Police Power MMDA and Bayani Fernando vs Viron Transportation Co. Inc.

GR 170656 August 15, 2007 Facts: President Arroyo issued EO No. 179 which states that the upon recommendation by the MMDA, it shall take measures to ease the traffic congestion primarily by setting up mass transport terminal facilities and more pertinent is the elimination of bus terminals along major thoroughfares of the metropolis. It also designated the MMDA as the implementing agency for this project. Pursuant to the EO the Metro Manila Council issued a resolution expressing full support for the project and agreed to the removal of bus terminals located along major roads. Viron Transport Co. a domestic corporation engaged in the business of public transportation with a provincial bus operation filed a petition before the RTC of Manila assailing said plan and asking the Court to construe the scope, extent and limitation of the power of the MMDA to regulate traffic. Mencorp, another bus operator later filed the same petition questioning the power of the MMDA to regulate traffic and the power to direct bus operators to abandon their terminals for a common facility. The trial court held the constitutionality and legality of the EO which empowered the MMDA under its mandate to administer such services and ruled that it is a valid exercise of police power of the State. However after filing a motion for reconsideration, the trial court reversed its decision this time holding that the EO was an unreasonable exercise of police power and that the MMDA does not possess the power to order the closure of the bus terminals. Hence, this petition. Issue: Whether or not EO 179 and the delegation for the implementation to the MMDA is a valid exercise of police power. Held: No, the Court ruled that the authority of the President to order the implementation of the project notwithstanding the designation of the MMDA as the implementing agency for the project may not be sustained. It is ultra vires, there being no legal basis therefor. The MMDA is as termed in the charter itself, a developmental authority, it is an agency created for the purpose of laying down policies and coordinating with the various national government agencies, all its functions are administrative in nature and are summed up in the charter itself. In the light of this administrative nature of its powers and functions, the MMDA is devoid of authority to implement the project as envisioned by EO 179 hence it could not have been validly designated by the President to undertake the project. It follows that the MMDA cannot validly order the closure and elimination of respondents bus terminals. The SC cited that the MMDA does not satisfy the two tests

of a valid police power measure being, one the interest of the public generally as distinguished that of a particular class and second, the means employed are reasonably necessary for the accomplishment of the purpose and not unduly oppressive upon individuals. The MMDA is not vested with police power. Petition is denied.