE OSG'S PETITION FOR DECLARATORY RELIEF AND INJUNCTION FOR FAILURE TO EXHAUST ADMINISTRATIVE REMEDIES.
IV
THE TRIAL COURT ERRED IN FAILING TO DECLARE THAT THE OSG HAS NO LEGAL CAPACITY TO SUE AND/OR THAT IT IS NOT A REAL PARTY-IN-INTEREST IN THE INSTANT CASE.21
Respondent Robinsons filed a Motion to Dismiss Appeal of the OSG on the ground that the lone issue raised therein involved a pure question of law, not reviewable by the Court of Appeals.
The Court of Appeals promulgated its Decision in CA-G.R. CV No. 76298 on 25 January 2007. The
appellate court agreed with respondent Robinsons that the appeal of the OSG should suffer the fate of dismissal, since "the issue on whether or not the National Building Code and its implementing rules require shopping mall operators to provide parking facilities to the public for free" was evidently a question of law. Even so, since CA-G.R. CV No. 76298 also included the appeal of respondent SM Prime, which raised issues worthy of consideration, and in order to satisfy the demands of substantial justice, the Court of Appeals proceeded to rule on the merits of the case.
In its Decision, the Court of Appeals affirmed the capacity of the OSG to initiate Civil Case No. 00-1210 before the RTC as the legal representative of the government,22 and as the one deputized by the Senate of the Republic of the Philippines through Senate Committee Report No. 225.
The Court of Appeals rejected the contention of respondent SM Prime that the OSG failed to exhaust administrative remedies. The appellate court explained that an administrative review is not a condition precedent to judicial relief where the question in dispute is purely a legal one, and nothing of an administrative nature is to be or can be done.
The Court of Appeals likewise refused to rule on the validity of the IRR of the National Building Code, as such issue was not among those the parties had agreed to be resolved by the RTC during the pre-trial conference for Civil Cases No. 00-1208 and No. 00-1210. Issues cannot be raised for the first time on appeal. Furthermore, the appellate court found that the controversy could be settled on other grounds, without touching on the issue of the validity of the IRR. It referred to the settled rule that courts should refrain from passing upon the constitutionality of a law or implementing rules, because of the principle that bars judicial inquiry into a constitutional question, unless the resolution thereof is indispensable to the determination of the case.
Lastly, the Court of Appeals declared that Section 803 of the National Building Code and Rule XIX of the IRR were clear and needed no further construction. Said provisions were only intended to control the occupancy or congestion of areas and structures. In the absence of any express and clear provision of law, respondents could not be obliged and expected to provide parking slots free of charge.
The fallo of the 25 January 2007 Decision of the Court of Appeals reads:
WHEREFORE, premises considered, the instant appeals are DENIED. Accordingly, appealed Decision is hereby AFFIRMED in toto.23
In its Resolution issued on 14 March 2007, the Court of Appeals denied the Motion for Reconsideration of the OSG, finding that the grounds relied upon by the latter had already been carefully considered, evaluated, and passed upon by the appellate court, and there was no strong and cogent reason to modify much less reverse the assailed judgment.
The OSG now comes before this Court, via the instant Petition for Review, with a single assignment of error:
THE COURT OF APPEALS SERIOUSLY ERRED IN AFFIRMING THE RULING OF THE LOWER COURT THAT RESPONDENTS ARE NOT OBLIGED TO PROVIDE FREE PARKING SPACES TO THEIR CUSTOMERS OR THE PUBLIC.24
The OSG argues that respondents are mandated to provide free parking by Section 803 of the National Building Code and Rule XIX of the IRR.
According to Section 803 of the National Building Code:
(a) Maximum site occupancy shall be governed by the use, type of construction, and height of the building and the use, area, nature, and location of the site; and subject to the provisions of the local zoning requirements and in accordance with the rules and regulations promulgated by the Secretary.
In connection therewith, Rule XIX of the old IRR,25 provides:
RULE XIX - PARKING AND LOADING SPACE REQUIREMENTS
Pursuant to Section 803 of the National Building Code (PD 1096) providing for maximum site occupancy, the following provisions on parking and loading space requirements shall be observed:
1. The parking space ratings listed below are minimum off-street requirements for specific uses/occupancies for buildings/structures:
1.1 The size of an average automobile parking slot shall be computed as 2.4 meters by 5.00 meters for perpendicular or diagonal parking, 2.00 meters by 6.00 meters for parallel parking. A truck or bus parking/loading slot shall be computed at a minimum of 3.60 meters by 12.00 meters. The parking slot shall be drawn to scale and the total number of which shall be indicated on the
plans and specified whether or not parking accommodations, are attendant-managed. (See Section 2 for computation of parking requirements).
x x x
1.7 Neighborhood shopping center - 1 slot/100 sq. m. of shopping floor area
The OSG avers that the aforequoted provisions should be read together with Section 102 of the National Building Code, which declares:
SECTION 102. Declaration of Policy
It is hereby declared to be the policy of the State to safeguard life, health, property, and public welfare, consistent with the principles of sound environmental management and control; and to this end, make it the purpose of this Code to provide for all buildings and structures, a framework of minimum standards and requirements to regulate and control their location, site, design, quality of materials, construction, use, occupancy, and maintenance.
The requirement of free-of-charge parking, the OSG argues, greatly contributes to the aim of safeguarding "life, health, property, and public welfare, consistent with the principles of sound environmental
management and control." Adequate parking spaces would contribute greatly to alleviating traffic congestion when complemented by quick and easy access thereto because of free-charge parking. Moreover, the power to regulate and control the use, occupancy, and maintenance of buildings and structures carries with it the power to impose fees and, conversely, to control - - partially or, as in this case, absolutely - - the imposition of such fees.
The Court finds no merit in the present Petition.
The explicit directive of the afore-quoted statutory and regulatory provisions, garnered from a plain reading thereof, is that respondents, as operators/lessors of neighborhood shopping centers, should provide parking and loading spaces, in accordance with the minimum ratio of one slot per 100 square meters of shopping floor area. There is nothing therein pertaining to the collection (or non-collection) of parking fees by respondents. In fact, the term "parking fees" cannot even be found at all in the entire National Building Code and its IRR.
Statutory construction has it that if a statute is clear and unequivocal, it must be given its literal meaning and applied
without any attempt at interpretation.26 Since Section 803 of the National Building Code and Rule XIX of its IRR do not mention parking fees, then simply, said provisions do not regulate the collection of the same. The RTC and the Court of Appeals correctly applied Article 1158 of the New Civil Code, which states:
Art. 1158. Obligations derived from law are not presumed. Only those expressly determined in this Code or in special laws are demandable, and shall be regulated by the precepts of the law which establishes them; and as to what has not been foreseen, by the provisions of this Book. (Emphasis ours.)
Hence, in order to bring the matter of parking fees within the ambit of the National Building Code and its IRR, the OSG had to resort to specious and feeble argumentation, in which the Court cannot concur.
The OSG cannot rely on Section 102 of the National Building Code to expand the coverage of Section 803 of the same Code and Rule XIX of the IRR, so as to include the regulation of parking fees. The OSG limits its citation to the first part of Section 102 of the National Building Code declaring the policy of the State "to safeguard life, health, property, and public welfare, consistent with the
principles of sound environmental management and control"; but totally ignores the second part of said provision, which reads, "and to this end, make it the purpose of this Code to provide for all buildings and structures, a framework of minimum standards and requirements to regulate and control their location, site, design, quality of materials, construction, use, occupancy, and maintenance." While the first part of Section 102 of the National Building Code lays down the State policy, it is the second part thereof that explains how said policy shall be carried out in the Code. Section 102 of the National Building Code is not an all-encompassing grant of regulatory power to the DPWH Secretary and local building officials in the name of life, health, property, and public welfare. On the contrary, it limits the regulatory power of said officials to ensuring that the minimum standards and requirements for all buildings and structures, as set forth in the National Building Code, are complied with.
Consequently, the OSG cannot claim that in addition to fixing the minimum requirements for parking spaces for buildings, Rule XIX of the IRR also mandates that such parking spaces be provided by building owners free of charge. If Rule XIX is not covered by the
enabling law, then it cannot be added to or included in the implementing rules. The rule-making power of administrative agencies must be confined to details for regulating the mode or proceedings to carry into effect the law as it has been enacted, and it cannot be extended to amend or expand the statutory requirements or to embrace matters not covered by the statute. Administrative regulations must always be in harmony with the provisions of the law because any resulting discrepancy between the two will always be resolved in favor of the basic law.27
From the RTC all the way to this Court, the OSG repeatedly referred to Republic v. Gonzales28 and City of Ozamis v. Lumapas29 to support its position that the State has the power to regulate parking spaces to promote the health, safety, and welfare of the public; and it is by virtue of said power that respondents may be required to provide free parking facilities. The OSG, though, failed to consider the substantial differences in the factual and legal backgrounds of these two cases from those of the Petition at bar.
In Republic, the Municipality of Malabon sought to eject the occupants of two parcels of land of the public domain to give way
to a road-widening project. It was in this context that the Court pronounced:
Indiscriminate parking along F. Sevilla Boulevard and other main thoroughfares was prevalent; this, of course, caused the build up of traffic in the surrounding area to the great discomfort and inconvenience of the public who use the streets. Traffic congestion constitutes a threat to the health, welfare, safety and convenience of the people and it can only be substantially relieved by widening streets and providing adequate parking areas.
The Court, in City of Ozamis, declared that the City had been clothed with full power to control and regulate its streets for the purpose of promoting public health, safety and welfare. The City can regulate the time, place, and manner of parking in the streets and public places; and charge minimal fees for the street parking to cover the expenses for supervision, inspection and control, to ensure the smooth flow of traffic in the environs of the public market, and for the safety and convenience of the public.
Republic and City of Ozamis involved parking in the local streets; in contrast, the present case deals with privately owned parking facilities available for use by the general public. In Republic
and City of Ozamis, the concerned local governments regulated parking pursuant to their power to control and regulate their streets; in the instant case, the DPWH Secretary and local building officials regulate parking pursuant to their authority to ensure compliance with the minimum standards and requirements under the National Building Code and its IRR. With the difference in subject matters and the bases for the regulatory powers being invoked, Republic and City of Ozamis do not constitute precedents for this case.
Indeed, Republic and City of Ozamis both contain pronouncements that weaken the position of the OSG in the case at bar. In Republic, the Court, instead of placing the burden on private persons to provide parking facilities to the general public, mentioned the trend in other jurisdictions wherein the municipal governments themselves took the initiative to make more parking spaces available so as to alleviate the traffic problems, thus:
Under the Land Transportation and Traffic Code, parking in designated areas along public streets or highways is allowed which clearly indicates that provision for parking spaces serves a useful purpose. In other jurisdictions where traffic is at
least as voluminous as here, the provision by municipal governments of parking space is not limited to parking along public streets or highways. There has been a marked trend to build off-street parking facilities with the view to removing parked cars from the streets. While the provision of off-street parking facilities or carparks has been commonly undertaken by private enterprise, municipal governments have been constrained to put up carparks in response to public necessity where private enterprise had failed to keep up with the growing public demand. American courts have upheld the right of municipal governments to construct off-street parking facilities as clearly redounding to the public benefit.30
In City of Ozamis, the Court authorized the collection by the City of minimal fees for the parking of vehicles along the streets: so why then should the Court now preclude respondents from collecting from the public a fee for the use of the mall parking facilities? Undoubtedly, respondents also incur expenses in the maintenance and operation of the mall parking facilities, such as electric consumption, compensation for parking attendants and security, and upkeep of the physical structures.
It is not sufficient for the OSG to claim that "the power to regulate and control the use, occupancy, and maintenance of buildings and structures carries with it the power to impose fees and, conversely, to control, partially or, as in this case, absolutely, the imposition of such fees." Firstly, the fees within the power of regulatory agencies to impose are regulatory fees. It has been settled law in this jurisdiction that this broad and all-compassing governmental competence to restrict rights of liberty and property carries with it the undeniable power to collect a regulatory fee. It looks to the enactment of specific measures that govern the relations not only as between individuals but also as between private parties and the political society.31 True, if the regulatory agencies have the power to impose regulatory fees, then conversely, they also have the power to remove the same. Even so, it is worthy to note that the present case does not involve the imposition by the DPWH Secretary and local building officials of regulatory fees upon respondents; but the collection by respondents of parking fees from persons who use the mall parking facilities. Secondly, assuming arguendo that the DPWH Secretary and local building officials do have regulatory powers over the collection of
parking fees for the use of privately owned parking facilities, they cannot allow or prohibit such collection arbitrarily or whimsically. Whether allowing or prohibiting the collection of such parking fees, the action of the DPWH Secretary and local building officials must pass the test of classic reasonableness and propriety of the measures or means in the promotion of the ends sought to be accomplished.32
Keeping in mind the aforementioned test of reasonableness and propriety of measures or means, the Court notes that Section 803 of the National Building Code falls under Chapter 8 on Light and Ventilation. Evidently, the Code deems it necessary to regulate site occupancy to ensure that there is proper lighting and ventilation in every building. Pursuant thereto, Rule XIX of the IRR requires that a building, depending on its specific use and/or floor area, should provide a minimum number of parking spaces. The Court, however, fails to see the connection between regulating site occupancy to ensure proper light and ventilation in every building vis - Ã -vis regulating the collection by building owners of fees for the use of their parking spaces. Contrary to the averment of the OSG, the former does not necessarily
include or imply the latter. It totally escapes this Court how lighting and ventilation conditions at the malls could be affected by the fact that parking facilities thereat are free or paid for.
The OSG attempts to provide the missing link by arguing that:
Under Section 803 of the National Building Code, complimentary parking spaces are required to enhance light and ventilation, that is, to avoid traffic congestion in areas surrounding the building, which certainly affects the ventilation within the building itself, which otherwise, the annexed parking spaces would have served. Free-of-charge parking avoids traffic congestion by ensuring quick and easy access of legitimate shoppers to off-street parking spaces annexed to the malls, and thereby removing the vehicles of these legitimate shoppers off the busy streets near the commercial establishments.33
The Court is unconvinced. The National Building Code regulates buildings, by setting the minimum specifications and requirements for the same. It does not concern itself with traffic congestion in areas surrounding the building. It is already a stretch to say that the National Building Code and its IRR also intend to solve the problem of traffic congestion around the
buildings so as to ensure that the said buildings shall have adequate lighting and ventilation. Moreover, the Court cannot simply assume, as the OSG has apparently done, that the traffic congestion in areas around the malls is due to the fact that respondents charge for their parking facilities, thus, forcing vehicle owners to just park in the streets. The Court notes that despite the fees charged by respondents, vehicle owners still use the mall parking facilities, which are even fully occupied on some days. Vehicle owners may be parking in the streets only because there are not enough parking spaces in the malls, and not because they are deterred by the parking fees charged by respondents. Free parking spaces at the malls may even have the opposite effect from what the OSG envisioned: more people may be encouraged by the free parking to bring their own vehicles, instead of taking public transport, to the malls; as a result, the parking facilities would become full sooner, leaving more vehicles without parking spaces in the malls and parked in the streets instead, causing even more traffic congestion.
Without using the term outright, the OSG is actually invoking police power to justify the regulation by the State, through the DPWH Secretary and local building
officials, of privately owned parking facilities, including the collection by the owners/operators of such facilities of parking fees from the public for the use thereof. The Court finds, however, that in totally prohibiting respondents from collecting parking fees from the public for the use of the mall parking facilities, the State would be acting beyond the bounds of police power.
Police power is the power of promoting the public welfare by restraining and regulating the use of liberty and property. It is usually exerted in order to merely regulate the use and enjoyment of the property of the owner. The power to regulate, however, does not include the power to prohibit. A fortiori, the power to regulate does not include the power to confiscate. Police power does not involve the taking or confiscation of property, with the exception of a few cases where there is a necessity to confiscate private property in order to destroy it for the purpose of protecting peace and order and of promoting the general welfare; for instance, the confiscation of an illegally possessed article, such as opium and firearms.34
When there is a taking or confiscation of private property for public use, the State is no longer exercising police power,
but another of its inherent powers, namely, eminent domain. Eminent domain enables the State to forcibly acquire private lands intended for public use upon payment of just compensation to the owner.35
Normally, of course, the power of eminent domain results in the taking or appropriation of title to, and possession of, the expropriated property; but no cogent reason appears why the said power may not be availed of only to impose a burden upon the owner of condemned property, without loss of title and possession.36 It is a settled rule that neither acquisition of title nor total destruction of value is essential to taking. It is usually in cases where title remains with the private owner that inquiry should be made to determine whether the impairment of a property is merely regulated or amounts to a compensable taking. A regulation that deprives any person of the profitable use of his property constitutes a taking and entitles him to compensation, unless the invasion of rights is so slight as to permit the regulation to be justified under the police power. Similarly, a police regulation that unreasonably restricts the right to use business property for business purposes amounts to a taking of private property, and the owner may recover
Although in the present case, title to and/or possession of the parking facilities remain/s with respondents, the prohibition against their collection of parking fees from the public, for the use of said facilities, is already tantamount to a taking or confiscation of their properties. The State is not only requiring that respondents devote a portion of the latter's properties for use as parking spaces, but is also mandating that they give the public access to said parking spaces for free. Such is already an excessive intrusion into the property rights of respondents. Not only are they being deprived of the right to use a portion of their properties as they wish, they are further prohibited from profiting from its use or even just recovering therefrom the expenses for the maintenance and operation of the required parking facilities.
The ruling of this Court in City Government of Quezon City v. Judge Ericta38 is edifying. Therein, the City Government of Quezon City passed an ordinance obliging private cemeteries within its jurisdiction to set aside at least six percent of their total area for charity, that is, for burial grounds of deceased paupers. According to the Court, the ordinance in
question was null and void, for it authorized the taking of private property without just compensation:
There is no reasonable relation between the setting aside of at least six (6) percent of the total area of all private cemeteries for charity burial grounds of deceased paupers and the promotion of' health, morals, good order, safety, or the general welfare of the people. The ordinance is actually a taking without compensation of a certain area from a private cemetery to benefit paupers who are charges of the municipal corporation. Instead of' building or maintaining a public cemetery for this purpose, the city passes the burden to private cemeteries.
'The expropriation without compensation of a portion of private cemeteries is not covered by Section 12(t) of Republic Act 537, the Revised Charter of Quezon City which empowers the city council to prohibit the burial of the dead within the center of population of the city and to provide for their burial in a proper place subject to the provisions of general law regulating burial grounds and cemeteries. When the Local Government Code, Batas Pambansa Blg. 337 provides in Section 177(q) that a sangguniang panlungsod may "provide for the burial of the dead
in such place and in such manner as prescribed by law or ordinance" it simply authorizes the city to provide its own city owned land or to buy or expropriate private properties to construct public cemeteries. This has been the law, and practise in the past. It continues to the present. Expropriation, however, requires payment of just compensation. The questioned ordinance is different from laws and regulations requiring owners of subdivisions to set aside certain areas for streets, parks, playgrounds, and other public facilities from the land they sell to buyers of subdivision lots. The necessities of public safety, health, and convenience are very clear from said requirements which are intended to insure the development of communities with salubrious and wholesome environments. The beneficiaries of the regulation, in turn, are made to pay by the subdivision developer when individual lots are sold to homeowners.
In conclusion, the total prohibition against the collection by respondents of parking fees from persons who use the mall parking facilities has no basis in the National Building Code or its IRR. The State also cannot impose the same prohibition by generally invoking police power, since said prohibition amounts to a taking of
respondents' property without payment of just compensation.
Given the foregoing, the Court finds no more need to address the issue persistently raised by respondent SM Prime concerning the unconstitutionality of Rule XIX of the IRR. In addition, the said issue was not among those that the parties, during the pre-trial conference for Civil Cases No. 12-08 and No. 00-1210, agreed to submit for resolution of the RTC. It is likewise axiomatic that the constitutionality of a law, a regulation, an ordinance or an act will not be resolved by courts if the controversy can be, as in this case it has been, settled on other grounds.39
WHEREFORE, the instant Petition for Review on Certiorari is hereby DENIED. The Decision dated 25 January 2007 and Resolution dated 14 March 2007 of the Court of Appeals in CA-G.R. CV No. 76298, affirming in toto the Joint Decision dated 29 May 2002 of the Regional Trial Court of Makati City, Branch 138, in Civil Cases No. 00-1208 and No. 00-1210 are hereby AFFIRMED. No costs.
