Ichong vs Hernandez The mere fact of alienage is the root cause of the distinction between the alien and
mere fact of alienage is the root cause of the distinction between the alien and the
FACTS:
The Legislature passed R.A. 1180 (An Act to Regulate the Retail Business). Its purpose was to
prevent persons who are not citizens of the Phil. from having a stranglehold upon the people’s
economic life.
 a prohibition against aliens and against associations, partnerships, or corporations
the capital of which are not wholly owned by Filipinos, from engaging directly or
indirectly in the retail trade
 aliens actually engaged in the retail business on May 15, 1954 are allowed to
continue their business, unless their licenses are forfeited in accordance with law,
until their death or voluntary retirement. In case of juridical persons, ten years
after the approval of the Act or until the expiration of term.
Citizens and juridical entities of the United States were exempted from this Act.
 provision for the forfeiture of licenses to engage in the retail business for violation
of the laws on nationalization, economic control weights and measures and labor
and other laws relating to trade, commerce and industry.
 provision against the establishment or opening by aliens actually engaged in the
retail business of additional stores or branches of retail business
Lao Ichong, in his own behalf and behalf of other alien residents, corporations and
partnerships affected by the Act, filed an action to declare it unconstitutional for the ff:
reasons:
 it denies to alien residents the equal protection of the laws and deprives them of
their liberty and property without due process
 the subject of the Act is not expressed in the title
 the Act violates international and treaty obligations
 the provisions of the Act against the transmission by aliens of their retail business
thru hereditary succession
ISSUE: WON the Act deprives the aliens of the equal protection of the laws.
HELD: The law is a valid exercise of police power and it does not deny the aliens the equal
protection of the laws. There are real and actual, positive and fundamental differences
between an alien and a citizen, which fully justify the legislative classification adopted.
RATIO:
The equal protection clause does not demand absolute equality among residents. It merely
requires that all persons shall be treated alike, under like circumstances and conditions both
as to privileges conferred and liabilities enforced.
The classification is actual, real and reasonable, and all persons of one class are treated alike.
The difference in status between citizens and aliens constitutes a basis for reasonable
classification in the exercise of police power.
Official statistics point out to the ever-increasing dominance and control by alien of the retail
trade. It is this domination and control that is the legislature’s target in the enactment of the
Act.
national as a trader. The alien is naturally lacking in that spirit of loyalty and enthusiasm for
the Phil. where he temporarily stays and makes his living. The alien owes no allegiance or
loyalty to the State, and the State cannot rely on him/her in times of crisis or emergency.
While the citizen holds his life, his person and his property subject to the needs of the country,
the alien may become the potential enemy of the State.
The alien retailer has shown such utter disregard for his customers and the people on whom
he makes his profit. Through the illegitimate use of pernicious designs and practices, the alien
now enjoys a monopolistic control on the nation’s economy endangering the national security
in times of crisis and emergency.
INCHONG VS HERNANDEZ
Lao Ichong is a Chinese businessman who entered the country to take advantage of business
opportunities herein abound (then) – particularly in the retail business. For some time he and
his fellow Chinese businessmen enjoyed a “monopoly” in the local market in Pasay. Until in
June 1954 when Congress passed the RA 1180 or the Retail Trade Nationalization Act the
purpose of which is to reserve to Filipinos the right to engage in the retail business. Ichong
then petitioned for the nullification of the said Act on the ground that it contravened several
treaties concluded by the RP which, according to him, violates the equal protection clause
(pacta sund servanda). He said that as a Chinese businessman engaged in the business here in
the country who helps in the income generation of the country he should be given equal
opportunity.
ISSUE: Whether or not a law may invalidate or supersede treaties or generally accepted
principles.
HELD: Yes, a law may supersede a treaty or a generally accepted principle. In this case, there is
no conflict at all between the raised generally accepted principle and with RA 1180. The equal
protection of the law clause “does not demand absolute equality amongst residents; it merely
requires that all persons shall be treated alike, under like circumstances and conditions both
as to privileges conferred and liabilities enforced”; and, that the equal protection clause “is
not infringed by legislation which applies only to those persons falling within a specified class,
if it applies alike to all persons within such class, and reasonable grounds exist for making a
distinction between those who fall within such class and those who do not.”
For the sake of argument, even if it would be assumed that a treaty would be in conflict with a
statute then the statute must be upheld because it represented an exercise of the police
power which, being inherent could not be bargained away or surrendered through the
medium of a treaty. Hence, Ichong can no longer assert his right to operate his market stalls
in the Pasay city market.
TIO VS. VIDEOGRAM REGULATORY BOARD [151 SCRA 208; G.R. No. L-
75697; 18 Jun 1987]
Facts: The case is a petition filed by petitioner on behalf of videogram operators adversely
affected by Presidential Decree No. 1987, “An Act Creating the Videogram Regulatory Board"
with broad powers to regulate and supervise the videogram industry.
A month after the promulgation of the said Presidential Decree, the amended the National
Internal Revenue Code provided that:
"SEC. 134. Video Tapes. — There shall be collected on each processed video-tape cassette,
ready for playback, regardless of length, an annual tax of five pesos; Provided, That locally
manufactured or imported blank video tapes shall be subject to sales tax."
"Section 10. Tax on Sale, Lease or Disposition of Videograms. — Notwithstanding any
provision of law to the contrary, the province shall collect a tax of thirty percent (30%) of the
purchase price or rental rate, as the case may be, for every sale, lease or disposition of a
videogram containing a reproduction of any motion picture or audiovisual program.”
“Fifty percent (50%) of the proceeds of the tax collected shall accrue to the province, and the
other fifty percent (50%) shall accrue to the municipality where the tax is collected;
PROVIDED, That in Metropolitan Manila, the tax shall be shared equally by the
City/Municipality and the Metropolitan Manila Commission.”
The rationale behind the tax provision is to curb the proliferation and unregulated circulation
of videograms including, among others, videotapes, discs, cassettes or any technical
improvement or variation thereof, have greatly prejudiced the operations of movie houses
and theaters. Such unregulated circulation have caused a sharp decline in theatrical
attendance by at least forty percent (40%) and a tremendous drop in the collection of sales,
contractor's specific, amusement and other taxes, thereby resulting in substantial losses
estimated at P450 Million annually in government revenues.
Videogram(s) establishments collectively earn around P600 Million per annum from rentals,
sales and disposition of videograms, and these earnings have not been subjected to tax,
thereby depriving the Government of approximately P180 Million in taxes each year.
The unregulated activities of videogram establishments have also affected the viability of the
movie industry.
Issues:
(1) Whether or not tax imposed by the DECREE is a valid exercise of police power.
(2) Whether or nor the DECREE is constitutional.
Held: Taxation has been made the implement of the state's police power. The levy of the 30%
tax is for a public purpose. It was imposed primarily to answer the need for regulating the
video industry, particularly because of the rampant film piracy, the flagrant violation of
intellectual property rights, and the proliferation of pornographic video tapes. And while it
was also an objective of the DECREE to protect the movie industry, the tax remains a valid
imposition.
We find no clear violation of the Constitution which would justify us in pronouncing
Presidential Decree No. 1987 as unconstitutional and void. While the underlying objective of
the DECREE is to protect the moribund movie industry, there is no question that public welfare
is at bottom of its enactment, considering "the unfair competition posed by rampant film
piracy; the erosion of the moral fiber of the viewing public brought about by the availability of
unclassified and unreviewed video tapes containing pornographic films and films with brutally
violent sequences; and losses in government revenues due to the drop in theatrical
attendance, not to mention the fact that the activities of video establishments are virtually
untaxed since mere payment of Mayor's permit and municipal license fees are required to
engage in business."
WHEREFORE, the instant Petition is hereby dismissed. No costs.
ASSOCIATION OF SMALL LANDOWNERS V. SECRETARY OF DAR, G.R. No.
78742 (175 SCRA 343), July 14, 1989
G.R. No. 78742 July 14, 1989
ASSOCIATION OF SMALL LANDOWNERS IN THE PHILIPPINES, INC., JUANITO D. GOMEZ,
GERARDO B. ALARCIO, FELIPE A. GUICO, JR., BERNARDO M. ALMONTE, CANUTO RAMIR B.
CABRITO, ISIDRO T. GUICO, FELISA I. LLAMIDO, FAUSTO J. SALVA, REYNALDO G. ESTRADA,
FELISA C. BAUTISTA, ESMENIA J. CABE, TEODORO B. MADRIAGA, AUREA J. PRESTOSA,
EMERENCIANA J. ISLA, FELICISIMA C. ARRESTO, CONSUELO M. MORALES, BENJAMIN R.
SEGISMUNDO, CIRILA A. JOSE & NAPOLEON S. FERRER, petitioners,
vs.
HONORABLE SECRETARY OF AGRARIAN REFORM, respondent.
G.R. No. 79310 July 14, 1989
ARSENIO AL. ACUNA, NEWTON JISON, VICTORINO FERRARIS, DENNIS JEREZA, HERMINIGILDO
GUSTILO, PAULINO D. TOLENTINO and PLANTERS' COMMITTEE, INC., Victorias Mill District,
Victorias, Negros Occidental, petitioners,
vs.
JOKER ARROYO, PHILIP E. JUICO and PRESIDENTIAL AGRARIAN REFORM COUNCIL,
respondents.
G.R. No. 79744 July 14, 1989
INOCENTES PABICO, petitioner,
vs.
HON. PHILIP E. JUICO, SECRETARY OF THE DEPARTMENT OF AGRARIAN REFORM, HON. JOKER
ARROYO, EXECUTIVE SECRETARY OF THE OFFICE OF THE PRESIDENT, and Messrs. SALVADOR
TALENTO, JAIME ABOGADO, CONRADO AVANCENA and ROBERTO TAAY, respondents.
G.R. No. 79777 July 14, 1989
NICOLAS S. MANAAY and AGUSTIN HERMANO, JR., petitioners,
vs.
HON. PHILIP ELLA JUICO, as Secretary of Agrarian Reform, and LAND BANK OF THE
PHILIPPINES,respondents.
CRUZ, J.:
FACTS:
These are consolidated cases involving common legal questions including serious challenges
to the constitutionality of R.A. No. 6657 also known as the "Comprehensive Agrarian Reform
Law of 1988"
In G.R. No. 79777, the petitioners are questioning the P.D No. 27 and E.O Nos. 228 and 229 on
the grounds inter alia of separation of powers, due process, equal protection and the
constitutional limitation that no private property shall be taken for public use without just
compensation.
In G.R. No. 79310, the petitioners in this case claim that the power to provide for a
Comprehensive Agrarian Reform Program as decreed by the Constitution belongs to the
Congress and not to the President, the also allege that Proclamation No. 131 and E.O No. 229
should be annulled for violation of the constitutional provisions on just compensation, due
process and equal protection. They contended that the taking must be simultaneous with
payment of just compensation which such payment is not contemplated in Section 5 of the
E.O No. 229.
In G.R. No. 79744, the petitioner argues that E.O Nos. 228 and 229 were invalidly issued by
the President and that the said executive orders violate the constitutional provision that no
private property shall be taken without due process or just compensation which was denied to
the petitioners.
In G.R. No 78742 the petitioners claim that they cannot eject their tenants and so are unable
to enjoy their right of retention because the Department of Agrarian Reform has so far not
issued the implementing rules of the decree. They therefore ask the Honorable Court for a
writ of mandamus to compel the respondents to issue the said rules.
ISSUE:
Whether or not the laws being challenged is a valid exercise of Police power or Power of
Eminent Domain.
RULING:
Police Power through the Power of Eminent Domain, though there are traditional distinction
between the police power and the power of eminent domain, property condemned under
police power is noxious or intended for noxious purpose, the compensation for the taking of
such property is not subject to compensation, unlike the taking of the property in Eminent
Domain or the power of expropriation which requires the payment of just compensation to
the owner of the property expropriated.
*OTHER RULING*
ISSUE
Whether or not the assailed statutes are valid exercises of police power.
Whether or not the content and manner of just compensation provided for the CARP is
violative of the Constitution.
Whether or not the CARP and EO 228 contravene a well accepted principle of eminent domain
by divesting the land owner of his property even before actual payment to him in full of just
compensation
HELD
Yes. The subject and purpose of agrarian reform have been laid down by the Constitution
itself, which satisfies the first requirement of the lawful subject. However, objection is raised
to the manner fixing the just compensation, which it is claimed is judicial prerogatives.
However, there is no arbitrariness in the provision as the determination of just compensation
by DAR is only preliminary unless accepted by all parties concerned. Otherwise, the courts will
still have the right to review with finality the said determination.
No. Although the traditional medium for payment of just compensation is money and no
other, what is being dealt with here is not the traditional exercise of the power and eminent
domain. This is a revolutionary kind of expropriation, which involves not mere millions of
pesos. The initially intended amount of P50B may not be enough, and is in fact not even fully
available at the time. The invalidation of the said section resulted in the nullification of the
entire program.
No. EO 228 categorically stated that all qualified farmer-beneficiaries were deemed full
owners of the land they acquired under PP 27, after proof of full payment of just
compensation. The CARP Law, for its part, conditions the transfer of possession and ownership
of the land to the government on the receipt by the landowner of the corresponding payment
or the deposit of DAR of the compensation in cash or LBP bonds with an accessible bank. Until
then, title also remains with the landowner.
MMDA v Bel-Air Village Association, Inc.
GR 135962
March 27, 2000
FACTS:
On December 30, 1995, respondent received from petitioner a notice requesting the former
to open its private road, Neptune Street, to public vehicular traffic starting January 2, 1996.
On the same day, respondent was apprised that the perimeter separating the subdivision from
Kalayaan Avenue would be demolished.
Respondent instituted a petition for injunction against petitioner, praying for the issuance of a
TRO and preliminary injunction enjoining the opening of Neptune Street and prohibiting the
demolition of the perimeter wall.
ISSUE:
WON MMDA has the authority to open Neptune Street to public traffic as an agent of the
state endowed with police power.
HELD:
A ‘local government’ is a “political subdivision of a nation or state which is constituted by law
and has substantial control of local affairs”. It is a “body politic and corporate” – one endowed
with powers as a political subdivision of the National Government and as a corporate entity
representing the inhabitants of its territory (LGC of 1991).
Our Congress delegated police power to the LGUs in Sec.16 of the LGC of 1991. It empowers
the sangguniang panlalawigan, panlungsod and bayan to “enact ordinances, approve
resolutions and appropriate funds for the general welfare of the [province, city or
municipality] and its inhabitants pursuant to Sec.16 of the Code and in the proper exercise of
the [LGU’s corporate powers] provided under the Code.”
There is no syllable in RA 7924 that grants the MMDA police power, let alone legislative
power. Unlike the legislative bodies of the LGUs, there is no grant of authority in RA 7924 that
allows the MMDA to enact ordinances and regulations for the general welfare of the
inhabitants of Metro Manila. The MMDA is merely a “development authority” and not a
political unit of government since it is neither an LGU or a public corporation endowed with
legislative power. The MMDA Chairman is not an elective official, but is merely appointed by
the President with the rank and privileges of a cabinet member.
In sum, the MMDA has no power to enact ordinances for the welfare of the community. It is
the LGUs, acting through their respective legislative councils, that possess legislative power
and police power.
The Sangguniang Panlungsod of Makati City did not pass any ordinance or resolution ordering
the opening of Neptune Street, hence, its proposed opening by the MMDA is illegal.
*OTHER RULING*
According to SC, Police power is an inherent attribute of sovereignty. Police power is lodged
primarily in the National Legislature, which the latter can delegate to the President and
administrative boards, LGU or other lawmaking bodies.
LGU is a political subdivision for local affairs. Which has a legislative body empowered to enact
ordinances, approved resolutions and appropriate funds for the general welfare of the
province/city/municipality.
The MMDA is, as termed in the charter itself, "development authority." All its functions are
administrative in nature.The powers of the MMDA are limited to the following acts:
formulation, coordination, regulation,implementation, preparation, management, monitoring,
setting of policies, installation of a system and administration. There is no syllable in R.A. No.
7924 that grants the MMDA police power, let alone legislative power
In sum, the MMDA has no power to enact ordinances for the welfare of the community. It is
the LGUs, acting through their respective legislative councils, that possess legislative power
and police power.
The Sangguniang Panlungsod of Makati City did not pass any ordinance or resolution ordering
the opening of Neptune Street, hence, its proposed opening by the MMDA is illegal.
Wherefore, the petition is denied.
FRANCISCO VS FERNANDO
FACTS:
Petitioner Ernesto B. Francisco, Jr. (petitioner), as member of the Integrated Bar of the
Philippines and taxpayer, filed this original action for the issuance of the writs of Prohibition
and Mandamus. Petitioner prays for the Prohibition writ to enjoin respondents Bayani F.
Fernando, Chairman of the Metropolitan Manila Development Authority (MMDA) and the
MMDA (respondents) from further implementing its “wet flag scheme” (“Flag Scheme”).
Petitioner contends that the Flag Scheme: (1) has no legal basis because the MMDA’s
governing body, the Metro Manila Council, did not authorize it; (2) violates the Due Process
Clause because it is a summary punishment for jaywalking; (3) disregards the Constitutional
protection against cruel, degrading, and inhuman punishment; and (4) violates “pedestrian
rights” as it exposes pedestrians to various potential hazards.
ISSUE:
Whether or not the petition was valid.
HELD:
The Court dismissed the petition. A citizen can raise a constitutional question only when (1)
he can show that he has personally suffered some actual or threatened injury because of the
allegedly illegal conduct of the government; (2) the injury is fairly traceable to the challenged
action; and (3) a favorable action will likely redress the injury. On the other hand, a party suing
as a taxpayer must specifically show that he has a sufficient interest in preventing the illegal
expenditure of money raised by taxation and that he will sustain a direct injury as a result of
the enforcement of the questioned statute. Petitioner meets none of the requirements under
either category.

Nor is there merit to petitioner’s claim that the Court should relax the standing requirement
because of the “transcendental importance” of the issues the petition raises. As an exception
to the standing requirement, the transcendental importance of the issues raised relates to the
merits of the petition. Thus, the party invoking it must show, among others, the presence of a
clear disregard of a constitutional or statutory prohibition. Petitioner has not shown such clear
constitutional or statutory violation.
On the Flag Scheme’s alleged lack of legal basis, we note that all the cities and municipalities
within the MMDA’s jurisdiction, except Valenzuela City, have each enacted anti-jaywalking
ordinances or traffic management codes with provisions for pedestrian regulation. Such fact
serves as sufficient basis for respondents’ implementation of schemes, or ways and means, to
enforce the anti-jaywalking ordinances and similar regulations. After all, the MMDA is an
administrative agency tasked with the implementation of rules and regulations enacted by
proper authorities. The absence of an anti-jaywalking ordinance in Valenzuela City does not
detract from this conclusion absent any proof that respondents implemented the FlagScheme
in that city.
MMDA v Viron Transport
G.R. No. 170656 August 15, 2007
J. Carpio Morales
Facts:
GMA declared Executive Order (E.O.) No. 179 operational, thereby creating the MMDA in
2003. Due to traffic congestion, the MMDA recommended a plan to “decongest traffic by
eliminating the bus terminals now located along major Metro Manila thoroughfares and
providing more and convenient access to the mass transport system.” The MMC gave a go
signal for the project. Viron Transit, a bus company assailed the move. They alleged that the
MMDA didn’t have the power to direct operators to abandon their terminals. In doing so they
asked the court to interpret the extent and scope of MMDA’s power under RA 7924. They also
asked if the MMDA law contravened the Public Service Act.
Another bus operator, Mencorp, prayed for a TRO for the implementation in a trial court. In
the Pre-Trial Order17 issued by the trial court, the issues were narrowed down to whether 1)
the MMDA’s power to regulate traffic in Metro Manila included the power to direct provincial
bus operators to abandon and close their duly established and existing bus terminals in order
to conduct business in a common terminal; (2) the E.O. is consistent with the Public Service
Act and the Constitution; and (3) provincial bus operators would be deprived of their real
properties without due process of law should they be required to use the common bus
terminals. The trial court sustained the constitutionality.
Both bus lines filed for a MFR in the trial court. It, on September 8, 2005, reversed its
Decision, this time holding that the E.O. was "an unreasonable exercise of police power"; that
the authority of the MMDA under Section (5)(e) of R.A. No. 7924 does not include the power
to order the closure of Viron’s and Mencorp’s existing bus terminals; and that the E.O. is
inconsistent with the provisions of the Public Service Act.
MMDA filed a petition in the Supreme Court. Petitioners contend that there is no justiciable
controversy in the cases for declaratory relief as nothing in the body of the E.O. mentions or
orders the closure and elimination of bus terminals along the major thoroughfares of Metro
Manila. To them, Viron and Mencorp failed to produce any letter or communication from the
Executive Department apprising them of an immediate plan to close down their bus terminals.
And petitioners maintain that the E.O. is only an administrative directive to government
agencies to coordinate with the MMDA and to make available for use government property
along EDSA and South Expressway corridors. They add that the only relation created by the
E.O. is that between the Chief Executive and the implementing officials, but not between third
persons.
Issues:
1. Is there a justiciable controversy?
2. Is the elimination of bus terminals unconstitutional?
Held: Yes to both. Petition dismissed.
Ratio:
1. Requisites: (a) there must be a justiciable controversy; (b) the controversy must be between
persons whose interests are adverse; (c) the party seeking declaratory relief must have a legal
interest in the controversy; and (d) the issue invoked must be ripe for judicial determination
It cannot be gainsaid that the E.O. would have an adverse effect on respondents. The closure
of their bus terminals would mean, among other things, the loss of income from the operation
and/or rentals of stalls thereat. Precisely, respondents claim a deprivation of their
constitutional right to property without due process of law.
Respondents have thus amply demonstrated a "personal and substantial interest in the case
such that [they have] sustained, or will sustain, direct injury as a result of [the E.O.’s]
enforcement." Consequently, the established rule that the constitutionality of a law or
administrative issuance can be challenged by one who will sustain a direct injury as a result of
its enforcement has been satisfied by respondents.
2. Under E.O. 125 A, the DOTC was given the objective of guiding government and private
investment in the development of the country’s intermodal transportation and
communications systems. It was also tasked to administer all laws, rules and regulations in the
field of transportation and communications.
It bears stressing that under the provisions of E.O. No. 125, as amended, it is the DOTC, and
not the MMDA, which is authorized to establish and implement a project such as the one
subject of the cases at bar. Thus, the President, although authorized to establish or cause the
implementation of the Project, must exercise the authority through the instrumentality of the
DOTC which, by law, is the primary implementing and administrative entity in the promotion,
development and regulation of networks of transportation, and the one so authorized to
establish and implement a project such as the Project in question.
By designating the MMDA as the implementing agency of the Project, the President clearly
overstepped the limits of the authority conferred by law, rendering E.O. No. 179 ultra vires.
There was no grant of authority to MMDA. It was delegated only to set the policies concerning
traffic in Metro Manila, and shall coordinate and regulate the implementation of all programs
and projects concerning traffic management, specifically pertaining to enforcement,
engineering and education.
In light of the administrative nature of its powers and functions, the MMDA is devoid of
authority to implement the Project as envisioned by the E.O; hence, it could not have been
validly designated by the President to undertake the Project.
MMDA’s move didn’t satisfy police power requirements such as that (1) the interest of the
public generally, as distinguished from that of a particular class, requires its exercise; and (2)
the means employed are reasonably necessary for the accomplishment of the purpose and
not unduly oppressive upon individuals. Stated differently, the police power legislation must
be firmly grounded on public interest and welfare and a reasonable relation must exist
between the purposes and the means.
As early as Calalang v. Williams, this Court recognized that traffic congestion is a public, not
merely a private, concern. The Court therein held that public welfare underlies the contested
statute authorizing the Director of Public Works to promulgate rules and regulations to
regulate and control traffic on national roads.
Likewise, in Luque v. Villegas,46 this Court emphasized that public welfare lies at the bottom
of any regulatory measure designed "to relieve congestion of traffic, which is, to say the least,
a menace to public safety." As such, measures calculated to promote the safety and
convenience of the people using the thoroughfares by the regulation of vehicular traffic
present a proper subject for the exercise of police power.
Notably, the parties herein concede that traffic congestion is a public concern that needs to be
addressed immediately. Are the means employed appropriate and reasonably necessary for
the accomplishment of the purpose. Are they not duly oppressive?
De la Cruz v. Paras- Bus terminals per se do not, however, impede or help impede the flow of
traffic. How the outright proscription against the existence of all terminals, apart from that
franchised to petitioner, can be considered as reasonably necessary to solve the traffic
problem, this Court has not been enlightened
In the subject ordinances, however, the scope of the proscription against the maintenance of
terminals is so broad that even entities which might be able to provide facilities better than
the franchised terminal are barred from operating at all.
Finally, an order for the closure of respondents’ terminals is not in line with the provisions of
the Public Service Act.
Consonant with such grant of authority, the PSC (now the ltfrb)was empowered to "impose
such conditions as to construction, equipment, maintenance, service, or operation as the
public interests and convenience may reasonably require" in approving any franchise or
privilege. The law mandates the ltfrb to require any public service to establish, construct,
maintain, and operate any reasonable extension of its existing facilities.
MMDA VS VIRON
Facts: PGMA issued EO 179, which provided for the establishment of a Mass Transport System
for Greater Manila. Pursuant to this EO, the Metro manila Council of the MMDA cited the
need to remove the bus terminals located along major thoroughfares of Metro Manila.
Respondents, provincial bus operators who had bus terminals that were threatened to be
removed, alleges that EO should be declared unconstitutional and illegal for transgressing the
possessory rights of owners and operators of public land transportation units over their
respective terminals
Issue: Whether or not EO 179 is a valid exercise of police power
Held: Petition denied. EO 179 is null and void. MMDA has no police power, let alone legislative
power. In light of the administrative nature of its powers and functions, the MMDA is devoid
of authority to implement the Project as envisioned by the EO; hence it could not have been
validly designated by the President to undertake the Project. It follows that the MMDA cannot
validly order the eliminationof the respondents’ terminals.
Police power rests primarily with the legislature, such power may be delegated, as it is in fact
increasingly being delegated. By virtue of a valid delegation, the power may be exercised by
the President and administrative boards as well as by the lawmaking bodies of
municipal corporations or local government under an express delegation by the LGC of 1991.
Measures calculated to promote the safety and convenience of the people using the
thoroughfares by the regulation of vehicular traffic present a proper subject for the exercise of
police power.
On Constitutional Law, “The true role of Constitutional Law is to effect an equilibrium between
authority and liberty so that rights are exercised within the framework of the law and the
laws are enacted with due deference to rights.”
LIM vs. PACQUING
G.R. 115044, January 27, 1995
Facts: On 15 September 1994, respondent Associated Development Corporation (ADC) filed a
petition for prohibition seeking to prevent GAB from withdrawing the provisional authority
that had been granted them to operate jai-alai. ADC's franchise was invalidated by PD No. 771,
which expressly revoked all existing franchises to operate all forms of gambling facilities issued
by local governments.
Respondent contends that Ordinance No. 7065 authorized the Mayor to allow ADC to operate
Jai-Alai in the City of Manila. ADC also assails the constitutionality of PD No. 771 as violative of
the equal protection and non-impairment clauses of the Constitution.
Issue: Whether ADC has a valid franchise to operate the Jai-Alai de Manila.
Held: PD No. 771 is a valid exercise of the inherent police power of the State. Gambling is
essentially antagonistic and self-reliance. It breeds indolence and erodes the value of good,
honest and hard work. It is, as very aptly stated by PD No. 771, a vice and a social ill which
government must minimize (if not eradicate) in pursuit of social and economic development.
Jai-alai is not a mere economic activity which the law seeks to regulate. It is essentially
gambling and whether it should be permitted and, if so, under what conditions are questions
primarily for the lawmaking authority to determine, talking into account national and local
interests. Here, it is the police power of the State that is paramount. On the alleged violation
of the non-impairment and equal protection clauses of the Constitution, it should be
remembered that a franchise is not in the strict sense a simple contract but rather it is more
importantly, a mere privilege specially in matters which are within the government's power to
regulate and even prohibit through the exercise of the police power. Thus, a gambling
franchise is always subject to the exercise of police power for the public welfare.
ADC has no franchise from Congress to operate the jai-alai therefore, it may not operate even
if it has a license from the Mayor to operate the jai-alai in the City of Manila.
Sangalang vs. Intermediate Appelate Court
176 SCRA 719
Ponente: Justice Sarmiento
Facts:
Bel-Air Village is located north of Buendia Avenue extension across a stretch of commercial
block from Reposo Street in the west up to Zodiac Street in the east. When Bel-Air Village was
planned, this block between Reposo and Zodiac Streets adjoining Buendia Avenue in front of
the village was designated as a commercial block. Bel-Air Village was owned and developed
into a residential subdivision in the 1950s by Makati Development Corporation (MDC), which
in 1968 was merged with Ayala Corporation.
Spouses Sangalang reside at 110 Jupiter St. between Makati Ave. and Reposo St.; Spouses
Gaston reside at 64 Jupiter St. between Makati Ave. and Zodiac St.; Spouses Briones reside at
66 Jupiter St.; while Bel-Air Village Association, Inc. (BAVA) is the homeowners’ association in
Bel-Air Village which takes care of the sanitation, security, traffic regulations and general
welfare of the village.
The lots which were acquired by the Sangalangs, the Gastons, the Brioneses in 1960, 1957 and
1958, respectively, all sold by MDC subject to certain conditions and easements contained in
Deed Restrictions which formed a part of each deed of sale (i.e. being automatic members of
Bel-Air Association who must abide by the rules and regulations laid down by the Association
[as per sanitation, security and general welfare of the community]; that lots cannot be
subdivided and only used for residential purposes; that single family house be constructed in
single lot; no commercial or advertising signs placed or erected on the lot; no farm animals
allowed, pets allowed; easement of 2 meters within lot; lot not used for immoral or illegal
trade or activity; grass always trimmed; Restrictions in force for 50 years starting 15 January
1957).
MDC constructed a fence on the commercial block along Jupiter Street in 1966, although it
was not part of the original plan. The fence was partially destroyed in 1970 due to a typhoon.
The fence was subsequently rebuilt by the Ayala. Jupiter Street was widened in 1972, and the
fence had to be destroyed. Upon request of BAVA, the wall was rebuilt inside the boundary of
the commercial block. Ayala finally decided to subdivide and sell the lots in the commercial
block between Buendia and Jupiter. BAVA requested confirmation of use of the commercial
lots.
On 30 June 1972, Ayala likewise informed BAVA that in a few months it shall subdivided and
sell the commercial lots bordering the north side of Buendia Avenue Extension from Reposo
St. up to Zodiac St. Deed restrictions (building having set back of 19 meters, and matters RE
entrances and exits) are imposed in such commercial lots to harmonize and blend with the
development and welfare of Bel-Air Village. Ayala further applied for special membership in
BAVA of the commercial lot owners, the application submitted to BAVA’s board of governors
for decision.
On 25 September 1972, height limitations for buildings were increased from 12.5 meters to 15
meters and Jupiter street is widened by 3.5 meters. The widening of the street reduced the
association dues to be remitted to BAVA, inasmuch that it now applies to 76,726 sq.m. rather
than 81,590 sq.m. Due rates have increased from P0.5/sq.m in 1972 to P3/sq.m in 1980.
On 4 April 1975, Makati enacted Ordinance 81, providing for the zonification of Makati, which
classified Bel-Air Village as a Class A Residential Zone, with its boundary in the south
extending to the center line of Jupiter Street (Chapter 3, Article 1, Section 3.03, paragraph F).
The Buendia Avenue extension area was classified as Administrative Office Zone with its
boundary in the North-North East Extending also up to the center line of Jupiter Street
(Chapter 3, Article 1, Section 3.05, paragraph C). The Residential Zone and the Administrative
Office Zone have a common boundary along the center line of Jupiter Street. The zoning was
later followed under the Comprehensive Zoning Ordinance for the National Capital Region
adopted by the Metro Manila Commission as Ordinance 81-01 on 14 March 1981, with
modification that Bel-Air Village is simply bounded in the South-Southeast by Jupiter Street,
and the block-deep strip along the northwest side of Buendia Avenue Extension from Reposo
to EDSA as High Intensity Commercial Zone. Under the zoning classification, Jupiter Street is a
common boundary of Bel-Air Village and the commercial zone.
On 17 January 1977, the Office of the Mayor of Makati directed BAVA, in the interest of public
welfare and purpose of easing traffic congestion, the opening of the Amapola (Estrella-
Mercedes; Palma gate-Villena), Mercedes (EDSA-Imelda/Amapola junction), Zodiac
(Mercedes-Buendia), Jupiter (Zodiac-Reposo, connecting Metropolitan avenue to Pasong
Tamo and V. Cruz extension), Neptune (Makati ave.-Reposo), Orbit (F.Zobel/ Candelaria
intersection –Jupiter Paseo de Roxas; Mercedes-Buendia) streets of Bel-Air Village for public
use. On 10 February, BAVA replied, expressing concern of the residents about the opening of
the streets to general public and requesting the indefinite postponement of the plan to open
Jupiter St. to public vehicles. BAVA, however, voluntarily opened the other streets.
On 12 August 1977, the municipal officials of Makati allegedly opened, destroyed and
removed the gates constructed at the corner of Reposo St. and Jupiter St. as well as
gates/fences constructed at Jupiter Street and Makati Avenue forcibly; thereby opening
Jupiter street to public traffic. Increased traffic was observed along Jupiter Street after its
opening to public use. Purchasers of the commercial lots started constructing their respective
buildings and demolished the fence or wall within the boundary of their lots. Many owners
constructed their own fences and walls and employed their own security guards.
On 27 January 1978, Ayala donated the entire Jupiter Street from Metropolitan Avenue to
Zodiac Street to BAVA. With the opening of the entire Jupiter street to public traffic, the
residential lots located in the northern side of Jupiter Street ceased to be used for purely
residential purposes, and became commercial in character.
On 29 October 1979, spouses Sangalang filed an action for damages against Ayala predicated
on both breach of contract and on tort or quasi-delict. A supplemental complaint was later
filed by the Sangalangs to augment the reliefs prayed for in the original complaint because of
alleged supervening events which occurred during the trial of the case. Claiming to be
similarly situated, spouses Gaston, Briones, and BAVA intervened in the case. The CFI Pasig
rendered a decision in favor of the Sangalangs awarding them P500,000 as actual and
consequential damages, P2M as moral damages, P500,000 as exemplary damages, P100,000
as attorney’s fees, and the cost of suit. The intervenors Gaston and Briones were awarded
P400,000 as consequential damages, P500,000 as moral damages, P500,000 as exemplary
damages, P50,000 as attorney’s fees, and the cost of suit; each. Intervenor BAVA was awarded
the same except for moral damages. The damages awarded bear legal interest from the filing
of the complaint. Ayala was also ordered to restore/reconstruct the perimeter wall at the
original position in 1966 at its own expense within 6 months from finality of judgment. On
appeal, the Court of Appeals reversed and set aside the decision for not being supported by
facts and law on the matter; and entered another, dismissing the case for lack of cause of
action; without pronouncement as to costs. Sangalang appealed.
[GR 74376] The Bel-Air Village Association (BAVA) filed and action to enforce the restrictions
stipulated in the deeds of sale executed by the Ayala Corporation. BAVA originally brought the
complaint in the RTC Makati, principally for specific performance, BAVA alleging that Rosario
de Jesus Tenorio allowed Cecilia Gonzalvez to occupy and convert the house at 60 Jupiter
Street into a restaurant, without its knowledge and consent, and in violation of the deed
restrictions which provide that the lot and building thereon must be used only for residential
purposes upon which the prayed-for main relief was for Tenorio and Gonzalves to
permanently refrain from using the premises as commercial and to comply with the terms of
the Deed Restrictions. The trial court dismissed the complaint on a procedural ground, i.e.,
pendency of an identical action, Civil Case 32346 (BAVA v. Tenorio). The Court of Appeals
affirmed, and held, in addition, that Jupiter Street “is classified as High density commercial (C-
3) zone as per Comprehensive Zoning Ordinance 81-01 for NCR following its own ruling in AC-
GR 66649 (BAVA v. Hy-Land Realty & Development Corp.). BAVA appealed.
[GR 76394] Spouses Eduardo Romualdez and Buena Tioseco are the owners of a house and lot
located at 108 Jupiter St (TCT 332394, Registry of Deeds Rizal).At the time they acquired the
subject house and lot, several restrictions were already annotated on the reverse side of their
title. The restriction(s) remain in force for 50 years from 15 January 1957, unless sooner
cancelled in its entirety by 2/3 vote of the members in good standing of the Bel-Air Village
Association (BAVA). However, the Association may from time to time, add new ones, amend or
abolish particular restrictions or parts thereof by majority rule. During the early part of 1979,
BAVA noted that certain renovations and constructions were being made by the spouses on
the premises. The latter failed to inform BAVA of the activity, even upon request, that
prompted BAVA to send its chief security officer to visit the premises on 23 March 1979 and
found out that the spouses were putting up a bake and coffee shop. The spouses were
reminded that they were violating the deed restriction, but the latter proceeded with the
construction of the bake shop. On 30 April 1979, BAVA wrote the spouses to desist from using
the premises for commercial purposes, with threat of suit. Despite the warning, the spouses
proceeded with the construction of their bake shop. The trial court adjudged in favor of BAVA.
On appeal, the Court of Appeals reversed the decision on the strength of its holding in AC-GR
66649. BAVA elevated the matter to the Supreme Court by a petition for review on certiorari.
The Court initially denied the petition for lack of merit, for which BAVA sought a
reconsideration. Pending resolution, the case was referred to the Second Division and
thereafter, to the Court En Banc en consulta. Per Resolution, dated 29 April 1988, the case was
consolidated with GR 74376 and 82281.
[GR 78182] Dolores Filley leased her building and lot situated at 205 Reposo Street to the
advertising firm J. Romero and Associates, in alleged violation of deed restrictions which
stipulated that Filley’s lot could only be used for residential purposes. The Bel-Air Village
Association (BAVA) sought judgment from the lower court ordering the Filley and J.Romero to
permanently refrain from using the premises in question as commercial and to comply with
the terms of the deed restrictions. The trial court granted the relief sought for by BAVA with
the a additional imposition of exemplary damages of P50,000.00 and attorney’s fees of
P10,000.00. The trial court gave emphasis to the restrictive clauses contained in Filley’s deed
of sale from BAVA, which made the conversion of the building into a commercial one a
violation. Appeal was made claiming that the restrictions in the deed of sale are outmoded.
BAVA on the other hand relied on a rigid interpretation of the contractual stipulations agreed
upon with Filley, in effect arguing that the restrictions are valid ad infinitum. The Court of
Appeals overturned the lower court, observing that J. Romero & Associates had been given
authority to open a commercial office by the Human Settlements Regulatory Commission.
[GR 82281] Violeta Moncal, owner of a parcel of land with a residential house constructed
thereon situated at 104 Jupiter Street, leased her property to Majal Development
Corporation, without the consent of the Bel-Air Village Association (BAVA). She purchased the
lot from Makati Development Corporation. The lot in question is restricted to be used for
residential purposes only as part of the deed restrictions annotated on its title. It is on the
same side of the street where there are restaurants, clinics, placement or employment
agencies and other commercial or business establishments. These establishments, however,
were sued by BAVA in the proper court. The trial court dismissed the BAVA’s complaint, a
dismissal affirmed on appeal. The appellate court declared that the opening of Jupiter Street
to human and vehicular traffic, and the commercialization of the Municipality of Makati in
general, were circumstances that had made compliance by Moncal with the aforesaid “deed
restrictions” “extremely difficult and unreasonable, a development that had excused
compliance altogether under Article 1267 of the Civil Code. BAVA appealed.
Short Facts:
GR 74376, 76394, 78182, and 82281 are efforts to enforce the “deed restrictions” against
specific residents of Jupiter Street and, with respect to GR 78182, Reposo Street. The
residents have allegedly converted their residences into commercial establishments (a
restaurant in GR 74376, a bakery and coffee shop in GR 76394, an advertising firm in GR
78182; and a construction company, apparently, in GR 82281) in violation of the said
restrictions. Their mother case, GR 71169 is, on the other hand, a petition to hold the vendor
itself, Ayala Corporation (formerly Makati Development Corporation), liable for tearing down
the perimeter wall along Jupiter Street that had theretofore closed its commercial section
from the residences of Bel-Air Village and ushering in, as a consequence, the full
“commercialization” of Jupiter Street, in violation of the very restrictions it had authored. The
Court of Appeals dismissed all 5 appeals on the basis primarily of its ruling in AC-GR 66649,
“Bel-Air Village, Inc. v. Hy-Land Realty Development Corporation, et al.,” in which the appellate
court explicitly rejected claims under the same “deed restrictions” as a result of Ordinance 81
enacted by the Government of the Municipality of Makati, as well as Comprehensive Zoning
Ordinance 8101 promulgated by the Metropolitan Manila Commission, which two ordinances
allegedly allowed the use of Jupiter Street both for residential and commercial purposes. It
was likewise held that these twin measures were valid as a legitimate exercise of police power.
Issue: WON Makati Resolution No. 81 and MMC Ordinance 81-01 are unconstitutional as
violative of the non-impairment clause of the Constitution.
Decision: No. Both are constitutional. All contracts are subject to the overriding demands,
needs, and interests of the greater number as the State may determine in the legitimate
exercise of police power. The Court guarantees sanctity of contract and is said to be the “law
between the contracting parties,” but while it is so, it cannot contravene “law, morals, good
customs, public order, or public policy.” Above all, it cannot be raised as a deterrent to police
power, designed precisely to promote health, safety, peace, and enhance the common good,
at the expense of contractual rights, whenever necessary. Police power is the power to
prescribe regulations to promote the health, morals, peace, education, good order or safety
and general welfare of the people. Invariably described as “the most essential, insistent, and
illimitable of powers” and “in a sense, the greatest and most powerful attribute of
government,” the exercise of the power may be judicially inquired into and corrected only if it
is capricious, whimsical, unjust or unreasonable, there having been a denial of due process or
a violation of any other applicable constitutional guarantee. Police power is elastic and must
be responsive to various social conditions; it is not confined within narrow circumscriptions of
precedents resting on past conditions; it must follow the legal progress of a democratic way of
life. Public welfare, when clashing with the individual right to property, should be made to
prevail through the state’s exercise of its police power. Herein, the MMC Ordinance represents
a legitimate exercise of police power, as the ordinance is neither capricious or arbitrary or
unreasonable; but that it is based on compelling interests of general welfare. The restrictive
easements are similar to any other contract, and should not deter the valid exercise of police
power. The MMC has reclassified Jupiter Street into a “high density commercial zone,
pursuant to Ordinance 81-01. Sangalang, BAVA, et. al., thus have no cause of action on the
strength alone of said “deed restrictions.”
Lorenzo vs Director of Health Digest
Facts:
Angel Lorenzo was a leper. He was confined in San Lazaro Hospital in Manila in conformity
with the provisions of Section 1058 of the Administrative Code, authorizing the segregation of
lepers. Lorenzo filed petition for a writ of habeas corpus with the Court of First Instance of
Manila, alleging that his confinement in said hospital was in violation of his constitutional
rights. He alleged that human beings are not incurable with leprosy and that the disease may
not be communicated by contact. The trial court sustained the law and denied the petition for
habeas corpus. Lorenzo appealed.
Issue:
1. Whether the Administrative Code provision on the confinement of lepers is violative of
one's constitutional right.
2. May the court resolve the question whether or not leprosy is a contagious disease?
Held:
1. No. Section 1058 of the Administrative Code was enacted by the legislative body in the
legitimate exercise of the police power which extends to the preservation of the public health.
It was place on the statute books in recognition of leprosy as a grave health problem. The
methods provided for the control of leprosy plainly constitute due process of law. Judicial
notice will be taken of the fact that leprosy is commonly believed to be an infectious disease
tending to cause one afflicted with it to be shunned and excluded from society, and that
compulsory segregation of lepers as a means of preventing the spread of the disease of
supported by high scientific authority. Upon this view, laws for the segregation of lepers have
been provided the world over. Similarly, the local legislature has regarded leprosy as a
contagious disease and has authorized measures to control the dread scourge. To that forum
must the petitioner go to reopen the question.
2. The assumption must be that if evidence was required to establish the necessity for the law,
that it was before the legislature when the act was passed. In the case of a statute purporting
the have been enacted in the interest of the public health, all questions relating to the
determination of matters of fact are for the legislature. If there is probable basis for sustaining
the conclusion reached, its findings are not subject to judicial review. Debatable questions are
for the Legislature to decide. The courts do not sit to resolve the merits of conflicting theories.
(Lorenzo vs Director of Health, No. 27484 September 1, 1927)
Restituto Ynot vs Intermediate Appellate Court
Police Power – Not Validly Exercised
There had been an existing law which prohibited the slaughtering of carabaos (EO 626). To
strengthen the law, Marcos issued EO 626-A which not only banned the movement of
carabaos from interprovinces but as well as the movement of carabeef. On 13 Jan 1984, Ynot
was caught transporting 6 carabaos from Masbate to Iloilo. He was then charged in violation
of EO 626-A. Ynot averred EO 626-A as unconstitutional for it violated his right to be heard or
his right to due process. He said that the authority provided by EO 626-A to outrightly
confiscate carabaos even without being heard is unconstitutional. The lower court ruled
against Ynot ruling that the EO is a valid exercise of police power in order to promote general
welfare so as to curb down the indiscriminate slaughter of carabaos.
ISSUE: Whether or not the law is valid.
HELD: The SC ruled that the EO is not valid as it indeed violates due process. EO 626-A
ctreated a presumption based on the judgment of the executive. The movement of carabaos
from one area to the other does not mean a subsequent slaughter of the same would ensue.
Ynot should be given to defend himself and explain why the carabaos are being transferred
before they can be confiscated. The SC found that the challenged measure is an invalid
exercise of the police power because the method employed to conserve the carabaos is not
reasonably necessary to the purpose of the law and, worse, is unduly oppressive. Due process
is violated because the owner of the property confiscated is denied the right to be heard in his
defense and is immediately condemned and punished. The conferment on the administrative
authorities of the power to adjudge the guilt of the supposed offender is a clear
encroachment on judicial functions and militates against the doctrine of separation of powers.
There is, finally, also an invalid delegation of legislative powers to the officers mentioned
therein who are granted unlimited discretion in the distribution of the properties arbitrarily
taken.
City Government of Quezon vs. Judge Ericta
City Government of Quezon vs. Judge Ericta GR No. L-34915 June 24, 1983
Facts:
An ordinance was promulgated in Quezon city which approved the the regulation
ofestablishment of private cemeteries in the said city. According to the ordinance, 6% of the
total area of the private memorial park shall be set aside for charity burial of deceased
persons who are paupers and have been residents of QC. Himlayang Pilipino, a private
memorial park, contends that the taking or confiscation of property restricts the use of
property such that it cannot be used for any reasonable purpose and deprives the owner of all
beneficial use of his property. It also contends that the taking is not a valid exercise of police
power, since the properties taken in the exercise of police power are destroyed and not for
the benefit of the public.
Issue:
Whether or not the ordinance made by Quezon City is a valid taking of private property
Ruling:
No, the ordinance made by Quezon City is not a valid way of taking private property. The
ordinace 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
maintaing a public cemeteries. State's exercise of the power of expropriation requires
payment of just compensation. Passing the ordinance without benefiting the owner of the
property with just compensation or due process, would amount to unjust taking of a real
property. Since the property that is needed to be taken will be used for the public's benefit,
then the power of the state to expropriate will come forward and not the police power of the
state.
City of Manila vs. Judge Laguio (G.R. No. 118127)
Facts:
The private respondent, Malate Tourist Development Corporation (MTOC) is a corporation
engaged in the business of operating hotels, motels, hostels, and lodging houses. 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.
March 30, 1993 - City Mayor Alfredo S. Lim approved an ordinance enacted which prohibited
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. The Ordinance prohibited the
establishment of sauna parlors, massage parlors, karaoke bars, beerhouses, night clubs, day
clubs, cabarets, motels, inns. Owners and operators of the enumerated establishments are
given three months to wind up business operations or transfer to any place outside Ermita-
Malate or convert said businesses to other kinds allowable within the area. The Ordinance
also provided that in case of violation and conviction, the premises of the erring
establishment shall be closed and padlocked permanently.
June 28, 1993 - MTOC filed a Petition with the lower court, praying that the Ordinance, insofar
as it included motels and inns as among its prohibited establishments, be declared invalid and
unconstitutional for several reasons but mainly because it is not a valid exercise of police
power and it constitutes a denial of equal protection under the law.
Judge Laguio ruled for the petitioners. The case was elevated to the Supreme Court.
Issue:
WON the Ordinance is constitutional.
Held:
SC held that the ordinance is unconstitutional for several reasons.
First, it did not meet the valid exercise of police power. To successfully invoke the exercise of
police power, not only must it appear that (1)the interest of the public generally, as
distinguished from those of a particular class, require an interference with private rights, but
(2)the means employed must be reasonably necessary for the accomplishment of the purpose
and not unduly oppressive. The object of the ordinance was the promotion and protection of
the social and moral values of the community. The closing down and transfer of businesses or
their conversion into businesses allowed under the ordinance have no reasonable relation to
its purpose. Otherwise stated, the prohibition of the enumerated establishments will not per
se protect and promote social and moral welfare of the community. It will not itself eradicate
prostitution, adultery, fornication nor will it arrest the spread of sexual disease in Manila.
Second. The modality employed constitutes unlawful taking. The ordinance is unreasonable
and oppressive as it substantially divests the respondent of the beneficial use of its property.
The ordinance forbids running of the enumerated businesses in Ermita-Malate area and
instructs owners/operators to wind up their business operations or to transfer outside the
area or convert said business into allowed business. An ordinance which permanently restricts
the use of property that it cannot be used for any reasonable purpose goes beyond regulation
and must be recognized as a taking of the property without just compensation. It is intrusive
and violative of the private property rights of individuals. There are two types of taking: A
“possessory” taking and a “regulatory” taking. The latter occurs when the government’s
regulation leaves no reasonable economically viable use of the property, as in this case.
Third. The ordinance violates the equal protection clause. Equal protection requires that all
persons or things similarly situated should be treated alike, both as to the rights conferred and
responsibilities imposed. Similar subjects, in other words, should not be treated differently, so
as to give undue favor to some. Legislative bodies are allowed to classify the subjects of
legislation provided the classification is reasonable. To be valid, it must conform to the
following requirements: (1)It must be based on substantial distinction; (2)It must be germane
to the purpose of the law; (3)It must not be limited to existing conditions only; and (4)It must
apply equally to all members of the class. In the Court’s view, there are no substantial
distinction 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 Court likewise
cannot see the logic for prohibiting the business and operation of motels in the Ermita-Malate
area but not outside this area. A noxious establishment does not become any less noxious if
located outside the area.

Fourth. The ordinance is repugnant to general laws, thus it is ultra vires. The ordinance is in
contravention of the Revised Administrative Code as the Code merely empowers the local
government units to regulate, and not prohibit, the establishments enumerated. Not only
that, it likewise runs counter to the provisions of P.D. 499. The P.D. 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.

Wherefore, the petition was DENIED and the decision of the RTC was AFFIRMED.