Police Power Cases Compilation

G.R. No.
L-34915 June 24, 1983

CITY GOVERNMENT OF QUEZON CITY and CITY COUNCIL OF QUEZON
CITY, petitioners,
vs.
HON. JUDGE VICENTE G. ERICTA as Judge of the Court of First Instance of
Rizal, Quezon City, Branch XVIII; HIMLAYANG PILIPINO, INC., respondents.
This is a petition for review which seeks the reversal of the decision of the Court of
First Instance of Rizal, Branch XVIII declaring Section 9 of Ordinance No. 6118, S-64,
of the Quezon City Council null and void.
Section 9 of Ordinance No. 6118, S-64, entitled "ORDINANCE REGULATING THE
ESTABLISHMENT, MAINTENANCE AND OPERATION OF PRIVATE MEMORIAL TYPE
CEMETERY OR BURIAL GROUND WITHIN THE JURISDICTION OF QUEZON CITY AND
PROVIDING PENALTIES FOR THE VIOLATION THEREOF" provides:
Sec. 9. At least six (6) percent of the total area of the memorial
park cemetery shall be set aside for charity burial of deceased
persons who are paupers and have been residents of Quezon City
for at least 5 years prior to their death, to be determined by
competent City Authorities. The area so designated shall
immediately be developed and should be open for operation not
later than six months from the date of approval of the application.
For several years, the aforequoted section of the Ordinance was not enforced by city
authorities but seven years after the enactment of the ordinance, the Quezon City
Council passed the following resolution:
RESOLVED by the council of Quezon assembled, to request, as it
does hereby request the City Engineer, Quezon City, to stop any
further selling and/or transaction of memorial park lots in Quezon
City where the owners thereof have failed to donate the required
6% space intended for paupers burial.
The respondent court, therefore, rendered the decision declaring Section 9 of

Ordinance No. 6118, S-64 null and void.
A motion for reconsideration having been denied, the City Government and City
Council filed the instant petition.
Petitioners argue that the taking of the respondent's property is a valid and
reasonable exercise of police power and that the land is taken for a public use as it is
intended for the burial ground of paupers. They further argue that the Quezon City
Council is authorized under its charter, in the exercise of local police power, " to
make such further ordinances and resolutions not repugnant to law as may be
necessary to carry into effect and discharge the powers and duties conferred by this
Act and such as it shall deem necessary and proper to provide for the health and
safety, promote the prosperity, improve the morals, peace, good order, comfort and
convenience of the city and the inhabitants thereof, and for the protection of
property therein."
On the other hand, respondent Himlayang Pilipino, Inc. contends that the taking or
confiscation of property is obvious because the questioned ordinance permanently
restricts the use of the property such that it cannot be used for any reasonable
purpose and deprives the owner of all beneficial use of his property.
The respondent also stresses that the general welfare clause is not available as a
source of power for the taking of the property in this case because it refers to "the
power of promoting the public welfare by restraining and regulating the use of
liberty and property." The respondent points out that if an owner is deprived of his
property outright under the State's police power, the property is generally not taken
for public use but is urgently and summarily destroyed in order to promote the
general welfare. The respondent cites the case of a nuisance per se or the
destruction of a house to prevent the spread of a conflagration.
We find the stand of the private respondent as well as the decision of the
respondent Judge to be well-founded. We quote with approval the lower court's
ruling which declared null and void Section 9 of the questioned city ordinance:
Pursuant to this petition, the Quezon City Engineer notified respondent Himlayang
Pilipino, Inc. in writing that Section 9 of Ordinance No. 6118, S-64 would be enforced
The issue is: Is Section 9 of the ordinance in question a valid

exercise of the police power?
Respondent Himlayang Pilipino reacted by filing with the Court of First Instance of
Rizal Branch XVIII at Quezon City, a petition for declaratory relief, prohibition and
mandamus with preliminary injunction (Sp. Proc. No. Q-16002) seeking to annul
Section 9 of the Ordinance in question The respondent alleged that the same is
contrary to the Constitution, the Quezon City Charter, the Local Autonomy Act, and
the Revised Administrative Code.
An examination of the Charter of Quezon City (Rep. Act No. 537),

does not reveal any provision that would justify the ordinance in
question except the provision granting police power to the City.
Section 9 cannot be justified under the power granted to Quezon
City to tax, fix the license fee, and regulatesuch other business,
trades, and occupation as may be established or practised in the
City.' (Subsections 'C', Sec. 12, R.A. 537).
There being no issue of fact and the questions raised being purely legal both
petitioners and respondent agreed to the rendition of a judgment on the pleadings.
The power to regulate does not include the power to prohibit

(People vs. Esguerra, 81 PhiL 33, Vega vs. Municipal Board of Iloilo,
L-6765, May 12, 1954; 39 N.J. Law, 70, Mich. 396). A fortiori, the
power to regulate does not include the power to confiscate. The
ordinance in question not only confiscates but also prohibits the
operation of a memorial park cemetery, because under Section 13
of said ordinance, 'Violation of the provision thereof is punishable
with a fine and/or imprisonment and that upon conviction thereof
the permit to operate and maintain a private cemetery shall be
revoked or cancelled.' The confiscatory clause and the penal
provision in effect deter one from operating a memorial park
cemetery. Neither can the ordinance in question be justified under
subsection "t", Section 12 of Republic Act 537 which authorizes
the City Council to'prohibit the burial of the dead within the center
of population of the city and provide for their
burial in such proper place and in such manner
as the council may determine, subject to the
provisions of the general law regulating burial
grounds and cemeteries and governing funerals
and disposal of the dead.' (Sub-sec. (t), Sec. 12,
Rep. Act No. 537).
There is nothing in the above provision which authorizes
confiscation or as euphemistically termed by the respondents,
'donation'
We now come to the question whether or not Section 9 of the
ordinance in question is a valid exercise of police power. The police
power of Quezon City is defined in sub-section 00, Sec. 12, Rep.
Act 537 which reads as follows:
(00) To make such further ordinance and
regulations not repugnant to law as may be
necessary to carry into effect and discharge the
powers and duties conferred by this act and such
as it shall deem necessary and proper to provide
for the health and safety, promote, the
prosperity, improve the morals, peace, good
order, comfort and convenience of the city and
the inhabitants thereof, and for the protection of
property therein; and enforce obedience thereto
with such lawful fines or penalties as the City
Council may prescribe under the provisions of
subsection (jj) of this section.
We start the discussion with a restatement of certain basic

principles. Occupying the forefront in the bill of rights is the
provision which states that 'no person shall be deprived of life,
liberty or property without due process of law' (Art. Ill, Section 1
subparagraph 1, Constitution).
On the other hand, there are three inherent powers of government
by which the state interferes with the property rights, namely-. (1)
police power, (2) eminent domain, (3) taxation. These are said to
exist independently of the Constitution as necessary attributes of
sovereignty.
Police power is defined by Freund as 'the power of promoting the
public welfare by restraining and regulating the use of liberty and
property' (Quoted in Political Law by Tanada and Carreon, V-11, p.
50). It is usually exerted in order to merely regulate the use and
enjoyment of property of the owner. If he is deprived of his
property outright, it is not taken for public use but rather to
destroy in order to promote the general welfare. In police power,
the owner does not recover from the government for injury
sustained in consequence thereof (12 C.J. 623). It has been said
that police power is the most essential of government powers, at
times the most insistent, and always one of the least limitable of
the powers of government (Ruby vs. Provincial Board, 39 PhiL 660;
Ichong vs. Hernandez, 1,7995, May 31, 1957). This power
embraces the whole system of public regulation (U.S. vs. Linsuya
Fan, 10 PhiL 104). The Supreme Court has said that police power is
so far-reaching in scope that it has almost become impossible to
limit its sweep. As it derives its existence from the very existence
of the state itself, it does not need to be expressed or defined in
its scope. Being coextensive with self-preservation and survival
itself, it is the most positive and active of all governmental
processes, the most essential insistent and illimitable Especially it
is so under the modern democratic framework where the demands
of society and nations have multiplied to almost unimaginable
proportions. The field and scope of police power have become
almost boundless, just as the fields of public interest and public
welfare have become almost all embracing and have transcended
human foresight. Since the Courts cannot foresee the needs and
demands of public interest and welfare, they cannot delimit
beforehand the extent or scope of the police power by which and
through which the state seeks to attain or achieve public interest
and welfare. (Ichong vs. Hernandez, L-7995, May 31, 1957).
The police power being the most active power of the government
and the due process clause being the broadest station on
governmental power, the conflict between this power of
government and the due process clause of the Constitution is
oftentimes inevitable.
It will be seen from the foregoing authorities that police power is

usually exercised in the form of mere regulation or restriction in
the use of liberty or property for the promotion of the general
welfare. It does not involve the taking or confiscation of property
with the exception of a few cases where there is a necessity to
confiscate private property in order to destroy it for the purpose of
protecting the peace and order and of promoting the general
welfare as for instance, the confiscation of an illegally possessed
article, such as opium and firearms.
It seems to the court that Section 9 of Ordinance No. 6118, Series
of 1964 of Quezon City is not a mere police regulation but an
outright confiscation. It deprives a person of his private property
without due process of law, nay, even without compensation.
In sustaining the decision of the respondent court, we are not unmindful of the
heavy burden shouldered by whoever challenges the validity of duly enacted
legislation whether national or local As early as 1913, this Court ruled in Case v.
Board of Health (24 PhiL 250) that the courts resolve every presumption in favor of
validity and, more so, where the ma corporation asserts that the ordinance was
enacted to promote the common good and general welfare.
In the leading case of Ermita-Malate Hotel and Motel Operators Association Inc. v.
City Mayor of Manila (20 SCRA 849) the Court speaking through the then Associate
Justice and now Chief Justice Enrique M. Fernando stated
Primarily what calls for a reversal of such a decision is the a of any
evidence to offset the presumption of validity that attaches to a
statute or ordinance. As was expressed categorically by Justice
Malcolm 'The presumption is all in favor of validity. ... The action of
the elected representatives of the people cannot be lightly set
aside. The councilors must, in the very nature of things, be familiar
with the necessities of their particular ... municipality and with all
the facts and lances which surround the subject and necessitate
action. The local legislative body, by enacting the ordinance, has
in effect given notice that the regulations are essential to the wellbeing of the people. ... The Judiciary should not lightly set aside
legislative action when there is not a clear invasion of personal or
property rights under the guise of police regulation. (U.S. v.
Salaveria (1918], 39 Phil. 102, at p. 111. There was an affirmation
of the presumption of validity of municipal ordinance as
announced in the leading Salaveria decision in Ebona v. Daet,
[1950]85 Phil. 369.)
We have likewise considered the principles earlier stated in Case v.
Board of Health supra :
... Under the provisions of municipal charters which are known as

the general welfare clauses, a city, by virtue of its police power,
may adopt ordinances to the peace, safety, health, morals and the
best and highest interests of the municipality. It is a well-settled
principle, growing out of the nature of well-ordered and society,
that every holder of property, however absolute and may be his
title, holds it under the implied liability that his use of it shall not
be injurious to the equal enjoyment of others having an equal right
to the enjoyment of their property, nor injurious to the rights of the
community. An property in the state is held subject to its general
regulations, which are necessary to the common good and general
welfare. Rights of property, like all other social and conventional
rights, are subject to such reasonable limitations in their
enjoyment as shall prevent them from being injurious, and to such
reasonable restraints and regulations, established by law, as the
legislature, under the governing and controlling power vested in
them by the constitution, may think necessary and expedient. The
state, under the police power, is possessed with plenary power to
deal with all matters relating to the general health, morals, and
safety of the people, so long as it does not contravene any positive
inhibition of the organic law and providing that such power is not
exercised in such a manner as to justify the interference of the
courts to prevent positive wrong and oppression.
but find them not applicable to the facts of this case.
There is no reasonable relation between the setting aside of at least six (6) percent
of the total area of an private cemeteries for charity burial grounds of deceased
paupers and the promotion of health, morals, good order, safety, or the general
welfare of the people. The ordinance is actually a taking without compensation of a
certain area from a private cemetery to benefit paupers who are charges of the
municipal corporation. Instead of building or maintaining a public cemetery for this
purpose, the city passes the burden to private cemeteries.
The expropriation without compensation of a portion of private cemeteries is not
covered by Section 12(t) of Republic Act 537, the Revised Charter of Quezon City
which empowers the city council to prohibit the burial of the dead within the center
of population of the city and to provide for their burial in a proper place subject to
the provisions of general law regulating burial grounds and cemeteries. When the
Local Government Code, Batas Pambansa Blg. 337 provides in Section 177 (q) that a
Sangguniang panlungsod may "provide for the burial of the dead in such place and
in such manner as prescribed by law or ordinance" it simply authorizes the city to
provide its own city owned land or to buy or expropriate private properties to
construct public cemeteries. This has been the law and practise in the past. It
continues to the present. Expropriation, however, requires payment of just
compensation. The questioned ordinance is different from laws and regulations
requiring owners of subdivisions to set aside certain areas for streets, parks,
playgrounds, and other public facilities from the land they sell to buyers of
subdivision lots. The necessities of public safety, health, and convenience are very
clear from said requirements which are intended to insure the development of
communities with salubrious and wholesome environments. The beneficiaries of the
regulation, in turn, are made to pay by the subdivision developer when individual
lots are sold to home-owners.
As a matter of fact, the petitioners rely solely on the general welfare clause or on
implied powers of the municipal corporation, not on any express provision of law as
statutory basis of their exercise of power. The clause has always received broad and
liberal interpretation but we cannot stretch it to cover this particular taking.
Moreover, the questioned ordinance was passed after Himlayang Pilipino, Inc. had
incorporated. received necessary licenses and permits and commenced operating.
The sequestration of six percent of the cemetery cannot even be considered as
having been impliedly acknowledged by the private respondent when it accepted
the permits to commence operations. WHEREFORE, the petition for review is
hereby DISMISSED. The decision of the respondent court is affirmed.
[G.R. No. 118127. April 12, 2005]
CITY OF MANILA, HON. ALFREDO S. LIM as the Mayor of the City of Manila,
HON. JOSELITO L. ATIENZA, in his capacity as Vice-Mayor of the City
of Manila and Presiding Officer of the City Council of Manila, HON.
ERNESTO A. NIEVA, HON. GONZALO P. GONZALES, HON. AVELINO S.
CAILIAN, HON. ROBERTO C. OCAMPO, HON. ALBERTO DOMINGO,
HON. HONORIO U. LOPEZ, HON. FRANCISCO G. VARONA, JR., HON.
ROMUALDO S. MARANAN, HON. NESTOR C. PONCE, JR., HON.
HUMBERTO B. BASCO, HON. FLAVIANO F. CONCEPCION, JR., HON.
ROMEO G. RIVERA, HON. MANUEL M. ZARCAL, HON. PEDRO S. DE
JESUS, HON. BERNARDITO C. ANG, HON. MANUEL L. QUIN, HON.
JHOSEP Y. LOPEZ, HON. CHIKA G. GO, HON. VICTORIANO A.
MELENDEZ, HON. ERNESTO V.P. MACEDA, JR., HON. ROLANDO P.
NIETO, HON. DANILO V. ROLEDA, HON. GERINO A. TOLENTINO, JR.,
HON. MA. PAZ E. HERRERA, HON. JOEY D. HIZON, HON. FELIXBERTO
D. ESPIRITU, HON. KARLO Q. BUTIONG, HON. ROGELIO P. DELA PAZ,
HON. BERNARDO D. RAGAZA, HON. MA. CORAZON R. CABALLES,
HON. CASIMIRO C. SISON, HON. BIENVINIDO M. ABANTE, JR., HON.
MA. LOURDES M. ISIP, HON. ALEXANDER S. RICAFORT, HON.
ERNESTO F. RIVERA, HON. LEONARDO L. ANGAT, and HON. JOCELYN
B. DAWIS, in their capacity as councilors of the City of
Manila, petitioners, vs. HON. PERFECTO A.S. LAGUIO, JR., as
Presiding Judge, RTC, Manila and MALATE TOURIST DEVELOPMENT
CORPORATION, respondents.
DECISION
TINGA, J.:
I know only that what is moral is what you feel good after and what is immoral is
what you feel bad after.
Ernest Hermingway
Death in the Afternoon, Ch. 1
It is a moral and political axiom that any dishonorable act, if performed by oneself, is
less immoral than if performed by someone else, who would be well-intentioned in
his dishonesty.
J. Christopher Gerald
Bonaparte in Egypt, Ch. I
The Courts commitment to the protection of morals is secondary to its fealty to
the fundamental law of the land. It is foremost a guardian of the Constitution but not
the conscience of individuals. And if it need be, the Court will not hesitate to make
the hammer fall, and heavily in the words of Justice Laurel, and uphold the
constitutional guarantees when faced with laws that, though not lacking in zeal to
promote morality, nevertheless fail to pass the test of constitutionality.
The pivotal issue in this Petition[1] under Rule 45 (then Rule 42) of the Revised
Rules on Civil Procedure seeking the reversal of the Decision[2] in Civil Case No. 9366511 of the Regional Trial Court (RTC) of Manila, Branch 18 (lower court), [3] is the
validity of Ordinance No. 7783 (the Ordinance) of the City of Manila.[4]
The antecedents are as follows:
Private respondent Malate Tourist Development Corporation (MTDC) is a
corporation engaged in the business of operating hotels, motels, hostels and lodging
houses.[5] It built and opened Victoria Court in Malate which was licensed as a motel
although duly accredited with the Department of Tourism as a hotel. [6] On 28 June
1993, MTDC filed a Petition for Declaratory Relief with Prayer for a Writ of
Preliminary Injunction and/or Temporary Restraining Order [7] (RTC Petition) with the
lower court impleading as defendants, herein petitioners City of Manila, Hon. Alfredo
S. Lim (Lim), Hon. Joselito L. Atienza, and the members of the City Council of Manila
(City Council). MTDC prayed that the Ordinance, insofar as it includes motels and
inns as among its prohibited establishments, be declared invalid and
unconstitutional.[8]
Enacted by the City Council[9] on 9 March 1993 and approved by petitioner City
Mayor on 30 March 1993, the said Ordinance is entitled
AN ORDINANCE PROHIBITING THE ESTABLISHMENT OR OPERATION OF BUSINESSES
PROVIDING CERTAIN FORMS OF AMUSEMENT, ENTERTAINMENT, SERVICES AND
FACILITIES IN THE ERMITA-MALATE AREA, PRESCRIBING PENALTIES FOR VIOLATION
THEREOF, AND FOR OTHER PURPOSES.[10]
The Ordinance is reproduced in full, hereunder:
SECTION 1. Any provision of existing laws and ordinances to the contrary
notwithstanding, no person, partnership, corporation or entity shall, in the
Ermita-Malate area bounded by Teodoro M. Kalaw Sr. Street in the North, Taft
Avenue in the East, Vito Cruz Street in the South and Roxas Boulevard in the West,
pursuant to P.D. 499 be allowed or authorized to contract and engage in, any
business providing certain forms of amusement, entertainment, services
and facilities where women are used as tools in entertainment and which
tend to disturb the community, annoy the inhabitants, and adversely affect
the social and moral welfare of the community,such as but not limited to:
1.
2.
3.
4.
5.
6.
7.
Sauna Parlors
Massage Parlors
Karaoke Bars
Beerhouses
Night Clubs
Day Clubs
Super Clubs
8. Discotheques
9. Cabarets
10. Dance Halls
11. Motels
12. Inns
SEC. 2 The City Mayor, the City Treasurer or any person acting in behalf of the
said officials are prohibited from issuing permits, temporary or otherwise, or
from granting licenses and accepting payments for the operation of
business enumerated in the preceding section.
SEC. 3. Owners and/or operator of establishments engaged in, or devoted to,
the businesses enumerated in Section 1 hereof are hereby given three (3) months
from the date of approval of this ordinance within which to wind up
business operations or to transfer to any place outside of the ErmitaMalate area or convert said businesses to other kinds of business
allowable within the area, such as but not limited to:
1. Curio or antique shop
2. Souvenir Shops
3. Handicrafts display centers
4. Art galleries
5. Records and music shops
6. Restaurants
7. Coffee shops
8. Flower shops
9. Music lounge and sing-along restaurants, with welldefined activities for wholesome family entertainment that cater to
both local and foreign clientele.
10. Theaters engaged in the exhibition, not only of motion
pictures but also of cultural shows, stage and theatrical plays, art
exhibitions, concerts and the like.
11. Businesses allowable within the law and medium
intensity districts as provided for in the zoning ordinances for
Metropolitan Manila, except new warehouse or open-storage depot,
dock or yard, motor repair shop, gasoline service station, light
industry with any machinery, or funeral establishments.
SEC. 4. Any person violating any provisions of this ordinance, shall upon
conviction, be punished by imprisonment of one (1) year or fine of FIVE
THOUSAND (P5,000.00) PESOS, or both, at the discretion of the Court,
PROVIDED, that in case of juridical person, the President, the General Manager, or
person-in-charge of operation shall be liable thereof; PROVIDED FURTHER, that in
case of subsequent violation and conviction, the premises of the erring
establishment shall be closed and padlocked permanently.
SEC. 5. This ordinance shall take effect upon approval.
Enacted by the City Council of Manila at its regular session today, March 9, 1993.
Approved by His Honor, the Mayor on March 30, 1993. (Emphasis supplied)
In the RTC Petition, MTDC argued that the Ordinance erroneously and
improperly included in its enumeration of prohibited establishments, motels and inns
such as MTDCs Victoria Court considering that these were not establishments for
amusement or entertainment and they were not services or facilities for
entertainment, nor did they use women as tools for entertainment, and neither did
they disturb the community, annoy the inhabitants or adversely affect the social and
moral welfare of the community.[11]
MTDC further advanced that the Ordinance was invalid and unconstitutional for
the following reasons: (1) The City Council has no power to prohibit the operation of
motels as Section 458 (a) 4 (iv) [12] of the Local Government Code of 1991 (the Code)
grants to the City Council only the power to regulate the establishment, operation
and maintenance of hotels, motels, inns, pension houses, lodging houses and other
similar establishments; (2) The Ordinance is void as it is violative of Presidential
Decree (P.D.) No. 499[13] which specifically declared portions of the Ermita-Malate
area as a commercial zone with certain restrictions; (3) The Ordinance does not
constitute a proper exercise of police power as the compulsory closure of the motel
business has no reasonable relation to the legitimate municipal interests sought to
be protected; (4) The Ordinance constitutes an ex post facto law by punishing the
operation of Victoria Court which was a legitimate business prior to its enactment;
(5) The Ordinance violates MTDCs constitutional rights in that: (a) it is confiscatory
and constitutes an invasion of plaintiffs property rights; (b) the City Council has no
power to find as a fact that a particular thing is a nuisance per se nor does it have
the power to extrajudicially destroy it; and (6) The Ordinance constitutes a denial of
equal protection under the law as no reasonable basis exists for prohibiting the
operation of motels and inns, but not pension houses, hotels, lodging houses or
other similar establishments, and for prohibiting said business in the Ermita-Malate
area but not outside of this area.[14]
In their Answer[15] dated 23 July 1993, petitioners City of Manila and Lim
maintained that the City Council had the power to prohibit certain forms of
entertainment in order to protect the social and moral welfare of the community as
provided for in Section 458 (a) 4 (vii) of the Local Government Code, [16] which reads,
thus:
Section 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:
....
(4) Regulate activities relative to the use of land, buildings and structures within the
city in order to promote the general welfare and for said purpose shall:
....
(vii) Regulate the establishment, operation, and maintenance of any
entertainment or amusement facilities, including theatrical performances,
circuses, billiard pools, public dancing schools, public dance halls, sauna
baths, massage parlors, and other places for entertainment or
amusement; regulate such other events or activities for amusement or
entertainment, particularly those which tend to disturb the community or
annoy the inhabitants, or require the suspension or suppression of the
same; or, prohibit certain forms of amusement or entertainment in order

to protect the social and moral welfare of the community.
Citing Kwong Sing v. City of Manila,[17] petitioners insisted that the power of
regulation spoken of in the above-quoted provision included the power to control, to
govern and to restrain places of exhibition and amusement. [18]
Petitioners likewise asserted that the Ordinance was enacted by the City
Council of Manila to protect the social and moral welfare of the community in
conjunction with its police power as found in Article III, Section 18(kk) of Republic Act
No. 409,[19] otherwise known as the Revised Charter of the City of Manila (Revised
Charter of Manila)[20] which reads, thus:
ARTICLE III
THE MUNICIPAL BOARD
...
Section 18. Legislative powers. The Municipal Board shall have the
following legislative powers:
...
(kk) 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 chapter; and to fix penalties for the violation of
ordinances which shall not exceed two hundred pesos fine or six months
imprisonment, or both such fine and imprisonment, for a single offense.
Further, the petitioners noted, the Ordinance had the presumption of validity;
hence, private respondent had the burden to prove its illegality or
unconstitutionality.[21]
Petitioners also maintained that there was no inconsistency between P.D. 499
and the Ordinance as the latter simply disauthorized certain forms of businesses and
allowed the Ermita-Malate area to remain a commercial zone. [22] The Ordinance, the
petitioners likewise claimed, cannot be assailed as ex post facto as it was
prospective in operation.[23] The Ordinance also did not infringe the equal protection
clause and cannot be denounced as class legislation as there existed substantial and
real differences between the Ermita-Malate area and other places in the City of
Manila.[24]
On 28 June 1993, respondent Judge Perfecto A.S. Laguio, Jr. (Judge Laguio)
issued an ex-parte temporary restraining order against the enforcement of
the Ordinance.[25] And on 16 July 1993, again in an intrepid gesture, he granted the
writ of preliminary injunction prayed for by MTDC.[26]
After trial, on 25 November 1994, Judge Laguio rendered the assailed Decision,
enjoining the petitioners from implementing the Ordinance. The dispositive portion
of said Decision reads:[27]
WHEREFORE, judgment is hereby rendered declaring Ordinance No. 778[3], Series of

1993, of the City of Manila null and void, and making permanent the writ of
preliminary injunction that had been issued by this Court against the defendant. No
costs.
SO ORDERED.[28]
Petitioners filed with the lower court a Notice of Appeal[29] on 12 December
1994, manifesting that they are elevating the case to this Court under then Rule 42
on pure questions of law.[30]
On 11 January 1995, petitioners filed the present Petition, alleging that the
following errors were committed by the lower court in its ruling: (1) It erred in
concluding that the subject ordinance is ultra vires, or otherwise, unfair,
unreasonable and oppressive exercise of police power; (2) It erred in holding that the
questioned Ordinance contravenes P.D. 499[31] which allows operators of all kinds of
commercial establishments, except those specified therein; and (3) It erred in
declaring the Ordinance void and unconstitutional.[32]
In the Petition and in its Memorandum,[33] petitioners in essence repeat the
assertions they made before the lower court. They contend that the
assailed Ordinance was enacted in the exercise of the inherent and plenary power of
the State and the general welfare clause exercised by local government units
provided for in Art. 3, Sec. 18 (kk) of the Revised Charter of Manila and
conjunctively, Section 458 (a) 4 (vii) of the Code. [34] They allege that
the Ordinance is a valid exercise of police power; it does not contravene P.D. 499;
and that it enjoys the presumption of validity. [35]
[36]
In its Memorandum
dated 27 May 1996, private respondent maintains that
the Ordinance is ultra vires and that it is void for being repugnant to the general law.
It reiterates that the questioned Ordinance is not a valid exercise of police power;
that it is violative of due process, confiscatory and amounts to an arbitrary
interference with its lawful business; that it is violative of the equal protection
clause; and that it confers on petitioner City Mayor or any officer unregulated
discretion in the execution of the Ordinance absent rules to guide and control his
actions.
This is an opportune time to express the Courts deep sentiment and
tenderness for the Ermita-Malate area being its home for several decades. A longtime resident, the Court witnessed the areas many turn of events. It relished its
glory days and endured its days of infamy. Much as the Court harks back to the
resplendent era of the Old Manila and yearns to restore its lost grandeur, it believes
that the Ordinance is not the fitting means to that end. The Court is of the opinion,
and so holds, that the lower court did not err in declaring the Ordinance, as it
did, ultra vires and therefore null and void.
The Ordinance is so replete with constitutional infirmities that almost every
sentence thereof violates a constitutional provision. The prohibitions and sanctions
therein transgress the cardinal rights of persons enshrined by the Constitution. The
Court is called upon to shelter these rights from attempts at rendering them
worthless.
The tests of a valid ordinance are well established. A long line of decisions has
held that for an ordinance to be valid, it must not only be within the corporate
powers of the local government unit to enact and must be passed according to the
procedure prescribed by law, it must also conform to the following substantive
requirements: (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.[37]
Anent the first criterion, ordinances shall only be valid when they are not
contrary to the Constitution and to the laws.[38] The Ordinance must satisfy two
requirements: it must pass muster under the test of constitutionality and the test of
consistency with the prevailing laws. That ordinances should be constitutional
uphold the principle of the supremacy of the Constitution. The requirement that the
enactment must not violate existing law gives stress to the precept that local
government units are able to legislate only by virtue of their derivative legislative
power, a delegation of legislative power from the national legislature. The delegate
cannot be superior to the principal or exercise powers higher than those of the latter.
[39]
This 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. The national legislature is still the
principal of the local government units, which cannot defy its will or modify or
violate it.[40]
The Ordinance was passed by the City Council in the exercise of its police
power, an enactment of the City Council acting as agent of Congress. Local
government units, as agencies of the State, are endowed with police power in order
to effectively accomplish and carry out the declared objects of their creation. [41] This
delegated police power is found in Section 16 of the Code, known as the general
welfare clause, viz:
SECTION 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.
Local government units exercise police power through their respective
legislative bodies; in this case, the sangguniang panlungsod or the city council. The
Code empowers the legislative bodies to enact ordinances, approve resolutions and
appropriate funds for the general welfare of the province/city/municipality and its
inhabitants pursuant to Section 16 of the Code and in the proper exercise of the
corporate powers of the province/city/ municipality provided under the Code. [42] The
inquiry in this Petition is concerned with the validity of the exercise of such
delegated power.
The Ordinance contravenes
the Constitution
The police power of the City Council, however broad and far-reaching, is
subordinate to the constitutional limitations thereon; and is subject to the limitation
that its exercise must be reasonable and for the public good. [43] In the case at bar,
the enactment of the Ordinance was an invalid exercise of delegated power as it is
unconstitutional and repugnant to general laws.
The relevant constitutional provisions are the following:

SEC. 5. The maintenance of peace and order, the protection of life, liberty, and
property, and the promotion of the general welfare are essential for the enjoyment
by all the people of the blessings of democracy.[44]
SEC. 14. The State recognizes the role of women in nation-building, and shall ensure
the fundamental equality before the law of women and men.[45]
SEC. 1. No person shall be deprived of life, liberty or property without due process of
law, nor shall any person be denied the equal protection of laws. [46]
Sec. 9. Private property shall not be taken for public use without just compensation.
[47]
A. The Ordinance infringes

the Due Process Clause
The constitutional safeguard of due process is embodied in the fiat (N)o person
shall be deprived of life, liberty or property without due process of law. . . . [48]
There is no controlling and precise definition of due process. It furnishes though
a standard to which governmental action should conform in order that deprivation of
life, liberty or property, in each appropriate case, be valid. This standard is aptly
described as a responsiveness to the supremacy of reason, obedience to the
dictates of justice,[49] and as such it is a limitation upon the exercise of the police
power.[50]
The purpose of the guaranty is to prevent governmental encroachment against
the life, liberty and property of individuals; to secure the individual from the
arbitrary exercise of the powers of the government, unrestrained by the established
principles of private rights and distributive justice; to protect property from
confiscation by legislative enactments, from seizure, forfeiture, and destruction
without a trial and conviction by the ordinary mode of judicial procedure; and to
secure to all persons equal and impartial justice and the benefit of the general law.
[51]
The guaranty serves as a protection against arbitrary regulation, and private

corporations and partnerships are persons within the scope of the guaranty insofar
as their property is concerned.[52]
This clause has been interpreted as imposing two separate limits on
government, usually called procedural due process and substantive due process.
Procedural due process, as the phrase implies, refers to the procedures that
the government must follow before it deprives a person of life, liberty, or property.
Classic procedural due process issues are concerned with what kind of notice and
what form of hearing the government must provide when it takes a particular action.
[53]
Substantive due process, as that phrase connotes, asks whether the

government has an adequate reason for taking away a persons life, liberty, or
property. In other words, substantive due process looks to whether there is a
sufficient justification for the governments action. [54] Case law in the United States
(U.S.) tells us that whether there is such a justification depends very much on the
level of scrutiny used.[55] For example, if a law is in an area where only rational basis
review is applied, substantive due process is met so long as the law is rationally
related to a legitimate government purpose. But if it is an area where strict scrutiny
is used, such as for protecting fundamental rights, then the government will meet
substantive due process only if it can prove that the law is necessary to achieve a
compelling government purpose.[56]
The police power granted to local government units must always be exercised
with utmost observance of the rights of the people to due process and equal
protection of the law. Such power cannot be exercised whimsically, arbitrarily or
despotically[57] as its exercise is subject to a qualification, limitation or restriction
demanded by the respect and regard due to the prescription of the fundamental law,
particularly those forming part of the Bill of Rights. Individual rights, it bears
emphasis, may be adversely affected only to the extent that may fairly be required
by the legitimate demands of public interest or public welfare. [58]Due process
requires the intrinsic validity of the law in interfering with the rights of the person to
his life, liberty and property.[59]
Requisites for the valid exercise
of Police Power are not met
To successfully invoke the exercise of police power as the rationale for the
enactment of the Ordinance, and to free it from the imputation of constitutional
infirmity, not only must it appear that the interests of the public generally, as
distinguished from those of a particular class, require 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. [60] It
must be evident that no other alternative for the accomplishment of the purpose
less intrusive of private rights can work. A reasonable relation must exist between
the purposes of the police measure and the means employed for its
accomplishment, for even under the guise of protecting the public interest, personal
rights and those pertaining to private property will not be permitted to be arbitrarily
invaded.[61]
Lacking a concurrence of these two requisites, the police measure shall be
struck down as an arbitrary intrusion into private rights [62] a violation of the due
process clause.
The Ordinance was enacted to address and arrest the social ills purportedly
spawned by the establishments in the Ermita-Malate area which are allegedly
operated under the deceptive veneer of legitimate, licensed and tax-paying
nightclubs, bars, karaoke bars, girlie houses, cocktail lounges, hotels and motels.
Petitioners insist that even the Court in the case of Ermita-Malate Hotel and Motel
Operators Association, Inc. v. City Mayor of Manila [63] had already taken judicial
notice of the alarming increase in the rate of prostitution, adultery and fornication in
Manila traceable in great part to existence of motels, which provide a necessary
atmosphere for clandestine entry, presence and exit and thus become the ideal
haven for prostitutes and thrill-seekers.[64]
The object of the Ordinance was, accordingly, the promotion and protection of
the social and moral values of the community. Granting for the sake of argument
that the objectives of the Ordinance are within the scope of the City Councils police
powers, the means employed for the accomplishment thereof were unreasonable
and unduly oppressive.
It is undoubtedly one of the fundamental duties of the City of Manila to make
all reasonable regulations looking to the promotion of the moral and social values of
the community. However, the worthy aim of fostering public morals and the
eradication of the communitys social ills can be achieved through means less
restrictive of private rights; it can be attained by reasonable restrictions rather than
by an absolute prohibition. The closing down and transfer of businesses or their
conversion into businesses allowed under the Ordinance have no reasonable relation
to the accomplishment of its purposes. Otherwise stated, the prohibition of the
enumerated establishments will not per se protect and promote the social and moral
welfare of the community; it will not in itself eradicate the alluded social ills of
prostitution, adultery, fornication nor will it arrest the spread of sexual disease in
Manila.
Conceding for the nonce that the Ermita-Malate area teems with houses of illrepute and establishments of the like which the City Council may lawfully prohibit,
[65]
it is baseless and insupportable to bring within that classification sauna parlors,
massage parlors, karaoke bars, night clubs, day clubs, super clubs, discotheques,
cabarets, dance halls, motels and inns. This is not warranted under the accepted
definitions of these terms. The enumerated establishments are lawful pursuits which
are not per se offensive to the moral welfare of the community.
That these are used as arenas to consummate illicit sexual affairs and as
venues to further the illegal prostitution is of no moment. We lay stress on the acrid
truth that sexual immorality, being a human frailty, may take place in the most
innocent of places that it may even take place in the substitute establishments
enumerated under Section 3 of the Ordinance. If the flawed logic of
the Ordinance were to be followed, in the remote instance that an immoral sexual
act transpires in a church cloister or a court chamber, we would behold the
spectacle of the City of Manila ordering the closure of the church or court concerned.
Every house, building, park, curb, street or even vehicles for that matter will not be
exempt from the prohibition. Simply because there are no pure places where there
are impure men. Indeed, even the Scripture and the Tradition of Christians churches
continually recall the presence and universality of sin in mans history.[66]
The problem, it needs to be pointed out, is not the establishment, which by its
nature cannot be said to be injurious to the health or comfort of the community and
which in itself is amoral, but the deplorable human activity that may occur within its
premises. While a motel may be used as a venue for immoral sexual activity, it
cannot for that reason alone be punished. It cannot be classified as a house of illrepute or as a nuisance per se on a mere likelihood or a naked assumption. If that
were so and if that were allowed, then the Ermita-Malate area would not only be
purged of its supposed social ills, it would be extinguished of its soul as well as every
human activity, reprehensible or not, in its every nook and cranny would be laid bare
to the estimation of the authorities.
The Ordinance seeks to legislate morality but fails to address the core issues of
morality. Try as the Ordinance may to shape morality, it should not foster the illusion
that it can make a moral man out of it because immorality is not a thing, a building
or establishment; it is in the hearts of men. The City Council instead should regulate
human conduct that occurs inside the establishments, but not to the detriment of
liberty and privacy which are covenants, premiums and blessings of democracy.
While petitioners earnestness at curbing clearly objectionable social ills is
commendable, they unwittingly punish even the proprietors and operators of
wholesome, innocent establishments. In the instant case, there is a clear invasion of
personal or property rights, personal in the case of those individuals desirous of
owning, operating and patronizing those motels and property in terms of the
investments made and the salaries to be paid to those therein employed. If the City
of Manila so desires to put an end to prostitution, fornication and other social ills, it
can instead impose reasonable regulations such as daily inspections of the
establishments for any violation of the conditions of their licenses or permits; it may
exercise its authority to suspend or revoke their licenses for these violations; [67] and
it may even impose increased license fees. In other words, there are other means to
reasonably accomplish the desired end.
Means employed are
constitutionally infirm
The Ordinance disallows the operation of sauna parlors, massage parlors,
karaoke bars, beerhouses, night clubs, day clubs, super clubs, discotheques,
cabarets, dance halls, motels and inns in the Ermita-Malate area. In Section 3
thereof, owners and/or operators of the enumerated establishments are given three
(3) months from the date of approval of the Ordinance within which to wind up
business operations or to transfer to any place outside the Ermita-Malate area or
convert said businesses to other kinds of business allowable within the area. Further,
it states in Section 4 that in cases of subsequent violations of the provisions of the
Ordinance, the premises of the erring establishment shall be closed and padlocked
permanently.
It is readily apparent that the means employed by the Ordinance for the
achievement of its purposes, the governmental interference itself, infringes on the
constitutional guarantees of a persons fundamental right to liberty and property.
Liberty as guaranteed by the Constitution was defined by Justice Malcolm to
include the right to exist and the right to be free from arbitrary restraint or
servitude. The term cannot be dwarfed into mere freedom from physical restraint of
the person of the citizen, but is deemed to embrace the right of man to enjoy the
facilities with which he has been endowed by his Creator, subject only to such
restraint as are necessary for the common welfare. [68] In accordance with this case,
the rights of the citizen to be free to use his faculties in all lawful ways; to live and
work where he will; to earn his livelihood by any lawful calling; and to pursue any
avocation are all deemed embraced in the concept of liberty. [69]
The U.S. Supreme Court in the case of Roth v. Board of Regents,[70] sought to
clarify the meaning of liberty. It said:
While the Court has not attempted to define with exactness the liberty. . .
guaranteed [by the Fifth and Fourteenth Amendments], the term denotes not merely
freedom from bodily restraint but also the right of the individual to contract, to
engage in any of the common occupations of life, to acquire useful knowledge, to
marry, establish a home and bring up children, to worship God according to the
dictates of his own conscience, and generally to enjoy those privileges long
recognizedas essential to the orderly pursuit of happiness by free men. In a
Constitution for a free people, there can be no doubt that the meaning of liberty
must be broad indeed.
In another case, it also confirmed that liberty protected by the due process
clause includes personal decisions relating to marriage, procreation, contraception,
family relationships, child rearing, and education. In explaining the respect the
Constitution demands for the autonomy of the person in making these choices, the
U.S. Supreme Court explained:
These matters, involving the most intimate and personal choices a person may
make in a lifetime, choices central to personal dignity and autonomy, are central to
the liberty protected by the Fourteenth Amendment. At the heart of liberty is the
right to define ones own concept of existence, of meaning, of universe, and of the
mystery of human life. Beliefs about these matters could not define the attributes of
personhood where they formed under compulsion of the State.[71]
Persons desirous to own, operate and patronize the enumerated
establishments under Section 1 of the Ordinance may seek autonomy for these
purposes.
Motel patrons who are single and unmarried may invoke this right to autonomy
to consummate their bonds in intimate sexual conduct within the motels premisesbe
it stressed that their consensual sexual behavior does not contravene any
fundamental state policy as contained in the Constitution. [72] Adults have a right to
choose to forge such relationships with others in the confines of their own private
lives and still retain their dignity as free persons. The liberty protected by the
Constitution allows persons the right to make this choice. [73] Their right to liberty
under the due process clause gives them the full right to engage in their conduct
without intervention of the government, as long as they do not run afoul of the law.
Liberty should be the rule and restraint the exception.
Liberty in the constitutional sense not only means freedom from unlawful
government restraint; it must include privacy as well, if it is to be a repository of
freedom. The right to be let alone is the beginning of all freedomit is the most
comprehensive of rights and the right most valued by civilized men.[74]
The concept of liberty compels respect for the individual whose claim to
privacy and interference demands respect. As the case of Morfe v. Mutuc,
[75]
borrowing the words of Laski, so very aptly stated:
Man is one among many, obstinately refusing reduction to unity. His separateness,
his isolation, are indefeasible; indeed, they are so fundamental that they are the
basis on which his civic obligations are built. He cannot abandon the consequences
of his isolation, which are, broadly speaking, that his experience is private, and the
will built out of that experience personal to himself. If he surrenders his will to
others, he surrenders himself. If his will is set by the will of others, he ceases to be a
master of himself. I cannot believe that a man no longer a master of himself is in any
real sense free.
Indeed, the right to privacy as a constitutional right was recognized in Morfe,
the invasion of which should be justified by a compelling state
interest. Morfe accorded recognition to the right to privacy independently of its
identification with liberty; in itself it is fully deserving of constitutional protection.
Governmental powers should stop short of certain intrusions into the personal life of
the citizen.[76]
There is a great temptation to have an extended discussion on these civil
liberties but the Court chooses to exercise restraint and restrict itself to the issues
presented when it should. The previous pronouncements of the Court are not to be
interpreted as a license for adults to engage in criminal conduct. The reprehensibility
of such conduct is not diminished. The Court only reaffirms and guarantees their
right to make this choice. Should they be prosecuted for their illegal conduct, they
should suffer the consequences of the choice they have made. That, ultimately, is
their choice.
Modality employed is
unlawful taking
In addition, the Ordinance is unreasonable and oppressive as it substantially

divests the respondent of the beneficial use of its property. [77] The Ordinance in
Section 1 thereof forbids the running of the enumerated businesses in the ErmitaMalate area and in Section 3 instructs its owners/operators to wind up business
operations or to transfer outside the area or convert said businesses into allowed
businesses. An ordinance which permanently restricts the use of property that it can
not be used for any reasonable purpose goes beyond regulation and must be
recognized as a taking of the property without just compensation. [78] It is intrusive
and violative of the private property rights of individuals.
The Constitution expressly provides in Article III, Section 9, that private
property shall not be taken for public use without just compensation. The provision is
the most important protection of property rights in the Constitution. This is a
restriction on the general power of the government to take property. The
constitutional provision is about ensuring that the government does not confiscate
the property of some to give it to others. In part too, it is about loss spreading. If the
government takes away a persons property to benefit society, then society should
pay. The principal purpose of the guarantee is to bar the Government from forcing
some people alone to bear public burdens which, in all fairness and justice, should
be borne by the public as a whole.[79]
There are two different types of taking that can be identified. A possessory
taking occurs when the government confiscates or physically occupies property. A
regulatory taking occurs when the governments regulation leaves no reasonable
economically viable use of the property.[80]
In the landmark case of Pennsylvania Coal v. Mahon,[81] it was held that a
taking also could be found if government regulation of the use of property went too
far. When regulation reaches a certain magnitude, in most if not in all cases there
must be an exercise of eminent domain and compensation to support the act. While
property may be regulated to a certain extent, if regulation goes too far it will be
recognized as a taking.[82]
No formula or rule can be devised to answer the questions of what is too far
and when regulation becomes a taking. In Mahon, Justice Holmes recognized that it
was a question of degree and therefore cannot be disposed of by general
propositions. On many other occasions as well, the U.S. Supreme Court has said that
the issue of when regulation constitutes a taking is a matter of considering the facts
in each case. The Court asks whether justice and fairness require that the economic
loss caused by public action must be compensated by the government and thus
borne by the public as a whole, or whether the loss should remain concentrated on
those few persons subject to the public action.[83]
What is crucial in judicial consideration of regulatory takings is that
government regulation is a taking if it leaves no reasonable economically viable use
of property in a manner that interferes with reasonable expectations for use. [84] A
regulation that permanently denies all economically beneficial or productive use of
land is, from the owners point of view, equivalent to a taking unless principles of
nuisance or property law that existed when the owner acquired the land make the
use prohibitable.[85] When the owner of real property has been called upon to
sacrifice all economically beneficial uses in the name of the common good, that is,
to leave his property economically idle, he has suffered a taking.[86]
A regulation which denies all economically beneficial or productive use of land
will require compensation under the takings clause. Where a regulation places
limitations on land that fall short of eliminating all economically beneficial use, a
taking nonetheless may have occurred, depending on a complex of factors including
the regulations economic effect on the landowner, the extent to which the regulation
interferes with reasonable investment-backed expectations and the character of
government action. These inquiries are informed by the purpose of the takings
clause which is to prevent the government from forcing some people alone to bear
public burdens which, in all fairness and justice, should be borne by the public as a
whole.[87]
A restriction on use of property may also constitute a taking if not reasonably
necessary to the effectuation of a substantial public purpose or if it has an unduly
harsh impact on the distinct investment-backed expectations of the owner. [88]
The Ordinance gives the owners and operators of the prohibited
establishments three (3) months from its approval within which to wind up business
operations or to transfer to any place outside of the Ermita-Malate area or convert
said businesses to other kinds of business allowable within the area. The directive to
wind up business operations amounts to a closure of the establishment, a
permanent deprivation of property, and is practically confiscatory. Unless the owner
converts his establishment to accommodate an allowed business, the structure
which housed the previous business will be left empty and gathering dust. Suppose
he transfers it to another area, he will likewise leave the entire establishment idle.
Consideration must be given to the substantial amount of money invested to build
the edifices which the owner reasonably expects to be returned within a period of
time. It is apparent that the Ordinance leaves no reasonable economically viable use
of property in a manner that interferes with reasonable expectations for use.
The second and third options to transfer to any place outside of the ErmitaMalate area or to convert into allowed businessesare confiscatory as well. The
penalty of permanent closure in cases of subsequent violations found in Section 4 of
the Ordinance is also equivalent to a taking of private property.
The second option instructs the owners to abandon their property and build
another one outside the Ermita-Malate area. In every sense, it qualifies as a taking
without just compensation with an additional burden imposed on the owner to build
another establishment solely from his coffers. The proffered solution does not put an
end to the problem, it merely relocates it. Not only is this impractical, it is
unreasonable, onerous and oppressive. The conversion into allowed enterprises is
just as ridiculous. How may the respondent convert a motel into a restaurant or a
coffee shop, art gallery or music lounge without essentially destroying its property?
This is a taking of private property without due process of law, nay, even without
compensation.
The penalty of closure likewise constitutes unlawful taking that should be
compensated by the government. The burden on the owner to convert or transfer
his business, otherwise it will be closed permanently after a subsequent violation
should be borne by the public as this end benefits them as a whole.
Petitioners cannot take refuge in classifying the measure as a zoning
ordinance. A zoning ordinance, although a valid exercise of police power, which
limits a wholesome property to a use which can not reasonably be made of it
constitutes the taking of such property without just compensation. Private property
which is not noxious nor intended for noxious purposes may not, by zoning, be
destroyed without compensation. Such principle finds no support in the principles of
justice as we know them. The police powers of local government units which have
always received broad and liberal interpretation cannot be stretched to cover this
particular taking.
Distinction should be made between destruction from necessity and eminent
domain. It needs restating that the property taken in the exercise of police power is
destroyed because it is noxious or intended for a noxious purpose while the property
taken under the power of eminent domain is intended for a public use or purpose
and is therefore wholesome.[89] If it be of public benefit that a wholesome property
remain unused or relegated to a particular purpose, then certainly the public should
bear the cost of reasonable compensation for the condemnation of private property
for public use.[90]
Further, the Ordinance fails to set up any standard to guide or limit the
petitioners actions. It in no way controls or guides the discretion vested in them. It
provides no definition of the establishments covered by it and it fails to set forth the
conditions when the establishments come within its ambit of prohibition.
The Ordinance confers upon the mayor arbitrary and unrestricted power to close
down establishments. Ordinances such as this, which make possible abuses in its
execution, depending upon no conditions or qualifications whatsoever other than the
unregulated arbitrary will of the city authorities as the touchstone by which its
validity is to be tested, are unreasonable and invalid. The Ordinance should have
established a rule by which its impartial enforcement could be secured. [91]
Ordinances placing restrictions upon the lawful use of property must, in order
to be valid and constitutional, specify the rules and conditions to be observed and
conduct to avoid; and must not admit of the exercise, or of an opportunity for the
exercise, of unbridled discretion by the law enforcers in carrying out its provisions. [92]
Thus, in Coates v. City of Cincinnati,[93] as cited in People v. Nazario,[94] the U.S.
Supreme Court struck down an ordinance that had made it illegal for three or more
persons to assemble on any sidewalk and there conduct themselves in a manner
annoying to persons passing by. The ordinance was nullified as it imposed no
standard at all because one may never know in advance what annoys some people
but does not annoy others.
Similarly, the Ordinance does not specify the standards to ascertain which
establishments tend to disturb the community, annoy the inhabitants, and adversely
affect the social and moral welfare of the community. The cited case supports the
nullification of the Ordinance for lack of comprehensible standards to guide the law
enforcers in carrying out its provisions.
Petitioners cannot therefore order the closure of the enumerated
establishments without infringing the due process clause. These lawful
establishments may be regulated, but not prevented from carrying on their
business. This is a sweeping exercise of police power that is a result of a lack of
imagination on the part of the City Council and which amounts to an interference
into personal and private rights which the Court will not countenance. In this regard,
we take a resolute stand to uphold the constitutional guarantee of the right to liberty
and property.
Worthy of note is an example derived from the U.S. of a reasonable regulation
which is a far cry from the ill-considered Ordinance enacted by the City Council.
In FW/PBS, INC. v. Dallas,[95] the city of Dallas adopted a comprehensive
ordinance regulating sexually oriented businesses, which are defined to include
adult arcades, bookstores, video stores, cabarets, motels, and theaters as well as
escort agencies, nude model studio and sexual encounter centers. Among other
things, the ordinance required that such businesses be licensed. A group of motel
owners were among the three groups of businesses that filed separate suits
challenging the ordinance. The motel owners asserted that the city violated the due
process clause by failing to produce adequate support for its supposition that renting
room for fewer than ten (10) hours resulted in increased crime and other secondary
effects. They likewise argued than the ten (10)-hour limitation on the rental of motel
rooms placed an unconstitutional burden on the right to freedom of association.
Anent the first contention, the U.S. Supreme Court held that the reasonableness of
the legislative judgment combined with a study which the city considered, was
adequate to support the citys determination that motels permitting room rentals for
fewer than ten (10 ) hours should be included within the licensing scheme. As
regards the second point, the Court held that limiting motel room rentals to ten (10)
hours will have no discernible effect on personal bonds as those bonds that are
formed from the use of a motel room for fewer than ten (10) hours are not those
that have played a critical role in the culture and traditions of the nation by
cultivating and transmitting shared ideals and beliefs.
The ordinance challenged in the above-cited case merely regulated the
targeted businesses. It imposed reasonable restrictions; hence, its validity was
upheld.
The case of Ermita Malate Hotel and Motel Operators Association, Inc. v. City
Mayor of Manila,[96] it needs pointing out, is also different from this case in that what
was involved therein was a measure which regulated the mode in which motels may
conduct business in order to put an end to practices which could encourage vice and
immorality. Necessarily, there was no valid objection on due process or equal
protection grounds as the ordinance did not prohibit motels. The Ordinance in this
case however is not a regulatory measure but is an exercise of an assumed power to
prohibit.[97]
The foregoing premises show that the Ordinance is an unwarranted and
unlawful curtailment of property and personal rights of citizens. For being
unreasonable and an undue restraint of trade, it cannot, even under the guise of
exercising police power, be upheld as valid.
B. The Ordinance violates Equal
Protection Clause
Equal protection requires that all persons or things similarly situated should be
treated alike, both as to rights conferred and responsibilities imposed. Similar
subjects, in other words, should not be treated differently, so as to give undue favor
to some and unjustly discriminate against others.[98] The guarantee means that no
person or class of persons shall be denied the same protection of laws which is
enjoyed by other persons or other classes in like circumstances. [99] The equal
protection of the laws is a pledge of the protection of equal laws. [100] It limits
governmental discrimination. The equal protection clause extends to artificial
persons but only insofar as their property is concerned. [101]
The Court has explained the scope of the equal protection clause in this wise:
What does it signify? To quote from J.M. Tuason & Co. v. Land Tenure Administration:
The ideal situation is for the laws benefits to be available to all, that none be placed
outside the sphere of its coverage. Only thus could chance and favor be excluded
and the affairs of men governed by that serene and impartial uniformity, which is of
the very essence of the idea of law. There is recognition, however, in the opinion
that what in fact exists cannot approximate the ideal. Nor is the law susceptible to
the reproach that it does not take into account the realities of the situation. The
constitutional guarantee then is not to be given a meaning that disregards what is,
what does in fact exist. To assure that the general welfare be promoted, which is the
end of law, a regulatory measure may cut into the rights to liberty and property.
Those adversely affected may under such circumstances invoke the equal protection
clause only if they can show that the governmental act assailed, far from being
inspired by the attainment of the common weal was prompted by the spirit of
hostility, or at the very least, discrimination that finds no support in reason.
Classification is thus not ruled out, it being sufficient to quote from the Tuason
decision anew that the laws operate equally and uniformly on all persons under
similar circumstances or that all persons must be treated in the same manner, the
conditions not being different, both in the privileges conferred and the liabilities
imposed. Favoritism and undue preference cannot be allowed. For the principle is
that equal protection and security shall be given to every person under
circumstances which, if not identical, are analogous. If law be looked upon in terms
of burden or charges, those that fall within a class should be treated in the same
fashion, whatever restrictions cast on some in the group equally binding on the rest.
[102]
Legislative bodies are allowed to classify the subjects of legislation. If the

classification is reasonable, the law may operate only on some and not all of the
people without violating the equal protection clause. [103] The classification must, as
an indispensable requisite, not be arbitrary. To be valid, it must conform to the
following requirements:
1) It must be based on substantial distinctions.
2) It must be germane to the purposes of the law.
3) It must not be limited to existing conditions only.
4) It must apply equally to all members of the class.[104]
In the Courts view, there are no substantial distinctions between motels, inns,
pension houses, hotels, lodging houses or other similar establishments. By
definition, all are commercial establishments providing lodging and usually meals
and other services for the public. No reason exists for prohibiting motels and inns
but not pension houses, hotels, lodging houses or other similar establishments. The
classification in the instant case is invalid as similar subjects are not similarly
treated, both as to rights conferred and obligations imposed. It is arbitrary as it does
not rest on substantial distinctions bearing a just and fair relation to the purpose of
the Ordinance.
The Court likewise cannot see the logic for prohibiting the business and
operation of motels in the Ermita-Malate area but not outside of this area. A noxious
establishment does not become any less noxious if located outside the area.
The standard where women are used as tools for entertainment is also
discriminatory as prostitutionone of the hinted ills the Ordinance aims to banishis
not a profession exclusive to women. Both men and women have an equal
propensity to engage in prostitution. It is not any less grave a sin when men engage
in it. And why would the assumption that there is an ongoing immoral activity apply
only when women are employed and be inapposite when men are in harness? This
discrimination based on gender violates equal protection as it is not substantially
related to important government objectives.[105] Thus, the discrimination is invalid.
Failing the test of constitutionality, the Ordinance likewise failed to pass the
test of consistency with prevailing laws.
C.
The Ordinance is repugnant

to general laws; it is ultra vires
The Ordinance is in contravention of the Code as the latter merely empowers

local government units to regulate, and not prohibit, the establishments enumerated
in Section 1 thereof.
The power of the City Council to regulate by ordinances the establishment,
operation, and maintenance of motels, hotels and other similar establishments is
found in Section 458 (a) 4 (iv), which provides that:
The word regulate, as used in subsection (l), section 2444 of the Administrative
Code, means and includes the power to control, to govern, and to restrain; but
regulate should not be construed as synonymous with suppress or prohibit.
Consequently, under the power to regulate laundries, the municipal authorities could
make proper police regulations as to the mode in which the employment or business
shall be exercised.[107]
...
...
(iv) Regulate the establishment, operation and maintenance of cafes, restaurants,
beerhouses, hotels, motels, inns, pension houses, lodging houses, and other similar
establishments, including tourist guides and transports . . . .
While its power to regulate the establishment, operation and maintenance of
any entertainment or amusement facilities, and to prohibit certain forms of
amusement or entertainment is provided under Section 458 (a) 4 (vii) of the Code,
which reads as follows:
...
...
(vii) Regulate the establishment, operation, and maintenance of any entertainment
or amusement facilities, including theatrical performances, circuses, billiard pools,
public dancing schools, public dance halls, sauna baths, massage parlors, and other
places for entertainment or amusement; regulate such other events or activities for
amusement or entertainment, particularly those which tend to disturb the
community or annoy the inhabitants, or require the suspension or suppression of the
same; or, prohibit certain forms of amusement or entertainment in order to protect
the social and moral welfare of the community.
Clearly, with respect to cafes, restaurants, beerhouses, hotels, motels, inns,
pension houses, lodging houses, and other similar establishments, the only power of
the City Council to legislate relative thereto is to regulate them to promote the
general welfare. The Code still withholds from cities the power to suppress and
prohibit altogether the establishment, operation and maintenance of such
establishments. It is well to recall the rulings of the Court in Kwong Sing v. City of
Manila[106] that:
And in People v. Esguerra,[108] wherein the Court nullified an ordinance of the

Municipality of Tacloban which prohibited the selling, giving and dispensing of liquor
ratiocinating that the municipality is empowered only to regulate the same and not
prohibit. The Court therein declared that:
(A)s a general rule when a municipal corporation is specifically given authority or
power to regulate or to license and regulate the liquor traffic, power to prohibit is
impliedly withheld.[109]
These doctrines still hold contrary to petitioners assertion [110] that they were
modified by the Code vesting upon City Councils prohibitory powers.
Similarly, the City Council exercises regulatory powers over public dancing
schools, public dance halls, sauna baths, massage parlors, and other places for
entertainment or amusement as found in the first clause of Section 458 (a) 4 (vii). Its
powers to regulate, suppress and suspend such other events or activities for
amusement or entertainment, particularly those which tend to disturb the
community or annoy the inhabitants and to prohibit certain forms of amusement or
entertainment in order to protect the social and moral welfare of the community are
stated in the second and third clauses, respectively of the same Section. The several
powers of the City Council as provided in Section 458 (a) 4 (vii) of the Code, it is
pertinent to emphasize, are separated by semi-colons (;), the use of which indicates
that the clauses in which these powers are set forth are independent of each other
albeit closely related to justify being put together in a single enumeration or
paragraph.[111] These powers, therefore, should not be confused, commingled or
consolidated as to create a conglomerated and unified power of regulation,
suppression and prohibition.[112]
The Congress unequivocably specified the establishments and forms of
amusement or entertainment subject to regulation among which are beerhouses,
hotels, motels, inns, pension houses, lodging houses, and other similar
establishments (Section 458 (a) 4 (iv)), public dancing schools, public dance halls,
sauna baths, massage parlors, and other places for entertainment or amusement
(Section 458 (a) 4 (vii)). This enumeration therefore cannot be included as among
other events or activities for amusement or entertainment, particularly those which
tend to disturb the community or annoy the inhabitants or certain forms of
amusement or entertainment which the City Council may suspend, suppress or
prohibit.
The rule is that the City Council has only such powers as are expressly granted
to it and those which are necessarily implied or incidental to the exercise thereof. By
reason of its limited powers and the nature thereof, said powers are to be
construed strictissimi juris and any doubt or ambiguity arising out of the terms used
in granting said powers must be construed against the City Council. [113] Moreover, it
is a general rule in statutory construction that the express mention of one person,
thing, or consequence is tantamount to an express exclusion of all others. Expressio
unius est exclusio alterium. This maxim is based upon the rules of logic and the
natural workings of human mind. It is particularly applicable in the construction of
such statutes as create new rights or remedies, impose penalties or punishments, or

otherwise come under the rule of strict construction. [114]
The argument that the City Council is empowered to enact the Ordinance by
virtue of the general welfare clause of the Code and of Art. 3, Sec. 18 (kk) of the
Revised Charter of Manila is likewise without merit. On the first point, the ruling of
the Court in People v. Esguerra,[115] is instructive. It held that:
The powers conferred upon a municipal council in the general welfare clause, or
section 2238 of the Revised Administrative Code, refers to matters not covered by
the other provisions of the same Code, and therefore it can not be applied to
intoxicating liquors, for the power to regulate the selling, giving away and
dispensing thereof is granted specifically by section 2242 (g) to municipal councils.
To hold that, under the general power granted by section 2238, a municipal council
may enact the ordinance in question, notwithstanding the provision of section 2242
(g), would be to make the latter superfluous and nugatory, because the power to
prohibit, includes the power to regulate, the selling, giving away and dispensing of
intoxicating liquors.
On the second point, it suffices to say that the Code being a later expression of
the legislative will must necessarily prevail and override the earlier law, the Revised
Charter of Manila. Legis posteriores priores contrarias abrogant, or later statute
repeals prior ones which are repugnant thereto. As between two laws on the same
subject matter, which are irreconcilably inconsistent, that which is passed later
prevails, since it is the latest expression of legislative will. [116] If there is an
inconsistency or repugnance between two statutes, both relating to the same
subject matter, which cannot be removed by any fair and reasonable method of
interpretation, it is the latest expression of the legislative will which must prevail and
override the earlier.[117]
Implied repeals are those which take place when a subsequently enacted law
contains provisions contrary to those of an existing law but no provisions expressly
repealing them. Such repeals have been divided into two general classes: those
which occur where an act is so inconsistent or irreconcilable with an existing prior
act that only one of the two can remain in force and those which occur when an act
covers the whole subject of an earlier act and is intended to be a substitute therefor.
The validity of such a repeal is sustained on the ground that the latest expression of
the legislative will should prevail.[118]
In addition, Section 534(f) of the Code states that 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. Thus, submitting to
petitioners interpretation that the Revised Charter of Manila empowers the City
Council to prohibit motels, that portion of the Charter stating such must be
considered repealed by the Code as it is at variance with the latters provisions
granting the City Council mere regulatory powers.
It is well to point out that petitioners also cannot seek cover under the general
welfare clause authorizing the abatement of nuisances without judicial proceedings.
That tenet applies to a nuisance per se, or one which affects the immediate safety of
persons and property and may be summarily abated under the undefined law of
necessity. It can not be said that motels are injurious to the rights of property, health
or comfort of the community. It is a legitimate business. If it be a nuisance per
accidens it may be so proven in a hearing conducted for that purpose. A motel is
not per se a nuisance warranting its summary abatement without judicial
intervention.[119]
Notably, the City Council was conferred powers to prevent and prohibit certain
activities and establishments in another section of the Code which is reproduced as
follows:
(1) Approve ordinances and pass resolutions necessary for an efficient and effective
city government, and in this connection, shall:
...
(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;
...
If it were the intention of Congress to confer upon the City Council the power to
prohibit the establishments enumerated in Section 1 of the Ordinance, it would have
so declared in uncertain terms by adding them to the list of the matters it may
prohibit under the above-quoted Section. The Ordinance now vainly attempts to
lump these establishments with houses of ill-repute and expand the City Councils
powers in the second and third clauses of Section 458 (a) 4 (vii) of the Code in an
effort to overreach its prohibitory powers. It is evident that these establishments
may only be regulated in their establishment, operation and maintenance.
It is important to distinguish the punishable activities from the establishments
themselves. That these establishments are recognized legitimate enterprises can be
gleaned from another Section of the Code. Section 131 under the Title on Local
Government Taxation expressly mentioned proprietors or operators of massage
clinics, sauna, Turkish and Swedish baths, hotels, motels and lodging houses as
among the contractors defined in paragraph (h) thereof. The same Section also
defined amusement as a pleasurable diversion and entertainment, synonymous to
relaxation, avocation, pastime or fun; and amusement places to include theaters,
cinemas, concert halls, circuses and other places of amusement where one seeks
admission to entertain oneself by seeing or viewing the show or performances. Thus,
it can be inferred that the Code considers these establishments as legitimate
enterprises and activities. It is well to recall the maxim reddendo singula
singulis which means that words in different parts of a statute must be referred to
their appropriate connection, giving to each in its place, its proper force and effect,
and, if possible, rendering none of them useless or superfluous, even if strict
grammatical construction demands otherwise. Likewise, where words under
consideration appear in different sections or are widely dispersed throughout an act
the same principle applies.[120]
Not only does the Ordinance contravene the Code, it likewise runs counter to
the provisions of P.D. 499. As correctly argued by MTDC, the statute had already
converted the residential Ermita-Malate area into a commercial area. The decree
allowed the establishment and operation of all kinds of commercial establishments
except warehouse or open storage depot, dump or yard, motor repair shop, gasoline
service station, light industry with any machinery or funeral establishment. The rule
is that for an ordinance to be valid and to have force and effect, it must not only be
within the powers of the council to enact but the same must not be in conflict with
or repugnant to the general law.[121] As succinctly illustrated in Solicitor General v.
Metropolitan Manila Authority:[122]
The requirement that the enactment must not violate existing law explains itself.
Local political subdivisions are able to legislate only by virtue of a valid delegation of
legislative power from the national legislature (except only that the power to create
their own sources of revenue and to levy taxes is conferred by the Constitution
itself). They are mere agents vested with what is called the power of subordinate
legislation. As delegates of the Congress, the local government units cannot
contravene but must obey at all times the will of their principal. In the case before
us, the enactment in question, which are merely local in origin cannot prevail
against the decree, which has the force and effect of a statute. [123]
Petitioners contend that the Ordinance enjoys the presumption of validity.
While this may be the rule, 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. 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.[124]
Conclusion
All considered, the Ordinance invades fundamental personal and property
rights
and
impairs
personal
privileges.
It
is
constitutionally
infirm.
The Ordinance contravenes statutes; it is discriminatory and unreasonable in its
operation; it is not sufficiently detailed and explicit that abuses may attend the
enforcement of its sanctions. And not to be forgotten, the City Council under the
Code had no power to enact theOrdinance and is therefore ultra vires, null and void.
Concededly, the challenged Ordinance was enacted with the best of motives
and shares the concern of the public for the cleansing of the Ermita-Malate area of
its social sins. Police power legislation of such character deserves the full
endorsement of the judiciary we reiterate our support for it. But inspite of its
virtuous aims, the enactment of the Ordinance has no statutory or constitutional
authority to stand on. Local legislative bodies, in this case, the City Council, cannot
prohibit the operation of the enumerated establishments under Section 1 thereof or
order their transfer or conversion without infringing the constitutional guarantees of
due process and equal protection of laws not even under the guise of police power.
WHEREFORE, the Petition is hereby DENIED and the decision of the Regional
Trial Court declaring the Ordinance void is AFFIRMED. Costs against petitioners.
SO ORDERED.
Davide, Jr., C.J., Puno, Quisumbing, Sandoval-Gutierrez, Carpio, AustriaMartinez, Corona, Carpio-Morales, Callejo, Sr., Azcuna, Chico-Nazario and Garcia,
JJ., concur
Panganiban, J., in the result.
Ynares- Santiago, J., concur in the result only.
among which, are SM City, Manila; SM Centerpoint, Sta. Mesa, Manila; SM City, North
Avenue, Quezon City; and SM Southmall, Las Pias.
THE OFFICE OF THE SOLICITOR GENERAL,
Petitioner,
- versus AYALA LAND INCORPORATED, ROBINSONS
LAND CORPORATION, SHANGRI-LA PLAZA
CORPORATION and SM PRIME HOLDINGS,
INC.,
Respondents.
G.R. No. 177056
The shopping malls operated or leased out by respondents have parking
Present:
facilities for all kinds of motor vehicles, either by way of parking spaces inside the
YNARES-SANTIAGO, J.,
Chairperson,
CHICO-NAZARIO,
VELASCO, JR.,
NACHURA, and
PERALTA, JJ.
mall buildings or in separate buildings and/or adjacent lots that are solely devoted
for use as parking spaces. Respondents Ayala Land, Robinsons, and SM Prime spent
for the construction of their own parking facilities. Respondent Shangri-la is renting
its parking facilities, consisting of land and building specifically used as parking
spaces, which were constructed for the lessors account.
Promulgated:
Respondents expend for the maintenance and administration of their
September 18, 2009

x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x
DECISION
respective parking facilities. They provide security personnel to protect the vehicles
parked in their parking facilities and maintain order within the area. In turn, they
collect the following parking fees from the persons making use of their parking
facilities, regardless of whether said persons are mall patrons or not:
CHICO-NAZARIO, J.:
Before this Court is a Petition for Review on Certiorari,[1] under Rule 45 of
Respondent
Ayala Land
On weekdays, P25.00 for the first four hours and P10.0

every succeeding hour; on weekends, flat rate of P
per day
Robinsons
P20.00 for the first three hours and P10.00 for

succeeding hour
Shangri-la
SM Prime
Flat rate of P30.00 per day

P10.00 to P20.00 (depending on whether the parking s
is outdoors or indoors) for the first three hours an
minutes, and P10.00 for every succeeding hour or fra
thereof
the Revised Rules of Court, filed by petitioner Office of the Solicitor General (OSG),
seeking the reversal and setting aside of the Decision [2] dated 25 January 2007 of
the Court of Appeals in CA-G.R. CV No. 76298, which affirmed in toto the Joint
Decision[3] dated 29 May 2002 of the Regional Trial Court (RTC) of Makati City, Branch
138, in Civil Cases No. 00-1208 and No. 00-1210; and (2) the Resolution [4] dated 14
March 2007 of the appellate court in the same case which denied the Motion for
Parking Fees
Reconsideration of the OSG. The RTC adjudged that respondents Ayala Land
Incorporated (Ayala Land), Robinsons Land Corporation (Robinsons), Shangri-la Plaza
The parking tickets or cards issued by respondents to vehicle owners contain the
Corporation (Shangri-la), and SM Prime Holdings, Inc. (SM Prime) could not be
stipulation that respondents shall not be responsible for any loss or damage to the
obliged to provide free parking spaces in their malls to their patrons and the general
vehicles parked in respondents parking facilities.
public.
In 1999, the Senate Committees on Trade and Commerce and on Justice
Respondents Ayala Land, Robinsons, and Shangri-la maintain and operate
and Human Rights conducted a joint investigation for the following purposes: (1) to
shopping malls in various locations in Metro Manila. Respondent SM Prime
inquire into the legality of the prevalent practice of shopping malls of charging
constructs, operates, and leases out commercial buildings and other structures,
parking fees; (2) assuming arguendo that the collection of parking fees was legally
authorized, to find out the basis and reasonableness of the parking rates charged by
shopping malls; and (3) to determine the legality of the policy of shopping malls of
denying liability in cases of theft, robbery, or carnapping, by invoking the waiver
clause at the back of the parking tickets. Said Senate Committees invited the top
executives of respondents, who operate the major malls in the country; the officials
level, the Building Officials enforce all rules/ regulations

formulated by the DPWH relative to all building plans,
specifications
and
designs
including
parking
space
requirements. There is, however, no single national department or
agency directly tasked to supervise the enforcement of the
provisions of the Code on parking, notwithstanding the national
character of the law.[6]
from the Department of Trade and Industry (DTI), Department of Public Works and
Highways (DPWH), Metro Manila Development Authority (MMDA), and other local
government
officials;
and
the
Philippine
Motorists
Association
(PMA)
as
representative of the consumers group.
After three public hearings held on 30 September, 3 November, and 1

December 1999, the afore-mentioned Senate Committees jointly issued Senate
Committee Report No. 225[5] on 2 May 2000, in which they concluded:
In view of the foregoing, the Committees find that the
collection of parking fees by shopping malls is contrary to the
National Building Code and is therefor [sic] illegal. While it is true
that the Code merely requires malls to provide parking spaces,
without specifying whether it is free or not, both Committees
believe that the reasonable and logical interpretation of the Code
is that the parking spaces are for free. This interpretation is not
only reasonable and logical but finds support in the actual practice
in other countries like the United States of America where parking
spaces owned and operated by mall owners are free of charge.
Figuratively speaking, the Code has expropriated the land
for parking something similar to the subdivision law which require
developers to devote so much of the land area for parks.
Moreover, Article II of R.A. No. 9734 (Consumer Act of
the Philippines) provides that it is the policy of the State to protect
the interest of the consumers, promote the general welfare and
establish
standards
of
conduct
for
business
and
industry. Obviously, a contrary interpretation (i.e., justifying the
collection of parking fees) would be going against the declared
policy of R.A. 7394.
Section 201 of the National Building Code gives the
responsibility for the administration and enforcement of the
provisions of the Code, including the imposition of penalties for
administrative violations thereof to the Secretary of Public
Works. This set up, however, is not being carried out in reality.
In the position paper submitted by the Metropolitan
Manila Development Authority (MMDA), its chairman, Jejomar C.
Binay, accurately pointed out that the Secretary of the DPWH is
responsible for the implementation/enforcement of the National
Building Code. After the enactment of the Local Government Code
of 1991, the local government units (LGUs) were tasked to
discharge the regulatory powers of the DPWH.Hence, in the local
Senate
Committee
Report
No.
225,
thus,
contained
the
following
recommendations:
In light of the foregoing, the Committees on Trade and
Commerce and Justice and Human Rights hereby recommend the
following:
1. The Office of the Solicitor General should institute the necessary
action to enjoin the collection of parking fees as well as to
enforce the penal sanction provisions of the National
Building Code. The Office of the Solicitor General should
likewise study how refund can be exacted from mall
owners who continue to collect parking fees.
2. The Department of Trade and Industry pursuant to the
provisions of R.A. No. 7394, otherwise known as the
Consumer Act of the Philippines should enforce the
provisions of the Code relative to parking. Towards this
end, the DTI should formulate the necessary
implementing rules and regulations on parking in
shopping malls, with prior consultations with the local
government units where these are located. Furthermore,
the DTI, in coordination with the DPWH, should be
empowered to regulate and supervise the construction
and maintenance of parking establishments.
3. Finally, Congress should amend and update the National
Building Code to expressly prohibit shopping malls from
collecting parking fees by at the same time, prohibit them
from invoking the waiver of liability.[7]
Respondent SM Prime thereafter received information that, pursuant to

Senate Committee Report No. 225, the DPWH Secretary and the local building
officials of Manila, Quezon City, and Las Pias intended to institute, through the OSG,
an action to enjoin respondent SM Prime and similar establishments from collecting
parking fees, and to impose upon said establishments penal sanctions under
Presidential Decree No. 1096, otherwise known as the National Building Code of the
Philippines (National Building Code), and its Implementing Rules and Regulations
(IRR). With the threatened action against it, respondent SM Prime filed, on 3 October
2000, a Petition for Declaratory Relief [8] under Rule 63 of the Revised Rules of Court,
against the DPWH Secretary and local building officials of Manila, Quezon City, and
As a result of the pre-trial conference held on the morning of 8 August 2001,
Las Pias. Said Petition was docketed as Civil Case No. 00-1208 and assigned to the
the RTC issued a Pre-Trial Order [12] of even date which limited the issues to be
RTC of Makati City, Branch 138, presided over by Judge Sixto Marella, Jr. (Judge
resolved in Civil Cases No. 00-1208 and No. 00-1210 to the following:
Marella). In its Petition, respondent SM Prime prayed for judgment:

a) Declaring Rule XIX of the Implementing Rules and
Regulations of the National Building Code as ultra vires, hence,
unconstitutional and void;
b) Declaring [herein respondent SM Prime]s clear legal
right to lease parking spaces appurtenant to its department
stores, malls, shopping centers and other commercial
establishments; and
c) Declaring the National Building Code of the Philippines
Implementing Rules and Regulations as ineffective, not having
been published once a week for three (3) consecutive weeks in a
newspaper of general circulation, as prescribed by Section 211 of
Presidential Decree No. 1096.
[Respondent SM Prime] further prays for such other
reliefs as may be deemed just and equitable under the premises.[9]
1. Capacity of the plaintiff [OSG] in Civil Case No. 00-1210

to institute the present proceedings and relative thereto whether
the controversy in the collection of parking fees by mall owners is
a matter of public welfare.
2.
Whether declaratory relief is proper.
3.
Whether respondent Ayala Land, Robinsons,
Shangri-La and SM Prime are obligated to provide parking spaces
in their malls for the use of their patrons or the public in general,
free of charge.
4.
damages.[13]
Entitlement of the parties of [sic] award of
On 29 May 2002, the RTC rendered its Joint Decision in Civil Cases No. 001208 and No. 00-1210.
The very next day, 4 October 2000, the OSG filed a Petition for Declaratory
The RTC resolved the first two issues affirmatively. It ruled that the OSG can
Relief and Injunction (with Prayer for Temporary Restraining Order and Writ of
initiate Civil Case No. 00-1210 under Presidential Decree No. 478 and the
Preliminary Injunction)[10] against respondents. This Petition was docketed as Civil
Administrative Code of 1987.[14] It also found that all the requisites for an action for
Case No. 00-1210 and raffled to the RTC of Makati, Branch 135, presided over by
declaratory relief were present, to wit:
Judge Francisco B. Ibay (Judge Ibay). Petitioner prayed that the RTC:
1. After summary hearing, a temporary restraining order
and a writ of preliminary injunction be issued restraining
respondents from collecting parking fees from their customers; and
2. After hearing, judgment be rendered declaring that the
practice of respondents in charging parking fees is violative of the
National Building Code and its Implementing Rules and Regulations
and is therefore invalid, and making permanent any injunctive writ
issued in this case.
Other reliefs just and equitable under the premises are
likewise prayed for.[11]
On 23 October 2000, Judge Ibay of the RTC of Makati City, Branch 135,
The requisites for an action for declaratory relief are: (a)

there is a justiciable controversy; (b) the controversy is between
persons whose interests are adverse; (c) the party seeking the
relief has a legal interest in the controversy; and (d) the issue
involved is ripe for judicial determination.
SM, the petitioner in Civil Case No. 001-1208 [sic] is a
mall operator who stands to be affected directly by the position
taken by the government officials sued namely the Secretary of
Public Highways and the Building Officials of the local government
units where it operates shopping malls. The OSG on the other
hand acts on a matter of public interest and has taken a position
adverse to that of the mall owners whom it sued. The construction
of new and bigger malls has been announced, a matter which the
Court can take judicial notice and the unsettled issue of whether
mall operators should provide parking facilities, free of charge
needs to be resolved.[15]
issued an Order consolidating Civil Case No. 00-1210 with Civil Case No. 00-1208
pending before Judge Marella of RTC of Makati, Branch 138.
As to the third and most contentious issue, the RTC pronounced that:
The Building Code, which is the enabling law and the

Implementing Rules and Regulations do not impose that parking
spaces shall be provided by the mall owners free of charge. Absent
such directive[,] AyalaLand, Robinsons, Shangri-la and SM [Prime]
are under no obligation to provide them for free. Article 1158 of
the Civil Code is clear:
Obligations derived from law are not
presumed. Only those expressly determined in
this Code or in special laws are demandable and
shall be regulated by the precepts of the law
which establishes them; and as to what has not
been foreseen, by the provisions of this Book
(1090).[]
xxxx
The provision on ratios of parking slots to several
variables, like shopping floor area or customer area found in Rule
XIX of the Implementing Rules and Regulations cannot be
construed as a directive to provide free parking spaces, because
the enabling law, the Building Code does not so provide. x x x.
To compel Ayala Land, Robinsons, Shangri-La and SM
[Prime] to provide parking spaces for free can be considered as an
unlawful taking of property right without just compensation.
Parking spaces in shopping malls are privately owned
and for their use, the mall operators collect fees. The legal
relationship could be either lease or deposit. In either case[,] the
mall owners have the right to collect money which translates into
income. Should parking spaces be made free, this right of mall
owners shall be gone. This, without just compensation. Further,
loss of effective control over their property will ensue which is
frowned upon by law.
The presence of parking spaces can be viewed in another
light. They can be looked at as necessary facilities to entice the
public to increase patronage of their malls because without
parking spaces, going to their malls will be inconvenient. These
are[,] however[,] business considerations which mall operators will
have to decide for themselves. They are not sufficient to justify a
legal conclusion, as the OSG would like the Court to adopt that it is
the obligation of the mall owners to provide parking spaces for
free.[16]
The RTC then held that there was no sufficient evidence to justify any award
FOR THE REASONS GIVEN, the Court declares that Ayala

Land[,] Inc., Robinsons Land Corporation, Shangri-la Plaza
Corporation and SM Prime Holdings[,] Inc. are not obligated to
provide parking spaces in their malls for the use of their patrons or
public in general, free of charge.
All counterclaims in Civil Case No. 00-1210 are dismissed.
No pronouncement as to costs.[17]
CA-G.R. CV No. 76298 involved the separate appeals of the OSG [18] and respondent
SM Prime[19] filed with the Court of Appeals. The sole assignment of error of the OSG
in its Appellants Brief was:
THE TRIAL COURT ERRED IN HOLDING THAT THE NATIONAL
BUILDING CODE DID NOT INTEND MALL PARKING SPACES TO BE
FREE OF CHARGE[;][20]
while the four errors assigned by respondent SM Prime in its Appellants Brief were:
I
THE TRIAL COURT ERRED IN FAILING TO DECLARE RULE XIX OF
THE IMPLEMENTING RULES AS HAVING BEEN ENACTED ULTRA
VIRES, HENCE, UNCONSTITUTIONAL AND VOID.
II
THE TRIAL COURT ERRED IN FAILING TO DECLARE THE
IMPLEMENTING RULES INEFFECTIVE FOR NOT HAVING BEEN
PUBLISHED AS REQUIRED BY LAW.
III
THE TRIAL COURT ERRED IN FAILING TO DISMISS THE OSGS
PETITION FOR DECLARATORY RELIEF AND INJUNCTION FOR
FAILURE TO EXHAUST ADMINISTRATIVE REMEDIES.
IV
THE TRIAL COURT ERRED IN FAILING TO DECLARE THAT THE OSG
HAS NO LEGAL CAPACITY TO SUE AND/OR THAT IT IS NOT A REAL
PARTY-IN-INTEREST IN THE INSTANT CASE.[21]
for damages.
Respondent Robinsons filed a Motion to Dismiss Appeal of the OSG on the ground
The RTC finally decreed in its 29 May 2002 Joint Decision in Civil Cases No. 00-1208
that the lone issue raised therein involved a pure question of law, not reviewable by
and No. 00-1210 that:
the Court of Appeals.
The Court of Appeals promulgated its Decision in CA-G.R. CV No. 76298 on 25
provision of law, respondents could not be obliged and expected to provide parking
January 2007. The appellate court agreed with respondent Robinsons that the appeal
slots free of charge.
of the OSG should suffer the fate of dismissal, since the issue on whether or not the
National Building Code and its implementing rules require shopping mall operators
The fallo of the 25 January 2007 Decision of the Court of Appeals reads:
to provide parking facilities to the public for free was evidently a question of
law. Even so, since CA-G.R. CV No. 76298 also included the appeal of respondent SM
Prime, which raised issues worthy of consideration, and in order to satisfy the
WHEREFORE, premises considered, the instant appeals

are DENIED. Accordingly,
appealed
Decision
is
hereby AFFIRMED in toto.[23]
demands of substantial justice, the Court of Appeals proceeded to rule on the merits
of the case.
In its Resolution issued on 14 March 2007, the Court of Appeals denied the Motion
for Reconsideration of the OSG, finding that the grounds relied upon by the latter
In its Decision, the Court of Appeals affirmed the capacity of the OSG to initiate Civil
had already been carefully considered, evaluated, and passed upon by the appellate
Case No. 00-1210 before the RTC as the legal representative of the government,
court, and there was no strong and cogent reason to modify much less reverse the
[22]
assailed judgment.
and as the one deputized by the Senate of the Republic of the Philippines through
Senate Committee Report No. 225.

The OSG now comes before this Court, via the instant Petition for Review,
The Court of Appeals rejected the contention of respondent SM Prime that
the OSG failed to exhaust administrative remedies. The appellate court explained
that an administrative review is not a condition precedent to judicial relief where the
question in dispute is purely a legal one, and nothing of an administrative nature is
with a single assignment of error:

THE COURT OF APPEALS SERIOUSLY ERRED IN AFFIRMING THE
RULING OF THE LOWER COURT THAT RESPONDENTS ARE NOT
OBLIGED TO PROVIDE FREE PARKING SPACES TO THEIR
CUSTOMERS OR THE PUBLIC.[24]
to be or can be done.
The OSG argues that respondents are mandated to provide free parking by
The Court of Appeals likewise refused to rule on the validity of the IRR of
Section 803 of the National Building Code and Rule XIX of the IRR.
the National Building Code, as such issue was not among those the parties had
agreed to be resolved by the RTC during the pre-trial conference for Civil Cases No.
00-1208 and No. 00-1210. Issues cannot be raised for the first time on
appeal. Furthermore, the appellate court found that the controversy could be settled
on other grounds, without touching on the issue of the validity of the IRR. It referred
to the settled rule that courts should refrain from passing upon the constitutionality
of a law or implementing rules, because of the principle that bars judicial inquiry into
According to Section 803 of the National Building Code:

SECTION 803. Percentage of Site Occupancy
(a) Maximum site occupancy shall be governed by the
use, type of construction, and height of the building and the use,
area, nature, and location of the site; and subject to the provisions
of the local zoning requirements and in accordance with the rules
and regulations promulgated by the Secretary.
a constitutional question, unless the resolution thereof is indispensable to the

determination of the case.
Lastly, the Court of Appeals declared that Section 803 of the National
Building Code and Rule XIX of the IRR were clear and needed no further
construction. Said provisions were only intended to control the occupancy or
congestion of areas and structures. In the absence of any express and clear
In connection therewith, Rule XIX of the old IRR,[25] provides:

RULE XIX PARKING AND LOADING SPACE REQUIREMENTS
Pursuant to Section 803 of the National Building Code (PD
1096) providing for maximum site occupancy, the following
provisions on parking and loading space requirements shall be

observed:
and, conversely, to control -- partially or, as in this case, absolutely -- the imposition
of such fees.
1. The parking space ratings listed below are minimum

off-street
requirements
for
specific
uses/occupancies for buildings/structures:
1.1 The size of an average automobile parking
slot shall be computed as 2.4 meters by
5.00 meters for perpendicular or
diagonal parking, 2.00 meters by 6.00
meters for parallel parking. A truck or
bus parking/loading slot shall be
computed at a minimum of 3.60 meters
by 12.00 meters. The parking slot shall
be drawn to scale and the total number
of which shall be indicated on the plans
and specified whether or not parking
accommodations,
are
attendantmanaged. (See
Section
2
for
computation of parking requirements).
The Court finds no merit in the present Petition.
The explicit directive of the afore-quoted statutory and regulatory

provisions, garnered from a plain reading thereof, is that respondents, as
operators/lessors of neighborhood shopping centers, should provide parking and
loading spaces, in accordance with the minimum ratio of one slot per 100 square
meters of shopping floor area. There is nothing therein pertaining to the collection
(or non-collection) of parking fees by respondents. In fact, the term parking fees
cannot even be found at all in the entire National Building Code and its IRR.
xxxx
Statutory construction has it that if a statute is clear and unequivocal, it

1.7 Neighborhood shopping center 1 slot/100 sq.
m. of shopping floor area
must be given its literal meaning and applied without any attempt at interpretation.
[26]
Since Section 803 of the National Building Code and Rule XIX of its IRR do not
mention parking fees, then simply, said provisions do not regulate the collection of
The OSG avers that the aforequoted provisions should be read together
with Section 102 of the National Building Code, which declares:
the same. The RTC and the Court of Appeals correctly applied Article 1158 of the
New Civil Code, which states:
SECTION 102. Declaration of Policy
Art. 1158. Obligations derived from law are not

presumed. Only those expressly determined in this Code or in
special laws are demandable, and shall be regulated by the
precepts of the law which establishes them; and as to what has
not been foreseen, by the provisions of this Book. (Emphasis ours.)
It is hereby declared to be the policy of the State to

safeguard life, health, property, and public welfare, consistent with
the principles of sound environmental management and control;
and to this end, make it the purpose of this Code to provide for all
buildings and structures, a framework of minimum standards and
requirements to regulate and control their location, site, design,
quality of materials, construction, use, occupancy, and
maintenance.
Hence, in order to bring the matter of parking fees within the ambit of the
National Building Code and its IRR, the OSG had to resort to specious and feeble
argumentation, in which the Court cannot concur.
The requirement of free-of-charge parking, the OSG argues, greatly contributes to

the aim of safeguarding life, health, property, and public welfare, consistent with the
The OSG cannot rely on Section 102 of the National Building Code to
principles of sound environmental management and control. Adequate parking
expand the coverage of Section 803 of the same Code and Rule XIX of the IRR, so as
spaces
when
to include the regulation of parking fees. The OSG limits its citation to the first part
free-charge
of Section 102 of the National Building Code declaring the policy of the State to
parking. Moreover, the power to regulate and control the use, occupancy, and
safeguard life, health, property, and public welfare, consistent with the principles of
maintenance of buildings and structures carries with it the power to impose fees
sound environmental management and control; but totally ignores the second part
would
complemented
contribute
by
quick
greatly
and
easy
to
alleviating
access
thereto
traffic
congestion
because
of
of said provision, which reads, and to this end, make it the purpose of this Code to
Indiscriminate parking along F. Sevilla Boulevard and other main

thoroughfares was prevalent; this, of course, caused the build up
of traffic in the surrounding area to the great discomfort and
inconvenience of the public who use the streets. Traffic congestion
constitutes a threat to the health, welfare, safety and convenience
of the people and it can only be substantially relieved by widening
streets and providing adequate parking areas.
provide for all buildings and structures, a framework of minimum standards and
requirements to regulate and control their location, site, design, quality of
materials, construction, use, occupancy, and maintenance. While the first part of
Section 102 of the National Building Code lays down the State policy, it is the second
part thereof that explains how said policy shall be carried out in the Code.Section
102 of the National Building Code is not an all-encompassing grant of regulatory
power to the DPWH Secretary and local building officials in the name of life, health,
property, and public welfare. On the contrary, it limits the regulatory power of said
officials to ensuring that the minimum standards and requirements for all buildings
and structures, as set forth in the National Building Code, are complied with.
The Court, in City of Ozamis, declared that the City had been clothed with
full power to control and regulate its streets for the purpose of promoting public
health, safety and welfare. The City can regulate the time, place, and manner of
parking in the streets and public places; and charge minimal fees for the street
parking to cover the expenses for supervision, inspection and control, to ensure the
Consequently, the OSG cannot claim that in addition to fixing the minimum
requirements for parking spaces for buildings, Rule XIX of the IRR also mandates
smooth flow of traffic in the environs of the public market, and for the safety and
convenience of the public.
that such parking spaces be provided by building owners free of charge. If Rule XIX
is not covered by the enabling law, then it cannot be added to or included in the
implementing rules. The rule-making power of administrative agencies must be
confined to details for regulating the mode or proceedings to carry into effect the
law as it has been enacted, and it cannot be extended to amend or expand the
statutory
requirements
or
to
embrace
matters
not
covered
by
the
statute. Administrative regulations must always be in harmony with the provisions of

the law because any resulting discrepancy between the two will always be resolved
in favor of the basic law.[27]
Republic and City of Ozamis involved parking in the local streets; in

contrast, the present case deals with privately owned parking facilities available for
use by the general public. In Republic andCity of Ozamis, the concerned local
governments regulated parking pursuant to their power to control and regulate their
streets; in the instant case, the DPWH Secretary and local building officials regulate
parking pursuant to their authority to ensure compliance with the minimum
standards and requirements under the National Building Code and its IRR. With the
difference in subject matters and the bases for the regulatory powers being
invoked, Republic and City of Ozamis do not constitute precedents for this case.
From the RTC all the way to this Court, the OSG repeatedly referred
to Republic v. Gonzales[28] and City of Ozamis v. Lumapas [29] to support its position
that the State has the power to regulate parking spaces to promote the health,
safety, and welfare of the public; and it is by virtue of said power that respondents
may be required to provide free parking facilities. The OSG, though, failed to
consider the substantial differences in the factual and legal backgrounds of these
two cases from those of the Petition at bar.
In Republic, the Municipality of Malabon sought to eject the occupants of

two parcels of land of the public domain to give way to a road-widening project. It
was in this context that the Court pronounced:
Indeed, Republic and City of Ozamis both contain pronouncements that

weaken the position of the OSG in the case at bar. In Republic, the Court, instead of
placing the burden on private persons to provide parking facilities to the general
public,
mentioned
the
trend
in
other
jurisdictions
wherein
the
municipal
governments themselves took the initiative to make more parking spaces available
so as to alleviate the traffic problems, thus:
Under the Land Transportation and Traffic Code, parking in
designated areas along public streets or highways is allowed which
clearly indicates that provision for parking spaces serves a useful
purpose. In other jurisdictions where traffic is at least as
voluminous as here, the provision by municipal governments of
parking space is not limited to parking along public streets or
highways. There has been a marked trend to build off-street
parking facilities with the view to removing parked cars from the
streets. While the provision of off-street parking facilities or

carparks has been commonly undertaken by private enterprise,
municipal governments have been constrained to put up carparks
in response to public necessity where private enterprise had failed
to keep up with the growing public demand. American courts have
upheld the right of municipal governments to construct off-street
parking facilities as clearly redounding to the public benefit.[30]
Keeping in mind the aforementioned test of reasonableness and propriety

of measures or means, the Court notes that Section 803 of the National Building
Code falls under Chapter 8 on Light and Ventilation. Evidently, the Code deems it
necessary to regulate site occupancy to ensure that there is proper lighting and
ventilation in every building. Pursuant thereto, Rule XIX of the IRR requires that a
In City of Ozamis, the Court authorized the collection by the City of minimal
fees for the parking of vehicles along the streets: so why then should the Court now
preclude respondents from collecting from the public a fee for the use of the mall
parking facilities? Undoubtedly, respondents also incur expenses in the maintenance
and operation of the mall parking facilities, such as electric consumption,
compensation for parking attendants and security, and upkeep of the physical
structures.
building, depending on its specific use and/or floor area, should provide a minimum
number of parking spaces. The Court, however, fails to see the connection between
regulating site occupancy to ensure proper light and ventilation in every
building vis--vis regulating the collection by building owners of fees for the use of
their parking spaces. Contrary to the averment of the OSG, the former does not
necessarily include or imply the latter. It totally escapes this Court how lighting and
ventilation conditions at the malls could be affected by the fact that parking facilities
thereat are free or paid for.
It is not sufficient for the OSG to claim that the power to regulate and
control the use, occupancy, and maintenance of buildings and structures carries with
it the power to impose fees and, conversely, to control, partially or, as in this case,
absolutely, the imposition of such fees. Firstly, the fees within the power of
regulatory agencies to impose are regulatory fees. It has been settled law in this
jurisdiction that this broad and all-compassing governmental competence to restrict
rights of liberty and property carries with it the undeniable power to collect a
regulatory fee. It looks to the enactment of specific measures that govern the
relations not only as between individuals but also as between private parties and the
The OSG attempts to provide the missing link by arguing that:

Under Section 803 of the National Building Code,
complimentary parking spaces are required to enhance light and
ventilation, that is, to avoid traffic congestion in areas surrounding
the building, which certainly affects the ventilation within the
building itself, which otherwise, the annexed parking spaces would
have served. Free-of-charge parking avoids traffic congestion by
ensuring quick and easy access of legitimate shoppers to off-street
parking spaces annexed to the malls, and thereby removing the
vehicles of these legitimate shoppers off the busy streets near the
commercial establishments.[33]
political society.[31] True, if the regulatory agencies have the power to impose
regulatory fees, then conversely, they also have the power to remove the
The Court is unconvinced. The National Building Code regulates buildings,
same. Even so, it is worthy to note that the present case does not involve the
by setting the minimum specifications and requirements for the same. It does not
imposition by the DPWH Secretary and local building officials of regulatory fees upon
concern itself with traffic congestion in areas surrounding the building. It is
respondents; but the collection by respondents of parking fees from persons who
already a stretch to say that the National Building Code and its IRR also intend to
use the mall parking facilities. Secondly, assuming arguendo that the DPWH
solve the problem of traffic congestion around the buildings so as to ensure that the
Secretary and local building officials do have regulatory powers over the collection
said buildings shall have adequate lighting and ventilation. Moreover, the Court
of parking fees for the use of privately owned parking facilities, they cannot allow or
cannot simply assume, as the OSG has apparently done, that the traffic congestion
prohibit such collection arbitrarily or whimsically. Whether allowing or prohibiting the
in areas around the malls is due to the fact that respondents charge for their parking
collection of such parking fees, the action of the DPWH Secretary and local building
facilities, thus, forcing vehicle owners to just park in the streets. The Court notes
officials must pass the test of classic reasonableness and propriety of the measures
that despite the fees charged by respondents, vehicle owners still use the mall
or means in the promotion of the ends sought to be accomplished.
[32]
parking facilities, which are even fully occupied on some days. Vehicle owners may
be parking in the streets only because there are not enough parking spaces in the
malls, and not because they are deterred by the parking fees charged by
settled rule that neither acquisition of title nor total destruction of value is essential
respondents. Free parking spaces at the malls may even have the opposite effect
to taking. It is usually in cases where title remains with the private owner that
from what the OSG envisioned: more people may be encouraged by the free parking
inquiry should be made to determine whether the impairment of a property is
to bring their own vehicles, instead of taking public transport, to the malls; as a
merely regulated or amounts to a compensable taking. A regulation that deprives
result, the parking facilities would become full sooner, leaving more vehicles without
any person of the profitable use of his property constitutes a taking and entitles him
parking spaces in the malls and parked in the streets instead, causing even more
to compensation, unless the invasion of rights is so slight as to permit the regulation
traffic congestion.
to be justified under the police power. Similarly, a police regulation that

unreasonably restricts the right to use business property for business purposes
Without using the term outright, the OSG is actually invoking police power
amounts to a taking of private property, and the owner may recover therefor. [37]
to justify the regulation by the State, through the DPWH Secretary and local building
Although in the present case, title to and/or possession of the parking
officials, of privately owned parking facilities, including the collection by the
facilities remain/s with respondents, the prohibition against their collection of
owners/operators of such facilities of parking fees from the public for the use
parking fees from the public, for the use of said facilities, is already tantamount to a
thereof. The Court finds, however, that in totally prohibiting respondents from
taking or confiscation of their properties. The State is not only requiring that
collecting parking fees from the public for the use of the mall parking facilities, the
respondents devote a portion of the latters properties for use as parking spaces, but
State would be acting beyond the bounds of police power.
is also mandating that they give the public access to said parking spaces for
free. Such
is
already
an
excessive
intrusion
into
the
property
rights
of
Police power is the power of promoting the public welfare by restraining
respondents. Not only are they being deprived of the right to use a portion of their
and regulating the use of liberty and property. It is usually exerted in order to merely
properties as they wish, they are further prohibited from profiting from its use or
regulate the use and enjoyment of the property of the owner. The power to regulate,
even just recovering therefrom the expenses for the maintenance and operation of
however, does not include the power to prohibit. A fortiori, the power to regulate
the required parking facilities.
does not include the power to confiscate. Police power does not involve the taking or
confiscation of property, with the exception of a few cases where there is a necessity
The ruling of this Court in City Government of Quezon City v. Judge
to confiscate private property in order to destroy it for the purpose of protecting
Ericta[38] is edifying. Therein, the City Government of Quezon City passed an
peace and order and of promoting the general welfare; for instance, the confiscation
ordinance obliging private cemeteries within its jurisdiction to set aside at least six
of an illegally possessed article, such as opium and firearms.
[34]
percent of their total area for charity, that is, for burial grounds of deceased
paupers. According to the Court, the ordinance in question was null and void, for it
When there is a taking or confiscation of private property for public use, the
authorized the taking of private property without just compensation:
State is no longer exercising police power, but another of its inherent powers,
namely, eminent domain. Eminent domain enables the State to forcibly acquire
private lands intended for public use upon payment of just compensation to the
owner.[35]
Normally, of course, the power of eminent domain results in the taking or

appropriation of title to, and possession of, the expropriated property; but no cogent
reason appears why the said power may not be availed of only to impose a burden
upon the owner of condemned property, without loss of title and possession.
[36]
It is a
There is no reasonable relation between the setting aside

of at least six (6) percent of the total area of all private cemeteries
for charity burial grounds of deceased paupers and the promotion
of' health, morals, good order, safety, or the general welfare of the
people. The ordinance is actually a taking without compensation of
a certain area from a private cemetery to benefit paupers who are
charges of the municipal corporation. Instead of' building or
maintaining a public cemetery for this purpose, the city passes the
burden to private cemeteries.
'The expropriation without compensation of a portion of
private cemeteries is not covered by Section 12(t) of Republic Act
537, the Revised Charter of Quezon City which empowers the city
council to prohibit the burial of the dead within the center of
population of the city and to provide for their burial in a proper
place subject to the provisions of general law regulating burial
grounds and cemeteries. When the Local Government Code, Batas
Pambansa Blg. 337 provides in Section 177(q) that a sangguniang
panlungsod may "provide for the burial of the dead in such place
and in such manner as prescribed by law or ordinance" it simply
authorizes the city to provide its own city owned land or to buy or
expropriate private properties to construct public cemeteries. This
has been the law, and practise in the past. It continues to the
present. Expropriation, however, requires payment of just
compensation. The questioned ordinance is different from laws
and regulations requiring owners of subdivisions to set aside
certain areas for streets, parks, playgrounds, and other public
facilities from the land they sell to buyers of subdivision lots. The
necessities of public safety, health, and convenience are very
clear from said requirements which are intended to insure the
development of communities with salubrious and wholesome
environments. The beneficiaries of the regulation, in turn, are
made to pay by the subdivision developer when individual lots are
sold to homeowners.
In conclusion, the total prohibition against the collection by respondents of parking

fees from persons who use the mall parking facilities has no basis in the National
Building Code or its IRR. The State also cannot impose the same prohibition by
generally invoking police power, since said prohibition amounts to a taking of
respondents property without payment of just compensation.
Given the foregoing, the Court finds no more need to address the issue persistently
raised by respondent SM Prime concerning the unconstitutionality of Rule XIX of the
IRR. In addition, the said issue was not among those that the parties, during the pretrial conference for Civil Cases No. 12-08 and No. 00-1210, agreed to submit for
resolution of the RTC. It is likewise axiomatic that the constitutionality of a law, a
regulation, an ordinance or an act will not be resolved by courts if the controversy
can be, as in this case it has been, settled on other grounds.[39]
WHEREFORE,
the
instant
Petition
for
Review
on Certiorari is
hereby DENIED. The Decision dated 25 January 2007 and Resolution dated 14
March 2007 of the Court of Appeals in CA-G.R. CV No. 76298, affirming in toto the
Joint Decision dated 29 May 2002 of the Regional Trial Court of Makati City, Branch
138, in Civil Cases No. 00-1208 and No. 00-1210 are hereby AFFIRMED.No costs.
SO ORDERED.
Carpio, and
Azcuna, JJ.
TRACKWORKS RAIL TRANSIT
ADVERTISING, VENDING AND Promulgated:
PROMOTIONS, INC.,
Respondent. October 25, 2005
x ---------------------------------------------------------------------------------------- x
YNARES-SANTIAGO, J.:
This petition for review[1] assails the August 31, 2004 Decision[2] of the Court of
Appeals in CA-G.R. SP No. 70932, which affirmed the March 25, 2002 Order [3] of the
Regional Trial Court of Pasig City, Branch 155, in Civil Case No. 68864, granting the
issuance of a writ of preliminary injunction restraining petitioner Metropolitan Manila
Development Authority (MMDA) from dismantling the signages, banners, and
billboards installed by respondent Trackworks Rail Transit Advertising, Vending and
Promotions, Inc. (TRACKWORKS) at the Metro Rail Transit structure along the Epifanio
De los Santos Avenue (MRT 3), and its March 14, 2005 Resolution [4] denying
petitioners motion for reconsideration.
The undisputed facts show that on August 8, 1997, the Philippine government,
FIRST DIVISION
through the Department of Transportation and Communications entered into a Build,

Lease and Transfer (BLT) Agreement with Metro Rail Transit Corporation, Limited
(MRTC). In the BLT Agreement, MRTC undertook to build MRT 3 which it shall own for
METROPOLITAN MANILA G.R. No. 167514
25 years, after which, ownership shall be transferred to the Philippine government in

accordance with Republic Act No. 6957 or the Build, Operate and Transfer Law. The
DEVELOPMENT AUTHORITY,
Petitioner, Present:
Davide, Jr., C.J. (Chairman),
- versus - Quisumbing,
Ynares-Santiago,
agreement allows MRTC, either by itself or through any estate developers, to

develop commercial premises in the MRT 3 structure or to obtain advertising income
therefrom, thus:
16.1. Details of Development Rights. DOTC hereby

confirms and awards to Metro Rail the rights to (a) develop
commercial premises in the Depot and the air space above the
Stations, which shall be allowed to such height as is legally and
technically feasible, (b) lease or sub-lease interests or assign such
interests in the Depot and such air space and (c) obtain any
advertising income from the Depot and such air space and LRTS
Phase I.[5]
contract with MRTC. Consequently, MMDA started dismantling the billboards and
streamers of TRACKWORKS.
On March 1, 2002, TRACKWORKS filed with the trial court a petition for injunction
with prayer for the issuance of a temporary restraining order and preliminary
injunction docketed as Civil Case No. 68864.[10]
LRTS Phase I means the rail transport system comprising

about 16.9 line kilometers extending from Taft Avenue, Pasay City,
to North Avenue, Quezon City, occupying a strip in the center of
EDSA approximately 10.5 meters wide (approximately 12 meters
wide at or around the Boni Avenue, Santolan and Buendia
Stations), plus about 0.1 to 0.2 line kilometers extending from the
North Avenue Station to the Depot, together with the Stations, 73
Light Rail Vehicles and all ancillary plant, equipment and facilities,
as more particularly detailed in the Specifications.[6]
On March 6, 2002, the court a quo issued a temporary restraining order advising
petitioner to desist from dismantling or destroying the signages, banners and
billboards of TRACKWORKS.[11] On March 25, 2002, the trial court issued the assailed
order granting the issuance of a writ of preliminary injunction against petitioner. The
decretal portion thereof, reads:
16.2. Assignment of Rights. During the Development Rights Period,

Metro Rail shall be entitled to assign all or any of its rights, titles
and interests in the Development Rights to bona fide real estate
developers. In this connection, Metro Rail may enter into such
development, lease, sub-lease or other agreements or contracts
relating to the Depot and the air space above the Stations (the
space not needed for all or any portion of the operation of the
LRTS) for all or any portion of the Development Rights Period. [7]
On October 27, 1998, MRTC entered into a Contract for Advertising Services with
TRACKWORKS giving the latter the exclusive right to undertake advertising and
promotional activities within and along the exterior and interior of the MRT 3
structure.[8] Thereafter, TRACKWORKS proceeded to install commercial billboards,
banners, signages and other forms of advertisement in the different parts of MRT 3
structure.
On January 29, 2001,[9] however, the MMDA requested TRACKWORKS to dismantle

the billboards purportedly in conformity with MMDA Regulation No. 96-009,
prohibiting the posting, installation and display of any kind or form of billboards,
signs, posts, streamers, in any part of the road, sidewalk, center island, posts, trees,
parks and open space. TRACKWORKS refused to comply and invoked its advertising
WHEREFORE, in view of the foregoing, and without delving into the

merits of the instant petition, let a WRIT OF PRELIMINARY
INJUNCTION be issued in the instant case restraining the
respondent FROM DISMANTLING OR OTHERWISE DESTROYING THE
SIGNAGES, BANNERS AND BILLBOARDS INSTALLED BY THE
PETITIONER UNTIL FURTHER ORDERS FROM THIS COURT,
conditioned upon the filing by the petitioner and approval of this
Court of a bond in the amount of PhP200,000.00 to answer for any
damage that the respondent may suffer if it turns out later on that
the aforesaid writ was improperly issued.
SO ORDERED.[12]
Without filing a motion for reconsideration, petitioner filed a petition for

certiorari with prohibition before the Court of Appeals which denied the
petition and affirmed the challenged order of the trial court. It held that
TRACKWORKS is entitled to protection because the commercial
advertisements of the latter is sanctioned by the BLT Agreement. The
appellate court further ruled that the petition is dismissable because
petitioner failed to move for reconsideration of the trial courts order before
resorting to the remedy of certiorari under Rule 65 of the Rules of Court.
Petitioners motion for reconsideration was denied, hence, the instant petition.
instance of a suitor who has sufficient interest in or title to the right or the property
sought to be protected. It is proper only when the plaintiff appears to be entitled to
the relief demanded in the complaint. The existence of the right and the violation
The sole issue for resolution is whether or not the trial court gravely abused its
thereof must be alleged in the complaint and must constitute at least a prima
discretion in issuing the writ of preliminary injunction.
facie showing of a right to the final relief. Thus, there are two requisite conditions for
the issuance of a preliminary injunction, namely, (1) the right to be protected
exists prima facie, and (2) the acts sought to be enjoined are violative of that right.
Section 3, Rule 58 of the Rules of Court enumerates the grounds for the
issuance of a writ of preliminary injunction as follows:
It must be proven that the violation sought to be prevented would cause an

irreparable injustice.
Further, while a clear showing of the right is necessary, its existence need
Sec. 3. Grounds for issuance of preliminary injunction.

A preliminary injunction may be granted when it is established:
not be conclusively established. In fact, the evidence required to justify the issuance
of a writ of preliminary injunctionin the hearing thereon need not be conclusive or
complete. The evidence need only be a sampling intended to give the court an idea
(a) That the applicant is entitled to the relief demanded,

and the whole or part of such relief consists in restraining the
commission or continuance of the act or acts complained of, or in
requiring the performance of an act or acts, either for a limited
period or perpetually;
of the justification for the preliminary injunction, pending judgment on the merits.
(b) That the commission, continuance or non-performance of the act or acts

complained of during the litigation would probably work injustice to the
applicant; or
In the case at bar, we find that TRACKWORKS sufficiently established a right to be
[14]
Thus, to be entitled to the writ, respondents are only required to show that they
have the ostensible right to the final relief prayed for in their complaint.
protected by a writ of preliminary injunction. The contract with the MRTC vested it
the exclusive right to undertake advertising and promotional activities at the MRT 3
(c) That a party, court, agency or a person is doing, threatening, or is

attempting to do, or is procuring or suffering to be done, some act or acts
probably in violation of the rights of the applicant respecting the subject of
the action or proceeding, and tending to render the judgment ineffectual.
structure. The Court of Appeals therefore correctly ruled that what is involved here is
not an indiscriminate posting and installation of commercial advertisements but one
sanctioned by a contract. If not restrained, the dismantling of, and prohibition from,
installing advertisements at the MRT 3 will cause irreparable injury to TRACKWORKS.
We held in Los Baos Rural Bank, Inc. v. Africa [13] that injunction is a
preservative remedy aimed to protect the complainants substantive rights and
interests during the pendency of the principal action. A preliminary injunction is
merely temporary. It is to be resorted to only when there is a pressing necessity to
avoid injurious consequences that cannot be remedied under any standard of
compensation. Injunction, like other equitable remedies, should be issued only at the
This is especially so because TRACKWORKS is generally not entitled to recover

damages resulting from acts of public officers done in their official capacity and in
the honest belief that they have such power. [15] Unless bad faith is clearly proven,
TRACKWORKS will be left without recourse even if petitioner is later declared without
authority to prohibit the posting of billboards and streamers at the MRT 3 structure.
Indeed, prudence dictates that the status quo be preserved until the merits of the
provisions of the Building Code and/or MMC Memorandum Circular No. 88-09? and
case can be heard fully.
(4) if the answer to the latter question is in the affirmative, can TRACKWORKS
posters, streamers and billboards be considered as distractions to motorists or
Moreover, the issuance of a writ of preliminary injunction pending
offensive to aesthetic and cultural values and traditions?
determination of the case is proper because TRACKWORKS successfully raise the

issue of petitioners power to effect the dismantling of the disputed commercial
Furthermore, even if the validity of the law itself is assailed, courts are not
advertisements. The general rule that a statute or ordinance enjoys the presumption
precluded from issuing an injunctive writ against the enforcement of the challenged
of validity and as such, cannot be restrained by injunction, [16] finds no application
statute. Thus, in Filipino Metals Corporation v. Secretary of Department of Trade and
here. The core issue in the present case is not the validity of the law or statute
Industry,[21] the Court upheld the writ of preliminary injunction issued by the court a
sought to be enforced by petitioner but its authority to enforce the same. Though
quo enjoining the implementation of Republic Act No. 8800, also known as the
the proper construction of the applicable statutes may incidentally be addressed,
Safeguard Measures Act. As explained by the Court:
the disposition of the instant controversy hinges on the focal question of whether or
not petitioner can validly prohibit the installation of commercial advertisements at
the MRT 3 structure on the basis of MMDA Regulation No. 96-009; [17] Presidential
Decree (PD) No. 1096, or the National Building Code of the Philippines and its
Implementing Rules and Regulations; and Metropolitan Manila Commission (MMC)
We have ruled that when the petitioner assailing a statute

has made out a case of unconstitutionality strong enough to
overcome, in the mind of the judge, the presumption of validity, in
addition to a showing of a clear legal right to the remedy sought, the
court should issue a writ of preliminary injunction.
Memorandum Circular No. 88-09,[18] dated September 16, 1988.

TRACKWORKS
contends
that
petitioner
cannot
validly
prohibit
the
installation of commercial advertisement at the MRT 3 structure on the basis alone

of MMDA Regulation No. 96-009 because it neither has legislative nor police power. It
also avers that petitioner does not have the authority to enforce the pertinent
provisions on Signs under the Building Code and its Implementing Rules [19] because
the power to enforce the same is lodged with the Secretary of the Department of
After a careful consideration of the submission by the

parties, we are convinced that petitioners herein have established
a strong case for the unconstitutionality of Rep. Act No. 8800
sufficient for the grant of apreliminary injunction. Note, however,
that a writ of preliminary injunction is issued merely to preserve
the status quo ante. Its sole objective 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.
Public Works and Highways.[20]

Thus, in resolving said issues, the court a quo is confronted with the
following legal queries (1) can petitioner validly order the dismantling of
TRACKWORKS commercial advertisements based on MMDA Regulation No. 96-009;
(2) is MMC Memorandum Circular No. 88-09 in conformity with the provisions of the
Building Code on Signs? (3) does petitioner possess the authority to enforce the
Respondents tenaciously argue that Rep. Act No. 8800

enjoys the presumption of validity and constitutionality until
proven otherwise. True, but for the purpose of issuing a provisional
remedy, strictly speaking, this contention lacks relevance.
Obviously, a law need not be declared unconstitutional first before
a preliminary injunction against its
enforcement may be
granted. Needless to stress, the moment a law is nullified for being
unconstitutional, it ceases to exist. Thus, a writ of injunction would

then become superfluous.
evasion of positive duty or to a virtual refusal to perform the duty enjoined by or to

act at all in contemplation of law.[22]
Only two requisites are necessary for a preliminary

injunction to issue: (1) the existence of a right to be protected and
(2) the facts, against which the injunction is to be directed violate
said right. While a clear showing of the right is necessary,
its existence need not be conclusively established. In fact,
the evidence required to justify the issuance of a writ
of preliminary injunction need not be conclusive or
complete. The evidence need only give the court an idea
of the justification for the preliminary injunction, pending
the decision of the case on the merits. Thus, to be entitled
to the writ, petitioners are only required to show that they
have an ostensible right to the final relief prayed for in
their complaint.
In the present case, considering that the power of petitioner to prevent

TRACKWORKS from installing commercial advertisement at the MRT 3 structure
depends on the resolution of the issues subject to the determination of the trial
court, the prudent course is to maintain the status quo pending decision on the
merits. We thus find no grave abuse of discretion by the trial court in issuing the
March 25, 2002 order authorizing the issuance of a writ of preliminary injunction
enjoining petitioner from dismantling the signages, posters and billboards of
TRACKWORKS. It is well-entrenched that the issuance of an injunctive writ rests upon
In this case, petitioners have demonstrated a clear right

threatened by the questioned safeguard measures. Being in a
business heavily dependent on importation of steel, they would be
severely damaged once safeguard measures are applied against
steel imports. Petitioners have shown, to the satisfaction of the
trial court and this Court that any increase in tariffs or quantitative
restriction on imports will force them to close down their
respective businesses and lay off their employees.
the sound discretion of the trial court. Hence, its exercise of sound judicial discretion
in injunctive matters must not be interfered with except when there is manifest
abuse,[23] which is wanting in the present case.
Finally, the Court of Appeals correctly held that the failure of petitioner to
file a motion for reconsideration of the trial courts order before resorting to the
This, to us, is sufficient to entitle petitioners to
a preliminary injunction. We thus hold that the Court of Appeals
erred in reversing the trial court order granting the writ
of preliminary injunction. (Emphasis ours)
remedy of certiorari under Rule 65 is fatal to its cause. Certiorari as a special civil
action will not lie unless a motion for reconsideration is filed before the respondent
tribunal. While the rules allow certain exceptions, none had been successfully
proven by petitioner to warrant a departure from the application of the general rule.
The invocation of public interest will not justify the non-observance of settled rules.
Grave abuse of discretion means such capricious and whimsical exercise of
Such phrase is not a magic incantation that obliterates willful disregard of time-
judgment as is equivalent to lack of jurisdiction. The abuse of discretion must be
honored jurisprudence that afford the tribunals, boards or offices, an opportunity to
grave as where the power is exercised in an arbitrary or despotic manner by reason
rectify the errors and mistakes it may have committed before resort to a petition for
of passion or personal hostility and must be so patent and gross as to amount to an
certiorari can be had.
Pagadian, Zamboanga del Sur, as terminal points, by virtue of a certificate of public

convenience issued to him by the Public Service Commission. On September 15,
1964, the Municipal Board of Ozamiz City enacted the following:
WHEREFORE, the petition is DENIED. The August 31, 2004 Decision and
ORDINANCE NO. 466
the March 14, 2005 Resolution of the Court of Appeals in CA-G.R. SP No. 70932,
AN ORDINANCE IMPOSING PARKING FEES FOR EVERY MOTOR
VEHICLE PARKED ON ANY PORTION OF THE EXISTING PARKING
SPACE IN THE CITY OF OZAMIZ. Be it ordained by the Municipal
Board of the City of Ozamiz, that:
which sustained the March 25, 2002 Order of the Regional Trial Court of Pasig City,
Branch 155, granting the issuance of a writ of preliminary injunction in Civil Case No.
68864, are AFFIRMED.
SECTION 1 There is hereby imposed parking fees for all motor

vehicles parked on any portion of the duly designated parking
areas in the City of Ozamiz;
SECTION 2. Motor Vechicles' as used in this ordinance shall be
construed to mean all vehicles run by engine whether the same is
offered for passengers or for cargoes of whatever kind or nature;
SO ORDERED.
SECTION 3. The word "Parking" as used in this ordinance shall

be construed to mean, when a motor vehicle of whatever kind is
stopped on any portion of the existing parking areas for the
purpose of loading and unloading passengers or cargoes;
G.R. No. L-30727 July 15, 1975

THE CITY OF OZAMIZ, Represented by THE CITY MAYOR, MUNICIPAL BOARD,
CITY TREASURER, and CITY AUDITOR, petitioner-appellant,
vs.
SERAPIO S. LUMAPAS and HONORABLE GERONIMO R. MARAVE, respondentsappellees.
Assistant City Fiscal Artemio C. Engracia for petitioner-appellant.
SECTION 4. For purposes of the fee hereinabove provided, the

following schedule of rates collectible daily from the conductor,
driver, operator and/or owner must be observed:
For Passenger
Francisco D. Boter for respondents-appellees.
(a) Passenger Bus ........................................................................

P1.00
(b) Weapon Carrier, Baby Bus & others of similar nature ..... .70
ANTONIO, J.:
Appeal by certiorari from the decision, dated March 18, 1969, of respondent Judge
Geronimo R. Marave, of the Court of First Instance of Misamis Occidental, Branch II,
Ozamiz City, declaring Ordinance No. 466, series of 1964, of the Municipal Board of
the City of Ozamiz, null and void (Civil Case No. OZ-159), and ordering petitioner to
return to respondent Serapio S. Lumapas the sum of P1,243.00, representing the
amount collected as parking fees, by virtue of the ordinance, without costs.
The facts of this case, which are not disputed, are as follows:
Respondent Serapio S. Lumapas is an operator of transportation buses for
passengers and cargoes, under the name of Romar Line, with Ozamiz City and
(c) Pick Up, Jeepneys, PU Cars and others of similar

nature ..............................................................................................
......................... .50
For Cargoes
(a) Cargo Trucks ..........................................................................
1.00
(b) Pick Up, Jeeps, Jeepneys, Weapon Carriers & Others of similar
nature ..............................................................................................
........................ .70
COME NOW the plaintiff and the defendants, through their

respective counsel, and unto this Honorable Court respectfully
submit this stipulation of facts, to wit:
SECTION 5. That the City Treasurer or his authorized

representative is hereby empowered to collect the herein parking
fees using any form of official receipt he may devise, from the
conductor, driver, operator and/or owner of the motor vehicles
parked in said designated parking areas;
(1) That the area enclosed in red pencil in the sketch is a market
site of the City of Ozamiz which holds the same in its proprietary
character as evidenced by Tax Declaration No. 51234. This area is
for public use.
SECTION 6. Any person or persons, violating any provision of

this ordinance shall, upon conviction thereof, be punished by an
imprisonment of not less than two (2) months nor more than six
(6) months, or by a fine in the sum of not less than P100.00 but
not more than P400.00 or both such fine and imprisonment at the
discretion of the Court;
SECTION 7. This ordinance shall take effect immediately upon
its approval.
Enacted, September 15, 1964,
Approved, October 7, 1964. 1
After approval of the above-quoted ordinance, the City of Ozamiz began collecting
the prescribed parking' fees and collected from respondent-appellee Serapio S.
Lumapas, who had paid under protest, the parking fees at One Peso (P1.00) for each
of his buses, from October 1964 to January 1967, or an aggregate amount of
P1,259.00 2 for which official receipts were issued by petitioner.
About four (4) years later, or on January 11, 1968, respondent Serapio S. Lumapas
filed a complaint, dated August 3, 1967 3 against the City of Ozamiz, represented by
the City Mayor, Municipal Board, City Treasurer, and City Auditor, with the Court of
First instance of Misamis Occidental, Branch II (Civil Case No. OZ-159), for recovery
of parking fees, alleging, among others, that said Ordinance No. 466 is ulta vires,
and praying that judgment be issued (1) nullifying Ordinance No. 466, series of
1964, and (2) ordering the Municipal Board to appropriate the amount of P1,459.00
for the reimbursement of P1,259.00 he had paid as parking fees, plus P200.00 as
attorney's fees.
On January 25, 1968, petitioner filed its answer, with affirmative defenses 4 to which
respondent-appellee Serapio S. Lumapas filed his reply, dated January 30, 1968. 5
(2) That the Zulueta Street is now extended up to the end of the
market site passing a row of tiendas up to the end marked "toilet"
in the sketch plan of market site when the market building was
constructed in 1969;
(3) That on the right side near the row of tiendas and near the
toilet and marked with series of x's and where the buses of
plaintiff were parking waiting for passengers going to the south;
(4) That this space marked "rig parking" in the sketch plan marked
"x" has been designated by City Ordinance No. 233 as a parking
place marked Exhibit "2";
(5) That the defendant City Government has been collecting
parking fees and issued corresponding official receipts to the
plaintiff for each unit belonging to the plaintiff every time it left
Ozamiz City from said parking place but once a day at one peso
per unit;
(6) That the total amount of parking fees collected from the
plaintiff by the defendant is P1,243.00 as per official receipts
actually counted in the presence of both parties;
(7) That the plaintiff made a demand for the reimbursement of the
total amount collected from 1964 to 1967 and this demand was
received on September 1, 1967, by the City Treasurer and that the
City Treasurer replied by first indorsement dated September 11,
1967, asking for reference and verification; and
(8) That in reply to said first indorsement, the plaintiff sent a letter
to the City Treasurer dated January 18, 1967, citing cases in
support of the demand, and in answer to that letter, the City
Treasurer in his communication dated January 11, 1968, flatly
denied payment of the demand.
On January 3, 1969, the parties, through their respective counsel, filed the following:
STIPULATION OF FACTS
(9) That the parties will file their respective memoranda within
twenty days from today.
WHEREFORE, it is respectfully prayed of this Honorable Court that

judgment be rendered based upon this stipulation of facts after
the parties shall have submitted their respective memoranda or
after the lapse of twenty days from today.
Ozamiz City, December 27, 1968. 6
On the basis of the foregoing Stipulation of Facts, and of the court's finding, after an
ocular inspection of the parking area designated by Ordinance No. 286, series of
1956, 7 superseding Ordinance No. 234, series of 1953, that it is a municipal street,
although part of the public market, said court rendered judgment on March 18, 1969
declaring that such parking fee is in the nature of toll fees for the use of public road
and made in violation of Section 59[b] of Republic Act No. 4136 (Land Transportation
and Traffic Code), there being no prior approval therefor by the President of the
Philippines upon recommendation of the Secretary of Public Works and
Communications (now Public Works). Hence, the present appeal by certiorari.
Petitioner now contends that the lower court erred: (1) in declaring Ordinance No.
466, series of 1964, of Ozamiz City, null and void; (2) in considering parking fees as
road tolls under Section 59[b] of Republic Act No. 4136; (3) in declaring the parking
area as a public street and not the patrimonial property of the city; and (4) in
ordering the reimbursement of parking fees paid by respondent-appellee.
Decisive of this controversy is whether the Municipal Board of the City of Ozamiz,
herein petitioner-appellant, had the power to enact said Ordinance No. 466.
Petitioner-appellant, in maintaining the affirmative view, contends: (1)that the
ordinance is valid for the fees collected thereunder are in the nature of property
rentals for the use of parking spaces belonging to the City in its proprietary
character, as evidenced by Tax Declaration No. 51234, and are authorized by
Section 2308 (f) of the Revised Administrative Code, 8(2) that Section 15 (y) of the
Charter of Ozamiz City (Republic Act No. 321) 9 also authorizes the Municipal Board
to regulate the use of streets which carries with it the power to impose fees for its
implementation; (3) that, pursuant to such power, the Municipal Board passed said
Ordinance No. 234, the purpose of which is to minimize accidents, to avoid
congestion of traffic, to enable the passengers to know the exact time of the
departure of trucks and, for this purpose, the Municipal Board provided for parking
areas for which the City has to have funds for the implementation of the purposes
abovestated; (4) that Section 2 of the Local Autonomy Law (Republic Act No.
2264)likewise empowers the local governments to impose taxes and fees, except
those that are enumerated therein, and parking fee is not among the exceptions:
and (5) that the word "toll" connotes the act of passing along the road and the
collection of toll fees may not be imposed unless approved by the President of the
Philippines upon the recommendation of the Secretary of Public Works, pursuant to
Section 59[b] of Republic Act No. 4136; whereas the word "parking" implies a
stationary condition and the parking fees provided for in Ordinance No. 466 is for the
privilege of using the designated parking area, which is owned by the City of
Ozamiz, as its patrimonial property.
On the other hand, respondent-appellee insists (1) that Ozamiz City has no power to
impose parking fees on motor vehicles parked on Zulueta Street, which is property
for public use and, as such, Ordinance No. 466 imposing such fees is null and void;
(2) that granting arguendo that Zulueta Street is part of the City's public market site,
its conversion into a street removes it from its category as patrimonial property to
one for public use; 10 (3) that the use of Zulueta Street as a parking place is only
incidental to the free passage of motor vehicles for, as soon as the buses are loaded
with passengers, the vehicles start their journey to their respective destinations and
pay the toll clerk at a station about one hundred; (100) feet ahead along Zulueta
Street before they are allowed to get out of the City and as such, the prohibition to
impose taxes or fees embodied in Section 59[b] of Republic. Act No. 4136 applies to
this case; (4) that Section 2308[f] of the Revised Administrative Code providing that
the "proceeds on income from the ... use or management of property lawfully held
by the municipality" accrue to the municipality, does not grant, either expressly or
by implication, to the municipality, the power to impose such tax, (5) that Section
15[y] of the Charter of Ozamiz City (Republic Act No. 321) which authorizes the City,
among others, "to regulate the use of a street," does not empower the City to
impose parking fees; besides, said section contains a proviso, i.e., "except as
otherwise provided by law", which, in this case, is Republic Act No. 4136; and (6)
that, since the power to impose parking fees is not among those conferred by the
Local Autonomy Act on local government, said City cannot, therefore, impose such
parking fees.
After the filing of its brief, or on December 10, 1969, the petitioner- appellant,
through its counsel, First Assistant City Fiscal Artemio C. Engracia, filed the following
Manifestation, dated November 27, 1969, praying that the decision of the lower
court be reversed in view of the approval by the President of the Philippines upon
the recommendation of the Secretary of Public Works of the ordinance in question
that validates the same, to wit:
1. That the decision of the lower court, marked Annex "E" of the
petition, declaring Ordinance No. 466, series of 1964, of Ozamiz
City, marked Annex "G" of the petition, null and void is based on
the non-compliance with the provisions of Section 59[b] of
Republic Act No. 4136, otherwise known as The Land
Transportation Law, which requires the approval by the President
of the Philippines upon the recommendation of the Secretary of
Public Works of such kind of ordinance..
2. That the President of the Philippines has now approved the
Ordinance in question. A certified copy of said approval is
hereunder quoted.
xxx xxx xxx
4th Indorsement
Manila, September 26, 1969
Respectfully returned to the Mayor, City of Ozamiz, hereby

approving, as recommended in the 3rd indorsement hereon of the
Secretary of Public Works and Communications, Ordinance No.
466, series of 1964, of that city, entitled: "AN ORDINANCE
IMPOSING PARKING FEES FOR EVERY MOTOR VEHICLE PARKED ON
ANY PORTION OF THE EXISTING PARKING SPACE IN THE OZAMIZ."
By Authority of the President:
(Sgd.) FLORES BAYOT
Assistant Executive Secretary
3. That the approval by the President of the Philippines is based
upon the recommendation of the Secretary of Public Works. A
certified copy of said recommendation is hereunder reproduced:
3rd Indorsement
June 3, 1969
Respectfully forwarded to His Excellency, the President of the
Philippines, Malacaang, recommending favorable action, in view
of the representations herein made, on the within letter dated
March 21, 1969 of Mayor Hilarion A. Ramiro, Ozamiz City,
requesting approval No. 466, series of 1964, passed by the
Municipal Board, same city regarding the collection of fees for the
privilege of parking vehicles in the lots privately-owned by said
City.
(Sgd.) ANTONIO V. RAQUIZA
Secretary
4. That the action of the Secretary of Public Works is based upon
the findings of the Commissioner of the Land Transportation
Commission. A certified copy of the same is herein reproduced:
xxx xxx xxx
2nd Indorsement
May 16, 1969
Respectfully returned to the Honorable Secretary, Department of
Public Works and Communications, Manila, with the statement that
this Commission interposes no objection on the approval of
Ordinance No. 466, series of 1964, of Ozamiz City, considering
that the schedule of rate collectible from the conductor, driver,
operator and/or owner as stated under Section 4 thereof appears
to be reasonable.
It may be stated in this connection that on the Decision of the CFI

of Misamis Occidental, Branch II, dated March 18, 1969 under Civil
Case No. OZ(159), the said Ordinance was declared null and void
for failure to comply with the provisions of Section 59[b] of R. A.
4136, regarding the required "approval by the President of the
Philippines upon recommendation of the Secretary of Public Works
and Communications."
(Sgd.) ROMEO F. EDU
Commissioner
The rule is well-settled that municipal corporations, being mere creatures of the law,
have only such powers as are expressly granted to them and those which are
necessarily implied or incidental to the exercise thereof, and the power to tax is
inherent upon the State and it can only be exercised by Congress, unless delegated
or conferred by it to a municipal corporation. As such, said corporation has only such
powers as the legislative department may have deemed fit to grant. By reason of
the limited powers of local governments and the nature thereof, said powers are to
be construed strictissimi juris and any doubt or ambiguity arising out of the terms
used in granting said powers must be construed against the municipality. 11
The implied powers which a municipal corporation possesses and can exercise are
only those necessarily incident to the powers expressly conferred. Inasmuch as a
city has no power, except by delegation from Congress, in order to enable it to
impose a tax or license fee, the power must be expressly granted or be necessarily
implied in, or incident to, the powers expressly conferred upon the city.
Under Sec. 15[Y] of the Ozamiz City Charter (Rep. Act No. 321), the municipal board
has the power "... to regulate the use of streets, avenues, alleys, sidewalks,
wharves, piers, parks, cemeteries and other public places; ...", and in subsection
[nn] of the same section 15, the authority "To enact all ordinances it may deem
necessary and proper for the sanitation and safety, the furtherance of 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 Charter ..." By this
express legislative grant of authority, police power is delegated to the municipal
corporation to be exercised as a governmental function for municipal purposes.
It is, therefore, patent that the City of Ozamiz has been clothed with full power to
control and regulate its streets for the purpose of promoting the public health, safety
and welfare. Indeed, municipal power to regulate the use of streets is a delegation of
the police power of the national government, and in the exercise of such power, a
municipal corporation can make all necessary and desirable regulations which are
reasonable and manifestly in the interest of public safety and convenience.
By virtue of the aforecited statutory grant of authority, the City of Ozamiz can
regulate the time, place, manner of parking in the streets and public places. It is,
however, insisted that the ordinance did not charge a parking fee but a toll fee for
the use of the street. It is true that the term " parking" ordinarily implies "something
more than a mere temporary and momentary stoppage at a curb for the purpose of
loading or unloading passengers or merchandize; it involves the idea of using a
portion of the street as storage space for an automobile." 12
In the case at bar, the TPU buses of respondent-appellee Sergio S. Lumapas stopped
on the extended portion of Zulueta Street beside the public market (Exhibit "X-1" of
Exhibit "X", Development Plan for Ozamiz Market Site),and that as soon as the buses
were loaded, they proceeded to the station, about one hundred (100) feet away from
the parking area, where a toll clerk of the City collected the "Parking" fee of P1.00
per bus once a day, before said buses were allowed to proceed to their destination.
Section 3 of the questioned Ordinance No. 466 defines the word "'parking' to mean
the stoppage of a motor vehicle of whatever kind on any portion of the
existing parking areas for the purpose of loading and unloading passengers or
cargoes." 13 (Emphasis supplied.)
The word "toll" when used in connection with highways has been defined as a duty
imposed on goods and passengers travelling public roads. 14 The toll for use of a toll
road is for its use in travelling thereon, not for its use as a parking place for
vehicles. 15
It is not pretended, however, that the public utility vehicles are subject to the
payment, if they pass without stopping thru the aforesaid sections of Zulueta Street.
Considering that the public utility vehicles are only charged the fee when said
vehicles stop on "any portion of the existing parking areas for the purpose of loading
or unloading passengers or cargoes", the fees collected are actually in the nature of
parking fees and not toll fees for the use of Zulueta Street. This is clear from the
Stipulation of Facts which shows that fees were not exacted for mere passage thru
the street but for stopping in the designated parking areas therein to unload or load
passengers or cargoes. It was not, therefore a toll fee for the use of public roads,
within the context of Section 59[b] of Republic Act No. 4136, which requires the
authorization of the President of the Philippines.
As adverted to above, the Municipal Board of Ozamiz City is expressly granted by its
Charter the power to regulate the use of its streets. The ordinance in question
appears to have been enacted in pursuance of this grant. The parking fee imposed is
minimal in amount, the maximum being only P1.00 a day for each passenger bus
and P1.00 for each cargo truck, the rates being lower for smaller types of vehicles.
This indicates that its purpose is not for revenue but for regulation. Moreover, it is
undeniable that by designating a specific place wherein passenger and freight
vehicles may load and unload passengers and cargoes, benefits are accorded to the
city's residents in the form of increased safety and convenience arising from the
decongestion of traffic.
Undoubtedly the city may impose a fee sufficient in amount to include the expense
of issuing the license and the cost of necessary inspection or police surveillance
connected with the business or calling licensed.
The fees charged in the case at bar are undeniably to cover the expenses for
supervision, inspection and control, to ensure the smooth flow of traffic in the
environs of the public market, and for the safety and convenience of the public.
WHEREFORE, the appealed decision is hereby reversed and Ordinance No. 466,
series of 1964 declared valid. No pronouncement as to costs.
Fernando (Chairman), Barredo, Aquino and Concepcion Jr., JJ., concur.

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G.R. No.

L-34915 June 24, 1983

The respondent court, therefore, rendered the decision declaring Section 9 of

The issue is: Is Section 9 of the ordinance in question a valid

An examination of the Charter of Quezon City (Rep. Act No. 537),

The power to regulate does not include the power to prohibit

We start the discussion with a restatement of certain basic

It will be seen from the foregoing authorities that police power is

... Under the provisions of municipal charters which are known as

[G.R. No. 118127. April 12, 2005]

same; or, prohibit certain forms of amusement or entertainment in order

WHEREFORE, judgment is hereby rendered declaring Ordinance No. 778[3], Series of

The relevant constitutional provisions are the following:

A. The Ordinance infringes

The guaranty serves as a protection against arbitrary regulation, and private

Substantive due process, as that phrase connotes, asks whether the

In addition, the Ordinance is unreasonable and oppressive as it substantially

Legislative bodies are allowed to classify the subjects of legislation. If the

The Ordinance is repugnant

The Ordinance is in contravention of the Code as the latter merely empowers

And in People v. Esguerra,[108] wherein the Court nullified an ordinance of the

such statutes as create new rights or remedies, impose penalties or punishments, or

G.R. No. 177056

The shopping malls operated or leased out by respondents have parking

September 18, 2009

Before this Court is a Petition for Review on Certiorari,[1] under Rule 45 of

On weekdays, P25.00 for the first four hours and P10.0

P20.00 for the first three hours and P10.00 for

Flat rate of P30.00 per day

vehicles parked in respondents parking facilities.

shopping malls in various locations in Metro Manila. Respondent SM Prime

level, the Building Officials enforce all rules/ regulations

representative of the consumers group.

After three public hearings held on 30 September, 3 November, and 1

Respondent SM Prime thereafter received information that, pursuant to

As a result of the pre-trial conference held on the morning of 8 August 2001,

Marella). In its Petition, respondent SM Prime prayed for judgment:

1. Capacity of the plaintiff [OSG] in Civil Case No. 00-1210

Whether declaratory relief is proper.

Entitlement of the parties of [sic] award of

Preliminary Injunction)[10] against respondents. This Petition was docketed as Civil

declaratory relief were present, to wit:

The requisites for an action for declaratory relief are: (a)

The Building Code, which is the enabling law and the

FOR THE REASONS GIVEN, the Court declares that Ayala

and No. 00-1210 that:

the Court of Appeals.

The Court of Appeals promulgated its Decision in CA-G.R. CV No. 76298 on 25

slots free of charge.

WHEREFORE, premises considered, the instant appeals

Senate Committee Report No. 225.

with a single assignment of error:

According to Section 803 of the National Building Code:

a constitutional question, unless the resolution thereof is indispensable to the

In connection therewith, Rule XIX of the old IRR,[25] provides:

provisions on parking and loading space requirements shall be

1. The parking space ratings listed below are minimum

The Court finds no merit in the present Petition.

The explicit directive of the afore-quoted statutory and regulatory

Statutory construction has it that if a statute is clear and unequivocal, it

SECTION 102. Declaration of Policy

Art. 1158. Obligations derived from law are not

It is hereby declared to be the policy of the State to