WHITE LIGHT CORPORATION, TITANIUM CORPORATION and STA.

MESA TOURIST & DEVELOPMENT

CORPORATION, Petitioners, vs. CITY OF MANILA, represented by DE CASTRO, MAYOR ALFREDO S. LIM, Respondent.
Tinga, J. January 20, 2009 G.R. No. 122846
Doctrine Test to determine whether an ordinance is valid – For an ordinance to be valid, it must not only be within the corporate
powers of the local government unit to enact and pass 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.

Constitutional challenge based on substantive due process; test used – Two standards of judicial review are commonly
used in testing the constitutionality of government action on the basis of substantive due process: rational basis for
economic legislation and strict scrutiny for laws dealing with the regulation of speech, gender, or race as well as other
fundamental rights. Under the former, laws are upheld if they rationally further a legitimate governmental interest. The
latter inquires as to the presence of compelling governmental interest and the absence of less restrictive means for
achieving that interest.
Summary Petitioners challenge the ordinance passed by the City of Manila prohibiting wash rate admissions and renting out a
room for more than twice a day. SC, in using the strict scrutiny test to examine the constitutionality of the ordinance on
the basis of a challenge to its compliance with substantive due process, struck down the ordinance as unconstitutional
for being an invalid exercise of police power, as it curtailed fundamental freedoms, and not merely economic freedoms.
Facts  Assailed ordinance: Then-Manila City Mayor Alfredo Lim signed into law an ordinance prohibiting short time
admission in hotels, motels, and similar establishments in the city. Short time admittance was defined as
admittance and charging of room rate for less than 12 hours or renting out rooms more than twice a day.
o Policy indicated behind the ordinance: “To protect the best interest, health and welfare, and the
morality of its constituents in general and the youth in particular.”
 Challenge: Malate Tourist and Development Corporation (which later withdrew from the case) filed a complaint
for declaratory relief with RTC Manila, alleging that the ordinance, insofar as it includes motels and inns among
prohibited establishments, was invalid and unconstitutional. Petitioners, component companies of the Anito
Group of Companies which owned and operated hotels and motels in Metro Manila, intervened in the case.
 RTC, CA decisions: RTC ruled for petitioners, striking down the ordinance as unconstitutional (basis: personal
liberties, right to operate economic enterprises). CA reversed the RTC and declared the ordinance as
constitutional (basis: no violation of freedom of movement, right to privacy; proper exercise of police power)
Issues/Ratio
I. [procedural issue] W/N petitioners have standing (YES)
Direct and personal interest presents the standard test for a petitioner's standing. SCOTUS in Allen v. Wright
re: three constitutional standing requirements: injury, causation, and redressability. Nonetheless, the rules on
standing admit of exceptions such as the concept of third party standing and the overbreadth doctrine, which
are appropriate under this particular set of facts.

On third party standing: SCOTUS in Powers v. Ohio recognized the right of litigants to bring actions on behalf
of third parties, provided three criteria are satisfied: (1) litigant must have suffered an injury-in-fact, giving him
or her a sufficiently concrete interest in the outcome of the issue in dispute; (2) the litigant must have a close
relation to the third party; and (3) there must exist some hindrance to the third party's ability to protect his or
her own interests. In this case, petitioners’ business interests are injured as they rely on the patronage of their
customers for their continued viability, who may not be able to or willing to bring the challenge themselves.

On overbreadth doctrine: Assuming petitioners do not have a relationship with their patrons for third party
standing to apply, the overbreadth doctrine comes into play. Challengers to government action are in effect
permitted to raise the rights of third parties when a statute needlessly restrains even constitutionally
guaranteed rights. Here, petitioners claim that the ordinance makes a sweeping intrusion into the right to liberty
of their clients. Based on the allegations in the petition, the ordinance suffers from overbreadth.

II. [substantive issue] W/N the ordinance was a valid exercise of police power (NO)
Test to determine whether an ordinance is valid
For an ordinance to be valid, it must not only be within the corporate powers of the local government unit to
enact and pass 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.

Police power vis-à-vis substantive due process

Police power is based upon the concept of necessity of the State and its corresponding right to protect itself
and its people. The ordinance aimed to minimize, if not eliminate, the use of the said establishments for illicit
sex, prostitution, drug use and alike, which certainly fall within the ambit of the police power of the State. The
primary constitutional challenge is one of due process, specifically substantive due process, where an inquiry
is made whether the government has sufficient justification for depriving a person of life, liberty, or property.

Two standards of judicial review are commonly used in testing the constitutionality of government action on the
basis of substantive due process: rational basis for economic legislation and strict scrutiny for laws dealing
 with the regulation of speech, gender, or race as well as other fundamental rights. Under the former, laws are
upheld if they rationally further a legitimate governmental interest. The latter inquires as to the presence of
compelling governmental interest and the absence of less restrictive means for achieving that interest.

Strict scrutiny examination

In the earlier case of Ermita-Malate v. City Mayor of Manila, which concerned the ordinance which required
patrons to fill up a personal information before admittance to a motel or hotel, the constitutional challenge there
was based on the injury to property rights of the petitioners, which warranted the use of the rational basis test.
In this case, however, petitioners were allowed to invoke the constitutional rights of their patrons, those who
would be deprived of availing short time access or wash-up rates to the lodging establishments in question.

The primary motivation behind the ordinance is the curtailment of illicit or immoral sexual behavior. However, it
cannot be denied that many other legitimate activities would be impaired in applying the prohibitions dictated
under the ordinance. Since the ordinance involves an intrusion into private rights, this ties in the examination of
the ordinance’s legitimacy as a police power measure with another constitutional requisite.

It must appear that the interests of the public in general require an interference with private rights and the
means must be reasonably necessary for the accomplishment of the purpose and not unduly oppressive of
private rights. It must be shown that no other alternative for the accomplishment of the purpose less intrusive of
private rights can work. A reasonable relation must also exist between the purposes of the measure and the
means employed for its accomplishment.

The assailed ordinance makes no distinction between places frequented by patrons engaged in illicit or
legitimate activities. It prevents legitimate use of places where illicit activities are rare or even unheard of. It
makes no classification of places of lodging and deems them all susceptible to illicit patronage and subjects
them without exception to the unjustified prohibition.

Less intrusive measures such as active police work and the strict enforcement of existing laws and regulations
would be more effective. measures would have minimal intrusion on the businesses of the petitioners and
other legitimate merchants. It is apparent that the ordinance can easily be circumvented by merely paying the
whole day rate. Those engaged in illicit activities can even collect wash rates from their clientele by charging
their customers a portion of the rent.

Holding Petition GRANTED. The decision of the CA is REVERSED and the RTC decision is REINSTATED.
Ordinance No. 7774 is declared UNCONSTITUTIONAL.