G.R. No.

92389 September 11, 1991

HON. JEJOMAR C. BINAY and the MUNICIPALITY OF MAKATI, petitioners,
vs.
HON. EUFEMIO DOMINGO and the COMMISSION ON AUDIT, respondents.
Jejomar C. Binay for himself and for his co-petitioner.
Manuel D. Tamase and Rafael C. Marquez for respondents.

PARAS, J.:p
The only pivotal issue before Us is whether or not Resolution No. 60, re-enacted under Resolution
No. 243, of the Municipality of Makati is a valid exercise of police power under the general welfare
clause.
The pertinent facts are:
On September 27, 1988, petitioner Municipality, through its Council, approved Resolution No. 60
which reads:
A RESOLUTION TO CONFIRM AND/OR RATIFY THE ONGOING BURIAL
ASSISTANCE PROGRAM INITIATED BY THE OFFICE OF THE MAYOR, OF
EXTENDING FINANCIAL ASSISTANCE OF FIVE HUNDRED PESOS (P500.00) TO
A BEREAVED FAMILY, FUNDS TO BE TAKEN OUT OF UNAPPROPRIATED
AVAILABLE FUNDS EXISTING IN THE MUNICIPAL TREASURY. (Rollo, Annnex "A"
p. 39)
Qualified beneficiaries, under the Burial Assistance Program, are bereaved families of Makati whose
gross family income does not exceed two thousand pesos (P2,000.00) a month. The beneficiaries,
upon fulfillment of other requirements, would receive the amount of five hundred pesos (P500.00)
cash relief from the Municipality of Makati. (Reno, Annex "13", p. 41)
Metro Manila Commission approved Resolution No. 60. Thereafter, the municipal secretary certified
a disbursement fired of four hundred thousand pesos (P400,000.00) for the implementation of the
Burial Assistance Program. (Rollo, Annex "C", p. 43).
Resolution No. 60 was referred to respondent Commission on Audit (COA) for its expected
allowance in audit. Based on its preliminary findings, respondent COA disapproved Resolution No.
60 and disallowed in audit the disbursement of finds for the implementation thereof. (Rollo, Annex
"D", P. 44)

Two letters for reconsideration (Annexes "E" and "F", Rollo, pp. 45 and 48, respectively) filed by
petitioners Mayor Jejomar Binay, were denied by respondent in its Decision No. 1159, in the
following manner:
Your request for reconsideration is predicated on the following grounds, to wit:
1. Subject Resolution No. 60, s. 1988, of the Municipal Council of Makati and the
intended disbursements fall within the twin principles of 'police power and parens
patriae and
2. The Metropolitan Manila Commission (MMC), under a Certification, dated June 5,
1989, has already appropriated the amount of P400,000.00 to implement the Id
resolution, and the only function of COA on the matter is to allow the financial
assistance in question.
The first contention is believed untenable. Suffice it to state that:
a statute or ordinance must have a real substantial, or rational
relation to the public safety, health, morals, or general welfare to be
sustained as a legitimate exercise of the police power. The mere
assertion by the legislature that a statute relates to the public health,
safety, or welfare does not in itself bring the statute within the police
power of a state for there must always be an obvious and real
connection between the actual provisions of a police regulations and
its avowed purpose, and the regulation adopted must be reasonably
adapted to accomplish the end sought to be attained. 16 Am. Jur 2d,
pp. 542-543; emphasis supplied).
Here, we see no perceptible connection or relation between the objective sought to
be attained under Resolution No. 60, s. 1988, supra, and the alleged public safety,
general welfare, etc. of the inhabitants of Makati.
Anent the second contention, let it be stressed that Resolution No. 60 is still subject
to the limitation that the expenditure covered thereby should be for a public purpose,
i.e., that the disbursement of the amount of P500.00 as burial assistance to a
bereaved family of the Municipality of Makati, or a total of P400,000.00 appropriated
under the Resolution, should be for the benefit of the whole, if not the majority, of the
inhabitants of the Municipality and not for the benefit of only a few individuals as in
the present case. On this point government funds or property shall be spent or used
solely for public purposes. (Cf. Section 4[2], P.D. 1445). (pp. 50-51, Rollo)
Bent on pursuing the Burial Assistance Program the Municipality of Makati, through its Council,
passed Resolution No. 243, re-affirming Resolution No. 60 (Rollo, Annex "H", p. 52).

However, the Burial Assistance Program has been stayed by COA Decision No. 1159. Petitioner,
through its Mayor, was constrained to file this special civil action of certiorari praying that COA
Decision No. 1159 be set aside as null and void.
The police power is a governmental function, an inherent attribute of sovereignty, which was born
with civilized government. It is founded largely on the maxims, "Sic utere tuo et ahenum non laedas
and "Salus populi est suprema lex Its fundamental purpose is securing the general welfare, comfort
and convenience of the people.
Police power is inherent in the state but not in municipal corporations (Balacuit v. CFI of Agusan del
Norte, 163 SCRA 182). Before a municipal corporation may exercise such power, there must be a
valid delegation of such power by the legislature which is the repository of the inherent powers of the
State. A valid delegation of police power may arise from express delegation, or be inferred from the
mere fact of the creation of the municipal corporation; and as a general rule, municipal corporations
may exercise police powers within the fair intent and purpose of their creation which are reasonably
proper to give effect to the powers expressly granted, and statutes conferring powers on public
corporations have been construed as empowering them to do the things essential to the enjoyment
of life and desirable for the safety of the people. (62 C.J.S., p. 277). The so-called inferred police
powers of such corporations are as much delegated powers as are those conferred in express
terms, the inference of their delegation growing out of the fact of the creation of the municipal
corporation and the additional fact that the corporation can only fully accomplish the objects of its
creation by exercising such powers. (Crawfordsville vs. Braden, 28 N.E. 849). Furthermore,
municipal corporations, as governmental agencies, must have such measures of the power as are
necessary to enable them to perform their governmental functions. The power is a continuing one,
founded on public necessity. (62 C.J.S. p. 273) Thus, not only does the State effectuate its purposes
through the exercise of the police power but the municipality does also. (U.S. v. Salaveria, 39 Phil.
102).
Municipal governments exercise this power under the general welfare clause: pursuant thereto they
are clothed with authority to "enact such ordinances and issue such regulations as may be
necessary to carry out and discharge the responsibilities conferred upon it by law, and such as shall
be necessary and proper to provide for the health, safety, comfort and convenience, maintain peace
and order, improve public morals, promote the prosperity and general welfare of the municipality and
the inhabitants thereof, and insure the protection of property therein." (Sections 91, 149, 177 and
208, BP 337). And under Section 7 of BP 337, "every local government unit shall exercise the
powers expressly granted, those necessarily implied therefrom, as well as powers necessary and
proper for governance such as to promote health and safety, enhance prosperity, improve morals,
and maintain peace and order in the local government unit, and preserve the comfort and
convenience of the inhabitants therein."
Police power is the power to prescribe regulations to promote the health, morals, peace, education,
good order or safety and general welfare of the people. It is the most essential, insistent, and
illimitable of powers. In a sense it is the greatest and most powerful attribute of the government. It is
elastic and must be responsive to various social conditions. (Sangalang, et al. vs. IAC, 176 SCRA
719). On it depends the security of social order, the life and health of the citizen, the comfort of an
existence in a thickly populated community, the enjoyment of private and social life, and the

beneficial use of property, and it has been said to be the very foundation on which our social system
rests. (16 C.J.S., P. 896) However, it is not confined within narrow circumstances of precedents
resting on past conditions; it must follow the legal progress of a democratic way of life. (Sangalang,
et al. vs. IAC,supra).
In the case at bar, COA is of the position that there is "no perceptible connection or relation between
the objective sought to be attained under Resolution No. 60, s. 1988, supra, and the alleged public
safety, general welfare. etc. of the inhabitants of Makati." (Rollo, Annex "G", p. 51).
Apparently, COA tries to re-define the scope of police power by circumscribing its exercise to "public
safety, general welfare, etc. of the inhabitants of Makati."
In the case of Sangalang vs. IAC, supra, We ruled that police power is not capable of an exact
definition but has been, purposely, veiled in general terms to underscore its all comprehensiveness.
Its scope, over-expanding to meet the exigencies of the times, even to anticipate the future where it
could be done, provides enough room for an efficient and flexible response to conditions and
circumstances thus assuring the greatest benefits.
The police power of a municipal corporation is broad, and has been said to be commensurate with,
but not to exceed, the duty to provide for the real needs of the people in their health, safety, comfort,
and convenience as consistently as may be with private rights. It extends to all the great public
needs, and, in a broad sense includes all legislation and almost every function of the municipal
government. It covers a wide scope of subjects, and, while it is especially occupied with whatever
affects the peace, security, health, morals, and general welfare of the community, it is not limited
thereto, but is broadened to deal with conditions which exists so as to bring out of them the greatest
welfare of the people by promoting public convenience or general prosperity, and to everything
worthwhile for the preservation of comfort of the inhabitants of the corporation (62 C.J.S. Sec. 128).
Thus, it is deemed inadvisable to attempt to frame any definition which shall absolutely indicate the
limits of police power.
COA's additional objection is based on its contention that "Resolution No. 60 is still subject to the
limitation that the expenditure covered thereby should be for a public purpose, ... should be for the
benefit of the whole, if not the majority, of the inhabitants of the Municipality and not for the benefit of
only a few individuals as in the present case." (Rollo, Annex "G", p. 51).
COA is not attuned to the changing of the times. Public purpose is not unconstitutional merely
because it incidentally benefits a limited number of persons. As correctly pointed out by the Office of
the Solicitor General, "the drift is towards social welfare legislation geared towards state policies to
provide adequate social services (Section 9, Art. II, Constitution), the promotion of the general
welfare (Section 5, Ibid) social justice (Section 10, Ibid) as well as human dignity and respect for
human rights. (Section 11, Ibid." (Comment, p. 12)
The care for the poor is generally recognized as a public duty. The support for the poor has long
been an accepted exercise of police power in the promotion of the common good.

There is no violation of the equal protection clause in classifying paupers as subject of legislation.
Paupers may be reasonably classified. Different groups may receive varying treatment. Precious to
the hearts of our legislators, down to our local councilors, is the welfare of the paupers. Thus,
statutes have been passed giving rights and benefits to the disabled, emancipating the tenant-farmer
from the bondage of the soil, housing the urban poor, etc.
Resolution No. 60, re-enacted under Resolution No. 243, of the Municipality of Makati is a paragon
of the continuing program of our government towards social justice. The Burial Assistance Program
is a relief of pauperism, though not complete. The loss of a member of a family is a painful
experience, and it is more painful for the poor to be financially burdened by such death. Resolution
No. 60 vivifies the very words of the late President Ramon Magsaysay 'those who have less in life,
should have more in law." This decision, however must not be taken as a precedent, or as an official
go-signal for municipal governments to embark on a philanthropic orgy of inordinate dole-outs for
motives political or otherwise.
PREMISES CONSIDERED, and with the afore-mentioned caveat, this petition is hereby GRANTED
and the Commission on Audit's Decision No. 1159 is hereby SET ASIDE.
SO ORDERED.
G.R. No. 111097 July 20, 1994
MAYOR PABLO P. MAGTAJAS & THE CITY OF CAGAYAN DE ORO, petitioners,
vs.
PRYCE PROPERTIES CORPORATION, INC. & PHILIPPINE AMUSEMENT AND GAMING
CORPORATION,respondents.
Aquilino G. Pimentel, Jr. and Associates for petitioners.
R.R. Torralba & Associates for private respondent.

CRUZ, J.:
There was instant opposition when PAGCOR announced the opening of a casino in Cagayan de Oro
City. Civic organizations angrily denounced the project. The religious elements echoed the objection
and so did the women's groups and the youth. Demonstrations were led by the mayor and the city
legislators. The media trumpeted the protest, describing the casino as an affront to the welfare of the
city.
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. To this end, it leased a portion of a building
belonging to Pryce Properties Corporation, Inc., one of the herein private respondents, renovated
and equipped the same, and prepared to inaugurate its casino there during the Christmas season.

The reaction of the Sangguniang Panlungsod of Cagayan de Oro City was swift and hostile. On
December 7, 1992, it enacted Ordinance No. 3353 reading as follows:
ORDINANCE NO. 3353
AN ORDINANCE PROHIBITING THE ISSUANCE OF BUSINESS PERMIT AND
CANCELLING EXISTING BUSINESS PERMIT TO ANY ESTABLISHMENT FOR
THE USING AND ALLOWING TO BE USED ITS PREMISES OR PORTION
THEREOF FOR THE OPERATION OF CASINO.
BE IT ORDAINED by the Sangguniang Panlungsod of the City of Cagayan de Oro, in
session assembled that:
Sec. 1. That pursuant to the policy of the city banning the operation of casino
within its territorial jurisdiction, no business permit shall be issued to any person,
partnership or corporation for the operation of casino within the city limits.
Sec. 2. That it shall be a violation of existing business permit by any persons,
partnership or corporation to use its business establishment or portion thereof, or
allow the use thereof by others for casino operation and other gambling activities.
Sec. 3. PENALTIES. Any violation of such existing business permit as defined
in the preceding section shall suffer the following penalties, to wit:
a) Suspension of the business permit for sixty (60)
days for the first offense and a fine of P1,000.00/day
b) Suspension of the business permit for Six (6)
months for the second offense, and a fine of
P3,000.00/day
c) Permanent revocation of the business permit and
imprisonment of One (1) year, for the third and
subsequent offenses.
Sec. 4. This Ordinance shall take effect ten (10) days from publication thereof.
Nor was this all. On January 4, 1993, it adopted a sterner Ordinance No. 3375-93 reading as follows:
ORDINANCE NO. 3375-93
AN ORDINANCE PROHIBITING THE OPERATION OF CASINO AND PROVIDING
PENALTY FOR VIOLATION THEREFOR.
WHEREAS, the City Council established a policy as early as 1990 against CASINO
under its Resolution No. 2295;

WHEREAS, on October 14, 1992, the City Council passed another Resolution No.
2673, reiterating its policy against the establishment of CASINO;
WHEREAS, subsequently, thereafter, it likewise passed Ordinance No. 3353,
prohibiting the issuance of Business Permit and to cancel existing Business Permit to
any establishment for the using and allowing to be used its premises or portion
thereof for the operation of CASINO;
WHEREAS, under Art. 3, section 458, No. (4), sub paragraph VI of the Local
Government Code of 1991 (Rep. Act 7160) and under Art. 99, No. (4), Paragraph VI
of the implementing rules of the Local Government Code, the City Council as the
Legislative Body shall enact measure to suppress any activity inimical to public
morals and general welfare of the people and/or regulate or prohibit such activity
pertaining to amusement or entertainment in order to protect social and moral
welfare of the community;
NOW THEREFORE,
BE IT ORDAINED by the City Council in session duly assembled that:
Sec. 1. The operation of gambling CASINO in the City of Cagayan de Oro is
hereby prohibited.
Sec. 2. Any violation of this Ordinance shall be subject to the following penalties:
a) Administrative fine of P5,000.00 shall be imposed against the proprietor,
partnership or corporation undertaking the operation, conduct, maintenance of
gambling CASINO in the City and closure thereof;
b) Imprisonment of not less than six (6) months nor more than one (1) year or a fine
in the amount of P5,000.00 or both at the discretion of the court against the manager,
supervisor, and/or any person responsible in the establishment, conduct and
maintenance of gambling CASINO.
Sec. 3. This Ordinance shall take effect ten (10) days after its publication in a local
newspaper of general circulation.
Pryce 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. 1 Reconsideration of this decision was denied on July 13, 1993. 2
Cagayan de Oro City and its mayor are now before us in this petition for review under Rule 45 of the
Rules of Court. 3 They aver that the respondent Court of Appeals erred in holding that:

1. Under existing laws, the Sangguniang Panlungsod of the City of Cagayan de Oro
does not have the power and authority to prohibit the establishment and operation of
a PAGCOR gambling casino within the City's territorial limits.
2. The phrase "gambling and other prohibited games of chance" found in Sec. 458,
par. (a), sub-par. (1) (v) of R.A. 7160 could only mean "illegal gambling."
3. The questioned Ordinances in effect annul P.D. 1869 and are therefore invalid on
that point.
4. The questioned Ordinances are discriminatory to casino and partial to cockfighting
and are therefore invalid on that point.
5. The questioned Ordinances are not reasonable, not consonant with the general
powers and purposes of the instrumentality concerned and inconsistent with the laws
or policy of the State.
6. It had no option but to follow the ruling in the case of Basco, et al. v.
PAGCOR, G.R. No. 91649, May 14, 1991, 197 SCRA 53 in disposing of the issues
presented in this present case.
PAGCOR is a corporation created directly by P.D. 1869 to help centralize and regulate all games of
chance, including casinos on land and sea within the territorial jurisdiction of the Philippines.
In Basco v. Philippine Amusements and Gaming Corporation, 4 this Court sustained the
constitutionality of the decree and even cited the benefits of the entity to the national economy as the third
highest revenue-earner in the government, next only to the BIR and the Bureau of Customs.
Cagayan de Oro City, like other local political subdivisions, is empowered to enact ordinances for the
purposes indicated in the Local Government Code. It is expressly vested with the police power under
what is known as the General Welfare Clause now embodied in Section 16 as follows:
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.
In addition, Section 458 of the said Code specifically declares that:

Sec. 458. Powers, Duties, Functions and Compensation. (a) The Sangguniang
Panlungsod, as the legislative body of the city, shall enact ordinances, approve
resolutions and appropriate funds for the general welfare of the city and its
inhabitants pursuant to Section 16 of this Code and in the proper exercise of the
corporate powers of the city as provided for under Section 22 of this Code, and shall:
(1) Approve ordinances and pass resolutions necessary for an efficient and effective
city government, and in this connection, shall:
xxx xxx xxx
(v) Enact ordinances intended to prevent, suppress
and impose appropriate penalties for habitual
drunkenness in public places, vagrancy, mendicancy,
prostitution, establishment and maintenance of
houses of ill repute,gambling and other prohibited
games of chance, fraudulent devices and ways to
obtain money or property, drug addiction,
maintenance of drug dens, drug pushing, juvenile
delinquency, the printing, distribution or exhibition of
obscene or pornographic materials or publications,
and such other activities inimical to the welfare and
morals of the inhabitants of the city;
This section also authorizes the local government units to regulate properties and businesses within
their territorial limits in the interest of the general welfare. 5
The petitioners argue that by virtue of these provisions, the Sangguniang Panlungsod may prohibit
the operation of casinos because they involve games of chance, which are detrimental to the people.
Gambling is not allowed by general law and even by the Constitution itself. The legislative power
conferred upon local government units may be exercised over all kinds of gambling and not only
over "illegal gambling" as the respondents erroneously argue. Even if the operation of casinos may
have been permitted under P.D. 1869, the government of Cagayan de Oro City has the authority to
prohibit them within its territory pursuant to the authority entrusted to it by the Local Government
Code.
It is submitted that this interpretation is consonant with the policy of local autonomy as mandated in
Article II, Section 25, and Article X of the Constitution, as well as various other provisions therein
seeking to strengthen the character of the nation. In giving the local government units the power to
prevent or suppress gambling and other social problems, the Local Government Code has
recognized the competence of such communities to determine and adopt the measures best
expected to promote the general welfare of their inhabitants in line with the policies of the State.
The petitioners also stress that when the Code expressly authorized the local government units to
prevent and suppress gambling and other prohibited games of chance, like craps, baccarat,
blackjack and roulette, it meant allforms of gambling without distinction. Ubi lex non distinguit, nec

nos distinguere debemos. 6 Otherwise, it would have expressly excluded from the scope of their power
casinos and other forms of gambling authorized by special law, as it could have easily done. The fact that
it did not do so simply means that the local government units are permitted to prohibit all kinds of
gambling within their territories, including the operation of casinos.
The adoption of the Local Government Code, it is pointed out, had the effect of modifying the charter
of the PAGCOR. The Code is not only a later enactment than P.D. 1869 and so is deemed to prevail
in case of inconsistencies between them. More than this, the powers of the PAGCOR under the
decree are expressly discontinued by the Code insofar as they do not conform to its philosophy and
provisions, pursuant to Par. (f) of its repealing clause reading as follows:
(f) All general and special laws, acts, city charters, decrees, executive orders,
proclamations and administrative regulations, or part or parts thereof which are
inconsistent with any of the provisions of this Code are hereby repealed or modified
accordingly.
It is also maintained that assuming there is doubt regarding the effect of the Local Government Code
on P.D. 1869, the doubt must be resolved in favor of the petitioners, in accordance with the direction
in the Code calling for its liberal interpretation in favor of the local government units. Section 5 of the
Code specifically provides:
Sec. 5. Rules of Interpretation. In the interpretation of the provisions of this Code,
the following rules shall apply:
(a) Any provision on a power of a local government unit shall be liberally interpreted
in its favor, and in case of doubt, any question thereon shall be resolved in favor of
devolution of powers and of the lower local government unit. Any fair and reasonable
doubt as to the existence of the power shall be interpreted in favor of the local
government unit concerned;
xxx xxx xxx
(c) The general welfare provisions in this Code shall be liberally interpreted to give
more powers to local government units in accelerating economic development and
upgrading the quality of life for the people in the community; . . . (Emphasis
supplied.)
Finally, the petitioners also attack gambling as intrinsically harmful and cite various provisions of the
Constitution and several decisions of this Court expressive of the general and official disapprobation
of the vice. They invoke the State policies on the family and the proper upbringing of the youth and,
as might be expected, call attention to the old case of U.S. v. Salaveria, 7 which sustained a municipal
ordinance prohibiting the playing of panguingue. The petitioners decry the immorality of gambling. They
also impugn the wisdom of P.D. 1869 (which they describe as "a martial law instrument") in creating
PAGCOR and authorizing it to operate casinos "on land and sea within the territorial jurisdiction of the
Philippines."
This is the opportune time to stress an important point.

The morality of gambling is not a justiciable issue. Gambling is not illegal per se. While it is generally
considered inimical to the interests of the people, there is nothing in the Constitution categorically
proscribing or penalizing gambling or, for that matter, even mentioning it at all. It is left to Congress
to deal with the activity as it sees fit. In the exercise of its own discretion, the legislature may prohibit
gambling altogether or allow it without limitation or it may prohibit some forms of gambling and allow
others for whatever reasons it may consider sufficient. Thus, it has prohibited jueteng and monte but
permits lotteries, cockfighting and horse-racing. In making such choices, Congress has consulted its
own wisdom, which this Court has no authority to review, much less reverse. Well has it been said
that courts do not sit to resolve the merits of conflicting theories. 8 That is the prerogative of the
political departments. It is settled that questions regarding the wisdom, morality, or practicibility of statutes
are not addressed to the judiciary but may be resolved only by the legislative and executive departments,
to which the function belongs in our scheme of government. That function is exclusive. Whichever way
these branches decide, they are answerable only to their own conscience and the constituents who will
ultimately judge their acts, and not to the courts of justice.
The only question we can and shall resolve in this petition is the validity of Ordinance No. 3355 and
Ordinance No. 3375-93 as enacted by the Sangguniang Panlungsod of Cagayan de Oro City. And
we shall do so only by the criteria laid down by law and not by our own convictions on the propriety
of gambling.
The tests of a valid ordinance are well established. A long line of decisions 9 has held that to be valid,
an ordinance must conform to the following substantive requirements:
1) It must not contravene the constitution or any statute.
2) It must not be unfair or oppressive.
3) It must not be partial or discriminatory.
4) It must not prohibit but may regulate trade.
5) It must be general and consistent with public policy.
6) It must not be unreasonable.
We begin by observing that under Sec. 458 of the 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 petitioners are less than accurate in claiming that the Code could have
excluded such games of chance but did not. In fact it does. The language of the section is clear and
unmistakable. Under the rule of noscitur a sociis, a word or phrase should be interpreted in relation
to, or given the same meaning of, words with which it is associated. Accordingly, we conclude that
since the word "gambling" is associated with "and other prohibited games of chance," the word
should be read as referring to only illegal gambling which, like the other prohibited games of chance,
must be prevented or suppressed.

We could stop here as this interpretation should settle the problem quite conclusively. But we will
not. The vigorous efforts of the petitioners on behalf of the inhabitants of Cagayan de Oro City, and
the earnestness of their advocacy, deserve more than short shrift from this Court.
The apparent flaw in the ordinances in question is that they contravene P.D. 1869 and the public
policy embodied therein insofar as they prevent PAGCOR from exercising the power conferred on it
to operate a casino in Cagayan de Oro City. The petitioners have an ingenious answer to this
misgiving. They deny that it is the ordinances that have changed P.D. 1869 for an ordinance
admittedly cannot prevail against a statute. Their theory is that the change has been made by the
Local Government Code itself, which was also enacted by the national lawmaking authority. In their
view, the decree has been, not really repealed by the Code, but merely "modified pro tanto" in the
sense that PAGCOR cannot now operate a casino over the objection of the local government unit
concerned. This modification of P.D. 1869 by the Local Government Code is permissible because
one law can change or repeal another law.
It seems to us that the petitioners are playing with words. While insisting that the decree has only
been "modifiedpro tanto," they are actually arguing that it is already dead, repealed and useless for
all intents and purposes because the Code has shorn PAGCOR of all power to centralize and
regulate casinos. Strictly speaking, its operations may now be not only prohibited by the local
government unit; in fact, the prohibition is not only discretionary but mandated by Section 458 of the
Code if the word "shall" as used therein is to be given its accepted meaning. Local government units
have now no choice but to prevent and suppress gambling, which in the petitioners' view includes
both legal and illegal gambling. Under this construction, PAGCOR will have no more games of
chance to regulate or centralize as they must all be prohibited by the local government units
pursuant to the mandatory duty imposed upon them by the Code. In this situation, PAGCOR cannot
continue to exist except only as a toothless tiger or a white elephant and will no longer be able to
exercise its powers as a prime source of government revenue through the operation of casinos.
It is noteworthy that the petitioners have cited only Par. (f) of the repealing clause, conveniently
discarding the rest of the provision which painstakingly mentions the specific laws or the parts
thereof which are repealed (or modified) by the Code. Significantly, P.D. 1869 is not one of them. A
reading of the entire repealing clause, which is reproduced below, will disclose the omission:
Sec. 534. Repealing Clause. (a) Batas Pambansa Blg. 337, otherwise known as
the "Local Government Code," Executive Order No. 112 (1987), and Executive Order
No. 319 (1988) are hereby repealed.
(b) Presidential Decree Nos. 684, 1191, 1508 and such other decrees, orders,
instructions, memoranda and issuances related to or concerning the barangay are
hereby repealed.
(c) The provisions of Sections 2, 3, and 4 of Republic Act No. 1939 regarding hospital
fund; Section 3, a (3) and b (2) of Republic Act. No. 5447 regarding the Special
Education Fund; Presidential Decree No. 144 as amended by Presidential Decree
Nos. 559 and 1741; Presidential Decree No. 231 as amended; Presidential Decree
No. 436 as amended by Presidential Decree No. 558; and Presidential Decree Nos.

381, 436, 464, 477, 526, 632, 752, and 1136 are hereby repealed and rendered of no
force and effect.
(d) Presidential Decree No. 1594 is hereby repealed insofar as it governs locallyfunded projects.
(e) The following provisions are hereby repealed or amended insofar as they are
inconsistent with the provisions of this Code: Sections 2, 16, and 29 of Presidential
Decree No. 704; Sections 12 of Presidential Decree No. 87, as amended; Sections
52, 53, 66, 67, 68, 69, 70, 71, 72, 73, and 74 of Presidential Decree No. 463, as
amended; and Section 16 of Presidential Decree No. 972, as amended, and
(f) All general and special laws, acts, city charters, decrees, executive orders,
proclamations and administrative regulations, or part or parts thereof which are
inconsistent with any of the provisions of this Code are hereby repealed or modified
accordingly.
Furthermore, it is a familiar rule that implied repeals are not lightly presumed in the absence of a
clear and unmistakable showing of such intention. In Lichauco & Co. v. Apostol, 10 this Court
explained:
The cases relating to the subject of repeal by implication all proceed on the
assumption that if the act of later date clearly reveals an intention on the part of the
lawmaking power to abrogate the prior law, this intention must be given effect; but
there must always be a sufficient revelation of this intention, and it has become an
unbending rule of statutory construction that the intention to repeal a former law will
not be imputed to the Legislature when it appears that the two statutes, or provisions,
with reference to which the question arises bear to each other the relation of general
to special.
There is no sufficient indication of an implied repeal of P.D. 1869. On the contrary, as the private
respondent points out, PAGCOR is mentioned as the source of funding in two later enactments of
Congress, to wit, R.A. 7309, creating a Board of Claims under the Department of Justice for the
benefit of victims of unjust punishment or detention or of violent crimes, and R.A. 7648, providing for
measures for the solution of the power crisis. PAGCOR revenues are tapped by these two statutes.
This would show that the PAGCOR charter has not been repealed by the Local Government Code
but has in fact been improved as it were to make the entity more responsive to the fiscal problems of
the government.
It is a canon of legal hermeneutics that instead of pitting one statute against another in an inevitably
destructive confrontation, courts must exert every effort to reconcile them, remembering that both
laws deserve a becoming respect as the handiwork of a coordinate branch of the government. On
the assumption of a conflict between P.D. 1869 and the Code, the proper action is not to uphold one
and annul the other but to give effect to both by harmonizing them if possible. This is possible in the
case before us. 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.
This approach would also affirm that there are indeed two kinds of gambling, to wit, the illegal and
those authorized by law. Legalized gambling is not a modern concept; it is probably as old as illegal
gambling, if not indeed more so. The petitioners' suggestion that the Code authorizes them to
prohibit all kinds of gambling would erase the distinction between these two forms of gambling
without a clear indication that this is the will of the legislature. Plausibly, following this theory, the City
of Manila could, by mere ordinance, prohibit the Philippine Charity Sweepstakes Office from
conducting a lottery as authorized by R.A. 1169 and B.P. 42 or stop the races at the San Lazaro
Hippodrome as authorized by R.A. 309 and R.A. 983.
In light of all the above considerations, we see no way of arriving at the conclusion urged on us by
the petitioners that the ordinances in question are valid. On the contrary, 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.
Municipal corporations owe their origin to, and derive their powers and rights wholly
from the legislature. It breathes into them the breath of life, without which they cannot
exist. As it creates, so it may destroy. As it may destroy, it may abridge and control.
Unless there is some constitutional limitation on the right, the legislature might, by a
single act, and if we can suppose it capable of so great a folly and so great a wrong,
sweep from existence all of the municipal corporations in the State, and the
corporation could not prevent it. We know of no limitation on the right so far as to the
corporation themselves are concerned. They are, so to phrase it, the mere tenants at
will of the legislature. 11
This basic relationship between the national legislature and the local government units has not been
enfeebled by the new provisions in the Constitution strengthening the policy of local autonomy.
Without meaning to detract from that policy, we here confirm that Congress retains control of the
local government units although in significantly reduced degree now than under our previous
Constitutions. The power to create still includes the power to destroy. The power to grant still
includes the power to withhold or recall. True, there are certain notable innovations in the
Constitution, like the direct conferment on the local government units of the power to tax, 12which
cannot now be withdrawn by mere statute. By and large, however, the national legislature is still the
principal of the local government units, which cannot defy its will or modify or violate it.

The Court understands and admires the concern of the petitioners for the welfare of their
constituents and their apprehensions that the welfare of Cagayan de Oro City will be endangered by
the opening of the casino. We share the view that "the hope of large or easy gain, obtained without
special effort, turns the head of the workman" 13 and that "habitual gambling is a cause of laziness and
ruin." 14 In People v. Gorostiza, 15 we declared: "The social scourge of gambling must be stamped out. The
laws against gambling must be enforced to the limit." George Washington called gambling "the child of
avarice, the brother of iniquity and the father of mischief." Nevertheless, we must recognize the power of
the legislature to decide, in its own wisdom, to legalize certain forms of gambling, as was done in P.D.
1869 and impliedly affirmed in the Local Government Code. That decision can be revoked by this Court
only if it contravenes the Constitution as the touchstone of all official acts. We do not find such
contravention here.
We hold that the power of PAGCOR to centralize and regulate all games of chance, including
casinos on land and sea within the territorial jurisdiction of the Philippines, remains unimpaired. P.D.
1869 has not been modified by the Local Government Code, which empowers the local government
units to prevent or suppress only those forms of gambling prohibited by law.
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.
WHEREFORE, the petition is DENIED and the challenged decision of the respondent Court of
Appeals is AFFIRMED, with costs against the petitioners. It is so ordered.
G.R. No. L-24670 December 14, 1979
ORTIGAS & CO., LIMITED PARTNERSHIP, plaintiff-appellant,
vs.
FEATI BANK AND TRUST CO., defendant-appellee.
Ramirez & Ortigas for appellant.
Taada, Teehankee & Carreon for appellee.

SANTOS, J.:
An appeal interposed on June 23, 1965 by plaintiff-appellant, Ortigas & Co., Limited Partnership,
from the decision of the Court of First Instance of Rizal, Branch VI, at Pasig, Hon. Andres Reyes
presiding, which dismissed its complaint in Civil Case No. 7706, entitled, "Ortigas & Company,
Limited Partnership, plaintiff, v. Feati Bank and Trust Company, defendant," for lack of merit.

The following facts a reproduction of the lower court's findings, which, in turn, are based on a
stipulation of facts entered into by the parties are not disputed. Plaintiff (formerly known as "Ortigas,
Madrigal y Cia") is a limited partnership and defendant Feati Bank and Trust Co., is a corporation
duly organized and existing in accordance with the laws of the Philippines. Plaintiff is engaged in real
estate business, developing and selling lots to the public, particularly the Highway Hills Subdivision
along Epifanio de los Santos Avenue, Mandaluyong, Rizal. 1
On March 4, 1952, plaintiff, as vendor, and Augusto Padilla y Angeles and Natividad Angeles, as
vendees, entered into separate agreements of sale on installments over two parcels of land, known
as Lots Nos. 5 and 6, Block 31, of the Highway Hills Subdivision, situated at Mandaluyong, Rizal. On
July 19, 1962, the said vendees transferred their rights and interests over the aforesaid lots in favor
of one Emma Chavez. Upon completion of payment of the purchase price, the plaintiff executed the
corresponding deeds of sale in favor of Emma Chavez. Both the agreements (of sale on installment)
and the deeds of sale contained the stipulations or restrictions that:
1. The parcel of land subject of this deed of sale shall be used the Buyer exclusively
for residential purposes, and she shall not be entitled to take or remove soil, stones
or gravel from it or any other lots belonging to the Seller.
2. All buildings and other improvements (except the fence) which may be constructed
at any time in said lot must be, (a) of strong materials and properly painted, (b)
provided with modern sanitary installations connected either to the public sewer or to
an approved septic tank, and (c) shall not be at a distance of less than two (2) meters
from its boundary lines. 2
The above restrictions were later annotated in TCT Nos. 101509 and 101511 of the Register of
Deeds of Rizal, covering the said lots and issued in the name of Emma Chavez. 3
Eventually, defendant-appellee acquired Lots Nos. 5 and 6, with TCT Nos. 101613 and 106092
issued in its name, respectively and the building restrictions were also annotated
therein. 4 Defendant-appellee bought Lot No. 5 directly from Emma Chavez, "free from all liens and
encumbrances as stated in Annex 'D', 5 while Lot No. 6 was acquired from Republic Flour Mills through a
"Deed of Exchange," Annex "E". 6 TCT No. 101719 in the name of Republic Flour Mills likewise contained
the same restrictions, although defendant-appellee claims that Republic Flour Mills purchased the said
Lot No. 6 "in good faith. free from all liens and encumbrances," as stated in the Deed of Sale, Annex
"F" 7 between it and Emma Chavez.
Plaintiff-appellant claims that the restrictions annotated on TCT Nos. 101509, 101511, 101719,
101613, and 106092 were imposed as part of its general building scheme designed for the
beautification and development of the Highway Hills Subdivision which forms part of the big landed
estate of plaintiff-appellant where commercial and industrial sites are also designated or
established. 8
Defendant-appellee, upon the other hand, maintains that the area along the western part of Epifanio
de los Santos Avenue (EDSA) from Shaw Boulevard to Pasig River, has been declared a
commercial and industrial zone, per Resolution No. 27, dated February 4, 1960 of the Municipal

Council of Mandaluyong, Rizal. 9 It alleges that plaintiff-appellant 'completely sold and transferred to
third persons all lots in said subdivision facing Epifanio de los Santos Avenue" 10 and the subject lots
thereunder were acquired by it "only on July 23, 1962 or more than two (2) years after the area ... had
been declared a commercial and industrial zone ... 11
On or about May 5, 1963, defendant-appellee began laying the foundation and commenced the
construction of a building on Lots Nos. 5 and 6, to be devoted to banking purposes, but which
defendant-appellee claims could also be devoted to, and used exclusively for, residential purposes.
The following day, plaintiff-appellant demanded in writing that defendant-appellee stop the
construction of the commerical building on the said lots. The latter refused to comply with the
demand, contending that the building was being constructed in accordance with the zoning
regulations, defendant-appellee having filed building and planning permit applications with the
Municipality of Mandaluyong, and it had accordingly obtained building and planning permits to
proceed with the construction.12
On the basis of the foregoing facts, Civil Case No. 7706, supra, was submitted in the lower court for
decision. The complaint sought, among other things, the issuance of "a writ of preliminary
injunction ... restraining and enjoining defendant, its agents, assigns, and those acting on its or their
behalf from continuing or completing the construction of a commercial bank building in the
premises ... involved, with the view to commanding the defendant to observe and comply with the
building restrictions annotated in the defendant's transfer certificate of title."
In deciding the said case, the trial court considered, as the fundamental issue, whether or not the
resolution of the Municipal Council of Mandaluyong declaring Lots Nos. 5 and 6, among others, as
part of the commercial and industrial zone of the municipality, prevailed over the building restrictions
imposed by plaintiff-appellant on the lots in question. 13 The records do not show that a writ of
preliminary injunction was issued.
The trial court upheld the defendant-appellee and dismissed the complaint, holding that the subject
restrictions were subordinate to Municipal Resolution No. 27, supra. It predicated its conclusion on
the exercise of police power of the said municipality, and stressed that private interest should "bow
down to general interest and welfare. " In short, it upheld the classification by the Municipal Council
of the area along Epifanio de los Santos Avenue as a commercial and industrial zone, and held that
the same rendered "ineffective and unenforceable" the restrictions in question as against defendantappellee. 14 The trial court decision further emphasized that it "assumes said resolution to be valid,
considering that there is no issue raised by either of the parties as to whether the same is null and void. 15
On March 2, 1965, plaintiff-appellant filed a motion for reconsideration of the above decision, 16 which
motion was opposed by defendant-appellee on March 17, 1965. 17 It averred, among others, in the motion
for reconsideration that defendant- appellee "was duty bound to comply with the conditions of the contract
of sale in its favor, which conditions were duly annotated in the Transfer Certificates of Title issued in her
(Emma Chavez) favor." It also invited the trial court's attention to its claim that the Municipal Council had
(no) power to nullify the contractual obligations assumed by the defendant corporation." 18
The trial court denied the motion for reconsideration in its order of March 26, 1965.

19

On April 2, 1965 plaintiff-appellant filed its notice of appeal from the decision dismissing the
complaint and from the order of March 26, 1965 denying the motion for reconsideration, its record on
appeal, and a cash appeal bond." 20 On April 14, the appeal was given due course 21 and the records of
the case were elevated directly to this Court, since only questions of law are raised. 22
Plaintiff-appellant alleges in its brief that the trial court erred
I. When it sustained the view that Resolution No. 27, series of 1960 of the Municipal
Council of Mandaluyong, Rizal declaring Lots Nos. 5 and 6, among others, as part of
the commercial and industrial zone, is valid because it did so in the exercise of its
police power; and
II. When it failed to consider whether or not the Municipal Council had the power to
nullify the contractual obligations assumed by defendant-appellee and when it did not
make a finding that the building was erected along the property line, when it should
have been erected two meters away from said property line. 23
The defendant-appellee submitted its counter-assignment of errors. In this connection, We already
had occasion to hold in Relativo v. Castro 24 that "(I)t is not incumbent on the appellee, who occupies a
purely defensive position, and is seeking no affirmative relief, to make assignments of error, "
The only issues to be resolved, therefore, are: (1) whether Resolution No. 27 s-1960 is a valid
exercise of police power; and (2) whether the said Resolution can nullify or supersede the
contractual obligations assumed by defendant-appellee.
1. The contention that the trial court erred in sustaining the validity of Resolution No. 27 as an
exercise of police power is without merit. In the first place, the validity of the said resolution was
never questioned before it. The rule is that the question of law or of fact which may be included in
the appellant's assignment of errors must be those which have been raised in the court below, and
are within the issues framed by the parties. 25 The object of requiring the parties to present all questions
and issues to the lower court before they can be presented to the appellate court is to enable the lower
court to pass thereon, so that the appellate court upon appeal may determine whether or not such ruling
was erroneous. The requirement is in furtherance of justice in that the other party may not be taken by
surprise.26 The rule against the practice of blowing "hot and cold" by assuming one position in the trial
court and another on appeal will, in the words of Elliot, prevent deception. 27 For it is well-settled that
issues or defenses not raised 28 or properly litigated 29 or pleaded 30 in the Court below cannot be raised or
entertained on appeal.
In this particular case, the validity of the resolution was admitted at least impliedly, in the stipulation
of facts below. when plaintiff-appellant did not dispute the same. The only controversy then as stated
by the trial court was whether or not the resolution of the Municipal Council of Mandaluyong ... which
declared lots Nos. 4 and 5 among others, as a part of the commercial and industrial zone of the
municipality, prevails over the restrictions constituting as encumbrances on the lots in
question. 31 Having admitted the validity of the subject resolution below, even if impliedly, plaintiffappellant cannot now change its position on appeal.

But, assuming arguendo that it is not yet too late in the day for plaintiff-appellant to raise the issue of
the invalidity of the municipal resolution in question, We are of the opinion that its posture is
unsustainable. Section 3 of R.A. No. 2264, otherwise known as the Local Autonomy
Act," 32 empowers a Municipal Council "to adopt zoning and subdivision ordinances or regulations"; 33 for
the municipality. Clearly, the law does not restrict the exercise of the power through an ordinance.
Therefore, granting that Resolution No. 27 is not an ordinance, it certainly is a regulatory measure within
the intendment or ambit of the word "regulation" under the provision. As a matter of fact the same section
declares that the power exists "(A)ny provision of law to the contrary notwithstanding ... "
An examination of Section 12 of the same law 34 which prescribes the rules for its interpretation likewise
reveals that the implied power of a municipality should be "liberally construed in its favor" and that "(A)ny
fair and reasonable doubt as to the existence of the power should be interpreted in favor of the local
government and it shall be presumed to exist." The same section further mandates that the general
welfare clause be liberally interpreted in case of doubt, so as to give more power to local governments in
promoting the economic conditions, social welfare and material progress of the people in the community.
The only exceptions under Section 12 are existing vested rights arising out of a contract between "a
province, city or municipality on one hand and a third party on the other," in which case the original terms
and provisions of the contract should govern. The exceptions, clearly, do not apply in the case at bar.
2. With regard to the contention that said resolution cannot nullify the contractual obligations
assumed by the defendant-appellee referring to the restrictions incorporated in the deeds of sale
and later in the corresponding Transfer Certificates of Title issued to defendant-appellee it should
be stressed, that while non-impairment of contracts is constitutionally guaranteed, the rule is not
absolute, since it has to be reconciled with the legitimate exercise of police power, i.e., "the power to
prescribe regulations to promote the health, morals, peace, education, good order or safety and
general welfare of the people. 35 Invariably described as "the most essential, insistent, and illimitable of
powers" 36 and "in a sense, the greatest and most powerful attribute of government, 37 the exercise of the
power may be judicially inquired into and corrected only if it is capricious, 'whimsical, unjust or
unreasonable, there having been a denial of due process or a violation of any other applicable
constitutional guarantee. 38 As this Court held through Justice Jose P. Bengzon in Philippine Long
Distance Company vs. City of Davao, et al. 39 police power "is elastic and must be responsive to various
social conditions; it is not, confined within narrow circumscriptions of precedents resting on past
conditions; it must follow the legal progress of a democratic way of life." We were even more emphatic
inVda. de Genuino vs. The Court of Agrarian Relations, et al., 40 when We declared: "We do not see why
public welfare when clashing with the individual right to property should not be made to prevail through
the state's exercise of its police power.
Resolution No. 27, s-1960 declaring the western part of highway 54, now E. de los Santos Avenue
(EDSA, for short) from Shaw Boulevard to the Pasig River as an industrial and commercial zone,
was obviously passed by the Municipal Council of Mandaluyong, Rizal in the exercise of police
power to safeguard or promote the health, safety, peace, good order and general welfare of the
people in the locality, Judicial notice may be taken of the conditions prevailing in the area, especially
where lots Nos. 5 and 6 are located. The lots themselves not only front the highway; industrial and
commercial complexes have flourished about the place. EDSA, a main traffic artery which runs
through several cities and municipalities in the Metro Manila area, supports an endless stream of
traffic and the resulting activity, noise and pollution are hardly conducive to the health, safety or
welfare of the residents in its route. Having been expressly granted the power to adopt zoning and

subdivision ordinances or regulations, the municipality of Mandaluyong, through its Municipal

'council, was reasonably, if not perfectly, justified under the circumstances, in passing the subject
resolution.
The scope of police power keeps expanding as civilization advances, stressed this Court, speaking
thru Justice Laurel in the leading case of Calalang v. Williams et al., 41 ThusAs was said in the case of Dobbins v. Los Angeles (195 US 223, 238 49 L. ed.
169), 'the right to exercise the police power is a continuing one, and a business
lawful today may in the future, because of changed situation, the growth of
population or other causes, become a menace to the public health and welfare, and
be required to yield to the public good.' And in People v. Pomar (46 Phil. 440), it was
observed that 'advancing civilization is bringing within the scope of police power of
the state today things which were not thought of as being with in such power
yesterday. The development of civilization), the rapidly increasing population, the
growth of public opinion, with an increasing desire on the part of the masses and of
the government to look after and care for the interests of the individuals of the state,
have brought within the police power many questions for regulation which formerly
were not so considered. 42 (Emphasis, supplied.)
Thus, the state, in order to promote the general welfare, may interfere with personal liberty, with
property, and with business and occupations. Persons may be subjected to all kinds of restraints and
burdens, in order to secure the general comfort health and prosperity of the state 43 and to this
fundamental aim of our Government, the rights of the individual are subordinated. 44
The need for reconciling the non-impairment clause of the Constitution and the valid exercise of
police power may also be gleaned from Helvering v. Davis 45 wherein Mr. Justice Cardozo, speaking for
the Court, resolved the conflict "between one welfare and another, between particular and general, thus

Nor is the concept of the general welfare static. Needs that were narrow or parochial
a century ago may be interwoven in our day with the well-being of the nation What is
critical or urgent changes with the times. 46
The motives behind the passage of the questioned resolution being reasonable, and it being a "
legitimate response to a felt public need," 47 not whimsical or oppressive, the non-impairment of
contracts clause of the Constitution will not bar the municipality's proper exercise of the power. Now Chief
Justice Fernando puts it aptly when he declared: "Police power legislation then is not likely to succumb to
the challenge that thereby contractual rights are rendered nugatory." 48
Furthermore, We restated in Philippine American Life Ins. Co. v. Auditor General 49 that laws and
reservation of essential attributes of sovereign power are read into contracts agreed upon by the parties.
Thus
Not only are existing laws read into contracts in order to fix obligations as between
the parties, butthe reservation of essential attributes of sovereign power is also read
into contracts as a postulate of the legal order. The policy of protecting contracts

against impairments presupposes the maintenance of a government by virtue of

which contractual relations are worthwhile a government which retains adequate
authority to secure the peace and good order of society.
Again, We held in Liberation Steamship Co., Inc. v. Court of Industrial Relations, 50 through Justice
J.B.L. Reyes, that ... the law forms part of, and is read into, every contract, unless clearly excluded
therefrom in those cases where such exclusion is allowed." The decision in Maritime Company of the
Philippines v. Reparations Commission, 51 written for the Court by Justice Fernando, now Chief Justice,
restates the rule.
One last observation. Appellant has placed unqualified reliance on American jurisprudence and
authorities 52 to bolster its theory that the municipal resolution in question cannot nullify or supersede the
agreement of the parties embodied in the sales contract, as that, it claims, would impair the obligation of
contracts in violation of the Constitution. Such reliance is misplaced.
In the first place, the views set forth in American decisions and authorities are not per se controlling
in the Philippines, the laws of which must necessarily be construed in accordance with the intention
of its own lawmakers and such intent may be deduced from the language of each law and the
context of other local legislation related thereto. 53 and Burgess, et al v. Magarian, et al., 55 two Of the
cases cited by plaintiff-appellant, lend support to the conclusion reached by the trial court, i.e. that the
municipal resolution supersedes/supervenes over the contractual undertaking between the parties. Dolan
v. Brown, states that "Equity will not, as a rule, enforce a restriction upon the use of property by
injunction where the property has so changed in character and environment as to make it unfit or
unprofitable for use should the restriction be enforced, but will, in such a case, leave the complainant to
whatever remedy he may have at law. 56 (Emphasis supplied.) Hence, the remedy of injunction in Dolan
vs. Brown was denied on the specific holding that "A grantor may lawfully insert in his deed conditions or
restrictions which are not against public policy and do not materially impair the beneficial enjoyment of the
estate. 57 Applying the principle just stated to the present controversy, We can say that since it is now
unprofitable, nay a hazard to the health and comfort, to use Lots Nos. 5 and 6 for strictly residential
purposes, defendants- appellees should be permitted, on the strength of the resolution promulgated
under the police power of the municipality, to use the same for commercial purposes. In Burgess v.
Magarian et al. it was, held that "restrictive covenants running with the land are binding on all subsequent
purchasers ... " However, Section 23 of the zoning ordinance involved therein contained
a proviso expressly declaring that the ordinance was not intended "to interfere with or abrogate or annul
any easements, covenants or other agreement between parties." 58 In the case at bar, no such proviso is
found in the subject resolution.
It is, therefore, clear that even if the subject building restrictions were assumed by the defendantappellee as vendee of Lots Nos. 5 and 6, in the corresponding deeds of sale, and later, in Transfer
Certificates of Title Nos. 101613 and 106092, the contractual obligations so assumed cannot prevail
over Resolution No. 27, of the Municipality of Mandaluyong, which has validly exercised its police
power through the said resolution. Accordingly, the building restrictions, which declare Lots Nos. 5
and 6 as residential, cannot be enforced.
IN VIEW OF THE FOREGOING, the decision appealed from, dismissing the complaint, is hereby
AFFIRMED. "without pronouncement as to costs.

SO ORDERED.
G.R. No. 141010

February 7, 2007

UNITED BF HOMEOWNERS ASSOCIATIONS, INC., ROMEO T. VILLAMEJOR, RAUL S.

LANUEVO, ROBERTO ARNALDO, FLORENTINO CONCEPCION, BF NORTHWEST
HOMEOWNERS ASSOCIATION, INC., KK HOMEOWNERS ASSOCIATION, INC., and BF
(CRAB) HOMEOWNERS ASSOCIATION, INC., Petitioners,
vs.
THE (MUNICIPAL) CITY MAYOR, THE (MUNICIPAL) CITY PLANNING AND DEVELOPMENT
COORDINATING OFFICER OR ZONING ADMINISTRATOR, THE (MUNICIPAL) CITY ENGINEER
AND/OR BUILDING OFFICIAL, THE CHIEF OF THE PERMITS AND LICENSES DIVISION, THE
SANGGUNIANG (BAYAN) PANGLUNGSOD, and BARANGAY BF HOMES, ALL OF
PARAAQUE CITY, METRO MANILA, Respondents,
EL GRANDE AGUIRRE COMMERCE AND TRADE ASSOCIATION (EL ACTO), RespondentIntervenor.
DECISION
CARPIO, J.:
The Case
This is a petition for review1 of the 28 June 1999 Decision2 and the 16 November 1999 Resolution3 of
the Court of Appeals in CA-G.R. SP No. 46624. The Court of Appeals held that Municipal Ordinance
No. 97-08 is a valid exercise of police power by the Municipality of Paraaque. 4
The Facts
BF Homes Paraaque Subdivision (BF Homes Paraaque), with a land area straddling the cities of
Paraaque, Las Pias, and Muntinlupa, is the largest subdivision in the country.
On 11 November 1997, the Municipal Council of Paraaque enacted Municipal Ordinance No. 97085 entitled, "An Ordinance Prescribing the Comprehensive Land Use Plan & Zoning of the
Municipality of Paraaque Pursuant to the Local Government Code of 1991 and Other Pertinent
Laws." Sections 11.5 and 11.6 of Municipal Ordinance No. 97-08, reclassifying El Grande and
Aguirre Avenues in BF Homes Paraaque from residential to commercial areas, read:
11.5 C-1 LOW INTENSITY COMMERCIAL ZONES
xxxx
BARANGAY BF HOMES
Lot deep both side[s] along Aguirre Avenue from Governor A. Santos Street eastward to
Gng. Elsie Gatches Street

Lot deep both side[s] along El Grande Avenue from Lopez Avenue gate southward to corner
Aguirre Avenue
xxxx
11.6 C-2 MAJOR COMMERCIAL ZONES
xxxx
BARANGAY BF HOMES
Lot deep both side[s] along Aguirre Avenue from Dallas to El Grande Avenue
Lot deep both side[s] along Aguirre Avenue from El Grande Avenue to Gov. A. Santos Street
BF Paraaque Commercial Plaza
Area bounded on the
North - Pres. Quezon Street
South - A. Aguirre Avenue
East - Presidents Avenue
West - MMP, Creek along BF Homeowners Association clubhouse
Lot deep east side along Presidents Avenue from Mac Donald southward to M. Rufino Street
Area bounded on the
North - A. Aguirre Avenue
South - A. Soriano Sr. & M. Rufino Street
East - Presidents Avenue
West - Gng. Elsie Ga[t]ches Street
x x x x6
On 27 January 1998, the United BF Homeowners Associations, Inc. (UBFHAI), 7 several
homeowners associations, and residents of BF Homes Paraaque (collectively petitioners) filed with
the Court of Appeals a petition for prohibition with an application for temporary restraining order and
preliminary injunction. Petitioners questioned the constitutionality of Sections 11.5, 11.6, 15, 8 17,9 and
19.610 of Municipal Ordinance No. 97-08.

Petitioners alleged that the reclassification of certain portions of BF Homes Paraaque from
residential to commercial zone is unconstitutional because it amounts to impairment of the contracts
between the developer of BF Homes Paraaque and the lot buyers. Petitioners cited the annotation
on the lot buyers titles which provides that "the property shall be used for residential purposes only
and for no other purpose."
On the other hand, public respondents alleged that the passage of Municipal Ordinance No. 97-08 is
a valid exercise of police power by the Municipal Council of Paraaque and that such ordinance can
nullify or supersede the contractual obligations entered into by the petitioners and the developer.
Meanwhile, El Grande Aguirre Commerce and Trade Organization (EL ACTO), a non-stock, nonprofit corporation, intervened as respondent. EL ACTO claimed that its members are lot owners,
residents, and operators of commercial establishments along El Grande and Aguirre Avenues in BF
Homes Paraaque, who will be affected if Municipal Ordinance No. 97-08 is declared
unconstitutional. EL ACTO asserted that Municipal Ordinance No. 97-08 is a valid exercise of police
power and that petitioners are guilty of estoppel since petitioners endorsed the opening of many of
these commercial establishments in BF Homes Paraaque. EL ACTO further alleged that the instant
petition should have been initially filed with the Regional Trial Court in accordance with the principle
of hierarchy of courts.
1awphi1.net

On 28 June 1999, the Court of Appeals dismissed the petition. Petitioners moved for
reconsideration, which the Court of Appeals denied.
Hence, this petition.
The Ruling of the Court of Appeals
Citing the General Welfare Clause11 of Republic Act No. 7160 (RA 7160), the Court of Appeals held
that the enactment of Municipal Ordinance No. 97-08 which, among others, reclassified El Grande
and Aguirre Avenues in BF Homes Paraaque as commercial zones, was a valid exercise of police
power by the Municipality of Paraaque.
The Court of Appeals took judicial notice of the fact that El Grande and Aguirre Avenues are main
streets of BF Homes Paraaque which have long been commercialized, thus:
The declaration of El Grande and Aguirre Avenues as commercial zones through Municipal
Ordinance No. 97-08 is an exercise of police power.
Obviously, because of the rapid and tremendous increase in population, the needs of the
homeowners in the BF Paraaque Subdivision grew. The commercial zones in the area proved
inadequate to service the needs of its residents. There was therefore a need to open more
commercial districts. In fact, records show that several homeowners along El Grande and Aguirre
Avenues converted their residences into business establishments. El Actos members are among
them.

Aside from the increasing number of commercial establishments therein, judicial notice may be
taken of the fact that El Grande and Aguirre Avenues are main thoroughfares of BF Homes
Paraaque which have long been commercialized. The local government therefore responded to
these changes in the community by enacting Ordinance No. 97-08 x x x. 12
The Issues
Petitioners raise the following issues:
1. Whether R.A. 7160, the Local Government Code of 1991 has repealed PD 957, the
Subdivision and Condominium Buyers Protective Decree;
2. Whether the power of local government units to enact comprehensive zoning ordinances
has legal limitations;
3. Whether Municipal Ordinance No. 97-08 is a legitimate exercise of police power;
4. Whether Municipal Ordinance No. 97-08 is constitutional considering that it impairs a
contractual obligation annotated in homeowners titles and violates the doctrine of separation
of powers;
5. Whether Municipal Ordinance No. 97-08 is enforceable pending review by the MMDA, the
Metro Manila Mayors Council and the HLURB.13
The resolution of these issues turns on the validity of Municipal Ordinance No. 97-08.
The Ruling of the Court
The petition is without merit.
Power to Enact Zoning Ordinances
The Municipal Council of Paraaque enacted Municipal Ordinance No. 97-08 pursuant to the
provisions of RA 7160 and Executive Order No. 72.14
Under Section 447 of RA 7160, the Sangguniang Bayan or the Municipal Council, as the legislative
body of the municipality, has the power to enact ordinances for the general welfare of the
municipality and its inhabitants.
Among the functions of the Sangguniang Bayan enumerated under Section 447 of RA 7160 are:
(2) Generate and maximize the use of resources and revenues for the development plans, program
objectives and priorities of the municipality as provided for under Section 18 of this Code with
particular attention to agro-industrial development and countryside growth and progress, and relative
thereto, shall:

xxxx
(vii) Adopt a comprehensive land use plan for the municipality: Provided, That the
formulation, adoption, or modification of said plan shall be in coordination with the approved
provincial comprehensive land use plan;
(viii) Reclassify land within the jurisdiction of the municipality subject to the pertinent
provision of this Code;
(ix) Enact integrated zoning ordinances in consonance with the approved
comprehensive land use plan, subject to existing laws, rules and regulations; establish
fire limits or zones, particularly in populous centers; and regulate the construction, repair or
modification of buildings within said fire limits or zones in accordance with the provisions of
the Fire Code; (Emphasis supplied)
On the other hand, Executive Order No. 72 provides:
SECTION 1. Plan formulation or updating. (a) Cities and municipalities shall continue to
formulate or update their respective comprehensive land use plans, in conformity with the
land use planning and zoning standards and guidelines prescribed by the HLURB pursuant to
national policies.
As a policy recommending body of the LGU, the city or municipal development council (CDC/MDC)
shall initiate the formulation or updating of its land use plan, in consultation with the concerned
sectors in the community. For this purpose, the CDC/MDC may seek the assistance of any local
official or field officer of NGAs operation in the LGU.
The city or municipal planning and development coordinator (CPDC/MPDC) and/or the city or
municipal agriculturist, if there is any, shall provide the technical support services and such other
assistance as may be required by the CDC/MDC to effectively carry out this function.
The comprehensive land use plan prepared by the CDC/MDC shall be submitted to the
sangguniang panglungsod or sangguniang bayan, as the case may be, for enactment into a
zoning ordinance. Such ordinance shall be enacted and approved in accordance with Articles 107
and 108 of the Implementing Rules and Regulations (IRR) of the LGC.
(b) The comprehensive land use plans of component cities and municipalities shall be formulated,
adopted, or modified in accordance with the approved provincial comprehensive land use plans.
(c) Cities and municipalities of metropolitan Manila shall continue to formulate or update their
respective comprehensive land use plans, in accordance with the land use planning and zoning
standards and guidelines prescribed by the HLURB pursuant to EO 392, S. of 1990, and other
pertinent national policies.
x x x x (Emphasis supplied)

Under Section 3(m), Rule 131 of the Rules of Court, there is a presumption that official duty has
been regularly performed. Thus, in the absence of evidence to the contrary, there is a presumption
that public officers performed their official duties regularly and legally and in compliance with
applicable laws, in good faith, and in the exercise of sound judgment.15
We find no sufficient evidence disputing the regularity of the enactment of Municipal Ordinance No.
97-08. Before the Municipal Council of Paraaque passed Municipal Ordinance No. 97-08, 16 it has
been the subject of barangay consultations and committee hearings in accordance with Executive
Order No. 72.
Reclassification of El Grande and Aguirre Avenues
Contrary to petitioners allegations, we find Municipal Ordinance No. 97-08 reasonable and not
discriminating or oppressive with respect to BF Homes Paraaque. As held by the Court of Appeals,
the increasing number of homeowners in BF Homes Paraaque necessitated the addition of
commercial areas in the subdivision to service the needs of the homeowners. In fact, several
homeowners along El Grande and Aguirre Avenues already converted their residences into business
establishments. Furthermore, as found by the Court of Appeals, El Grande and Aguirre Avenues are
main thoroughfares in BF Homes Paraaque which have long been commercialized.
Even petitioner UBFHAI, the recognized umbrella organization of all homeowners associations in BF
Homes Paraaque, acknowledged the need for additional commercial area. Records reveal that as
early as 30 July 1989, UBFHAI recommended for approval an "Amended Integrated Zoning Policies
and Guidelines for BF Homes Paraaque."17 UBFHAI proposed another commercial zone in BF
Homes Paraaque to accommodate the growing needs of the residents, thus:
Subject to the approval of BF Homes, Inc., the Local Zoning Official/Planning Officer of Paraaque
and the Metro Manila Commission and in recognition of the fact that the subdivision has
tremendously grown in size and population since 1983 when the above-mentioned guidelines
of the MMC [Ordinance 81-01] were promulgated, such that one commercial zone for the
entire subdivision is now inadequate vis-a-vis the needs of the residents, the UBFHAI is
proposing another commercial zone in Phase III of the Subdivision, in the vicinity of the
Parish of the Presentation of the Child Jesus as follows:
One lot deep along Aguirre Avenue from Gov. Santos St., to the end of Aguirre Avenue and
two lots deep along El Grande from where it intersects Aguirre Avenue.
Pending approval of the aforesaid proposal, commercial buildings constructed and existing
in the aforesaid area will be given temporary-use permits good for five (5) years from
December 31, 1986 or until December 31, 1991, after which, the same must revert to residential
status, unless, in the meantime the proposal is approved, provided all such buildings must comply
with the set-back and parking provision of the Metro Manila Commission Ordinance 81-01; I.M. 0983.
xxxx

The term for temporary use permits of the designated commercial area shall be considered
extended for 8 years from December 31, 1991 to December 31, 1998; without prejudice to the
official conversion of the area under existing MMA/LGC guidelines to commercial.18 (Emphasis
supplied)
Thus, UBFHAIs proposed new commercial area, encompassing El Grande and Aguirre Avenues, is
substantially the same area, which Municipal Ordinance No. 97-08 later reclassified as a commercial
zone.
Furthermore, in the subsequent years, UBFHAI and its member homeowners associations endorsed
the issuance of municipal and barangay permits for commercial establishments along El Grande and
Aguirre Avenues. Contrary to petitioners allegations, the commercial establishments endorsed by
UBFHAI were not mere convenience stores, which Metro Manila Commission Ordinance No. 810119 and Municipal Ordinance No. 97-08 allow in residential areas. Among the commercial
establishments which UBFHAI endorsed were a trading business,20 electronics repair shop,21 minigrocery store,22 beauty salon,23 school,24 dress shop,25 and consultancy or management services
business.26
Clearly, the reclassification of El Grande and Aguirre Avenues in BF Homes Paraaque as
commercial area was reasonable and justified under the circumstances.
Non-Impairment of Contract
Petitioners invoke Presidential Decree No. 957 (PD 957), 27 otherwise known as the Subdivision and
Condominium Buyers Protective Decree. Petitioners maintain that PD 957 is intended primarily to
protect the buyers and to ensure that subdivision developers keep their promises and
representations. Petitioners allege that one of the promises of the developer of BF Homes
Paraaque is that the property shall be used for residential purposes only. Petitioners assert that the
reclassification of certain portions of BF Homes Paraaque from residential to commercial zone is
unconstitutional because it impairs the contracts between the developer of BF Homes Paraaque
and the lot buyers.
The Court has upheld in several cases the superiority of police power over the non-impairment
clause.28 The constitutional guaranty of non-impairment of contracts is limited by the exercise of the
police power of the State, in the interest of public health, safety, morals and general welfare. 29
In Ortigas & Co., Limited Partnership v. Feati Bank and Trust Co.,30 the Court held that contractual
restrictions on the use of property could not prevail over the reasonable exercise of police power
through zoning regulations. The Court held:
With regard to the contention that said resolution cannot nullify the contractual obligations assumed
by the defendant-appelleereferring to the restrictions incorporated in the deeds of sale and later in
the corresponding Transfer Certificates of Title issued to defendant-appelleeit should be stressed,
that while non-impairment of contracts is constitutionally guaranteed, the rule is not absolute,
since it has to be reconciled with the legitimate exercise of police power, i.e., "the power to
prescribe regulations to promote the health, morals, peace, education, good order or safety

and general welfare of the people." Invariably described as "the most essential, insistent, and
illimitable of powers" and "in a sense, the greatest and most powerful attribute of
government," the exercise of the power may be judicially inquired into and corrected only if it
is capricious, whimsical, unjust or unreasonable, there having been a denial of due process
or a violation of any other applicable constitutional guarantee. As this Court held through
Justice Jose P. Bengzon in Philippine Long Distance Company v. City of Davao, et al., police power
"is elastic and must be responsive to various social conditions; it is not confined within narrow
circumscriptions of precedents resting on past conditions; it must follow the legal progress of a
democratic way of life." We were even more emphatic inVda. De Genuino v. The Court of Agrarian
Relations, et al., when We declared: "We do not see why the public welfare when clashing with
the individual right to property should not be made to prevail through the states exercise of
its police power."
Resolution No. 27. s-1960 declaring the western part of Highway 54, now E. de los Santos Avenue
(EDSA, for short) from Shaw Boulevard to the Pasig River as an industrial and commercial zone,
was obviously passed by the Municipal Council of Mandaluyong, Rizal in the exercise of police
power to safeguard or promote the health, safety, peace, good order and general welfare of the
people in the locality. Judicial notice may be taken of the conditions prevailing in the area, especially
where Lots Nos. 5 and 6 are located. The lots themselves not only front the highway; industrial and
commercial complexes have flourished about the place. EDSA, a main traffic artery which runs
through several cities and municipalities in the Metro Manila area, supports an endless stream of
traffic and the resulting activity, noise and pollution are hardly conducive to the health, safety or
welfare of the residents in its route. Having been expressly granted the power to adopt zoning and
subdivision ordinances or regulations, the municipality of Mandaluyong, through its Municipal
Council, was reasonably, if not perfectly, justified under the circumstances, in passing the subject
resolution.31 (Emphasis supplied)
Likewise, in Sangalang v. Intermediate Appellate Court,32 the Court upheld Metro Manila Commission
Ordinance No. 81-01, which reclassified Jupiter Street in Makati into a high-density commercial
zone, as a legitimate exercise of police power. The Court held that the power of the Metro Manila
Commission and the Makati Municipal Council to enact zoning ordinances for the general welfare
prevails over the deed restrictions on the lot owners in Bel-Air Village which restricted the use of the
lots for residential purposes only. The Court held:
It is not that we are saying that restrictive easements, especially the easements herein in question,
are invalid or ineffective. As far as the Bel-Air subdivision itself is concerned, certainly, they are valid
and enforceable. But they are, like all contracts, subject to the overriding demands, needs, and
interests of the greater number as the State may determine in the legitimate exercise of police
power. Our jurisdiction guarantees sanctity of contract and is said to be the "law between the
contracting parties," but while it is so, it cannot contravene "law, morals, good customs,
public order, or public policy." Above all, it cannot be raised as a deterrent to police power,
designed precisely to promote health, safety, peace, and enhance the common good, at the
expense of contractual rights, whenever necessary. x x x33 (Emphasis supplied)

Similarly, in this case, Municipal Ordinance No. 97-08 is a legitimate exercise of police power and
the reclassification of El Grande and Aguirre Avenues in BF Homes Paraaque is not arbitrary or
unreasonable.
WHEREFORE, we AFFIRM the Decision dated 28 June 1999 and the Resolution dated 16
November 1999 of the Court of Appeals in CA-G.R. SP No. 46624.
SO ORDERED.
G.R. No. 40243 March 11, 1992
CELESTINO TATEL, petitioner,
vs.
MUNICIPALITY OF VIRAC, SALVADOR A. SURTIDA, in his capacity as Mayor of Virac,
Catanduanes; GAVINO V. GUERRERO, in his capacity as Vice-Mayor of Virac, Catanduanes;
JOSE T. BUEBOS, in his capacity as Councilor of Virac, Catanduanes; ANGELES TABLIZO, in
his capacity as Councilor of Virac, Catanduanes; ELPIDIO T. ZAFE, in his capacity as
Councilor of Virac, Catanduanes; MARIANO ALBERTO, in his capacity as Councilor of Virac,
Catanduanes; JULIA A. GARCIA, in her capacity as Councilor of Virac, Catanduanes; and
PEDRO A. GUERRERO, in his capacity as Councilor of Virac, Catanduanes,respondents.

NOCON, J.:
This is a Petition for Prohibition with Preliminary Injunction with the Court of First Instance of
Catanduanes filed by appellant, Celestino Tatel, a businessman engaged in the import and export of
abaca and other products against the Municipal Council of Virac, Catanduanes and its municipal
officials enjoining them from enforcing Resolution No 29 1 of the Council, declaring the warehouse of
petitioner in barrio Sta. Elena of the said municipality a public nuisance within the purview of Article 694 of
the Civil Code of the Philippines and directing the petitioner to remove and transfer said warehouse to a
more suitable place within two (2) months from receipt of the said resolution.
It appears from the records that on the basis of complaints received from the residents of barrio Sta.
Elena on March 18, 1966 against the disturbance caused by the operation of the abaca bailing
machine inside the warehouse of petitioner which affected the peace and tranquility of the
neighborhood due to the smoke, obnoxious odor and dust emitted by the machine, a committee was
appointed by the municipal council of Virac to investigate the matter. The committee noted the
crowded nature of the neighborhood with narrow roads and the surrounding residential houses, so
much so that an accidental fire within the warehouse of the petitioner occasioned by the continuance
of the activity inside the warehouse and the storing of inflammable materials created a danger to the
lives and properties of the people within the neighborhood.
Resultantly, Resolution No. 29 was passed by the Municipal Council of Virac on April 22, 1966
declaring the warehouse owned and operated by petitioner a public nuisance within the purview of
Article 694 of the New Civil Code. 2

His motion for reconsideration having been denied by the Municipal Council of Virac, petitioner
instituted the present petition for prohibition with preliminary injunction.
Respondent municipal officials contend that petitioner's warehouse was constructed in violation of
Ordinance No. 13, series of 1952, prohibiting the construction of warehouses near a block of houses
either in the poblacion or barrios without maintaining the necessary distance of 200 meters from said
block of houses to avoid loss of lives and properties by accidental fire.
On the other hand, petitioner contends that said ordinance is unconstitutional, contrary to the due
process and equal protection clause of the Constitution and null and void for not having been passed
in accordance with law.
The issue then boils down on whether petitioner's warehouse is a nuisance within the meaning of
Article 694 of the Civil Code and whether Ordinance No. 13, S. 1952 of the Municipality of Virac is
unconstitutional and void.
In a decision dated September 18, 1969, the court a quo ruled as follows:
1. The warehouse in question was legally constructed under a valid permit issued by
the municipality of Virac in accordance with existing regulations and may not be
destroyed or removed from its present location;
2. Ordinance No. 13, series of 1952, is a legitimate and valid exercise of police
power by the Municipal Council of Virac is not (sic) unconstitutional and void as
claimed by the petitioner;
3. The storage by the petitioner of abaca and copra in the warehouse is not only in
violation of the provisions of the ordinance but poses a grave danger to the safety of
the lives and properties of the residents of the neighborhood due to accidental fire
and constitutes a public nuisance under the provisions of Article 694 of the New Civil
code of the Philippines and may be abated;
4. Accordingly, the petitioner is hereby directed to remove from the said warehouse
all abaca and copra and other inflammable articles stored therein which are
prohibited under the provisions of Ordinance No. 13, within a period of two (2)
months from the time this decision becomes final and that henceforth, the petitioner
is enjoined from storing such prohibited articles in the warehouse. With costs against
petitioner.
Seeking appellate review, petitioner raised as errors of the court a quo:
1. In holding that Ordinance No. 13, series of 1952, of the Municipality of Virac,
Catanduanes, is a legitimate and valid exercise of police power of the Municipal
Council, and therefore, constitutional;

2. In giving the ordinance a meaning other than and different from what it provided by
declaring that petitioner violated the same by using the warehouse for storage of
abaca and copra when what is prohibited and penalized by the ordinance is the
construction of warehouses.
3. In refusing to take judicial notice of the fact that in the municipality, there are
numerous establishments similarly situated as appellants' warehouses but which are
not prosecuted.
We find no merit in the Petition.
Ordinance No. 13, series of 1952, was passed by the Municipal Council of Virac in the exercise of its
police power. It is a settled principle of law that municipal corporations are agencies of the State for
the promotion and maintenance of local self-government and as such are endowed with the police
powers in order to effectively accomplish and carry out the declared objects of their creation. 3 Its
authority emanates from the general welfare clause under the Administrative Code, which reads:
The municipal council shall enact such ordinances and make such regulations, not
repugnant to law, as may be necessary to carry into effect and discharge the powers
and duties conferred upon it by law and such as shall seem necessary and proper to
provide for the health and safety, promote the prosperity, improve the morals, peace,
good order, comfort and convenience of the municipality and the inhabitants thereof,
and for the protection of property therein. 4
For an ordinance to be valid, it must not only be within the corporate powers of the municipality to
enact but must also be passed according to the procedure prescribed by law, and must be in
consonance with certain well established and basic principles of a substantive nature. These
principles require that a municipal ordinance (1) must not contravene the Constitution or any statute
(2) must not be unfair or oppressive (3) must not be partial or discriminatory (4) must not prohibit but
may regulate trade (5) must be general and consistent with public policy, and (6) must not be
unreasonable. 5 Ordinance No. 13, Series of 1952, meets these criteria.
As to the petitioner's second assignment of error, the trial court did not give the ordinance in question
a meaning other than what it says. Ordinance No. 13 passed by the Municipal Council of Virac on
December 29, 1952, 6reads:
AN ORDINANCE STRICTLY PROHIBITING THE CONSTRUCTION OF
WAREHOUSE IN ANY FORM NEAR A BLOCK OF HOUSES EITHER IN
POBLACION OR BARRIO WITH NECESSARY DISTANCE TO AVOID GREAT
LOSSES OF PROPERTY AND LIVES BY FIRE ACCIDENT.
Section 1 provides:
It is strictly prohibited to construct warehouses in any form to any person, persons,
entity, corporation or merchants, wherein to keep or store copra, hemp, gasoline,
petroleum, alcohol, crude oil, oil of turpentine and the like products or materials if not

within the distance of 200 meters from a block of houses either in the poblacion or
barrios to avoid great losses of properties inclusive lives by fire accident.
Section 2 provides: 7
Owners of warehouses in any form, are hereby given advice to remove their said
warehouses this ordinance by the Municipal Council, provided however, that if those
warehouses now in existence should no longer be utilized as such warehouse for the
above-described products in Section 1 of this ordinance after a lapse of the time
given for the removal of the said warehouses now in existence, same warehouses
shall be exempted from the spirit of the provision of section 1 of this
ordinance,provided further, that these warehouses now in existence, shall in the
future be converted into non-inflammable products and materials warehouses.
In spite of its fractured syntax, basically, what is regulated by the ordinance is the construction of
warehouses wherein inflammable materials are stored where such warehouses are located at a
distance of 200 meters from a block of houses and not the construction per se of a warehouse. The
purpose is to avoid the loss of life and property in case of fire which is one of the primordial
obligation of the government.
This was also the observation of the trial court:
A casual glance of the ordinance at once reveals a manifest disregard of the
elemental rules of syntax. Experience, however, will show that this is not uncommon
in law making bodies in small towns where local authorities and in particular the
persons charged with the drafting and preparation of municipal resolutions and
ordinances lack sufficient education and training and are not well grounded even on
the basic and fundamental elements of the English language commonly used
throughout the country in such matters. Nevertheless, if one scrutinizes the terms of
the ordinance, it is clear that what is prohibited is the construction of warehouses by
any person, entity or corporation wherein copra, hemp, gasoline and other
inflammable products mentioned in Section 1 may be stored unless at a distance of
not less than 200 meters from a block of houses either in the poblacion or barrios in
order to avoid loss of property and life due to fire. Under Section 2, existing
warehouses for the storage of the prohibited articles were given one year after the
approval of the ordinance within which to remove them but were allowed to remain in
operation if they had ceased to store such prohibited articles.
The ambiguity therefore is more apparent than real and springs from simple error in
grammatical construction but otherwise, the meaning and intent is clear that what is
prohibited is the construction or maintenance of warehouses for the storage of
inflammable articles at a distance within 200 meters from a block of houses either in
the poblacion or in the barrios. And the purpose of the ordinance is to avoid loss of
life and property in case of accidental fire which is one of the primordial and basic
obligation of any government. 8

Clearly, the lower court did NOT add meaning other than or differrent from what was provided in the
ordinance in question. It merely stated the purpose of the ordinance and what it intends to prohibit to
accomplish its purpose.
As to the third assignment of error, that warehouses similarly situated as that of the petitioner were
not prosecuted, suffice it to say that the mere fact that the municipal authorities of Virac have not
proceeded against other warehouses in the municipality allegedly violating Ordinance No. 13 is no
reason to claim that the ordinance is discriminatory. A distinction must be made between the law
itself and the manner in which said law is implemented by the agencies in charge with its
administration and enforcement. There is no valid reason for the petitioner to complain, in the
absence of proof that the other bodegas mentioned by him are operating in violation of the ordinance
and that the complaints have been lodged against the bodegas concerned without the municipal
authorities doing anything about it.
The objections interposed by the petitioner to the validity of the ordinance have not been
substantiated. Its purpose is well within the objectives of sound government. No undue restraint is
placed upon the petitioner or for anybody to engage in trade but merely a prohibition from storing
inflammable products in the warehouse because of the danger of fire to the lives and properties of
the people residing in the vicinity. As far as public policy is concerned, there can be no better policy
than what has been conceived by the municipal government.
As to petitioner's contention of want of jurisdiction by the lower court we find no merit in the same.
The case is a simple civil suit for abatement of a nuisance, the original jurisdiction of which falls
under the then Court of First Instance.
WHEREFORE, for lack of merit, the petition is hereby DISMISSED. Costs against petitioner.
SO ORDERED.
G.R. No. 156052

March 7, 2007

SOCIAL JUSTICE SOCIETY (SJS), VLADIMIR ALARIQUE T. CABIGAO, and BONIFACIO S.

TUMBOKON,Petitioners,
vs.
HON. JOSE L. ATIENZA, JR., in his capacity as Mayor of the City of Manila, Respondent.
DECISION
CORONA, J.:
In this original petition for mandamus,1 petitioners Social Justice Society (SJS), Vladimir Alarique T.
Cabigao and Bonifacio S. Tumbokon seek to compel respondent Hon. Jose L. Atienza, Jr., mayor of
the City of Manila, to enforce Ordinance No. 8027.
The antecedents are as follows.

On November 20, 2001, the Sangguniang Panlungsod of Manila enacted Ordinance No.
8027.2 Respondent mayor approved the ordinance on November 28, 2001. 3 It became effective on
December 28, 2001, after its publication.4
Ordinance No. 8027 was enacted pursuant to the police power delegated to local government units,
a principle described as the power inherent in a government to enact laws, within constitutional
limits, to promote the order, safety, health, morals and general welfare of the society.5 This is evident
from Sections 1 and 3 thereof which state:
SECTION 1. For the purpose of promoting sound urban planning and ensuring health, public safety,
and general welfare of the residents of Pandacan and Sta. Ana as well as its adjoining areas, the
land use of [those] portions of land bounded by the Pasig River in the north, PNR Railroad Track in
the east, Beata St. in the south, Palumpong St. in the southwest, and Estero de Pancacan in the
west[,] PNR Railroad in the northwest area, Estero de Pandacan in the [n]ortheast, Pasig River in
the southeast and Dr. M.L. Carreon in the southwest. The area of Punta, Sta. Ana bounded by the
Pasig River, Marcelino Obrero St., Mayo 28 St., and F. Manalo Street, are hereby reclassified from
Industrial II to Commercial I.
xxx xxx xxx
SEC. 3. Owners or operators of industries and other businesses, the operation of which are no
longer permitted under Section 1 hereof, are hereby given a period of six (6) months from the date of
effectivity of this Ordinance within which to cease and desist from the operation of businesses which
are hereby in consequence, disallowed.
Ordinance No. 8027 reclassified the area described therein from industrial to commercial and
directed the owners and operators of businesses disallowed under Section 1 to cease and desist
from operating their businesses within six months from the date of effectivity of the ordinance.
Among the businesses situated in the area are the so-called "Pandacan Terminals" of the oil
companies Caltex (Philippines), Inc., Petron Corporation and Pilipinas Shell Petroleum Corporation.
However, on June 26, 2002, the City of Manila and the Department of Energy (DOE) entered into a
memorandum of understanding (MOU)6 with the oil companies in which they agreed that "the scaling
down of the Pandacan Terminals [was] the most viable and practicable option." Under the MOU, the
oil companies agreed to perform the following:
Section 1. - Consistent with the objectives stated above, the OIL COMPANIES shall, upon signing of
this MOU, undertake a program to scale down the Pandacan Terminals which shall include, among
others, the immediate removal/decommissioning process of TWENTY EIGHT (28) tanks starting with
the LPG spheres and the commencing of works for the creation of safety buffer and green zones
surrounding the Pandacan Terminals. xxx
Section 2. Consistent with the scale-down program mentioned above, the OIL COMPANIES shall
establish joint operations and management, including the operation of common, integrated and/or
shared facilities, consistent with international and domestic technical, safety, environmental and
economic considerations and standards. Consequently, the joint operations of the OIL COMPANIES

in the Pandacan Terminals shall be limited to the common and integrated areas/facilities. A separate
agreement covering the commercial and operational terms and conditions of the joint operations,
shall be entered into by the OIL COMPANIES.
Section 3. - The development and maintenance of the safety and green buffer zones mentioned
therein, which shall be taken from the properties of the OIL COMPANIES and not from the
surrounding communities, shall be the sole responsibility of the OIL COMPANIES.
The City of Manila and the DOE, on the other hand, committed to do the following:
Section 1. - The City Mayor shall endorse to the City Council this MOU for its appropriate action with
the view of implementing the spirit and intent thereof.
Section 2. - The City Mayor and the DOE shall, consistent with the spirit and intent of this MOU,
enable the OIL COMPANIES to continuously operate in compliance with legal requirements, within
the limited area resulting from the joint operations and the scale down program.
Section 3. - The DOE and the City Mayor shall monitor the OIL COMPANIES compliance with the
provisions of this MOU.
Section 4. - The CITY OF MANILA and the national government shall protect the safety buffer and
green zones and shall exert all efforts at preventing future occupation or encroachment into these
areas by illegal settlers and other unauthorized parties.
The Sangguniang Panlungsod ratified the MOU in Resolution No. 97.7 In the same resolution,
the Sangguniandeclared that the MOU was effective only for a period of six months starting July 25,
2002.8 Thereafter, on January 30, 2003, the Sanggunian adopted Resolution No. 139 extending the
validity of Resolution No. 97 to April 30, 2003 and authorizing Mayor Atienza to issue special
business permits to the oil companies. Resolution No. 13, s. 2003 also called for a reassessment of
the ordinance.10
Meanwhile, petitioners filed this original action for mandamus on December 4, 2002 praying that
Mayor Atienza be compelled to enforce Ordinance No. 8027 and order the immediate removal of the
terminals of the oil companies.11
The issues raised by petitioners are as follows:
1. whether respondent has the mandatory legal duty to enforce Ordinance No. 8027 and
order the removal of the Pandacan Terminals, and
2. whether the June 26, 2002 MOU and the resolutions ratifying it can amend or repeal
Ordinance No. 8027.12
Petitioners contend that respondent has the mandatory legal duty, under Section 455 (b) (2) of the
Local Government Code (RA 7160),13 to enforce Ordinance No. 8027 and order the removal of the
Pandacan Terminals of the oil companies. Instead, he has allowed them to stay.

Respondents defense is that Ordinance No. 8027 has been superseded by the MOU and the
resolutions.14However, he also confusingly argues that the ordinance and MOU are not inconsistent
with each other and that the latter has not amended the former. He insists that the ordinance
remains valid and in full force and effect and that the MOU did not in any way prevent him from
enforcing and implementing it. He maintains that the MOU should be considered as a mere guideline
for its full implementation.15
Under Rule 65, Section 316 of the Rules of Court, a petition for mandamus may be filed when any
tribunal, corporation, board, officer or person unlawfully neglects the performance of an act which
the law specifically enjoins as a duty resulting from an office, trust or station. Mandamus is an
extraordinary writ that is employed to compel the performance, when refused, of a ministerial duty
that is already imposed on the respondent and there is no other plain, speedy and adequate remedy
in the ordinary course of law. The petitioner should have a well-defined, clear and certain legal right
to the performance of the act and it must be the clear and imperative duty of respondent to do the
act required to be done.17
Mandamus will not issue to enforce a right, or to compel compliance with a duty, which is
questionable or over which a substantial doubt exists. The principal function of the writ
of mandamus is to command and to expedite, not to inquire and to adjudicate; thus, it is neither the
office nor the aim of the writ to secure a legal right but to implement that which is already
established. Unless the right to the relief sought is unclouded, mandamus will not issue.18
To support the assertion that petitioners have a clear legal right to the enforcement of the ordinance,
petitioner SJS states that it is a political party registered with the Commission on Elections and has
its offices in Manila. It claims to have many members who are residents of Manila. The other
petitioners, Cabigao and Tumbokon, are allegedly residents of Manila.
We need not belabor this point. We have ruled in previous cases that when a mandamus proceeding
concerns a public right and its object is to compel a public duty, the people who are interested in the
execution of the laws are regarded as the real parties in interest and they need not show any
specific interest.19 Besides, as residents of Manila, petitioners have a direct interest in the
enforcement of the citys ordinances. Respondent never questioned the right of petitioners to
institute this proceeding.
On the other hand, the Local Government Code imposes upon respondent the duty, as city mayor, to
"enforce all laws and ordinances relative to the governance of the city.">20 One of these is Ordinance
No. 8027. As the chief executive of the city, he has the duty to enforce Ordinance No. 8027 as long
as it has not been repealed by theSanggunian or annulled by the courts.21 He has no other choice. It is his ministerial
duty to do so. In Dimaporo v. Mitra, Jr.,22 we stated the reason for this:

These officers cannot refuse to perform their duty on the ground of an alleged invalidity of the statute imposing the duty. The reason for this is obvious. It might seriously hinder
the transaction of public business if these officers were to be permitted in all cases to question the constitutionality of statutes and ordinances imposing duties upon them and
which have not judicially been declared unconstitutional. Officers of the government from the highest to the lowest are creatures of the law and are bound to obey it. 23

The question now is whether the MOU entered into by respondent with the oil companies and the subsequent resolutions passed by the Sanggunian have made the
respondents duty to enforce Ordinance No. 8027 doubtful, unclear or uncertain. This is also connected to the second issue raised by petitioners, that is, whether the MOU and
Resolution Nos. 97, s. 2002 and 13, s. 2003 of the Sanggunian can amend or repeal Ordinance No. 8027.

We need not resolve this issue. Assuming that the terms of the MOU were inconsistent with Ordinance No. 8027, the resolutions which ratified it and made it binding on the
City of Manila expressly gave it full force and effectonly until April 30, 2003. Thus, at present, there is nothing that legally hinders respondent from enforcing Ordinance No.
8027.24

Ordinance No. 8027 was enacted right after the Philippines, along with the rest of the world, witnessed the horror of the September 11, 2001 attack on the Twin Towers of the
World Trade Center in New York City. The objective of the ordinance is to protect the residents of Manila from the catastrophic devastation that will surely occur in case of a
terrorist attack25 on the Pandacan Terminals. No reason exists why such a protective measure should be delayed.

WHEREFORE, the petition is hereby GRANTED. Respondent Hon. Jose L. Atienza, Jr., as mayor of the City of Manila, is directed to immediately enforce Ordinance No. 8027.

SO ORDERED.

[G. R. No. 131512. January 20, 2000]

LAND TRANSPORTATION OFFICE [LTO], represented by Assistant Secretary
Manuel F. Bruan, LTO Regional Office, Region X represented by its Regional
Director, Timoteo A. Garcia; and LTO Butuan represented by Rosita G. Sadiaga,
its Registrar, petitioners, vs. CITY OF BUTUAN, represented in this case by
Democrito D. Plaza II, City Mayor, respondents.
DECISION
VITUG, J.:
The 1987 Constitution enunciates the policy that the territorial and political
subdivisions shall enjoy local autonomy. In obedience to that, mandate of the
fundamental law, Republic Act ("R.A.") No.7160, otherwise known as the Local
Government Code, expresses that the territorial and political subdivisions of the State
shall enjoy genuine and meaningful local autonomy in order to enable them to attain
their fullest development as self-reliant communities and make them more effective
partners in the attainment of national goals, and that it is a basic aim of the State to
provide for a more responsive and accountable local government structure instituted
through a system of decentralization whereby local government units shall be given
more powers, authority, responsibilities and resources.
[1]

[2]

While the Constitution seeks to strengthen local units and ensure their viability,
clearly, however, it has never been the intention of that organic law to create

an imperium in imperio and install an intrasovereign political subdivision independent

of a single sovereign state.
The Court is asked in this instance to resolve the issue of whether under the present
set up the power of the Land Registration Office ("LTO") to register, tricycles in
particular, as well as to issue licenses for the driving thereof, has likewise
devolved to local government units.
The Regional Trial Court (Branch 2) of Butuan City held: that the authority to
register tricycles, the grant of the corresponding franchise, the issuance of tricycle
drivers' license, and the collection of fees therefor had all been vested in the Local
Government Units ("LGUs"). Accordingly, it decreed the issuance of a permanent writ
of injunction against LTO, prohibiting and enjoining LTO, as well as its employees
and other persons acting in its behalf, from (a) registering tricycles and (b) issuing
licenses to drivers of tricycles. The Court of Appeals, on appeal to it, sustained the
trial court.
[3]

The adverse rulings of both the court a quo and the appellate court prompted the LTO
to file the instant petition for review on certiorari to annul and set aside the decision,
dated 17 November 1997, of the Court of Appeals affirming the permanent
injunctive writ order of the Regional Trial Court (Branch 2) of Butuan City.
[4]

Respondent City of Butuan asserts that one of the salient provisions introduced by the
Local Government Code is in the area of local taxation which allows LGUs to collect
registration fees or charges along with, in its view, the corresponding issuance of all
kinds of licenses or permits for the driving of tricycles.
The 1987 Constitution provides:
"Each local government unit shall have the power to create its own
sources of revenues and to levy taxes, fees, and charges subject to such
guidelines and limitations as the Congress may provide, consistent with
the basic policy of local autonomy. Such taxes, fees, and charges shall
accrue exclusively to the local governments."
[5]

Section 129 and Section 133 of the Local Government Code read:

"SEC. 129. Power to Create Sources of Revenue. - Each local

government unit shall exercise its power to create its own sources of
revenue and to levy taxes, fees, and charges subject to the provisions
herein, consistent with the basic policy of local autonomy. Such taxes,
fees, and charges shall accrue exclusively to the local government units."
"SEC. 133. Common Limitations on the Taxing Powers of Local
Government Units. - Unless otherwise provided herein, the exercise of
the taxing powers of provinces, cities, municipalities, and barangays
shall not extend to the levy of the following:
"xxx.......xxx.......xxx.
"(I) Taxes, fees or charges for the registration of motor vehicles and for
the issuance of all kinds of licenses or permits for the driving thereof,
except tricycles."
Relying on the foregoing provisions of the law, the Sangguniang Panglungsod ("SP")
of Butuan, on 16 August 1992, passed SP Ordinance No.916-92 entitled "An
Ordinance Regulating the Operation of Tricycles-for-Hire, providing mechanism for
the issuance of Franchise, Registration and Permit, and Imposing Penalties for
Violations thereof and for other Purposes." The ordinance provided for, among other
things, the payment of franchise fees for the grant of the franchise of tricycles-forhire, fees for the registration of the vehicle, and fees for the issuance of a permit for
the driving thereof.
Petitioner LTO explains that one of the functions of the national government that,
indeed, has been transferred to local government units is the franchising authority
over tricycles-for-hire of the Land Transportation Franchising and Regulatory Board
("LTFRB") but not, it asseverates, the authority of LTO to register all motor vehicles
and to issue to qualified persons of licenses to drive such vehicles.
In order to settle the variant positions of the parties, the City of Butuan, represented
by its City Mayor Democrito D. Plaza, filed on 28 June 1994 with the trial court a
petition for "prohibition, mandamus,injunction with a prayer for preliminary
restraining order ex-parte" seeking the declaration of the validity of SP Ordinance

No.962-93 and the prohibition of the registration of tricycles-for-hire and the issuance
of licenses for the driving thereof by the LTO.
LTO opposed the prayer in the petition.
On 20 March 1995, the trial court rendered a resolution; the dispositive portion read:
"In view of the foregoing, let a permanent injunctive writ be issued
against the respondent Land Transportation Office and the other
respondents, prohibiting and enjoining them, their employees, officers,
attorney's or other persons acting in their behalf from forcing or
compelling Tricycles to be registered with, and drivers to secure their
licenses from respondent LTO or secure franchise from LTFRB and from
collecting fees thereon. It should be understood that the registration,
franchise of tricycles and driver's license/permit granted or issued by the
City of Butuan are valid only within the territorial limits of Butuan City.
"No pronouncement as to costs."

[6]

Petitioners timely moved for a reconsideration of the above resolution but it was to no
avail. Petitioners then appealed to the Court of Appeals. In its now assailed decision,
the appellate court, on 17 November 1997, sustained the trial court. It ruled:
"WHEREFORE, the petition is hereby DISMISSED and the questioned
permanent injunctive writ issued by the court a quo dated March 20,
1995 AFFIRMED."
[7]

Coming up to this Court, petitioners raise this sole assignment of error, to

wit:
"The Court of Appeals [has] erred in sustaining the validity of the writ of
injunction issued by the trial court which enjoined LTO from (1)
registering tricycles-for-hire and (2) issuing licenses for the driving
thereof since the Local Government Code devolved only the franchising
authority of the LTFRB. Functions of the LTO were not devolved to the
LGU's."
[8]

The petition is impressed with merit.

The Department of Transportation and Communications ("DOTC"), through the LTO

and the LTFRB, has since been tasked with implementing laws pertaining to land
transportation. The LTO is a line agency under the DOTC whose powers and
functions, pursuant to Article III, Section 4 (d) (1), of R.A. No.4136, otherwise
known as Land Transportation and Traffic Code, as amended, deal primarily with the
registration of all motor vehicles and the licensing of drivers thereof. The LTFRB,
upon the other hand, is the governing body tasked by E.O. No. 202, dated 19 June
1987, to regulate the operation of public utility or "for hire" vehicles and to grant
franchises or certificates of public convenience ("CPC"). Finely put, registration
and licensing functions are vested in the LTO
while franchising andregulatory responsibilities had been vested in the LTFRB.
[9]

[10]

[11]

Under the Local Government Code, certain functions of the DOTC were transferred to
the LGUs, thusly:
"SEC. 458. Powers, Duties, Functions and Compensation. -
"xxx.......xxx.......xxx
"(3) Subject to the provisions of Book II of this Code, enact ordinances
granting franchises and authorizing the issuance of permits or licenses,
upon such conditions and for such purposes intended to promote the
general welfare of the inhabitants of the city and pursuant to this
legislative authority shall:
"xxx.......xxx.......xxx.
"(VI) Subject to the guidelines prescribed by the Department of
Transportation and Communications, regulate the operation of
tricycles and grant franchises for the operation thereof within the
territorial jurisdiction of the city." (Emphasis supplied)
LGUs indubitably now have the power to regulate the operation of tricycles-for-hire
and to grant franchises for the operation thereof. "To regulate" means to fix, establish,
or control; to adjust by rule, method, or established mode; to direct by rule or
restriction; or to subject to governing principles or laws. A franchise is defined to be
a special privilege to do certain things conferred by government on an individual or
corporation, and which does not belong to citizens generally of common right. On
[12]

[13]

the other hand, "to register" means to record formally and exactly, to enroll, or to enter
precisely in a list or the like, and a "driver's license" is the certificate or license
issued by the government which authorizes a person to operate a motor vehicle. The
devolution of the functions of the DOTC, performed by the LTFRB, to the LGUs, as
so aptly observed by the Solicitor General, is aimed at curbing the alarming increase
of accidents in national highways involving tricycles. It has been the perception that
local governments are in good position to achieve the end desired by the law-making
body because of their proximity to the situation that can enable them to address that
serious concern better than the national government.
[14]

[15]

It may not be amiss to state, nevertheless, that under Article 458 (a)[3-VI] of the Local
Government Code, the power of LGUs to regulate the operation of tricycles and to
grant franchises for the operation thereof is still subject to the guidelines prescribed by
the DOTC. In compliance therewith, the Department of Transportation and
Communications ("DOTC") issued "Guidelines to Implement the
Devolutionof LTFRBs Franchising Authority over Tricycles-For-Hire to Local
Government units pursuant to the Local Government Code." Pertinent provisions of
the guidelines state:
"In lieu of the Land Transportation Franchising and Regulatory Board
(LTFRB) in the DOTC, the Sangguniang Bayan/Sangguniang
Panglungsod (SB/SP) shall perform the following:
"(a) Issue, amend, revise, renew, suspend, or cancel MTOP and prescribe
the appropriate terms and conditions therefor;
"xxx.......xxx.......xxx.
"Operating Conditions:
"1. For safety reasons, no tricycles should operate on national highways
utilized by 4 wheel vehicles greater than 4 tons and where normal speed
exceed 40 KPH. However, the SB/SP may provide exceptions if there is
no alternative routs.
"2. Zones must be within the boundaries of the municipality/city.
However, existing zones within more than one municipality/city shall be
maintained, provided that operators serving said zone shall secure

MTOP's from each of the municipalities/cities having jurisdiction over

the areas covered by the zone.
"3. A common color for tricycles-for-hire operating in the same zone
may be imposed. Each unit shall be assigned and bear an identification
number, aside from its LTO license plate number.
"4. An operator wishing to stop service completely, or to suspend service
for more than one month, should report in writing such termination or
suspension to the SB/SP which originally granted the MTOP prior
thereto. Transfer to another zone may be permitted upon application.
"5. The MTOP shall be valid for three (3) years, renewable for the same
period. Transfer to another zone, change of ownership of unit or transfer
of MTOP shall be construed as an amendment to an MTOP and shall
require appropriate approval of the SB/SP.
"6. Operators shall employ only drivers duly licensed by LTO for
tricycles-for-hire.
"7. No tricycle-for-hire shall be allowed to carry more passengers and/or
goods than it is designed for.
"8. A tricycle-for-hire shall be allowed to operate like a taxi service, i.e.,
service is rendered upon demand and without a fixed route within a
zone."
[16]

Such as can be gleaned from the explicit language of the statute, as well as the
corresponding guidelines issued by DOTC, the newly delegated powers pertain to
the franchising and regulatory powers theretofore exercised by the LTFRB and
not to the functions of the LTO relative to the registration of motor vehicles and
issuance of licenses for the driving thereof. Clearly unaffected by the Local
Government Code are the powers of LTO under R.A. No.4136 requiring the
registration of all kinds of motor vehicles "used or operated on or upon any public
highway" in the country. Thus "SEC. 5. All motor vehicles and other vehicles must be registered. - (a)
No motor vehicle shall be used or operated on or upon any public

highway of the Philippines unless the same is properly registered for the
current year in accordance with the provisions of this Act (Article 1,
Chapter II, R.A. No. 4136).
The Commissioner of Land Transportation and his deputies are empowered at anytime
to examine and inspect such motor vehicles to determine whether said vehicles are
registered, or are unsightly, unsafe, improperly marked or equipped, or otherwise unfit
to be operated on because of possible excessive damage to highways, bridges and
other infrastructures. The LTO is additionally charged with being the central
repository and custodian of all records of all motor vehicles.
[17]

[18]

The Court shares the apprehension of the Solicitor General if the above functions
were to likewise devolve to local government units; he states:
"If the tricycle registration function of respondent LTO is decentralized,
the incidence of theft of tricycles will most certainly go up, and stolen
tricycles registered in one local government could be registered in
another with ease. The determination of ownership thereof will also
become very difficult.
"Fake driver's licenses will likewise proliferate. This likely scenario
unfolds where a tricycle driver, not qualified by petitioner LTO's testing,
could secure a license from one municipality, and when the same is
confiscated, could just go another municipality to secure another license.
"Devolution will entail the hiring of additional personnel charged with
inspecting tricycles for road worthiness, testing drivers, and
documentation. Revenues raised from tricycle registration may not be
enough to meet salaries of additional personnel and incidental costs for
tools and equipment."
[19]

The reliance made by respondents on the broad taxing power of local government
units, specifically under Section 133 of the Local Government Code, is tangential.
Police power and taxation, along with eminent domain, are inherent powers of
sovereignty which the State might share with local government units by delegation
given under a constitutional or a statutory fiat. All these inherent powers are for a
public purpose and legislative in nature but the similarities just about end there. The

basic aim of police power is public good and welfare. Taxation, in its case, focuses on
the power of government to raise revenue in order to support its existence and carry
out its legitimate objectives. Although correlative to each other in many respects, the
grant of one does not necessarily carry with it the grant of the other. The two powers
are, by tradition and jurisprudence, separate and distinct powers, varying in their
respective concepts, character, scopes and limitations. To construe the tax provisions
of Section 133(1) indistinctively would result in the repeal to that extent of LTO's
regulatory power which evidently has not been intended. If it were otherwise, the law
could have just said so in Section 447 and 458 of Book III of the Local Government
Code in the same manner that the specific devolution of LTFRB's power on
franchising of tricycles has been provided. Repeal by implication is not favored. The
power over tricycles granted under Section 458(a)(3)(VI) of the Local Government
Code to LGUs is the power to regulate their operation and to grant franchises for the
operation thereof. The exclusionary clause contained in the tax provisions of Section
133(1) of the Local Government Code must not be held to have had the effect of
withdrawing the express power of LTO to cause the registration of all motor vehicles
and the issuance of licenses for the driving thereof. These functions of the LTO are
essentially regulatory in nature, exercised pursuant to the police power of the State,
whose basic objectives are to achieve road safety by insuring the road worthiness of
these motor vehicles and the competence of drivers prescribed by R. A. 4136. Not
insignificant is the rule that a statute must not be construed in isolation but must be
taken in harmony with the extant body of laws.
[20]

[21]

The Court cannot end this decision without expressing its own serious concern
over the seeming laxity in the grant of franchises for the operation of tricyclesfor-hire and in allowing the indiscriminate use by such vehicles on public
highways and principal thoroughfares. Senator Aquilino C. Pimentel, Jr., the
principal author, and sponsor of the bill that eventually has become to be known as the
Local Government Code, has aptly remarked:
"Tricycles are a popular means of transportation, specially in the
countryside. They are, unfortunately, being allowed to drive along
highways and principal thoroughfares where they pose hazards to
their passengers arising from potential collisions with buses, cars
and jeepneys.

"The operation of tricycles within a municipality may be regulated

by the Sangguniang Bayan. In this connection,
the Sangguniang concerned would do well to consider prohibiting
the operation of tricycles along or across highways invite collisions
with faster and bigger vehicles and impede the flow of traffic."
[22]

The need for ensuring public safety and convenience to commuters and pedestrians
alike is paramount. It might be well, indeed, for public officials concerned to pay heed
to a number of provisions in our laws that can warrant in appropriate cases an
incurrence of criminal and civil liabilities. Thus The Revised Penal Code "Art. 208. Prosecution of offenses; negligence and tolerance. - The
penalty of prision correccional in its minimum period and suspension
shall be imposed upon any public officer, or officer of the law, who, in
dereliction of the duties of his office, shall maliciously refrain from
instituting prosecution for the punishment of violators of the law, or shall
tolerate the commission of offenses."
The Civil Code "Art. 27. Any person suffering material or moral loss because a public
servant or employee refuses or neglects, without just cause, to perform
his official duty may file an action for damages and other relief against
the latter, without prejudice to any disciplinary administrative action that
may be taken."
"Art. 34. When a member of a city or municipal police force refuses or
fails to render aid or protection to any person in case of danger to life or
property, such peace officer shall be primarily liable for damages, and
the city or municipality shall be subsidiarily responsible therefor. The
civil action herein recognized shall be independent of any criminal,
proceedings, and a preponderance of evidence shall suffice to support
such action."
"Art. 2189. Provinces, cities and municipalities shall be liable for
damages for the death of, or injuries suffered by, any person by reason of

the defective condition of roads, streets, bridges, public buildings, and

other public works under their control or supervision."
The Local Government Code "Sec. 24. Liability for Damages. - Local government units and their
officials are not exempt from liability for death or injury to persons or
damage to property."
WHEREFORE, the assailed decision which enjoins the Land Transportation Office
from requiring the due registration of tricycles and a license for the driving thereof is
REVERSED and SET ASIDE.
No pronouncements on costs.
Let copies of this decision be likewise furnished the Department of Interior and Local
Governments, the Department of Public Works and Highways and the Department of
Transportation and Communication.
SO ORDERED.
G.R. No. L-38429 June 30, 1988
CARLOS BALACUIT, LAMBERTO TAN and SERGIO YU CARCEL, petitioners-appellants,
vs.
COURT OF FIRST INSTANCE OF AGUSAN DEL NORTE AND BUTUAN CITY, Branch 11, and
the CITY OF BUTUAN, respondents-appellees.
Romeo B. Sanchez, Eduardo Deza Mercado and Wilfred D. Asis for petitioners.
The City Legal Officer for respondents-appeliees.

GANCAYCO, J.:
At issue in the petition for review before Us is the validity and constitutionality of Ordinance No. 640
passed by the Municipal Board of the City of Butuan on April 21, 1969, the title and text of which are
reproduced below:
ORDINANCE--640

ORDINANCE PENALIZING ANY PERSON, GROUP OF PERSONS, ENTITY OR

CORPORATION ENGAGED IN THE BUSINESS OF SELLING ADMISSION
TICKETS TO ANY MOVIE OR OTHER PUBLIC EXHIBITIONS, GAMES,
CONTESTS OR OTHER PERFORMANCES TO REQUIRE CHILDREN BETWEEN
SEVEN (7) AND TWELVE (12) YEARS OF AGE TO PAY FULL PAYMENT FOR
TICKETS INTENDED FOR ADULTS BUT SHOULD CHARGE ONLY ONE-HALF OF
THE SAID TICKET
xxx xxx xxx
Be it ordained by the Municipal Board of the City of Butuan in session assembled,
that:
SECTION 1It shall be unlawful for any person, group of persons, entity, or
corporation engaged in the business of selling admission tickets to any movie or
other public exhibitions, games, contests, or other performances to require children
between seven (7) and twelve (12) years of age to pay full payment for admission
tickets intended for adults but should charge only one-half of the value of the said
tickets.
SECTION 2Any person violating the provisions of this Ordinance shall upon
conviction be punished by a fine of not less than TWO HUNDRED PESOS (P200.00)
but not more than SIX HUNDRED PESOS (P600.00) or an imprisonment of not less
than TWO (2) MONTHS or not more than SIX (6) MONTHS or both such firm and
imprisonment in the discretion of the Court.
If the violator be a firm or corporation the penalty shall be imposed upon the
Manager, Agent or Representative of such firm or corporation.
SECTION 3This ordinance shall take effect upon its approval.
Petitioners are Carlos Balacuit Lamberto Tan, and Sergio Yu Carcel managers of the Maya and
Dalisay Theaters, the Crown Theater, and the Diamond Theater, respectively. Aggrieved by the effect
of Ordinance No. 640, they filed a complaint before the Court of First Instance of Agusan del Norte
and Butuan City docketed as Special Civil Case No. 237 on June 30, 1969 praying, inter alia, that
the subject ordinance be declared unconstitutional and, therefore, void and unenforceable. 1
Upon motion of the petitioners, 2 a temporary restraining order was issued on July 14, 1969 by the court
a quo enjoining the respondent City of Butuan and its officials from enforcing Ordinance No. 640. 3 On
July 29, 1969, respondents filed their answer sustaining the validity of the ordinance. 4
On January 30, 1973, the litigants filed their stipulation of facts. 5 On June 4, 1973, the respondent
court rendered its decision, 6 the dispositive part of which reads:
IN THE LIGHT OF ALL THE FOREGOING, the Court hereby adjudges in favor of the
respondents and against the petitioners, as follows:

1. Declaring Ordinance No. 640 of the City of Butuan constitutional and valid:
Provided, however, that the fine for a single offense shall not exceed TWO
HUNDRED PESOS, as prescribed in the aforequoted Section 15 (nn) of Rep. Act No.
523;
2. Dissolving the restraining order issued by this Court; and;
3. Dismissing the complaint, with costs against the petitioners.
4. SO ORDERED. 7
Petitioners filed their motion for reconsideration 8 of the decision of the court a quo which was denied in
a resolution of the said court dated November 10, 1973. 9
Hence, this petition.
Petitioners attack the validity and constitutionality of Ordinance No. 640 on the grounds that it is ultra
vires and an invalid exercise of police power.
Petitioners contend that Ordinance No. 640 is not within the power of' the Municipal Board to enact
as provided for in Section 15(n) of Republic Act No. 523, the Charter of the City of Butuan, which
states:
Sec. 15. General powers and duties of the Board Except as otherwise provided by
law, and subject to the conditions and limitations thereof, the Municipal Board shall
have the following legislative powers:
xxx xxx xxx
(n) To regulate and fix the amount of the license fees for the following; . . . theaters,
theatrical performances, cinematographs, public exhibitions and all other
performances and places of amusements ...
xxx xxx xxx
Respondent City of Butuan, on the other hand, attempts to justify the enactment of the ordinance by
invoking the general welfare clause embodied in Section 15 (nn) of the cited law, which provides:
(nn) To enact all ordinances it may deem necessary and proper for the sanitation and
safety, the furtherance of the prosperity, and the promotion of the morality, peace,
good order, comfort, convenience, and general welfare of the city and its inhabitants,
and such others as may be necessary to carry into effect and discharge the powers
and duties conferred by this Act, and to fix the penalties for the violation of the
ordinances, which shall not exceed a two hundred peso fine or six months
imprisonment, or both such fine and imprisonment, for a single offense.

We can see from the aforecited Section 15(n) that the power to regulate and fix the amount of
license fees for theaters, theatrical performances, cinematographs, public exhibitions and other
places of amusement has been expressly granted to the City of Butuan under its charter. But the
question which needs to be resolved is this: does this power to regulate include the authority to
interfere in the fixing of prices of admission to these places of exhibition and amusement whether
under its general grant of power or under the general welfare clause as invoked by the City?
This is the first time this Court is confronted with the question of direct interference by the local
government with the operation of theaters, cinematographs and the like to the extent of fixing the
prices of admission to these places. Previous decisions of this Court involved the power to impose
license fees upon businesses of this nature as a corollary to the power of the local government to
regulate them. Ordinances which required moviehouses or theaters to increase the price of their
admission tickets supposedly to cover the license fees have been held to be invalid for these
impositions were considered as not merely license fees but taxes for purposes of revenue and not
regulation which the cities have no power to exact, 10 unless expressly granted by its charter. 11
Applying the ruling in Kwong Sing v. City of Manila, 12 where the word "regulate" was interpreted to
include the power to control, to govern and to restrain, it would seem that under its power to regulate
places of exhibitions and amusement, the Municipal Board of the City of Butuan could make proper police
regulations as to the mode in which the business shall be exercised.
While in a New York case, 13 an ordinance which regulates the business of selling admission tickets to
public exhibitions or performances by virtue of the power of cities under the General City Law "to maintain
order, enforce the laws, protect property and preserve and care for the safety, health, comfort and general
welfare of the inhabitants of the city and visitors thereto; and for any of said purposes, to regulate and
license occupations" was considered not to be within the scope of any duty or power implied in the
charter. It was held therein that the power of regulation of public exhibitions and places of amusement
within the city granted by the charter does not carry with it any authority to interfere with the price of
admission to such places or the resale of tickets or tokens of admission.
In this jurisdiction, it is already settled that the operation of theaters, cinematographs and other
places of public exhibition are subject to regulation by the municipal council in the exercise of
delegated police power by the local government. 14 Thus, in People v. Chan, 15 an ordinance of the City
of Manila prohibiting first run cinematographs from selling tickets beyond their seating capacity was
upheld as constitutional for being a valid exercise of police power. Still in another case, 16 the validity of an
ordinance of the City of Bacolod prohibiting admission of two or more persons in moviehouses and other
amusement places with the use of only one ticket was sustained as a valid regulatory police measure not
only in the interest of preventing fraud in so far as municipal taxes are concerned but also in accordance
with public health, public safety, and the general welfare.
The City of Butuan, apparently realizing that it has no authority to enact the ordinance in question
under its power to regulate embodied in Section 15(n), now invokes the police power as delegated to
it under the general welfare clause to justify the enactment of said ordinance.
To invoke the exercise of police power, not only must it appear that the interest of the public
generally requires an interference with private rights, but the means adopted must be reasonably
necessary for the accomplishment of the purpose and not unduly oppressive upon individuals. 17 The

legislature may not, under the guise of protecting the public interest, arbitrarily interfere with private
business, or impose unusual and unnecessary restrictions upon lawful occupations. In other words, the
determination as to what is a proper exercise of its police power is not final or conclusive, but is subject to
the supervision of the courts. 18

Petitioners maintain that Ordinance No. 640 violates the due process clause of the Constitution for
being oppressive, unfair, unjust, confiscatory, and an undue restraint of trade, and violative of the
right of persons to enter into contracts, considering that the theater owners are bound under a
contract with the film owners for just admission prices for general admission, balcony and lodge.
In Homeowners' Association of the Philippines, Inc. v. Municipal Board of the City of Manila, 19 this
Court held:
The authority of municipal corporations to regulate is essentially police power,
Inasmuch as the same generally entails a curtailment of the liberty, the rights and/or
the property of persons, which are protected and even guaranteed by the
Constitution, the exercise of police power is necessarily subject to a qualification,
limitation or restriction demanded by the regard, the respect and the obedience due
to the prescriptions of the fundamental law, particularly those forming part of the
Constitution of Liberty, otherwise known as the Bill of Rights the police power
measure must be reasonable. In other words, individual rights may be adversely
affected by the exercise of police power to the extent only and only to the extent-that may be fairly required by the legitimate demands of public interest or public
welfare.
What is the reason behind the enactment of Ordinance No. 640?
A reading of the minutes of the regular session of the Municipal Board when the ordinance in
question was passed shows that a certain Councilor Calo, the proponent of the measure, had taken
into account the complaints of parents that for them to pay the full price of admission for their
children is too financially burdensome.
The trial court advances the view that "even if the subject ordinance does not spell out its raison
d'etre in all probability the respondents were impelled by the awareness that children are entitled to
share in the joys of their elders, but that considering that, apart from size, children between the ages
of seven and twelve cannot fully grasp the nuance of movies or other public exhibitions, games,
contests or other performances, the admission prices with respect to them ought to be reduced. 19a
We must bear in mind that there must be public necessity which demands the adoption of proper
measures to secure the ends sought to be attained by the enactment of the ordinance, and the large
discretion is necessarily vested in the legislative authority to determine not only what the interests of
the public require, but what measures are necessary for the protection of such interests. 20 The
methods or means used to protect the public health, morals, safety or welfare, must have some relation to
the end in view, for under the guise of the police power, personal rights and those pertaining to private
property will not be permitted to be arbitralily invaded by the legislative department. 21

We agree with petitioners that the ordinance is not justified by any necessity for the public interest.
The police power legislation must be firmly grounded on public interest and welfare, and a
reasonable relation must exist between purposes and means. 22 The evident purpose of the ordinance
is to help ease the burden of cost on the part of parents who have to shell out the same amount of money
for the admission of their children, as they would for themselves, A reduction in the price of admission
would mean corresponding savings for the parents; however, the petitioners are the ones made to bear
the cost of these savings. The ordinance does not only make the petitioners suffer the loss of earnings
but it likewise penalizes them for failure to comply with it. Furthermore, as petitioners point out, there will
be difficulty in its implementation because as already experienced by petitioners since the effectivity of the
ordinance, children over 12 years of age tried to pass off their age as below 12 years in order to avail of
the benefit of the ordinance. The ordinance does not provide a safeguard against this undesirable
practice and as such, the respondent City of Butuan now suggests that birth certificates be exhibited by
movie house patrons to prove the age of children. This is, however, not at all practicable. We can see that
the ordinance is clearly unreasonable if not unduly oppressive upon the business of petitioners. Moreover,
there is no discernible relation between the ordinance and the promotion of public health, safety, morals
and the general welfare.
Respondent City of Butuan claims that it was impelled to protect the youth from the pernicious
practice of movie operators and other public exhibitions promoters or the like of demanding equal
price for their admission tickets along with the adults. This practice is allegedly repugnant and
unconscionable to the interest of the City in the furtherance of the prosperity, peace, good order,
comfort, convenience and the general well-being of its inhabitants.
There is nothing pernicious in demanding equal price for both children and adults. The petitioners
are merely conducting their legitimate businesses. The object of every business entrepreneur is to
make a profit out of his venture. There is nothing immoral or injurious in charging the same price for
both children and adults. In fact, no person is under compulsion to purchase a ticket. It is a totally
voluntary act on the part of the purchaser if he buys a ticket to such performances.
Respondent City of Butuan claims that Ordinance No. 640 is reasonable and necessary to lessen
the economic burden of parents whose minor children are lured by the attractive nuisance being
maintained by the petitioners. Respondent further alleges that by charging the full price, the children
are being exploited by movie house operators. We fail to see how the children are exploited if they
pay the full price of admission. They are treated with the same quality of entertainment as the adults.
The supposition of the trial court that because of their age children cannot fully grasp the nuances of
such entertainment as adults do fails to convince Us that the reduction in admission ticket price is
justifiable. In fact, by the very claim of respondent that movies and the like are attractive nuisances,
it is difficult to comprehend why the municipal board passed the subject ordinance. How can the
municipal authorities consider the movies an attractive nuisance and yet encourage parents and
children to patronize them by lowering the price of admission for children? Perhaps, there is some
,truth to the argument of petitioners that Ordinance No. 640 is detrimental to the public good and the
general welfare of society for it encourages children of tender age to frequent the movies, rather
than attend to their studies in school or be in their homes.
Moreover, as a logical consequence of the ordinance, movie house and theater operators will be
discouraged from exhibiting wholesome movies for general patronage, much less children's pictures
if only to avoid compliance with the ordinance and still earn profits for themselves. For after all, these

movie house and theater operators cannot be compelled to exhibit any particular kind of film except
those films which may be dictated by public demand and those which are restricted by censorship
laws. So instead of children being able to share in the joys of their elders as envisioned by the trial
court, there will be a dearth of wholesome and educational movies for them to enjoy.
There are a number of cases decided by the Supreme Court and the various state courts of the
United States which upheld the right of the proprietor of a theater to fix the price of an admission
ticket as against the right of the state to interfere in this regard and which We consider applicable to
the case at bar.
A theater ticket has been described to be either a mere license, revocable at the will of the proprietor
of the theater or it may be evidence of a contract whereby, for a valuable consideration, the
purchaser has acquired the right to enter the theater and observe the performance on condition that
he behaves properly. 23 Such ticket, therefore, represents a right, Positive or conditional, as the case may
be, according to the terms of the original contract of sale. This right is clearly a right of property. The ticket
which represents that right is also, necessarily, a species of property. As such, the owner thereof, in the
absence of any condition to the contrary in the contract by which he obtained it, has the clear right to
dispose of it, to sell it to whom he pleases and at such price as he can obtain. 24 So that an act prohibiting
the sale of tickets to theaters or other places of amusement at more than the regular price was held
invalid as conflicting with the state constitution securing the right of property. 25
In Collister vs. Hayman, 26 it was held:
The defendants were conducting a private business, which, even if clothed with a
public interest, was without a franchise to accommodate the public, and they had the
right to control it, the same as the proprietors of any other business, subject to such
obligations as were placed upon them by statute. Unlike a carrier of passengers, for
instance, with a franchise from the state, and hence under obligation to transport
anyone who applies and to continue the business year in and year out, the
proprietors of a theater can open and close their place at will, and no one can make
a lawful complaint. They can charge what they choose for admission to their theater.
They can limit the number admitted. They can refuse to sell tickets and collect the
price of admission at the door. They can preserve order and enforce quiet while the
performance is going on. They can make it a part of the contract and condition of
admission, by giving due notice and printing the condition in the ticket that no one
shall be admitted under 21 years of age, or that men only or women only shall be
admitted, or that a woman cannot enter unless she is accompanied by a male escort,
and the like. The proprietors, in the control of their business, may regulate the terms
of admission in any reasonable way. If those terms are not satisfactory, no one is
obliged to buy a ticket or make the contract. If the terms are satisfactory, and the
contract is made, the minds of the parties meet upon the condition, and the
purchaser impliedly promises to perform it.
In Tyson and Bro. United Theater Ticket Officers, Inc. vs. Banton, 27 the United States Supreme
Court held:

... And certainly a place of entertainment is in no legal sense a public utility; and quite
as certainly, its activities are not such that their enjoyment can be regarded under
any conditions from the point of view of an emergency.
The interest of the public in theaters and other places of entertainment may be more
nearly, and with better reason, assimilated to the like interest in provision stores and
markets and in the rental of houses and apartments for residence purposes; although
in importance it fails below such an interest in the proportion that food and shelter are
of more moment than amusement or instruction. As we have shown there is no
legislative power to fix the prices of provisions or clothing, or the rental charges for
houses and apartments, in the absence of some controlling emergency; and we are
unable to perceive any dissimilarities of such quality or degree as to justify a different
rule in respect of amusements and entertainment ...
We are in consonance with the foregoing observations and conclusions of American courts. In this
jurisdiction, legislation had been passed controlling the prices of goods commodities and drugs
during periods of emergency,28 limiting the net profits of public utility 29 as well as regulating rentals of
residential apartments for a limited period, 30 as a matter of national policy in the interest of public health
and safety, economic security and the general welfare of the people. And these laws cannot be impugned
as unconstitutional for being violative of the due process clause.
However, the same could not be said of theaters, cinematographs and other exhibitions. In no sense
could these businesses be considered public utilities. The State has not found it appropriate as a
national policy to interfere with the admission prices to these performances. This does not mean
however, that theaters and exhibitions are not affected with public interest even to a certain degree.
Motion pictures have been considered important both as a medium for the communication of Ideas
and expression of the artistic impulse. Their effects on the perceptions by our people of issues and
public officials or public figures as well as the prevailing cultural traits are considerable. 31 People of
all ages flock to movie houses, games and other public exhibitions for recreation and relaxation. The
government realizing their importance has seen it fit to enact censorship laws to regulate the movie
industry.32 Their aesthetic entertainment and even educational values cannot be underestimated. Even
police measures regulating the operation of these businesses have been upheld in order to safeguard
public health and safety.
Nonetheless, as to the question of the subject ordinance being a valid exercise of police power, the
same must be resolved in the negative. While it is true that a business may be regulated, it is equally
true that such regulation must be within the bounds of reason, that is, the regulatory ordinance must
be reasonable, and its provisions cannot be oppressive amounting to an arbitrary interference with
the business or calling subject of regulation. A lawful business or calling may not, under the guise of
regulation, be unreasonably interfered with even by the exercise of police power. 33 A police measure
for the regulation of the conduct, control and operation of a business should not encroach upon the
legitimate and lawful exercise by the citizens of their property rights. 34 The right of the owner to fix a price
at which his property shall be sold or used is an inherent attribute of the property itself and, as such,
within the protection of the due process clause."" Hence, the proprietors of a theater have a right to
manage their property in their own way, to fix what prices of admission they think most for their own
advantage, and that any person who did not approve could stay away. 36

Respondent City of Butuan argues that the presumption is always in favor of the validity of the
ordinance. This maybe the rule but it has already been held that although the presumption is always
in favor of the validity or reasonableness of the ordinance, such presumption must nevertheless be
set aside when the invalidity or unreasonableness appears on the face of the ordinance itself or is
established by proper evidence. 37 The exercise of police power by the local government is valid unless it
contravenes the fundamental law of the land, or an act of the legislature, or unless it is against public
policy or is unreasonable, oppressive, partial, discriminating or in derogation of a common right. 38
Ordinance No. 640 clearly invades the personal and property rights of petitioners for even if We
could assume that, on its face, the interference was reasonable, from the foregoing considerations, it
has been fully shown that it is an unwarranted and unlawful curtailment of the property and personal
rights of citizens. For being unreasonable and an undue restraint of trade, it cannot, under the guise
of exercising police power, be upheld as valid.
WHEREFORE, the decision of the trial court in Special Civil Case No. 237 is hereby REVERSED
and SET ASIDE and a new judgment is hereby rendered declaring Ordinance No. 640
unconstitutional and, therefore, null and void. This decision is immediately executory.
SO ORDERED.

[G.R. No. 110249. August 21, 1997]

ALFREDO TANO, BALDOMERO TANO, DANILO TANO, ROMUALDO

TANO, TEOCENES MIDELLO, ANGEL DE MESA, EULOGIO
TREMOCHA, FELIPE ONGONION, JR., ANDRES LINIJAN,
ROBERT LIM, VIRGINIA LIM, FELIMON DE MESA, GENEROSO
ARAGON, TEODORICO ANDRE, ROMULO DEL ROSARIO,
CHOLITO ANDRE, ERICK MONTANO, ANDRES OLIVA, VITTORIO
SALVADOR, LEOPOLDO ARAGON, RAFAEL RIBA, ALEJANDRO
LEONILA, JOSE DAMACINTO, RAMIRO MANAEG, RUBEN
MARGATE, ROBERTO REYES, DANILO PANGARUTAN, NOE
GOLPAN,ESTANISLAO ROMERO, NICANOR DOMINGO, ROLDAN
TABANG, PANGANIBAN, ADRIANO TABANG, FREDDIE
SACAMAY, MIGUEL TRIMOCHA, PACENCIO LABABIT, PABLO H.
OMPAD, CELESTINO A. ABANO, ALLAN ALMODAL, BILLY D.
BARTOLAY, ALBINO D. LIQUE, MELCHOR J. LAYSON, MELANI
AMANTE, CLARO E. YATOC, MERGELDO B. BALDEO, EDGAR
M. ALMASET A., JOSELITO MANAEG, LIBERATO ANDRADA,
JR., ROBERTO BERRY, RONALD VILLANUEVA, EDUARDO
VALMORIA, WILDREDO MENDOZA, NAPOLEON BABANGA,

ROBERTO TADEPA, RUBEN ASINGUA, SILVERIO GABO, JERRY

ROMERO, DAVID PANGAGARUTAN, DANIEL PANGGARUTAN,
ROMEO AGAWIN, FERNANDO EQUIZ, DITO LEQUIZ, RONILO
ODERABLE, BENEDICTO TORRES, ROSITO A. VALDEZ,
CRESENCIO A. SAYANG, NICOMEDES S. ACOSTA, ERENEO A.
SEGARINO, JR., WILDREDO A. RAUTO, DIOSDADO A. ACOSTA,
BONIFACIO G. SISMO, TACIO ALUBA, DANIEL B. BATERZAL,
ELISEO YBAEZ, DIOSDADO E. HANCHIC, EDDIE ESCALICAS,
ELEAZAR
B. BATERZAL, DOMINADOR HALICHIC,
ROOSEVELT RISMO-AN, ROBERT C. MERCADER, TIRSO
ARESGADO, DANIEL CHAVEZ, DANILO CHAVEZ, VICTOR
VILLAROEL, ERNESTO C. YABANEZ, ARMANDO T. SANTILLAN,
RUDY S. SANTILLAN, JODJEN ILUSTRISIMO, NESTOR
SALANGRON, ALBERTO SALANGRON, ROGER L. ROXAS,
FRANCISCO T. ANTICANO, PASTOR SALANGRON, BIENVENIDO
SANTILLAN, GILBUENA LADDY, FIDEL BENJAMIN JOVELITO
BELGANO, HONEY PARIOL, ANTONIO SALANGRON, NICASIO
SALANGRON, & AIRLINE SHIPPERS ASSOCIATION OF
PALAWAN, petitioners, vs. GOV. SALVADOR P. SOCRATES,
MEMBERS OF SANGGUNIAN PANLALAWIGAN OF PALAWAN,
namely, VICE-GOVERNOR JOEL T. REYES, JOSE D. ZABALA,
ROSALINO R. ACOSTA, JOSELITO A. CADLAON, ANDRES R.
BAACO, NELSON P. PENEYRA, CIPRIANO C. BARROMA,
CLARO E. ORDINARIO, ERNESTO A. LLACUN, RODOLFO C.
FLORDELIZA, GILBERT S. BAACO, WINSTON G. ARZAGA,
NAPOLEON F. ORDONEZ and GIL P. ACOSTA, CITY MAYOR
EDWARD
HAGEDORN,
MEMBERS
OF
SANGGUNIANG
PANLUNGSOD NG PUERTO PRINCESA, ALL MEMBERS OF
BANTAY DAGAT, MEMBERS OF PHILIPPINE NATIONAL POLICE
OF PALAWAN, PROVINCIAL AND CITY PROSECUTORS OF
PALAWAN and PUERTO PRINCESA CITY, and ALL JUDGES OF
PALAWAN,
REGIONAL,
MUNICIPAL
AND
METROPOLITAN, respondents.
DECISION

DAVIDE, JR., J.:

Petitioners caption their petition as one for Certiorari, Injunction With

Preliminary Mandatory Injunction,with Prayer for Temporary Restraining
Order and pray that this Court: (1) declare as unconstitutional: (a) Ordinance
No. 15-92, dated 15 December 1992, of the Sangguniang Panlungsod of
Puerto Princesa; (b) Office Order No. 23, Series of 1993, dated 22 January
1993, issued by Acting City Mayor Amado L. Lucero of Puerto Princesa City;
and (c) Resolution No. 33, Ordinance No. 2, Series of 1993, dated 19
February 1993, of theSangguniang Panlalawigan of Palawan; (2) enjoin the
enforcement thereof; and (3) restrain respondents Provincial and City
Prosecutors of Palawan and Puerto Princesa City and Judges of Regional
Trial Courts, Metropolitan Trial Courts and Municipal Circuit Trial Courts in
Palawan from assuming jurisdiction over and hearing cases concerning the
violation of the Ordinances and of the Office Order.
[1]

More appropriately, the petition is, and shall be treated as, a special civil
action for certiorari and prohibition.
The following is petitioners summary of the factual antecedents giving rise
to the petition:
1.
On December 15, 1992, the Sangguniang Panlungsod ng Puerto Princesa City
enacted Ordinance No. 15-92 which took effect on January 1, 1993 entitled: AN
ORDINANCE BANNING THE SHIPMENT OF ALL LIVE FISH AND LOBSTER
OUTSIDE PUERTO PRINCESA CITY FROM JANUARY 1, 1993 TO JANUARY 1,
1998 AND PROVIDING EXEMPTIONS, PENALTIES AND FOR OTHER
PURPOSES THEREOF, the full text of which reads as follows:
Section 1. Title of the Ordinance. - This Ordinance is entitled: AN ORDINANCE
BANNING THE SHIPMENT OF ALL LIVE FISH AND LOBSTER OUTSIDE
PUERTO PRINCESA CITY FROM JANUARY 1, 1993 TO JANUARY 1, 1998 AND
PROVIDING EXEMPTIONS, PENALTIES AND FOR OTHER PURPOSES
THEREOF.
Section 2. Purpose, Scope and Coverage. - To effectively free our City Sea Waters
from Cyanide and other Obnoxious substance, and shall cover all persons and/or
entities operating within and outside the City of Puerto Princesa who is are [sic]

directly or indirectly in the business or shipment of live fish and lobster outside the
City.
Section 3. Definition of terms. - For purpose of this Ordinance the following are
hereby defined:
A. SEA BASS - A kind of fish under the family of Centropomidae, better known as
APAHAP;
B. CATFISH - A kind of fish under the family of Plotosidae, better known as HITOHITO;
C. MUDFISH - A kind of fish under the family of Orphicaphalisae better known as
DALAG
D. ALL LIVE FISH - All alive, breathing not necessarily moving of all specie[s] use
for food and for aquarium purposes.
E. LIVE LOBSTER - Several relatively, large marine crustaceans of the genus
Homarus that are alive and breathing not necessarily moving.
Section 4. It shall be unlawful [for] any person or any business enterprise or company
to ship out from Puerto Princesa City to any point of destination either via aircraft or
seacraft of any live fish and lobster except SEA BASS, CATFISH, MUDFISH, AND
MILKFISH FRIES.
Section 5. Penalty Clause. - Any person/s and or business entity violating this
Ordinance shall be penalized with a fine of not more than P5,000.00 or imprisonment
of not more than twelve (12) months, cancellation of their permit to do business in the
City of Puerto Princesa or all of the herein stated penalties, upon the discretion of the
court.
Section 6. If the owner and/or operator of the establishment found vilating the
provisions of this ordinance is a corporation or a partnership, the penalty prescribed in
Section 5 hereof shall be imposed upon its president and/or General Manager or
Managing Partner and/or Manager, as the case maybe [sic].

Section 7. Any existing ordinance or any provision of any ordinance inconsistent to

[sic] this ordinance is deemed repealed.
Section 8. This Ordinance shall take effect on January 1, 1993.
SO ORDAINED.
xxx
2.
To implement said city ordinance, then Acting City Mayor Amado L. Lucero
issued Office Order No. 23, Series of 1993 dated January 22, 1993 which reads as
follows:
In the interest of public service and for purposes of City Ordinance No. PD426-1474, otherwise known as AN ORDINANCE REQUIRING ANY PERSON
ENGAGED OR INTENDING TO ENGAGE IN ANY BUSINESS, TRADE,
OCCUPATION, CALLING OR PROFESSION OR HAVING IN HIS POSSESSION
ANY OF THE ARTICLES FOR WHICH A PERMIT IS REQUIRED TO BE HAD,
TO OBTAIN FIRST A MAYORS PERMIT and City Ordinance No. 15-92, AN
ORDINANCE BANNING THE SHIPMENT OF ALL LIVE FISH AND LOBSTER
OUTSIDE PUERTO PRINCESA CITY FROM JANUARY 1, 1993 TO JANUARY 1,
1998, you are hereby authorized and directed to check or conduct necessary
inspections on cargoes containing live fish and lobster being shipped out from the
Puerto Princesa Airport, Puerto Princesa Wharf or at any port within the jurisdiction
of the City to any point of destinations [sic] either via aircraft or seacraft.
The purpose of the inspection is to ascertain whether the shipper possessed the
required Mayors Permit issued by this Office and the shipment is covered by invoice
or clearance issued by the local office of the Bureau of Fisheries and Aquatic
Resources and as to compliance with all other existing rules and regulations on the
matter.
Any cargo containing live fish and lobster without the required documents as stated
herein must be held for proper disposition.
In the pursuit of this Order, you are hereby authorized to coordinate with the PAL
Manager, the PPA Manager, the local PNP Station and other offices concerned for the

needed support and cooperation. Further, that the usual courtesy and diplomacy must
be observed at all times in the conduct of the inspection.
Please be guided accordingly.
xxx
3.
On February 19, 1993, the Sangguniang Panlalawigan, Provincial Government
of Palawan enacted Resolution No. 33 entitled: A RESOLUTION PROHIBITING
THE CATCHING, GATHERING, POSSESSING, BUYING, SELLING AND
SHIPMENT OF LIVE MARINE CORAL DWELLING AQUATIC ORGANISMS,
TO WIT: FAMILY: SCARIDAE (MAMENG), EPINE PHELUS
FASCIATUS(SUNO). CROMILEPTES ALTIVELIS (PANTHER OR SENORITA),
LOBSTER BELOW 200 GRAMS AND SPAWNING, TRADACNA
GIGAS (TAKLOBO), PINCTADA MARGARITEFERA(MOTHER PEARL,
OYSTERS, GIANT CLAMS AND OTHER SPECIES), PENAEUS
MONODON (TIGER PRAWN-BREEDER SIZE OR MOTHER), EPINEPHELUS
SUILLUS (LOBA OR GREEN GROUPER) AND
FAMILY: BALISTIDAE (TROPICAL AQUARIUM FISHES) FOR A PERIOD FIVE
(5) YEARS IN AND COMING FROM PALAWAN WATERS, the full text of which
reads as follows:
WHEREAS, scientific and factual researches [sic] and studies disclose that only five
(5) percent of the corals of our province remain to be in excellent condition as [a]
habitat of marine coral dwelling aquatic organisms;
WHEREAS, it cannot be gainsaid that the destruction and devastation of the corals of
our province were principally due to illegal fishing activities like dynamite fishing,
sodium cyanide fishing, use of other obnoxious substances and other related activities;
WHEREAS, there is an imperative and urgent need to protect and preserve the
existence of the remaining excellent corals and allow the devastated ones to
reinvigorate and regenerate themselves into vitality within the span of five (5) years;
WHEREAS, Sec. 468, Par. 1, Sub-Par. VI of the [sic] R.A. 7160 otherwise known as
the Local Government Code of 1991 empowers the Sangguniang Panlalawigan to
protect the environment and impose appropriate penalties [upon] acts which endanger

the environment such as dynamite fishing and other forms of destructive fishing,
among others.
NOW, THEREFORE, on motion by Kagawad Nelson P. Peneyra and upon unanimous
decision of all the members present;
Be it resolved as it is hereby resolved, to approve Resolution No. 33, Series of 1993 of
the Sangguniang Panlalawigan and to enact Ordinance No. 2 for the purpose, to wit:
ORDINANCE NO. 2
Series of 1993
BE IT ORDAINED BY THE SANGGUNIANG PANLALAWIGAN IN SESSION
ASSEMBLED:
Section 1. TITLE - This Ordinance shall be known as an Ordinance Prohibiting the
catching, gathering, possessing, buying, selling and shipment of live marine coral
dwelling aquatic organisms, to wit: 1. Family: Scaridae (Mameng), 2. Epinephelus
Fasciatus (Suno), 3. Cromileptes altivelis (Panther or Senorita), lobster below 200
grams and spawning), 4. Tridacna Gigas (Taklobo), 5. Pinctada Margaretefera
(Mother Pearl, Oysters, Giant Clams and other species), 6. Penaeus Monodon (Tiger
Prawn-breeder size or mother), 7. Epinephelus Suillus (Loba or Green Grouper) and
8. Family: Balistidae (Topical Aquarium Fishes) for a period of five (5) years in and
coming from Palawan Waters.
Section II. PRELIMINARY CONSIDERATIONS
1. Sec. 2-A (Rep. Act 7160). It is hereby declared, the policy of the state that the
territorial and political subdivisions of the State shall enjoy genuine and meaningful
local autonomy to enable them to attain their fullest development as self reliant
communities and make them more effective partners in the attainment of national
goals. Toward this end, the State shall provide for [a] more responsive and
accountable local government structure instituted through a system of decentralization
whereby local government units shall be given more powers, authority,
responsibilities and resources.

2. Sec. 5-A (R.A. 7160). Any provision on a power of [a] local Government Unit
shall be liberaly interpreted in its favor, and in case of doubt, any question thereon
shall be resolved in favor of devolution of powers and of the lower government
units. Any fair and reasonable doubts as to the existence of the power shall be
interpreted in favor of the Local Government Unit concerned.
3. Sec. 5-C (R.A. 7160). The general welfare provisions in this Code shall be
liberally interpreted to give more powers to local government units in accelerating
economic development and upgrading the quality of life for the people in the
community.
4. Sec. 16 (R.A. 7160). 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.
Section III. DECLARATION OF POLICY. - It is hereby declared to be the policy of
the Province of Palawan to protect and conserve the marine resources of Palawan not
only for the greatest good of the majority of the present generation but with [the]
proper perspective and consideration of [sic] their prosperity, and to attain this end,
the Sangguniang Panlalawigan henceforth declares that is [sic] shall be unlawful for
any person or any business entity to engage in catching, gathering, possessing, buying,
selling and shipment of live marine coral dwelling aquatic organisms as enumerated in
Section 1 hereof in and coming out of Palawan Waters for a period of five (5) years;
Section IV. PENALTY CLAUSE. - Any person and/or business entity violating this
Ordinance shall be penalized with a fine of not more than Five Thousand Pesos
(P5,000.00), Philippine Currency, and/or imprisonment of six (6) months to twelve
(12) months and confiscation and forfeiture of paraphernalias [sic] and equipment in
favor of the government at the discretion of the Court;
Section V. SEPARABILITY CLAUSE. - If for any reason, a Section or provision of
this Ordinance shall be held as unconditional [sic] or invalid, it shall not affect the
other provisions hereof.
Section VI. REPEALING CLAUSE. - Any existing Ordinance or a provision of any
ordinance inconsistent herewith is deemed modified, amended or repealed.

Section VII. EFFECTIVITY. - This Ordinance shall take effect ten (10) days after its
publication.
SO ORDAINED.
xxx
4.
The respondents implemented the said ordinances, Annexes A and C hereof
thereby depriving all the fishermen of the whole province of Palawan and the City of
Puerto Princesa of their only means of livelihood and the petitioners Airline Shippers
Association of Palawan and other marine merchants from performing their lawful
occupation and trade;
5.
Petitioners Alfredo Tano, Baldomero Tano, Teocenes Midello, Angel de Mesa,
Eulogio Tremocha, and Felipe Ongonion, Jr. were even charged criminally under
criminal case no. 93-05-C in the 1st Municipal Circuit Trial Court of Cuyo-AgutayaMagsaysay, an original carbon copy of the criminal complaint dated April 12, 1993 is
hereto attached as Annex D; while xerox copies are attached as Annex D to the
copies of the petition;
6.
Petitioners Robert Lim and Virginia Lim, on the other hand, were charged by
the respondent PNP with the respondent City Prosecutor of Puerto Princesa City, a
xerox copy of the complaint is hereto attached as Annex E;
Without seeking redress from the concerned local government units,
prosecutors office and courts, petitioners directly invoked our original
jurisdiction by filing this petition on 4 June 1993. In sum, petitioners contend
that:
First, the Ordinances deprived them of due process of law, their livelihood,
and unduly restricted them from the practice of their trade, in violation of
Section 2, Article XII and Sections 2 and 7 of Article XIII of the 1987
Constitution.
Second, Office Order No. 23 contained no regulation nor condition under
which the Mayors permit could be granted or denied; in other words, the
Mayor had the absolute authority to determine whether or not to issue permit.

Third, as Ordinance No. 2 of the Province of Palawan altogether

prohibited the catching, gathering, possession, buying, selling and shipping of
live marine coral dwelling organisms, without any distinction whether it was
caught or gathered through lawful fishing method, the Ordinance took away
the right of petitioners-fishermen to earn their livelihood in lawful ways; and
insofar as petitioners-members of Airline Shippers Association are concerned,
they were unduly prevented from pursuing their vocation and entering into
contracts which are proper, necessary, and essential to carry out their
business endeavors to a successful conclusion.
Finally, as Ordinance No. 2 of the Sangguniang Panlalawigan is null and
void, the criminal cases based thereon against petitioners Tano and the others
have to be dismissed.
In the Resolution of 15 June 1993 we required respondents to comment
on the petition, and furnished the Office of the Solicitor General with a copy
thereof.
In their comment filed on 13 August 1993, public respondents Governor
Socrates and Members of the Sangguniang Panlalawigan of Palawan
defended the validity of Ordinance No.2, Series of 1993, as a valid exercise of
the Provincial Governments power under the general welfare clause (Section
16 of the Local Government Code of 1991 [hereafter, LGC]), and its specific
power to protect the environment and impose appropriate penalties for acts
which endanger the environment, such as dynamite fishing and other forms of
destructive fishing under Section 447 (a) (1) (vi), Section 458 (a) (1) (vi), and
Section 468 (a) (1) (vi), of the LGC. They claimed that in the exercise of such
powers, the Province of Palawan had the right and responsibilty to insure
that the remaining coral reefs, where fish dwells [sic], within its territory remain
healthy for the future generation. The Ordinance, they further asserted,
covered only live marine coral dwelling aquatic organisms which were
enumerated in the ordinance and excluded other kinds of live marine aquatic
organisms not dwelling in coral reefs; besides the prohibition was for only five
(5) years to protect and preserve the pristine coral and allow those damaged
to regenerate.

Aforementioned respondents likewise maintained that there was no

violation of due process and equal protection clauses of the Constitution. As to
the former, public hearings were conducted before the enactment of the
Ordinance which, undoubtedly, had a lawful purpose and employed
reasonable means; while as to the latter, a substantial distinction existed
between a fisherman who catches live fish with the intention of selling it live,
and a fisherman who catches live fish with no intention at all of selling it live,
i.e., the former uses sodium cyanide while the latter does not. Further, the
Ordinance applied equally to all those belonging to one class.
On 25 October 1993 petitioners filed an Urgent Plea for the Immediate
Issuance of a Temporary Restraining Order claiming that despite the
pendency of this case, Branch 50 of the Regional Trial Court of Palawan was
bent on proceeding with Criminal Case No. 11223 against petitioners Danilo
Tano, Alfredo Tano, Eulogio Tremocha, Romualdo Tano, Baldomero Tano,
Andres Lemihan and Angel de Mesa for violation of Ordinance No. 2 of the
Sangguniang Panlalawigan of Palawan. Acting on said plea, we issued on 11
November 1993 a temporary restraining order directing Judge Angel Miclat of
said court to cease and desist from proceeding with the arraignment and pretrial of Criminal Case No. 11223.
On 12 July 1994, we excused the Office of the Solicitor General from filing
a comment, considering that as claimed by said office in its Manifestation of
28 June 1994, respondents were already represented by counsel.
The rest of the respondents did not file any comment on the petition.
In the resolution of 15 September 1994, we resolved to consider the
comment on the petition as the Answer, gave due course to the petition and
required the parties to submit their respective memoranda.
[2]

On 22 April 1997 we ordered impleaded as party respondents the

Department of Agriculture and the Bureau of Fisheries and Aquatic Resources
and required the Office of the Solicitor General to comment on their behalf.
But in light of the latters motion of 9 July 1997 for an extension of time to file
the comment which would only result in further delay, we dispensed with said
comment.

After due deliberation on the pleadings filed, we resolved to dismiss this

petition for want of merit, on 22 July 1997, and assigned it to the ponente for
the writing of the opinion of the Court.
I

There are actually two sets of petitioners in this case. The first is
composed of Alfredo Tano, Baldomero Tano, Danilo Tano, Romualdo Tano,
Teocenes Midello, Angel de Mesa, Eulogio Tremocha, Felipe Ongonion, Jr.,
Andres Linijan, and Felimon de Mesa, who were criminally charged with
violating Sangguniang Panlalawigan Resolution No. 33 and Ordinance No. 2,
Series of 1993, of the Province of Palawan, in Criminal Case No. 93-05-C of
the 1 Municipal Circuit Trial Court (MCTC) of Palawan; and Robert Lim and
Virginia Lim who were charged with violating City Ordinance No. 15-92 of
Puerto Princesa City and Ordinance No. 2, Series of 1993, of the Province of
Palawan before the Office of the City Prosecutor of Puerto Princesa. All of
them, with the exception of Teocenes Midello, Felipe Ongonion, Jr., Felimon
de Mesa, Robert Lim and Virginia Lim, are likewise the accused in Criminal
Case No. 11223 for the violation of Ordinance No. 2 of the Sangguniang
Panlalawigan of Palawan, pending before Branch 50 of the Regional Trial
Court of Palawan.
st

[3]

[4]

[5]

The second set of petitioners is composed of the rest of the petitioners

numbering seventy-seven (77), all of whom, except the Airline Shippers
Association of Palawan -- an alleged private association of several marine
merchants -- are natural persons who claim to be fishermen.
The primary interest of the first set of petitioners is, of course, to prevent
the prosecution, trial and determination of the criminal cases until the
constitutionality or legality of the Ordinances they allegedly violated shall have
been resolved. The second set of petitioners merely claim that they being
fishermen or marine merchants, they would be adversely affected by the
ordinances.
As to the first set of petitioners, this special civil for certiorari must fail on
the ground of prematurity amounting to a lack of cause of action. There is no
showing that the said petitioners, as the accused in the criminal cases, have

filed motions to quash the informations therein and that the same were
denied. The ground available for such motions is that the facts charged
therein do not constitute an offense because the ordinances in question are
unconstitutional. It cannot then be said that the lower courts acted without or
in excess of jurisdiction or with grave abuse of discretion to justify recourse to
the extraordinary remedy of certiorari or prohibition. It must further be
stressed that even if the petitioners did file motions to quash, the denial
thereof would not forthwith give rise to a cause of action under Rule 65 of the
Rules of Court. The general rule is that where a motion to quash is denied,
the remedy therefrom is notcertiorari, but for the party aggrieved thereby to go
to trial without prejudice to reiterating special defenses involved in said
motion, and if, after trial on the merits of adverse decision is rendered, to
appeal therefrom in the manner authorized by law. And , even where in an
exceptional circumstance such denial may be the subject of a special civil
action for certiorari, a motion for reconsideration must have to be filed to allow
the court concerned an opportunity to correct its errors, unless such motion
may be dispensed with because of existing exceptional circumstances.
Finally, even if a motion for reconsideration has been filed and denied, the
remedy under Rule 65 is still unavailable absent any showing of the grounds
provided for in Section 1 thereof. For obvious reasons, the petition at bar
does not, and could not have , alleged any of such grounds.
[6]

[7]

[8]

[9]

As to the second set of petitioners, the instant petition is obviously one for
DECLARATORY RELIEF, i.e., for a declaration that the Ordinances in
question are a nullity ... for being unconstitutional. As such, their petition
must likewise fail, as this Court is not possessed of original jurisdiction over
petitions for declaratory relief even if only questions of law are involved, it
being settled that the Court merely exercises appellate jurisdiction over such
petitions.
[10]

[11]

[12]

II

Even granting arguendo that the first set of petitioners have a cause of
action ripe for the extraordinary writ of certiorari, there is here a clear
disregard of the hierarchy of courts, and no special and important reason or
exceptional or compelling circumstance has been adduced why direct
recourse to us should be allowed. While we have concurrent jurisdiction with

Regional Trial courts and with the Court of Appeals to issue writs of certiorari,
prohibition, mandamus, quo warranto, habeas corpus and injunction, such
concurrence gives petitioners no unrestricted freedom of choice of court
forum, so we held in People v. Cuaresma:
[13]

This concurrence of jurisdiction is not to be taken as according to parties seeking

any of the writs an absolute unrestrained freedom of choice of the court to which
application therefor will be directed. There is after all hierarchy of courts. That
hierarchy is determinative of the venue of appeals, and should also serve as a general
determinant of the appropriate forum for petitions for the extraordinary writs. A
becoming regard for that judicial hierarchy most certainly indicates that petitions for
the issuance of extraordinary writs against first level (inferior) courts should be filed
with the Regional Trial Court, and those against the latter, with the Court of Appeals.
A direct invocation of the Supreme Courts original jurisdiction to issue these writs
should be allowed only when there are special and important reasons therefor, clearly
and specifically set out in the petition. This is established policy. It is a policy
necessary to prevent inordinate demands upon the Courts time and attention which
are better devoted to those matters within its exclusive jurisdiction, and to prevent
further over-crowding of the Courts docket.
The Court feels the need to reaffirm that policy at this time, and to enjoin strict
adherence thereto in the light of what it perceives to be a growing tendency on the part
of litigants and lawyers to have their applications for the so-called extraordinary writs,
and sometimes even their appeals, passed upon and adjudicated directly and
immediately by the highest tribunal of the land.
In Santiago v. Vasquez, this Court forcefully expressed that the
propensity of litigants and lawyers to disregard the hierarchy of courts must be
put to a halt, not only because of the imposition upon the precious time of this
Court, but also because of the inevitable and resultant delay, intended or
otherwise, in the adjudication of the case which often has to be remanded or
referred to the lower court, the proper forum under the rules of procedure, or
as better equipped to resolve the issues since this Court is not a trier of facts.
We reiterated the judicial policy that this Court will not entertain direct resort
to it unless the redress desired cannot be obtained in the appropriate courts or
where exceptional and compelling circumstances justify availment of a
remedy within and calling for the exercise of [its] primary jurisdiction.
[14]

III

Notwithstanding the foregoing procedural obstacles against the first set of

petitioners, we opt to resolve this case on its merits considering that the
lifetime of the challenged Ordinances is about to end. Ordinance No. 15-92 of
the City of Puerto Princesa is effective only up to 1 January 1998, while
Ordinance No. 2 of the Province of Palawan, enacted on 19 February 1993, is
effective for only five (5) years. Besides, these Ordinances were undoubtedly
enacted in the exercise of powers under the new LGC relative to the
protection and preservation of the environment and are thus novel and of
paramount importance. No further delay then may be allowed in the resolution
of the issues raised.
It is of course settled that laws (including ordinances enacted by local
government units) enjoy the presumption of constitutionality. To overthrow
this presumption, there must be a clear and unequivocal breach of the
Constitution, not merely a doubtful or argumentative contradiction. In short,
the conflict with the Constitution must be shown beyond reasonable doubt.
Where doubt exists, even if well founded, there can be no finding of
unconstitutionality. To doubt is to sustain.
[15]

[16]

[17]

After a scrunity of the challenged Ordinances and the provisions of the

Constitution petitioners claim to have been violated, we find petitioners
contentions baseless and so hold that the former do not suffer from any
infirmity, both under the Constitution and applicable laws.
Petitioners specifically point to Section 2, Article XII and Sections 2 and 7,
Article XIII of the Constitution as having been transgressed by the
Ordinances.
The pertinent portion of Section 2 of Article XII reads:
SEC. 2.

x x x

The State shall protect the nation's marine wealth in its archipelagic waters, territorial
sea, and exclusive economic zone, and reserve its use and enjoyment exclusively to
Filipino citizens.

The Congress may, by law, allow small-scale utilization of natural resources by

Filipino citizens, as well as cooperative fish farming, with priority to subsistence
fishermen and fishworkers in rivers, lakes, bays, and lagoons.
Sections 2 and 7 of Article XIII provide:
Sec. 2. The promotion of social justice shall include the commitment to create
economic opportunities based on freedom of initiative and self-reliance.
xxx
SEC. 7. The State shall protect the rights of subsistence fishermen, especially of
local communities, to the preferential use of the communal marine and fishing
resources, both inland and offshore. It shall provide support to such fishermen
through appropriate technology and research, adequate financial, production, and
marketing assistance, and other services. The State shall also protect, develop, and
conserve such resources. The protection shall extend to offshore fishing grounds of
subsistence fishermen against foreign intrusion. Fishworkers shall receive a just share
from their labor in the utilization of marine and fishing resources.
There is absolutely no showing that any of the petitioners qualifies as a
subsistence or marginal fisherman. In their petition, petitioner Airline Shippers
Association of Palawan is described as a private association composed of
Marine Merchants; petitioners Robert Lim and Virginia Lim, as merchants;
while the rest of the petitioners claim to be fishermen, without any
qualification, however, as to their status.
Since the Constitution does not specifically provide a definition of the
terms subsistence or marginal fishermen, they should be construed in
their general and ordinary sense. Amarginal fisherman is an individual
engaged in fishing whose margin of return or reward in his harvest of fish as
measured by existing price levels is barely sufficient to yield a profit or cover
the cost of gathering the fish, while a subsistence fisherman is one whose
catch yields but the irreducible minimum for his livelihood. Section 131(p) of
the LGC (R.A. No. 7160) defines a marginal farmer or fisherman as
an individual engaged in subsistence farming or fishing which shall be limited
to the sale, barter or exchange of agricultural or marine products produced by
[18]

[19]

[20]

himself and his immediate family. It bears repeating that nothing in the record
supports a finding that any petitioner falls within these definitions.
Besides, Section 2 of Article XII aims primarily not to bestow any right to
subsistence fishermen, but to lay stress on the duty of the State to protect the
nations marine wealth. What the provision merely recognizes is that the State
may allow, by law, cooperative fish farming, with priority to subsistence
fishermen and fishworkers in rivers, lakes, bays, and lagoons. Our survey of
the statute books reveals that the only provision of law which speaks of the
preferential right of marginal fishermen is Section 149 of the LGC of 1991
which pertinently provides:
SEC. 149. Fishery Rentals, Fees and Charges. -- x x x
(b) The sangguniang bayan may:
(1) Grant fishery privileges to erect fish corrals, oyster, mussels or other aquatic
beds or bangus fry areas, within a definite zone of the municipal waters, as determined
by it: Provided, however, That duly registered organizations and cooperatives of
marginal fishermen shall have preferential right to such fishery privileges ....
In a Joint Administrative Order No. 3, dated 25 April 1996, the Secretary of the
Department of Agriculture and the Secretary of the Department of Interior and
Local Government prescribed the guidelines on the preferential treatment of
small fisherfolk relative to the fishery right mentioned in Section 149. This
case, however, does not involve such fishery right.
Anent Section 7 of Article XIII, it speaks not only of the use of communal
marine and fishing resources, but of their protection, development, and
conservation. As hereafter shown, the ordinances in question are meant
precisely to protect and conserve our marine resources to the end that their
enjoyment by the people may be guaranteed not only for the present
generation, but also for the generations to come.
The so-called preferential right of subsistence or marginal fishermen to
the use of marine resources is not at all absolute. In accordance with the
Regalian Doctrine, marine resources belong to the State, and, pursuant to the

first paragraph of Section 2, Article XII of the Constitution, their exploration,

development and utilization ... shall be under the full control and supervision
of the State. Moreover, their mandated protection, development, and
conservation as necessarily recognized by the framers of the Constitution,
imply certain restrictions on whatever right of enjoyment there may be in favor
of anyone. Thus, as to the curtailment of the preferential treatment of
marginal fisherman, the following exchange between Commissioner Francisco
Rodrigo and Commissioner Jose F.S. Bengzon, Jr., took place at the plenary
session of the Constitutional Commission:
MR. RODRIGO:
Let us discuss the implementation of this because I would not raise the hopes
of our people, and afterwards fail in the implementation. How will this be
implemented? Will there be a licensing or giving of permits so that
government officials will know that one is really a marginal fisherman? Or if
policeman say that a person is not a marginal fisherman, he can show his
permit, to prove that indeed he is one.
MR. BENGZON:
Certainly, there will be some mode of licensing insofar as this is concerned
and this particular question could be tackled when we discuss the Article on
Local Governments -- whether we will leave to the local governments or to
Congress on how these things will be implemented. But certainly, I think our
Congressmen and our local officials will not be bereft of ideas on how to
implement this mandate.
x x x
MR. RODRIGO:
So, once one is licensed as a marginal fisherman, he can go anywhere in the
Philippines and fish in any fishing grounds.
MR. BENGZON:

Subject to whatever rules and regulations and local laws that may be
passed, may be existing or will be passed. (underscoring supplied for
emphasis).
[21]

What must likewise be borne in mind is the state policy enshrined in the
Constitution regarding the duty of the State to protect and advance the right of
the people to a balanced and healthful ecology in accord with the rhythm and
harmony of nature. On this score, in Oposa v. Factoran, this Court
declared:
[22]

[23]

While the right to balanced and healthful ecology is to be found under the Declaration
of Principles the State Policies and not under the Bill of Rights, it does not follow that
it is less important than any of the civil and political rights enumerated in the latter.
Such a right belongs to a different category of rights altogether for it concerns nothing
less than self-preservation and self-perpetuation - aptly and fittingly stressed by the
petitioners - the advancement of which may even be said to predate all governments
and constitutions. As a matter of fact, these basic rights need not even be written in the
Constitution for they are assumed to exist from the inception of humankind. If they
are now explicitly mentioned in the fundamental charter, it is because of the wellfounded fear of its framers that unless the rights to a balanced and healthful ecology
and to health are mandated as state policies by the Constitution itself, thereby
highlighting their continuing importance and imposing upon the state a solemn
obligation to preserve the first and protect and advance the second , the day would not
be too far when all else would be lost not only for the present generation, but also for
those to come - generations which stand to inherit nothing but parched earth incapable
of sustaining life.
The right to a balanced and healthful ecology carries with it a correlative duty to
refrain from impairing the environment ...
The LGC provisions invoked by private respondents merely seek to give
flesh and blood to the right of the people to a balanced and healthful ecology.
In fact, the General Welfare Clause, expressly mentions this right:
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. (underscoring supplied).
Moreover, Section 5(c) of the LGC explicitly mandates that the general welfare
provisions of the LGC shall be liberally interpreted to give more powers to the
local government units in accelerating economic development and upgrading
the quality of life for the people of the community.
The LGC vests municipalities with the power to grant fishery privileges in
municipal waters and to impose rentals, fees or charges therefor; to penalize,
by appropriate ordinances, the use of explosives, noxious or poisonous
substances, electricity, muro-ami, and other deleterious methods of fishing;
and to prosecute any violation of the provisions of applicable fishery laws.
Further, the sangguniang bayan, the sangguniang panlungsod and
the sangguniang panlalawigan are directed to enact ordinances for the
general welfare of the municipality and its inhabitants, which shall
include, inter alia, ordinances that [p]rotect the environment and impose
appropriate penalties for acts which endanger the environment such as
dynamite fishing and other forms of destructive fishing ... and such other
activities which result in pollution, acceleration of eutrophication of rivers and
lakes or of ecological imbalance.
[24]

[25]

Finally, the centerpiece of LGC is the system of decentralization as

expressly
mandated
by
the
Constitution. Indispensable
thereto
is devolution and the LGC expressly provides that [a]ny provision on a power
of a local government unit shall be liberally interpreted in its favor, and in case
of doubt, any question thereon shall be resolved in favor of devolution of
powers and of the lower local government unit. Any fair and reasonable doubt
as to the existence of the power shall be interpreted in favor of the local
government unit concerned, Devolution refers to the act by which the
[26]

[27]

[28]

National Government confers power and authority upon the various local
government units to perform specific functions and responsibilities.
[29]

One of the devolved powers enumerated in the section of the LGC on

devolution is the enforcement of fishery laws in municipal waters including the
conservation of mangroves. This necessarily includes enactment of
ordinances to effectively carry out such fishery laws within the municipal
waters.
[30]

The term municipal waters, in turn, include not only streams, lakes, and
tidal waters within the municipality, not being the subject of private ownership
and not comprised within the national parks, public forest, timber lands, forest
reserves, or fishery reserves, but also marine waters included between two
lines drawn perpendicularly to the general coastline from points where the
boundary lines of the municipality or city touch the sea at low tide and a third
line parallel with the general coastline and fifteen kilometers from it. Under
P.D. No. 704, the marine waters included in municipal waters is limited to
three nautical miles from the general coastline using the above perpendicular
lines and a third parallel line.
[31]

These fishery laws which local government units may enforce under
Section 17(b), (2), (i) in municipal waters include: (1) P.D. No. 704; (2) P.D.
No. 1015 which, inter alia, authorizes the establishment of a closed season
in any Philippine water if necessary for conservation or ecological purposes;
(3) P.D. No. 1219 which provides for the exploration, exploitation, utilization,
and conservation of coral resources; (4) R.A. No. 5474, as amended by B.P.
Blg. 58, which makes it unlawful for any person, association, or corporation to
catch or cause to be caught, sell, offer to sell, purchase, or have in possession
any of the fish specie called gobiidae or ipon during closed season; and (5)
R.A. No. 6451 which prohibits and punishes electrofishing, as well as various
issuances of the BFAR.
To those specifically devolved insofar as the control and regulation of
fishing in municipal waters and the protection of its marine environment are
concerned, must be added the following:
1. Issuance of permits to construct fish cages within municipal waters;

2. Issuance of permits to gather aquarium fishes within municipal waters;

3. Issuance of permits to gather kapis shells within municipal waters;
4. Issuance of permits to gather/culture shelled mollusks within municipal waters;
5. Issuance of licenses to establish seaweed farms within municipal waters;
6. Issuance of licenses to establish culture pearls within municipal waters;
7. Issuance of auxiliary invoice to transport fish and fishery products; and
8. Establishment of closed season in municipal waters.

These functions are covered in the Memorandum of Agreement of 5 April

1994 between the Department of Agriculture and the Department of Interior
and Local Government.
In light then of the principles of decentralization and devolution enshrined
in the LGC and the powers granted to local government units under Section
16 (the General Welfare Clause), and under Sections 149, 447 (a) (1) (vi), 458
(a) (1) (vi) and 468 (a) (1) (vi), which unquestionably involve the exercise of
police power, the validity of the questioned Ordinances cannot be doubted.
Parenthetically, we wish to add that these Ordinances find full support
under R.A. No. 7611, otherwise known as the Strategic Environmental Plan
(SEP) for Palawan Act, approved on 19 July 1992. This statute adopts a
comprehensive framework for the sustainable development of Palawan
compatible with protecting and enhancing the natural resources and
endangered environment of the province, which shall serve to guide the local
government of Palawan and the government agencies concerned in the
formulation and implementation of plans, programs and projects affecting said
province.
[32]

At this time then, it would be appropriate to determine the relation between

the assailed Ordinances and the aforesaid powers of the Sangguniang
Panlungsod of the City of Puerto Princesa and the Sangguniang
Panlalawigan of the Province of Palawan to protect the environment. To

begin, we ascertain the purpose of the Ordinances as set forth in the

statement of purposes or declaration of policies quoted earlier.
It is clear to the Court that both Ordinances have two principal objectives
or purposes: (1) to establish a closed season for the species of fish or
aquatic animals covered therein for a period of five years, and (2) to protect
the corals of the marine waters of the City of Puerto Princesa and the
Province of Palawan from further destruction due to illegal fishing activities.
The accomplishment of the first objective is well within the devolved power
to enforce fishery laws in municipal waters, such as P.D. No. 1015, which
allows the establishment of closed seasons. The devolution of such power
has been expressly confirmed in the Memorandum of Agreement of 5 April
1994 between the Department of Agriculture and the Department of Interior
and Local Government.
The realization of the second objective falls within both the general welfare
clause of the LGC and the express mandate thereunder to cities and
provinces to protect the environment and impose appropriate penalties for
acts which endanger the environment.
[33]

The destruction of the coral reefs results in serious, if not irreparable,

ecological imbalance, for coral reefs are among the natures life-support
systems. They collect, retain, and recycle nutrients for adjacent nearshore
areas such as mangroves, seagrass beds, and reef flats; provide food for
marine plants and animals; and serve as a protective shelter for aquatic
organisms. It is said that [e]cologically, the reefs are to the oceans what
forests are to continents: they are shelter and breeding grounds for fish and
plant species that will disappear without them.
[34]

[35]

[36]

The prohibition against catching live fish stems, in part, from the modern
phenomenon of live-fish trade which entails the catching of so-called exotic
tropical species of fish not only for aquarium use in the West, but also for the
market for live banquet fish [which] is virtually insatiable in ever more affluent
Asia. These exotic species are coral-dwellers, and fishermen catch them by
diving in shallow water with corraline habitats and squirting sodium cyanide
poison at passing fish directly or onto coral crevices; once affected the fish are
[37]

immobilized [merely stunned] and then scooped by hand. The diver then
surfaces and dumps his catch into a submerged net attached to the
skiff . Twenty minutes later, the fish can swim normally. Back on shore, they
are placed in holding pens, and within a few weeks, they expel the cyanide
from their system and are ready to be hauled. Then they are placed in
saltwater tanks or packaged in plastic bags filled with seawater for shipment
by air freight to major markets for live food fish. While the fish are meant to
survive, the opposite holds true for their former home as [a]fter the fisherman
squirts the cyanide, the first thing to perish is the reef algae, on which fish
feed. Days later, the living coral starts to expire. Soon the reef loses its
function as habitat for the fish, which eat both the algae and invertebrates that
cling to the coral. The reef becomes an underwater graveyard, its skeletal
remains brittle, bleached of all color and vulnerable to erosion from the
pounding of the waves. It has been found that cyanide fishing kills most
hard and soft corals within three months of repeated application.
[38]

[39]

[40]

[41]

The nexus then between the activities barred by Ordinance No. 15-92 of
the City of Puerto Princesa and the prohibited acts provided in Ordinance No.
2, Series of 1993 of the Province of Palawan, on one hand, and the use of
sodium cyanide, on the other, is painfully obvious. In sum, the public purpose
and reasonableness of the Ordinances may not then be controverted.
As to Office Order No. 23, Series of 1993, issued by Acting City Mayor
Amado L. Lucero of the City of Puerto Princesa, we find nothing therein
violative of any constitutional or statutory provision. The Order refers to the
implementation of the challenged ordinance and is not the Mayors Permit.
The dissenting opinion of Mr. Justice Josue N. Bellosillo relies upon the
lack of authority on the part of the Sangguniang Panlungsod of Puerto
Princesa to enact Ordinance No. 15, Series of 1992, on the theory that the
subject thereof is within the jurisdiction and responsibility of the Bureau of
Fisheries and Aquatic Resources (BFAR) under P.D. No. 704, otherwise
known as the Fisheries Decree of 1975; and that, in any event, the Ordinance
is unenforceable for lack of approval by the Secretary of the Department of
Natural Resources (DNR), likewise in accordance with P.D. No. 704.

The majority is unable to accommodate this view. The jurisdiction and

responsibility of the BFAR under P. D. no. 704, over the management,
conservation, development, protection, utilization and disposition of all fishery
and aquatic resources of the country is not all-encompassing. First, Section 4
thereof excludes from such jurisdiction and responsibility municipal waters,
which shall be under the municipal or city government concerned, except
insofar as fishpens and seaweed culture in municipal in municipal centers are
concerned. This section provides, however, that all municipal or city
ordinances and resolutions affecting fishing and fisheries and any disposition
thereunder shall be submitted to the Secretary of the Department of Natural
Resources for appropriate action and shall have full force and effect only upon
his approval.
[42]

Second, it must at once be pointed out that the BFAR is no longer under
the Department of Natural Resources (now Department of Environment and
Natural Resources). Executive Order No. 967 of 30 June 1984 transferred the
BFAR from the control and supervision of the Minister (formerly Secretary) of
Natural Resources to the Ministry of Agriculture and Food (MAF) and
converted it into a mere staff agency thereof, integrating its functions with the
regional offices of the MAF.
In Executive Order No. 116 of 30 January 1987, which reorganized the
MAF, the BFAR was retained as an attached agency of the MAF. And under
the Administrative Code of 1987, the BFAR is placed under the Title
concerning the Department of Agriculture.
[43]

[44]

Therefore, it is incorrect to say that the challenged Ordinance of the City of

Puerto Princesa is invalid or unenforceable because it was not approved by
the Secretary of the DENR. If at all, the approval that should be sought would
be that of the Secretary of the Department of Agriculture (not DENR) of
municipal ordinances affecting fishing and fisheries in municipal waters has
been dispensed with in view of the following reasons:
(1)
Section 534 (Repealing Clause) of the LGC expressly repeals
or amends Section 16 and 29 of P.D. No. 704 insofar that they are
inconsistent with the provisions of the LGC.
[45]

(2)
As discussed earlier, under the general welfare clause of the
LGC, local government units have the power, inter alia, to enact ordinances to
enhance the right of the people to a balanced ecology. It likewise specifically
vests municipalities with the power to grant fishery privileges in municipal
waters, and impose rentals, fees or charges therefor; to penalize, by
appropriate ordinances, the use of explosives, noxious or poisonous
substances, electricity, muro-ami, and other deleterious methods of fishing;
and to prosecute other methods of fishing; and to prosecute any violation of
the provisions of applicable fishing laws. Finally, it imposes upon
the sangguniang bayan, the sangguniang panlungsod, and the sangguniang
panlalawigan the duty to enact ordinances to [p]rotect the environment and
impose appropriate penalties for acts which endanger the environment such
as dynamite fishing and other forms of destructive fishing and such other
activities which result in pollution, acceleration of eutrophication of rivers and
lakes or of ecological imbalance.
[46]

[47]

In closing, we commend the Sangguniang Panlungsod of the City of

Puerto Princesa and Sangguniang Panlalawigan of the Province of Palawan
for exercising the requisite political will to enact urgently needed legislation to
protect and enhance the marine environment, thereby sharing in the
herculean task of arresting the tide of ecological destruction. We hope that
other local government units shall now be roused from their lethargy and
adopt a more vigilant stand in the battle against the decimation of our legacy
to future generations. At this time, the repercussions of any further delay in
their response may prove disastrous, if not, irreversible.
WHEREFORE, the instant petition is DISMISSED for lack of merit and the
temporary restraining order issued on 11 November 1993 is LIFTED.
No pronouncement as to costs.
SO ORDERED.
G.R. No. 100152. March 31, 2000]
ACEBEDO OPTICAL COMPANY, INC., petitioner, vs. THE HONORABLE
COURT OF APPEALS, Hon. MAMINDIARA MANGOTARA, in his capacity

as Presiding Judge of the RTC, 12th Judicial Region, Br. 1, Iligan City;
SAMAHANG OPTOMETRIST Sa PILIPINAS - Iligan City Chapter, LEO T.
CAHANAP, City Legal Officer, and Hon. CAMILO P. CABILI, City Mayor of
Iligan, respondents.
DECISION
PURISIMA, J.:
At bar is a petition for review under Rule 45 of the Rules of Court seeking to
nullify the dismissal by the Court of Appeals of the original petition
for certiorari, prohibition and mandamus filed by the herein petitioner against
the City Mayor and City Legal Officer of Iligan and the Samahang Optometrist
sa Pilipinas - Iligan Chapter (SOPI, for brevity).
The antecedent facts leading to the filing of the instant petition are as follows:
Petitioner applied with the Office of the City Mayor of Iligan for a business
permit. After consideration of petitioners application and the opposition
interposed thereto by local optometrists, respondent City Mayor issued
Business Permit No. 5342 subject to the following conditions:
1. Since it is a corporation, Acebedo cannot put up an optical
clinic but only a commercial store;
2. Acebedo cannot examine and/or prescribe reading and similar
optical glasses for patients, because these are functions of optical
clinics;
3. Acebedo cannot sell reading and similar eyeglasses without a
prescription having first been made by an independent
optometrist (not its employee) or independent optical clinic.
Acebedo can only sell directly to the public, without need of a
prescription, Ray-Ban and similar eyeglasses;
4. Acebedo cannot advertise optical lenses and eyeglasses, but
can advertise Ray-Ban and similar glasses and frames;

5. Acebedo is allowed to grind lenses but only upon the

prescription of an independent optometrist.
[1]

On December 5, 1988, private respondent Samahan ng Optometrist Sa

Pilipinas (SOPI), Iligan Chapter, through its Acting President, Dr. Frances B.
Apostol, lodged a complaint against the petitioner before the Office of the City
Mayor, alleging that Acebedo had violated the conditions set forth in its
business permit and requesting the cancellation and/or revocation of such
permit.
Acting on such complaint, then City Mayor Camilo P. Cabili designated City
Legal Officer Leo T. Cahanap to conduct an investigation on the matter. On
July 12, 1989, respondent City Legal Officer submitted a report to the City
Mayor finding the herein petitioner guilty of violating all the conditions of its
business permit and recommending the disqualification of petitioner from
operating its business in Iligan City. The report further advised that no new
permit shall be granted to petitioner for the year 1989 and should only be
given time to wind up its affairs.
On July 19, 1989, the City Mayor sent petitioner a Notice of Resolution and
Cancellation of Business Permit effective as of said date and giving petitioner
three (3) months to wind up its affairs.
On October 17, 1989, petitioner brought a petition for certiorari, prohibition
and mandamus with prayer for restraining order/preliminary injunction against
the respondents, City Mayor, City Legal Officer and Samahan ng Optometrists
sa Pilipinas-Iligan City Chapter (SOPI), docketed as Civil Case No. 1497
before the Regional Trial Court of Iligan City, Branch I. Petitioner alleged
that (1) it was denied due process because it was not given an opportunity to
present its evidence during the investigation conducted by the City Legal
Officer; (2) it was denied equal protection of the laws as the limitations
imposed on its business permit were not imposed on similar businesses in
Iligan City; (3) the City Mayor had no authority to impose the special
conditions on its business permit; and (4) the City Legal Officer had no
authority to conduct the investigation as the matter falls within the exclusive
jurisdiction of the Professional Regulation Commission and the Board of
Optometry.

Respondent SOPI interposed a Motion to Dismiss the Petition on the ground

of non-exhaustion of administrative remedies but on November 24, 1989,
Presiding Judge Mamindiara P. Mangotara deferred resolution of such Motion
to Dismiss until after trial of the case on the merits. However, the prayer for a
writ of preliminary injunction was granted. Thereafter, respondent SOPI filed
its answer.
On May 30, 1990, the trial court dismissed the petition for failure to exhaust
administrative remedies, and dissolved the writ of preliminary injunction it
earlier issued. Petitioners motion for reconsideration met the same fate. It
was denied by an Order dated June 28, 1990.
On October 3, 1990, instead of taking an appeal, petitioner filed a petition
for certiorari, prohibition and mandamus with the Court of Appeals seeking to
set aside the questioned Order of Dismissal, branding the same as tainted
with grave abuse of discretion on the part of the trial court.
On January 24, 1991, the Ninth Division of the Court of Appeals dismissed
the petition for lack of merit. Petitioners motion reconsideration was also
denied in the Resolution dated May 15, 1991.
[2]

Undaunted, petitioner has come before this court via the present petition,
theorizing that:
A.

THE RESPONDENT COURT, WHILE CORRECTLY HOLDING

THAT THE RESPONDENT CITY MAYOR ACTED BEYOND HIS
AUTHORITY IN IMPOSING THE SPECIAL CONDITIONS IN THE
PERMIT AS THEY HAD NO BASIS IN ANY LAW OR
ORDINANCE, ERRED IN HOLDING THAT THE SAID SPECIAL
CONDITIONS NEVERTHELESS BECAME BINDING ON
PETITIONER UPON ITS ACCEPTANCE THEREOF AS A
PRIVATE AGREEMENT OR CONTRACT.
B.

THE RESPONDENT COURT OF APPEALS ERRED IN

HOLDING THAT THE CONTRACT BETWEEN PETITIONER AND
THE CITY OF ILIGAN WAS ENTERED INTO BY THE LATTER IN
THE PERFORMANCE OF ITS PROPRIETARY FUNCTIONS.
The petition is impressed with merit.
Although petitioner agrees with the finding of the Court of Appeals that
respondent City Mayor acted beyond the scope of his authority in imposing
the assailed conditions in subject business permit, it has excepted to the
ruling of the Court of Appeals that the said conditions nonetheless became
binding on petitioner, once accepted, as a private agreement or contract.
Petitioner maintains that the said special conditions are null and void for
being ultra vires and cannot be given effect; and therefore, the principle of
estoppel cannot apply against it.
On the other hand, the public respondents, City Mayor and City Legal Officer,
private respondent SOPI and the Office of the Solicitor General contend that
as a valid exercise of police power, respondent City Mayor has the authority to
impose, as he did, special conditions in the grant of business permits.
Police power as an inherent attribute of sovereignty is the power to prescribe
regulations to promote the health, morals, peace, education, good order or
safety and general welfare of the people. The State, through the legislature,
has delegated the exercise of police power to local government units, as
agencies of the State, in order to effectively accomplish and carry out the
declared objects of their creation. This delegation of police power is
embodied in the general welfare clause of the Local Government Code which
provides:
[3]

[4]

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.
The scope of police power has been held to be so comprehensive as to
encompass almost all matters affecting the health, safety, peace, order,
morals, comfort and convenience of the community. Police power is
essentially regulatory in nature and the power to issue licenses or grant
business permits, if exercised for a regulatory and not revenue-raising
purpose, is within the ambit of this power.
[5]

The authority of city mayors to issue or grant licenses and business permits is
beyond cavil. It is provided for by law.
Section 171, paragraph 2 (n) of Batas Pambansa Bilang 337 otherwise known
as the Local Government Code of 1983, reads:
Sec. 171. The City Mayor shall:
xxx
n) Grant or refuse to grant, pursuant to law, city licenses or
permits, and revoke the same for violation of law or ordinance or
the conditions upon which they are granted.
However, the power to grant or issue licenses or business permits must
always be exercised in accordance with law, with utmost observance of the
rights of all concerned to due process and equal protection of the law.
Succinct and in point is the ruling of this Court, that:
"x x x While a business may be regulated, such regulation must,
however, be within the bounds of reason, i. e., the regulatory
ordinance must be reasonable, and its provision cannot be

oppressive amounting to an arbitrary interference with the

business or calling subject of regulation. A lawful business or
calling may not, under the guise of regulation, be unreasonably
interfered with even by the exercise of police power. xxx
xxx xxx xxx
xxx The exercise of police power by the local government is valid
unless it contravenes the fundamental law of the land or an act of
the legislature, or unless it is against public policy or is
unreasonable, oppressive, partial, discriminating or in derogation
of a common right."
[6]

In the case under consideration, the business permit granted by respondent

City Mayor to petitioner was burdened with several conditions. Petitioner
agrees with the holding by the Court of Appeals that respondent City Mayor
acted beyond his authority in imposing such special conditions in its permit as
the same have no basis in the law or ordinance. Public respondents and
private respondent SOPI, on the other hand, are one in saying that the
imposition of said special conditions on petitioners business permit is well
within the authority of the City Mayor as a valid exercise of police power.
As aptly discussed by the Solicitor General in his Comment, the power to
issue licenses and permits necessarily includes the corollary power to revoke,
withdraw or cancel the same. And the power to revoke or cancel, likewise
includes the power to restrict through the imposition of certain conditions. In
the case of Austin-Hardware, Inc. vs. Court of Appeals, it was held that the
power to license carries with it the authority to provide reasonable terms and
conditions under which the licensed business shall be conducted. As the
Solicitor General puts it:
[7]

"If the City Mayor is empowered to grant or refuse to grant a

license, which is a broader power, it stands to reason that he can
also exercise a lesser power that is reasonably incidental to his
express power, i. e. to restrict a license through the imposition of
certain conditions, especially so that there is no positive
prohibition to the exercise of such prerogative by the City Mayor,

nor is there any particular official or body vested with such

authority"
[8]

However, the present inquiry does not stop there, as the Solicitor General
believes. The power or authority of the City Mayor to impose conditions or
restrictions in the business permit is indisputable. What petitioner assails are
the conditions imposed in its particular case which, it complains, amount to a
confiscation of the business in which petitioner is engaged.
Distinction must be made between the grant of a license or permit to do
business and the issuance of a license to engage in the practice of a
particular profession. The first is usually granted by the local authorities and
the second is issued by the Board or Commission tasked to regulate the
particular profession. A business permit authorizes the person, natural or
otherwise, to engage in business or some form of commercial activity. A
professional license, on the other hand, is the grant of authority to a natural
person to engage in the practice or exercise of his or her profession.
In the case at bar, what is sought by petitioner from respondent City Mayor is
a permit to engage in the business of running an optical shop. It does not
purport to seek a license to engage in the practice of optometry as a corporate
body or entity, although it does have in its employ, persons who are duly
licensed to practice optometry by the Board of Examiners in Optometry.
The case of Samahan ng Optometrists sa Pilipinas vs. Acebedo International
Corporation, G.R. No. 117097, promulgated by this Court on March 21, 1997,
is in point. The factual antecedents of that case are similar to those of the
case under consideration and the issue ultimately resolved therein is exactly
the same issue posed for resolution by this Court en banc.
[9]

In the said case, the Acebedo International Corporation filed with the Office of
the Municipal Mayor an application for a business permit for the operation of a
branch of Acebedo Optical in Candon, Ilocos Sur. The application was
opposed by the Samahan ng Optometrists sa Pilipinas-Ilocos Sur Chapter,
theorizing that Acebedo is a juridical entity not qualified to practice optometry.
A committee was created by the Office of the Mayor to study private
respondents application. Upon recommendation of the said committee,

Acebedos application for a business permit was denied. Acebedo filed a

petition with the Regional Trial Court but the same was dismissed. On appeal,
however, the Court of Appeals reversed the trial courts disposition, prompting
the Samahan ng Optometrists to elevate the matter to this Court.
The First Division of this Court, then composed of Honorable Justice Teodoro
Padilla, Josue Bellosillo, Jose Vitug and Santiago Kapunan, with Honorable
Justice Regino Hermosisima, Jr. as ponente, denied the petition and ruled in
favor of respondent Acebedo International Corporation, holding that "the fact
that private respondent hires optometrists who practice their profession in the
course of their employment in private respondents optical shops, does not
translate into a practice of optometry by private respondent itself." The Court
further elucidated that in both the old and new Optometry Law, R.A. No. 1998,
superseded by R.A. No. 8050, it is significant to note that there is no
prohibition against the hiring by corporations of optometrists. The Court
concluded thus:
[10]

"All told, there is no law that prohibits the hiring by corporations of

optometrists or considers the hiring by corporations of
optometrists as a practice by the corporation itself of the
profession of optometry."
In the present case, the objective of the imposition of subject conditions on
petitioners business permit could be attained by requiring the optometrists in
petitioners employ to produce a valid certificate of registration as optometrist,
from the Board of Examiners in Optometry. A business permit is issued
primarily to regulate the conduct of business and the City Mayor cannot,
through the issuance of such permit, regulate the practice of a profession, like
that of optometry. Such a function is within the exclusive domain of the
administrative agency specifically empowered by law to supervise the
profession, in this case the Professional Regulations Commission and the
Board of Examiners in Optometry.
It is significant to note that during the deliberations of the bicameral
conference committee of the Senate and the House of Representatives on
R.A. 8050 (Senate Bill No. 1998 and House Bill No. 14100), the committee
failed to reach a consensus as to the prohibition on indirect practice of

optometry by corporations. The proponent of the bill, former Senator Freddie

Webb, admitted thus:
"Senator Webb: xxx xxx xxx
The focus of contention remains to be the proposal of prohibiting the indirect
practice of optometry by corporations. We took a second look and even a third
look at the issue in the bicameral conference, but a compromise remained
elusive."
[11]

Former Senator Leticia Ramos-Shahani likewise voted her reservation in

casting her vote:
"Senator Shahani: Mr. President
The optometry bills have evoked controversial views from the
members of the panel. While we realize the need to uplift the
standards of optometry as a profession, the consensus of both
Houses was to avoid touching sensitive issues which properly
belong to judicial determination. Thus, the bicameral conference
committee decided to leave the issue of indirect practice of
optometry and the use of trade names open to the wisdom of the
Courts which are vested with the prerogative of interpreting the
laws."
[12]

From the foregoing, it is thus evident that Congress has not adopted a
unanimous position on the matter of prohibition of indirect practice of
optometry by corporations, specifically on the hiring and employment of
licensed optometrists by optical corporations. It is clear that Congress left the
resolution of such issue for judicial determination, and it is therefore proper for
this Court to resolve the issue.
Even in the United States, jurisprudence varies and there is a conflict of
opinions among the federal courts as to the right of a corporation or individual
not himself licensed, to hire and employ licensed optometrists.
[13]

Courts have distinguished between optometry as a learned profession in the

category of law and medicine, and optometry as a mechanical art. And,

insofar as the courts regard optometry as merely a mechanical art, they have
tended to find nothing objectionable in the making and selling of eyeglasses,
spectacles and lenses by corporations so long as the patient is actually
examined and prescribed for by a qualified practitioner.
[14]

The primary purpose of the statute regulating the practice of optometry is to

insure that optometrical services are to be rendered by competent and
licensed persons in order to protect the health and physical welfare of the
people from the dangers engendered by unlicensed practice. Such purpose
may be fully accomplished although the person rendering the service is
employed by a corporation.
[15]

Furthermore, it was ruled that the employment of a qualified optometrist by a

corporation is not against public policy. Unless prohibited by statutes, a
corporation has all the contractual rights that an individual has and it does
not become the practice of medicine or optometry because of the presence of
a physician or optometrist. The manufacturing, selling, trading and bartering
of eyeglasses and spectacles as articles of merchandise do not constitute the
practice of optometry.
[16]

[17]

[18]

[19]

In the case of Dvorine vs. Castelberg Jewelry Corporation, defendant

corporation conducted as part of its business, a department for the sale of
eyeglasses and the furnishing of optometrical services to its clients. It
employed a registered optometrist who was compensated at a regular salary
and commission and who was furnished instruments and appliances needed
for the work, as well as an office. In holding that the corporation was not
engaged in the practice of optometry, the court ruled that there is no public
policy forbidding the commercialization of optometry, as in law and medicine,
and recognized the general practice of making it a commercial business by
advertising and selling eyeglasses.
[20]

To accomplish the objective of the regulation, a state may provide by statute

that corporations cannot sell eyeglasses, spectacles, and lenses unless a duly
licensed physician or a duly qualified optometrist is in charge of, and in
personal attendance at the place where such articles are sold. In such a
case, the patients primary and essential safeguard lies in the optometrists
[21]

control of the "treatment" by means of prescription and preliminary and final

examination.
[22]

In analogy, it is noteworthy that private hospitals are maintained by

corporations incorporated for the purpose of furnishing medical and surgical
treatment. In the course of providing such treatments, these corporations
employ physicians, surgeons and medical practitioners, in the same way that
in the course of manufacturing and selling eyeglasses, eye frames and optical
lenses, optical shops hire licensed optometrists to examine, prescribe and
dispense ophthalmic lenses. No one has ever charged that these corporations
are engaged in the practice of medicine. There is indeed no valid basis for
treating corporations engaged in the business of running optical shops
differently.
It also bears stressing, as petitioner has pointed out, that the public and
private respondents did not appeal from the ruling of the Court of Appeals.
Consequently, the holding by the Court of Appeals that the act of respondent
City Mayor in imposing the questioned special conditions on petitioners
business permit is ultra vires cannot be put into issue here by the
respondents. It is well-settled that:
"A party who has not appealed from the decision may not obtain
any affirmative relief from the appellate court other than what he
had obtain from the lower court, if any, whose decision is brought
up on appeal.
[23]

xxx an appellee who is not an appellant may assign errors in his

brief where his purpose is to maintain the judgment on other
grounds, but he cannot seek modification or reversal of the
judgment or affirmative relief unless he has also appealed."
[24]

Thus, respondents submission that the imposition of subject special

conditions on petitioners business permit is not ultra vires cannot prevail over
the finding and ruling by the Court of Appeals from which
they (respondents) did not appeal.

Anent the second assigned error, petitioner maintains that its business permit
issued by the City Mayor is not a contract entered into by Iligan City in the
exercise of its proprietary functions, such that although petitioner agreed to
such conditions, it cannot be held in estoppel since ultra vires acts cannot be
given effect.
Respondents, on the other hand, agree with the ruling of the Court of Appeals
that the business permit in question is in the nature of a contract between
Iligan City and the herein petitioner, the terms and conditions of which are
binding upon agreement, and that petitioner is estopped from questioning the
same. Moreover, in the Resolution denying petitioners motion for
reconsideration, the Court of Appeals held that the contract between the
petitioner and the City of Iligan was entered into by the latter in the
performance of its proprietary functions.
This Court holds otherwise. It had occasion to rule that a license or permit is
not in the nature of a contract but a special privilege.
"xxx a license or a permit is not a contract between the
sovereignty and the licensee or permitee, and is not a property in
the constitutional sense, as to which the constitutional proscription
against impairment of the obligation of contracts may extend. A
license is rather in the nature of a special privilege, of a
permission or authority to do what is within its terms. It is not in
any way vested, permanent or absolute."
[25]

It is therefore decisively clear that estoppel cannot apply in this case. The fact
that petitioner acquiesced in the special conditions imposed by the City Mayor
in subject business permit does not preclude it from challenging the said
imposition, which is ultra vires or beyond the ambit of authority of respondent
City Mayor. Ultra vires acts or acts which are clearly beyond the scope of
ones authority are null and void and cannot be given any effect. The doctrine
of estoppel cannot operate to give effect to an act which is otherwise null and
void or ultra vires.
The Court of Appeals erred in adjudging subject business permit as having
been issued by respondent City Mayor in the performance of proprietary

functions of Iligan City. As hereinabove elaborated upon, the issuance of

business licenses and permits by a municipality or city is essentially regulatory
in nature. The authority, which devolved upon local government units to issue
or grant such licenses or permits, is essentially in the exercise of the police
power of the State within the contemplation of the general welfare clause of
the Local Government Code.
WHEREFORE, the petition is GRANTED; the Decision of the Court of Appeals
in CA-GR SP No. 22995 REVERSED; and the respondent City Mayor is
hereby ordered to reissue petitioners business permit in accordance with law
and with this disposition. No pronouncement as to costs.
SO ORDERED.
[G.R. No. 150763. July 2, 2004]

RURAL BANK OF MAKATI, INC., ESTEBAN S. SILVA and MAGDALENA

V. LANDICHO, petitioners, vs. MUNICIPALITY OF MAKATI and
ATTY. VICTOR A. L. VALERO, respondents.
DECISION
QUISUMBING, J.:

In its decision dated July 17, 2001, in CA-G.R. CV No. 58214, the Court
of
Appeals
affirmed
the
decision dated October
22,
1996 of
the Regional Trial Court of Makati City, Branch 134, in Civil Case No. 91-2866
dismissing petitioners complaint for recovery of a sum of money and
damages. Petitioners now assail said CA decision as well as the
Resolution datedNovember 9, 2001, which denied their Motion for
Reconsideration.
[1]

[2]

[3]

The facts are as follows:

Sometime in August 1990, Atty. Victor A.L. Valero, then the municipal
attorney of the Municipality of Makati, upon request of the municipal treasurer,
went to the Rural Bank of Makati to inquire about the banks payments of
taxes and fees to the municipality. He was informed, however, by petitioner

Magdalena V. Landicho, corporate secretary of the bank, that the bank was
exempt from paying taxes under Republic Act No. 720, as amended.
[4]

On November 19, 1990, the municipality lodged a complaint with the

Prosecutors Office, charging petitioners Esteban S. Silva, president and
general manager of the bank and Magdalena V. Landicho for violation of
Section 21(a), Chapter II, Article 3 in relation to Sections 105 and 169 of the
Metropolitan Tax Code.
On April 5, 1991, an Information docketed as Criminal Case No. 140208,
for violation of Municipal Ordinance Nos. 122 and 39 for non-payment of the
mayors permit fee, was filed with the Metropolitan Trial Court (MeTC)
of Makati against petitioners. Another Information, docketed as Criminal Case
No. 140209, for non-payment of annual business tax, in violation of Metro
Manila Commission Ordinance No. 82-03, Section 21(a), Chapter II, Article 3,
was likewise filed with the MeTC.
While said cases were pending with the municipal court, respondent
municipality ordered the closure of the bank. This prompted petitioners to pay,
under protest, the mayors permit fee and the annual fixed tax in the amount
of P82,408.66.
On October 18, 1991, petitioners filed with the RTC of Makati a Complaint
for Sum of Money and Damages, docketed as Civil Case No. 91-2866.
Petitioners alleged that they were constrained to pay the amount
of P82,408.66 because of the closure order, issued despite the pendency of
Criminal Cases Nos. 140208-09 and the lack of any notice or assessment of
the fees to be paid. They averred that the collection of the taxes/fees was
oppressive, arbitrary, unjust and illegal. Additionally, they alleged that
respondent Atty. Valero had no power to enforce laws and ordinances, thus
his action in enforcing the collection of the permit fees and business taxes
was ultra vires. Petitioners claimed that the bank lost expected earnings in
the amount of P19,778. Petitioners then assailed the municipal ordinances
of Makati as invalid for want of the requisite publication.
In its Answer, respondent municipality asserted that petitioners payment
of P82,408.66 was for a legal obligation because the payment of the mayors

permit fee as well as the municipal business license was required of all
business concerns. According to respondent, said requirement was in
furtherance of the police power of the municipality to regulate businesses.
For his part, Atty. Valero filed an Answer claiming that there was no
coercion committed by the municipality, that payment was a legal obligation of
the bank, and that its claim of exemption had no legal basis. He further
alleged that petitioners action was clearly intended to harass and humiliate
him and as counterclaim, he asked for moral and other damages.
On October 22, 1996, the RTC decided Civil Case No. 91-2866 as
follows:
WHEREFORE, in view of all the foregoing, judgment is hereby rendered dismissing
the complaint.
On the counterclaim, the plaintiffs are hereby ordered jointly and severally to pay to
defendant Victor Valero the sum of P200,000.00 as moral damages and the amount
of P50,000.00 as attorneys fees.
The counterclaim of defendant Municipality is dismissed.
Cost against the plaintiffs.
SO ORDERED.

[5]

In finding for respondents, the RTC ruled that the bank was engaged in
business as a rural bank. Hence, it should secure the necessary permit and
business license, as well as pay the corresponding charges and fees. It found
that the municipality had authority to impose licenses and permit fees on
persons engaging in business, under its police power embodied under the
general welfare clause. Also, the RTC declared unmeritorious petitioners
claim for exemption under Rep. Act No. 720 since said exemption had been
withdrawn by Executive Order No. 93 and the Rural Bank Act of 1992.
These statutes no longer exempted rural banks from paying corporate
income taxes and local taxes, fees and charges. It also found petitioners
claim of lack of publication of MMC Ordinance Nos. 82-03 and Municipal
[6]

[7]

Ordinance No. 122 to be mere allegations unsupported by clear and

convincing evidence.
In awarding damages to Atty. Valero, the RTC found that he had been
maliciously impleaded as defendant. It noted that Atty. Valero, as a municipal
legal officer, was tasked to enforce municipal ordinances. In short, he was
merely an agent of the local chief executive and should not be faulted for
performing his assigned task.
Petitioners seasonably moved for reconsideration, but this was denied by
the RTC in its Order dated January 10, 1997.
[8]

Petitioners appealed to the Court of Appeals in CA-G.R. CV No.

58214. The appellate court sustained the lower court in this wise:
WHEREFORE, premises considered, the appealed decision is hereby AFFIRMED in
toto.
SO ORDERED.

[9]

The Court of Appeals found the order of closure of the bank valid and
justified since the bank was operating without any permit and without having
paid the requisite permit fee. Thus, declared the Court of Appeals, it is not
merely a matter of enforcement and collection of fees, as the appellants would
have it, but a violation of the municipalitys authority to regulate the
businesses operating within its territory.
[10]

The appellate court also brushed aside petitioners claim that the general
welfare clause is limited only to legislative action. It declared that the exercise
of police power by the municipality was mandated by the general welfare
clause, which authorizes the local government units to enact ordinances, not
only to carry into effect and discharge such duties as are conferred upon them
by law, but also those for the good of the municipality and its inhabitants. This
mandate includes the regulation of useful occupations and enterprises.
Petitioner moved for reconsideration, but the appellate court in its
Resolution of November 9, 2001 denied the same.
[11]

Hence, this instant petition alleging that the Honorable Court of Appeals
seriously erred in:
1) .HOLDING THAT THE CLOSURE BY THE APPELLEE, VICTOR
VALERO, OF THE APPELLANT BANK WAS A LEGITIMATE EXERCISE
OF POLICE POWER BY THE MUNICIPALITY OF MAKATI;
2) .NOT CONSIDERING THE FACT THAT MAKATI ORDINANCE 122
REQUIRING MAYORS PERMIT FOR OPERATION OF AN
ESTABLISHMENT AND MMC ORDINANCE NO. 82-03 WERE
ADMITTED AS NOT PUBLISHED AS REQUIRED IN TAADA, ET AL.,
vs. TUVERA, NO. L-63915, DECEMBER 29, 1986 AND THAT NO TAX
ASSESSMENT WAS PRESENTED TO THE BANK;
3) .AWARDING MORAL DAMAGES TO APPELLEE VICTOR VALERO
IN THE AMOUNT OF P200,000.00 AND ATTORNEYS FEES IN THE
SUM OF P50,000.00;
4) .NOT AWARDING TO THE APPELLANT BANK, THE AMOUNT OF
P57,854.00 REPRESENTING THE AMOUNT UNJUSTLY AND
ILLEGALLY COLLECTED FROM THE APPELLANT BANK;
5) .NOT AWARDING THE AMOUNT OF P10,413.75 YEARLY
REPRESENTING THE UNREALIZED PROFIT WHICH THE
APPELLANT BANK IS BEING DEPRIVED OF IN THE USE OF THE
AFORESAID AMOUNT PLUS LEGAL INTEREST ALLOWED IN
JUDGMENT FROM THE TIME OF THE EXTRAJUDICIAL DEMAND.
(DEMAND LETTER, DATED OCTOBER 4, 1991, EXHIBIT O FOR
THE APPELLANTS);
6) .NOT GRANTING TO APPELLANTS ESTEBAN S. SILVA
AND MAGDALENA LANDICHO MORAL DAMAGES IN THE
AMOUNT OF P15,000.00;
7) .NOT AWARDING TO APPELLANTS, P1,000,000.00 EXEMPLARY
DAMAGES; 25% OF THE APPELLANTS CLAIM AS AND FOR
ATTORNEYS FEE AND COSTS OF SUIT.
[12]

Essentially, the following are the relevant issues for our resolution:
1. Whether or not petitioner bank is liable to pay the business taxes and
mayors permit fees imposed by respondent;
2. Whether or not the closure of petitioner bank is valid;
3. Whether or not petitioners are entitled to an award of unrealized profit
and damages;
4. Whether or not respondent Atty. Victor Valero is entitled to damages.
On the first issue, petitioner bank claims that of the P82,408.66 it paid
under protest, it is actually liable only for the amount of P24,154, representing
taxes, fees and charges due beginning 1987, or after the issuance of E.O. No.
93. Prior to said year, it was exempt from paying any taxes, fees, and
charges by virtue of Rep. Act No. 720.
We find the banks claim for refund untenable now.
Section 14 of Rep. Act No. 720, as amended by Republic Act No. 4106,
approved on July 19, 1964, had exempted rural banks with net assets not
exceeding one million pesos (P1,000,000) from the payment of all taxes,
charges and fees. The records show that as of December 29, 1986, petitioner
banks net assets amounted only to P745,432.29 or below the one million
ceiling provided for in Section 14 of the old Rural Banking Act. Hence, under
Rep. Act No. 720, petitioner bank could claim to be exempt from payment of
all taxes, charges and fees under the aforementioned provision.
[13]

[14]

However, on December 17, 1986, Executive Order No. 93 was issued by

then President Corazon Aquino, withdrawing all tax and duty incentives with
certain exceptions. Notably, not included among the exceptions were those
granted to rural banks under Rep. Act No. 720. With the passage of said law,
petitioner could no longer claim any exemption from payment of business
taxes and permit fees.

Now, as to the refund of P57,854 claimed by petitioners allegedly because

of overpayment of taxes and fees, we note that petitioners have not
adequately substantiated their claim. As found by the Court of Appeals:
As to the computation of the payable fees, the plaintiffs-appellants claim an
overpayment and pray for a refund. It is not clearly shown from their argument that
such overpayment exists. And from their initial complaint, they even asked for the
refund of the whole P82,408.66 paid, which complaint was instituted in 1991. They
claim having paid the fees and charges due since 1991, which is irrelevant, since
the P82,408.66 was paid for the period before 1991, and thus no deduction can be
made for payments after that period. It is not clear where their computation
of P57,854.00 owed them came from, and lacking solid support, their prayer for a
partial refund must fail. Plaintiffs-appellants have failed to show that the payment of
fees and charges even covered the period before their exemption was withdrawn.
[15]

Factual findings of the Court of Appeals, which are supported on record,

are binding and conclusive upon this Court. As repeatedly held, such findings
will not be disturbed unless they are palpably unsupported by the evidence on
record or unless the judgment itself is based on misapprehension of facts.
Moreover, in a petition for review, only questions of law are properly
raised. On this score, the refund sought by petitioners could not be
entertained much less granted.
[16]

Anent the second issue, petitioner bank claims that the closure of
respondent bank was an improper exercise of police power because a
municipal corporation has no inherent but only delegated police power, which
must be exercised not by the municipal mayor but by the municipal council
through the enactment of ordinances. It also assailed the Court of Appeals for
invoking the General Welfare Clause embodied in Section 16 of the Local
Government Code of 1991, which took effect in 1992, when the closure of
the bank was actually done onJuly 31, 1991.
[17]

[18]

Indeed the Local Government Code of 1991 was not yet in effect when the
municipality ordered petitioner banks closure on July 31, 1991. However, the
general welfare clause invoked by the Court of Appeals is not found on the
provisions of said law alone. Even under the old Local Government Code
(Batas Pambansa Blg. 337) which was then in effect, a general welfare
[19]

clause was provided for in Section 7 thereof. Municipal corporations are

agencies of the State for the promotion and maintenance of local selfgovernment and as such are endowed with police powers in order to
effectively accomplish and carry out the declared objects of their creation.
The authority of a local government unit to exercise police power under a
general welfare clause is not a recent development. This was already
provided for as early as the Administrative Code of 1917. Since then it has
been reenacted and implemented by new statutes on the matter. Thus, the
closure of the bank was a valid exercise of police power pursuant to the
general welfare clause contained in and restated by B.P. Blg. 337, which was
then the law governing local government units. No reversible error arises in
this instance insofar as the validity of respondent municipalitys exercise of
police power for the general welfare is concerned.
[20]

[21]

The general welfare clause has two branches. The first, known as
the general legislative power, authorizes the municipal council to enact
ordinances and make regulations not repugnant to law, as may be necessary
to carry into effect and discharge the powers and duties conferred upon the
municipal council by law. The second, known as the police power proper,
authorizes the municipality to enact ordinances as may be necessary and
proper for the health and safety, prosperity, morals, peace, good order,
comfort, and convenience of the municipality and its inhabitants, and for the
protection of their property.
[22]

In the present case, the ordinances imposing licenses and requiring

permits for any business establishment, for purposes of regulation enacted by
the municipal council of Makati, fall within the purview of the first branch of the
general welfare clause. Moreover, the ordinance of the municipality imposing
the annual business tax is part of the power of taxation vested upon local
governments as provided for under Section 8 of B.P. Blg. 337, to wit:
[23]

Sec. 8. Authority to Create Sources of Revenue. (1) Each local government unit
shall have the power to create its own sources of revenue and to levy taxes, subject to
such limitations as may be provided by law.
...

Implementation of these ordinances is vested in the municipal mayor, who

is the chief executive of the municipality as provided for under the Local
Government Code, to wit:
Sec. 141. Powers and Duties.
(1) The mayor shall be the chief executive of the municipal government and shall
exercise such powers, duties and functions as provided in this Code and other laws.
(2)

He shall:
...

(k)
Grant licenses and permits in accordance with existing laws or municipal
ordinances and revoke them for violation of the conditions upon which they have
been granted;
...
(o)
Enforce laws, municipal ordinances and resolutions and issue necessary
orders for their faithful and proper enforcement and execution;
(p)
Ensure that all taxes and other revenues of the municipality are
collected, and that municipal funds are spent in accordance with law, ordinances and
regulations;
...
(t)
Cause to be instituted judicial proceedings in connection with the violation
of ordinances, for the collection of taxes, fees and charges, and for the recovery of
property and funds of the municipality, and otherwise to protect the interest of the
municipality; (Emphasis supplied)
[24]

...
Consequently, the municipal mayor, as chief executive, was clothed with
authority to create a Special Task Force headed by respondent Atty. Victor
A.L. Valero to enforce and implement said ordinances and resolutions and to
file appropriate charges and prosecute violators. Respondent Valero could
[25]

hardly be faulted for performing his official duties under the cited
circumstances.
Petitioners contend that MMC Ordinance No. 82-03 and Municipal
Ordinance No. 122 are void for lack of publication. This again raises a factual
issue, which this Court may not look into. As repeatedly held, this Court is not
a trier of facts. Besides, both the Court of Appeals and the trial court found
lack of sufficient evidence on this point to support petitioners claim, thus:
[26]

And finally the matter of the lack of publication is once again alleged by the plaintiffsappellants, claiming that the matter was skirted by the trial court. This argument must
fail, in the light of the trial courts squarely finding lack of evidence to support the
allegation of the plaintiffs-appellants. We quote from the trial courts decision:
The contention that MMC Ordinance No. 82-03 and Municipal Ordinance No. 122
of Makati are void as they were not publishced (sic) is untenable. The mere allegation
of the plaintiff is not sufficient to declare said ordinances void. The plaintiffs failed to
adduce clear, convincing and competent evidence to prove said Ordinances
void. Moreover, in this jurisdiction, an ordinance is presumed to be valid unless
declared otherwise by a Court in an appropriate proceeding where the validity of the
ordinance is directly put in issue.
[27]

On the issue of the closure of the bank, we find that the bank was not
engaged in any illegal or immoral activities to warrant its outright closure. The
appropriate remedies to enforce payment of delinquent taxes or fees are
provided for in Section 62 of the Local Tax Code, to wit:
SEC. 62. Civil Remedies. The civil remedies available to enforce payment of
delinquent taxes shall be by distraint of personal property, and by legal action. Either
of these remedies or both simultaneously may be pursued at the discretion of the
proper authority.
The payment of other revenues accruing to local governments shall be enforced by
legal action.
[28]

Said Section 62 did not provide for closure. Moreover, the order of closure
violated petitioners right to due process, considering that the records show

that the bank exercised good faith and presented what it thought was a valid
and legal justification for not paying the required taxes and fees. The violation
of a municipal ordinance does not empower a municipal mayor to avail of
extrajudicial remedies. It should have observed due process before ordering
the banks closure.
[29]

Finally, on the issue of damages, we agree with both the trial and the
appellate courts that the bank is not entitled to any damages. The award of
moral damages cannot be granted to a corporation, it being an artificial person
that exists only in legal contemplation and cannot, therefore, experience
physical suffering and mental anguish, which can be experienced only by one
having a nervous system. There is also no sufficient basis for the award of
exemplary damages. There being no moral damages, exemplary damages
could not be awarded also. As to attorneys fees, aside from lack of adequate
support and proof on the matter, these fees are not recoverable as a matter of
right but depend on the sound discretion of the courts.
[30]

[31]

Under the circumstances of this case, the award of damages to Atty.

Valero is also baseless. We cannot ascribe any illegal motive or malice to the
bank for impleading Atty. Valero as an officer of respondent municipality. The
bank filed the case against respondent municipality in the honest belief that it
is exempt from paying taxes and fees. Since Atty. Valero was the official
charged with the implementation of the ordinances of respondent municipality,
he was rightly impleaded as a necessary party in the case.
WHEREFORE, the assailed Decision dated July 17, 2001, of the Court of
Appeals in CA-G.R. CV No. 58214 is AFFIRMED with MODIFICATIONS, so
that (1) the order denying any claim for refunds and fees allegedly overpaid by
the bank, as well as the denial of any award for damages and unrealized
profits, is hereby SUSTAINED; (2) the order decreeing the closure of petitioner
bank is SET ASIDE; and (3) the award of moral damages and attorneys fees
to Atty. Victor A.L. Valero is DELETED. No pronouncement as to costs.
SO ORDERED.
G.R. No. 111397

August 12, 2002

HON. ALFREDO LIM and RAFAELITO GARAYBLAS, petitioners,

vs.
THE COURT OF APPEALS, HON. WILFREDO REYES and BISTRO PIGALLE, INC., respondents.
CARPIO, J.:
The Case
Before us is a petition for review on certiorari1 of the Decision of the Court of Appeals dated March
25, 1993,2and its Resolution dated July 13, 19933 which denied petitioners motion for
reconsideration. The assailed Decision sustained the orders dated December 29, 1992, January 20,
1993 and March 2, 1993,4 issued by Branch 36 of the Regional Trial Court of Manila. The trial courts
orders enjoined petitioner Alfredo Lim ("Lim" for brevity), then Mayor of Manila, from investigating,
impeding or closing down the business operations of the New Bangkok Club and the Exotic Garden
Restaurant owned by respondent Bistro Pigalle Inc. ("Bistro" for brevity).
The Antecedent Facts
On December 7, 1992 Bistro filed before the trial court a petition5 for mandamus and prohibition, with
prayer for temporary restraining order or writ of preliminary injunction, against Lim in his capacity as
Mayor of the City of Manila. Bistro filed the case because policemen under Lims instructions
inspected and investigated Bistros license as well as the work permits and health certificates of its
staff. This caused the stoppage of work in Bistros night club and restaurant operations. 6 Lim also
refused to accept Bistros application for a business license, as well as the work permit applications
of Bistros staff, for the year 1993.7
In its petition, Bistro argued that Lims refusal to issue the business license and work permits violated
the doctrine laid down this Court in De la Cruz vs. Paras,8 to wit:
"Municipal corporations cannot prohibit the operation of nightclubs. They may be regulated,
but not prevented from carrying on their business."
Acting on Bistros application for injunctive relief, the trial court issued the first assailed temporary
restraining order on December 29, 1992, the dispositive portion of which reads:
"WHEREFORE, respondent and/or his agents and representatives are ordered to refrain
from inspecting or otherwise interfering in the operation of the establishments of petitioner
(Bistro Pigalle, Inc.)."9
At the hearing, the parties submitted their evidence in support of their respective positions. On
January 20, 1993, the trial court granted Bistros application for a writ of prohibitory preliminary
injunction. The dispositive portion of the trial courts order declared:
"WHEREFORE, in view of all the foregoing, Petitioners application for a writ of prohibitory
preliminary injunction is granted, and Respondent, and any/all persons acting under his
authority, are and (sic) ordered to cease and desist from inspecting, investigating and

otherwise closing or impeding the business operations of Petitioner Corporations

establishments while the petition here is pending resolution on the merits.
Considering that the Respondent is a government official and this injunction relates to his
official duties, the posting of an injunction bond by the Petitioners is not required.
On the other hand, Petitioners application for a writ of mandatory injunction is hereby
denied, for to grant the same would amount to granting the writ of mandamus prayed for. The
Court reserves resolution thereof until the parties shall have been heard on the merits." 10
However, despite the trial courts order, Lim still issued a closure order on Bistros operations
effective January 23, 1993, even sending policemen to carry out his closure order.
On January 25, 1993, Bistro filed an "Urgent Motion for Contempt" against Lim and the policemen
who stopped Bistros operations on January 23, 1993. At the hearing of the motion for contempt on
January 29, 1993, Bistro withdrew its motion on condition that Lim would respect the courts
injunction.
However, on February 12, 13, 15, 26 and 27, and on March 1 and 2, 1993, Lim, acting through his
agents and policemen, again disrupted Bistros business operations.
Meanwhile, on February 17, 1993, Lim filed a motion to dissolve the injunctive order of January 20,
1993 and to dismiss the case. Lim insisted that the power of a mayor to inspect and investigate
commercial establishments and their staff is implicit in the statutory power of the city mayor to issue,
suspend or revoke business permits and licenses. This statutory power is expressly provided for in
Section 11 (l), Article II of the Revised Charter of the City of Manila and in Section 455, paragraph 3
(iv) of the Local Government Code of 1991.
The trial court denied Lims motion to dissolve the injunction and to dismiss the case in an order
dated March 2, 1993, the dispositive portion of which stated:
"WHEREFORE, premises considered, the Court hereby orders:
(1) The denial of respondents motion to dissolve the writ of preliminary prohibitory injunction
or the dismissal of the instant case;
(2) Petitioner-corporation is authorized to remove the wooden cross-bars or any other
impediments which were placed at its establishments, namely, New Bangkok Club and
Exotic Garden Restaurant on February 12, 1993 and February 15, 1993, respectively, and
thereafter said establishments are allowed to resume their operations;
(3) All the other petitioners are allowed to continue working in the aforenamed
establishments of petitioner-corporation if they have not yet reported; and
(4) The hearing on the contempt proceedings is deferred to give sufficient time to respondent
to elevate the matters assailed herein to the Supreme Court." 11

On March 10, 1993, Lim filed with the Court of Appeals a petition for certiorari, prohibition and
mandamus against Bistro and Judge Wilfredo Reyes. Lim claimed that the trial judge committed
grave abuse of discretion amounting to lack of jurisdiction in issuing the writ of prohibitory
preliminary injunction.
On March 25, 1993, the Court of Appeals rendered the assailed decision. 12 In a resolution dated July
13, 1993, the Court of Appeals denied Lims motion for reconsideration. 13
On July 1, 1993, Manila City Ordinance No. 778314 took effect. On the same day, Lim ordered the
Western Police District Command to permanently close down the operations of Bistro, which order
the police implemented at once.15
The Ruling of the Court of Appeals
In denying Lims petition, the Court of Appeals held that the trial court did not commit grave abuse of
discretion since it issued the writ after hearing on the basis of the evidence adduced.
The Court of Appeals reasoned thus:
"x x x. A writ of preliminary injunction may issue if the act sought to be enjoined will cause
irreparable injury to the movant or destroy the status quo before a full hearing can be had on
the merits of the case.
A writ of preliminary injunction, as an ancillary or preventive remedy, may only be resorted to
by a litigant to protect or preserve his rights or interests and for no other purpose during the
pendency of the principal action. It is primarily intended to maintain the status quo between
the parties existing prior to the filing of the case.
In the case at bar, We find that the respondent Judge did not act improvidently in issuing the
assailed orders granting the writ of preliminary injunction in order to maintain the status quo,
while the petition is pending resolution on the merits. The private respondent correctly points
out that the questioned writ was regularly issued after several hearings, in which the parties
were allowed to adduce evidence, and argue their respective positions.
The issuance of a writ of preliminary injunction is within the limits of the sound exercise of
discretion of the court and the appellate court will not interfere, except, in a clear case of
abuse thereof. x x x.
WHEREFORE, the petition is DENIED DUE COURSE and is accordingly DISMISSED." 16
Hence, this petition.
The Issues
In their Memorandum, petitioners raise the following issues:

1. "DID RESPONDENT JUDGE COMMIT GRAVE ABUSE OF DISCRETION AMOUNTING

TO LACK OR EXCESS OF JURISDICTION IN ISSUING HIS SAID ASSAILED ORDERS OF
DECEMBER 29, 1992, JANUARY 20, 1993 AND MARCH 2, 1993?"
2. "DID RESPONDENT COURT OF APPEALS COMMIT REVERSIBLE ERRORS IN
RENDERING ITS ASSAILED DECISION OF MARCH 25, 1993 AND ITS ASSAILED
RESOLUTION OF JULY 13, 1993?"
3. "DID SAID CIVIL CASE NO. 92-63712 AND SAID CA-G.R. SP NO. 30381 BECOME
MOOT AND ACADEMIC WHEN THE NEW BANGKOK CLUB AND THE EXOTIC GARDEN
RESTAURANT OF PRIVATE RESPONDENT WERE CLOSED ON JULY 1, 1993
PURSUANT TO ORDINANCE NO. 7783?"
The Ruling of the Court
The petition is without merit.
Considering that the constitutionality of Ordinance No. 7783 was not raised before the trial court or
the Court of Appeals, and this issue is still under litigation in another case, 17 the Court will deal only
with the first two issues raised by petitioner.
Validity of the Preliminary Injunction
Bistros cause of action in the mandamus and prohibition proceedings before the trial court is the
violation of its property right under its license to operate. The violation consists of the work disruption
in Bistros operations caused by Lim and his subordinates as well as Lims refusal to issue a
business license to Bistro and work permits to its staff for the year 1993. The primary relief prayed
for by Bistro is the issuance of writs of mandatory and prohibitory injunction. The mandatory
injunction seeks to compel Lim to accept Bistros 1993 business license application and to issue
Bistros business license. Also, the mandatory injunction seeks to compel Lim to accept the
applications of Bistros staff for work permits. The writ of prohibitory injunction seeks to enjoin Lim
from interfering, impeding or otherwise closing down Bistros operations.
The trial court granted only the prohibitory injunction. This enjoined Lim from interfering, impeding or
otherwise closing down Bistros operations pending resolution of whether Lim can validly refuse to
issue Bistros business license and its staffs work permits for the year 1993.
Lim contends that the Court of Appeals erred in upholding the prohibitory injunction. Lim relies
primarily on his power, as Mayor of the City of Manila, to grant and refuse municipal licenses and
business permits as expressly provided for in the Local Government Code and the Revised Charter
of the City of Manila. Lim argues that the powers granted by these laws implicitly include the power
to inspect, investigate and close down Bistros operations for violation of the conditions of its licenses
and permits.
On the other hand, Bistro asserts that the legal provisions relied upon by Lim do not apply to the
instant case. Bistro maintains that the Local Government Code and the Revised Charter of the City

of Manila do not expressly or impliedly grant Lim any power to prohibit the operation of night clubs.
Lim failed to specify any violation by Bistro of the conditions of its licenses and permits. In refusing to
accept Bistros business license application for the year 1993, Bistro claims that Lim denied Bistro
due process of law.
The Court of Appeals held that the trial court did not commit grave abuse of discretion in issuing the
prohibitory preliminary injunction.
We uphold the findings of the Court of Appeals.
The authority of mayors to issue business licenses and permits is beyond question. The law
expressly provides for such authority. Section 11 (l), Article II of the Revised Charter of the City of
Manila, reads:
"Sec. 11. General duties and powers of the mayor. The general duties and powers of the
mayor shall be:
x x x.
(l) To grant and refuse municipal licenses or permits of all classes and to revoke the
same for violation of the conditions upon which they were granted, or if acts prohibited
by law or municipal ordinances are being committed under the protection of such licenses or
in the premises in which the business for which the same have been granted is carried on, or
for any other reason of general interest." (Emphasis supplied)
On the other hand, Section 455 (3) (iv) of the Local Government Code provides:
"Sec. 455. Chief Executive, Powers, Duties and Compensation: xxx.
(b) For efficient, effective and economical governance the purpose of which is the general
welfare of the City and its inhabitants pursuant to Section 16 of this Code, the City Mayor
shall:
(3) x x x.
(iv) Issue licenses and permits and suspend or revoke the same for any
violation of the condition upon which said licenses or permits had been
issued, pursuant to law or ordinance." (Emphasis supplied)
From the language of the two laws, it is clear that the power of the mayor to issue business licenses
and permits necessarily includes the corollary power to suspend, revoke or even refuse to issue the
same. However, the power to suspend or revoke these licenses and permits is expressly premised
on the violation of the conditions of these permits and licenses. The laws specifically refer to the
"violation of the condition(s)" on which the licenses and permits were issued. Similarly, the power to
refuse to issue such licenses and permits is premised on non-compliance with the prerequisites for
the issuance of such licenses and permits. The mayor must observe due process in exercising these

powers, which means that the mayor must give the applicant or licensee notice and opportunity to be
heard.
True, the mayor has the power to inspect and investigate private commercial establishments for any
violation of the conditions of their licenses and permits. However, the mayor has no power to order a
police raid on these establishments in the guise of inspecting or investigating these commercial
establishments. Lim acted beyond his authority when he directed policemen to raid the New
Bangkok Club and the Exotic Garden Restaurant. Such act of Lim violated Ordinance No.
771618 which expressly prohibits police raids and inspections, to wit:
"Section 1. No member of the Western Police District shall conduct inspection of food and
other business establishments for the purpose of enforcing sanitary rules and regulations,
inspecting licenses and permits, and/or enforcing internal revenue and customs laws and
regulations. This responsibility should be properly exercised by Local Government
Authorities and other concerned agencies." (Emphasis supplied)
These local government officials include the City Health Officer or his representative, pursuant to the
Revised City Ordinances of the City of Manila,19 and the City Treasurer pursuant to Section 470 of
the Local Government Code.20
Lim has no authority to close down Bistros business or any business establishment in Manila
without due process of law. Lim cannot take refuge under the Revised Charter of the City of Manila
and the Local Government Code. There is no provision in these laws expressly or impliedly granting
the mayor authority to close down private commercial establishments without notice and hearing,
and even if there is, such provision would be void. The due process clause of the Constitution
requires that Lim should have given Bistro an opportunity to rebut the allegations that it violated the
conditions of its licenses and permits.
The regulatory powers granted to municipal corporations must always be exercised in accordance
with law, with utmost observance of the rights of the people to due process and equal protection of
the law.21 Such power cannot be exercised whimsically, arbitrarily or despotically. In the instant case,
we find that Lims exercise of this power violated Bistros property rights that are protected under the
due process clause of the Constitution.
Lim did not charge Bistro with any specific violation of the conditions of its business license or
permits. Still, Lim closed down Bistros operations even before the expiration of its business license
on December 31, 1992. Lim also refused to accept Bistros license application for 1993, in effect
denying the application without examining whether it complies with legal prerequisites.
Lims zeal in his campaign against prostitution is commendable. The presumption is that he acted in
good faith and was motivated by his concern for his constituents when he implemented his
campaign against prostitution in the Ermita-Malate area. However, there is no excusing Lim for
arbitrarily closing down, without due process of law, the business operations of Bistro. For this
reason, the trial court properly restrained the acts of Lim.

Consequently, the Court of Appeals did not err in upholding the trial courts orders. The sole
objective of a writ of preliminary injunction is to preserve the status quo until the merits of the case
can be heard fully. It is generally availed of to prevent actual or threatened acts, until the merits of
the case can be disposed of.22 In the instant case, the issuance of the writ of prohibitory preliminary
injunction did not dispose of the main case for mandamus. The trial court issued the injunction in
view of the disruptions and stoppage in Bistros operations as a consequence of Lims closure
orders. The injunction was intended to maintain the status quo while the petition has not been
resolved on the merits.
WHEREFORE, the petition is denied for lack of merit. The assailed Decision of the Court of Appeals
in CA-G.R. SP NO. 30381 is AFFIRMED in toto.
SO ORDERED.