Lung

Center of the Philippines vs. Quezon City

GR 144104
June 29, 2004
FACTS:
Lung Center of the Philippines is a non-stock and non-profit entity established by virtue of Presidential Decree No.
1823. It is the registered owner of a parcel of land and erected in the middle of the aforesaid lot is a hospital known as
the Lung Center of the Philippines. A big space at the ground floor is being leased to private parties, for canteen and
small store spaces, and to medical or professional practitioners as their private clinics. Almost one-half of the entire
area on the left side of the building is vacant and idle, while a big portion on the right side is being leased for
commercial purposes to a private enterprise known as the Eliptical Orchids and Garden Center.
LCP accepts paying and non-paying patients and also receive annual subsidies from the government.
Both the land and the hospital building of the LCP were assessed for real property taxes in the amount of P4, 554,
860.00 by the City Assessor of Quezon City. LCP filed a Claim for Exemption from real property taxes with the City
Assessor, averring that it is a charitable institution and that a minimum of 60% of its hospital beds are exclusively used
for charity patients and that the major thrust of its hospital operation is to serve charity patients.
On appeal to the Central Board of Assessment Appeals (CBAA), the petition was dismissed. CBAA ruled that LCP was
not a charitable institution hence it was not entitled to real property tax exemption under the Constitution.
ISSUE: (1) W/N LCP is a charitable institution? (2) W/N it is exempted from real property tax?
HELD:
On the first issue: YES. LCP is a charitable institution. The test of a charity and a charitable organization are in law the
same. The test whether an enterprise is charitable or not is whether it exists to carry out a purpose reorganized in law
as charitable or whether it is maintained for gain, profit, or private advantage. Under P.D. No. 1823, the petitioner is a
non-profit and non-stock corporation. It was organized for the welfare and benefit of the Filipino people principally to
help combat the high incidence of lung and pulmonary diseases in the Philippines.
On the second issue: NO. Those portions of its real property that are leased to private entities are not exempt from real
property taxes as these are not actually, directly and exclusively used for charitable purposes. If real property is used
for one or more commercial purposes, it is not exclusively used for the exempted purposes but is subject to taxation.
What is meant by actual, direct and exclusive use of the property for charitable purposes is the direct and immediate
and actual application of the property itself to the purposes for which the charitable institution is organized. It is not
the use of the income from the real property that is determinative of whether the property is used for tax-exempt
purposes. The petitioner failed to discharge its burden to prove that the entirety of its real property is actually, directly
and exclusively used for charitable purposes.

CIR vs. CA, CTA & ADMU
FACTS:
Ateneo de Manila University is a non-stock non-profit educational institution. One of its auxiliary units, namely the
Institute of Philippine Culture or IPC is engaged in social science studies of Philippine society and culture. Occasionally,
it accepts sponsorships from international institutions, organizations, private foundations and government agencies.
It received from the CIR a demand letter for alleged deficiency contractors tax and alleged deficiency income tax. Upon
receiving a letter-protest from ADMU, CIR cancelled the assessment for deficiency income tax but increased the
deficiency contractors tax.
CIR contends that IPC is an independent contractor under Sec. 205 of NIR Code and is therefore subject to 3%
Contractors Tax. The CA & CTA both ruled that IPC does NOT fall under the definition of independent contractors.
ISSUE: W/N IPC is an independent contractor under Sec. 205 of the Code?
HELD: NO. CIR erred in applying the principles of tax exemption without first applying the well settled doctrine of strict
interpretation in the imposition of taxes. The Supreme Court reiterates that a statute will not be construed as imposing
a tax unless it does so clearly, expressly and unambiguously because burdens are not to be imposed beyond what
statures expressly and clearly import. CIR must determine first if ADMU is covered by Sec. 205 of the Code.
To be covered by Sec. 205 and therefore be imposed the 3% contractors tax, it must be proven that IPC through ADMU
is an independent contractor. It must be selling its services for a fee in pursuit of an independent business.
From the records, Supreme Court finds no evidence that Ateneos IPC ever sold its services for a fee. The funds they
received are not given in the concept of a fee but rather as an endowment/donation. The amounts may not be deemed
as fees that can be subjected to the 3% contractors tax.


General Principles and Income Taxation

Sison vs Ancheta
Facts:
Antero Sison was a regular tax payer. He filed a suit for declaratory relief or prohibition proceeding questioning the
validity of Section 1 of Batas Pambansa Blg. 135 which amends Section 21 of the NIRC of 1977 resulting to a change in
tax rates on citizens or residents on their (a) taxable compensation income, (b) taxable net income, (c) royalties, prizes,
and other winnings, (d) interest from bank deposits and yield or any other monetary benefit from deposit substitutes
and from trust fund and similar arrangements, (e) dividends and share of individual partner in the net profits of
taxable partnership, (f) adjusted gross income. He alleged that the law is contrary to the equal protection, due process

clause and the uniformity in taxation. His concern was that he was unduly discriminated because he was imposed a
higher tax rates on his professional income vis--vis those who have fixed income or salaried individual taxpayers.
Issue:
1. Whether or not the law is contrary to the Constitution on the basis of equal protection, due process, and uniformity
in taxation.
2. Whether or not the imposition of tax rates based on income classification is oppressive.
Held:
1. No, the law is not contrary to the Constitution. The due process clause cannot be invoked as the taxing statute was
not shown to be so arbitrary. 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. Equality and uniformity in taxation means that all taxable articles or kinds of property of the
same class shall be taxed at the same rate.
2. No, it is not oppressive. Taxpayers who are recipients of compensation income are set apart as a class. As there is
practically no overhead expense, these taxpayers are not entitled to make deductions for income tax purposes because
they are in the same situation more or less. On the other hand, in the case of professionals in the practice of their
calling and businessmen, there is no uniformity in the costs or expenses necessary to produce their income. It would
not be just then to disregard the disparities by giving all of them zero deduction and indiscriminately impose on all
alike the same tax rates on the basis of gross income.



CITY OF OZAMIS VS LUMAPAS
G.R. No. L-30727, 65 SCRA 33, July 15, 1975
FACTS:
This case is about a bus company, Romar Line, transporting passengers and cargo with Ozamis City and Pagadian City
as terminal points. Said bus company is operated by the respondent SERAPIO LUMAPAS.
Then, the Municipal Board of Ozamis City enacted Ordinance No. 466 imposing parking fees for every motor vehicle
parked on any parking space in Ozamis City.
Since Romar Line is affected of said ordinance, Lumapas paid said fee under protest for 2 years and 4 months. After 4
years, Lumapas filed a complained against City of Ozamis, with CFI-Misamis Occidental, for recovery of parking fees,
alleging that the said ordinance is ULTRA VIRES.
CFI ruled in favor of Lumapas and held that the parking area where buses of Romar Lines are parked is part of the
municipal street and the parking fee is in the nature of a toll fee for the use of a public road. As such, the enactment of
said ordinance is in violation of Sec. 59 (b) of RA No. 4136 (Land Transportation and Traffic Code) for it has no prior
approval by the president of the Philippines with recommendation of Secretary of Public Works and Communications,
and is NULL & VOID.
Hence, this appeal by certiorari.
ISSUE (1) WON the Ordinance No. 466, which imposes parking fees in Ozamis, is valid.
HELD:
City of Ozamis has been clothed with full power to CONTROL and REGULATE its street to promote public health, safety
and welfare.
The SC held that power to tax can only be exercised by the Congress, unless delegated or conferred to others as
provided for by law. Included in said delegation is the express grant of powers, among others. And such delegation of
power to tax are to be construed against the Municipality. In this case, RA 321 (Ozamis City Chapter) delegates to the
Municipal Board the power to regulate the use of the streets, among other public places.
Said republic act delegates the police power to the municipal corporation to be exercised as a governmental functions
for municipal purposes.
ISSUE (2) WON the fee charged is a parking fee and not a toll fee.
HELD:
The SC ruled that the word TOLL is defined as a DUTY imposed on goods and passengers travelling public roads, and
not for use, as a parking place for vehicles.
In this case, the contested ordinance defined parking as the STOPPAGE of a motor vehicle on an existing parking areas
to unload and load passengers or cargoes. Considering the use of the land, the fee paid is that of a PARKING FEE and
not a toll fee, and which is imposed to cover the expenses for supervision, inspection and control, to ensure smooth
flow of traffic in the environs of the public market, and for safety and convenience of the public.
SC reversed decision of CFI and declared Ordinance No. 466 VALID.



Lorenzo T Oa and Heirs of Julia Buales vs The Commissioner Of Internal Revenue

Facts:
Julia Buales died leaving as heirs her surviving spouse, Lorenzo T. Oa and her five children.Settlement of estate was
filed and Lorenzo was appointed as administrator. Year after, Lorenzo submitted a project of partition which was then
approved. Three of the children were still minors hence Lorenzo filed a petition to be their guardian and it was

subsequently granted.
Although the project of partition was approved by the court, no attempt was made to divide the properties therein
listed. Instead it remained with their father who is the appointed administrator and these were used in business like
selling and leasing those properties. Their investments gradually increased. Petitioners do not actually receive their
shares in the yearly income. The income was always left in the hands of Lorenzo, which in return invested these in real
properties and securities.
In line with the scenario mentioned, CIR decided that petitioners formed an unregistered partnership and therefore,
subject to corporate income tax. Petitioners protested against the assessment and asked for reconsideration but it was
denied by CIR.

Issue:
Whether or not petitioner is considered to have formed an unregistered partenrship subject to tax under Section 24
and 84 of National Internal Revenue Code?

Held:
Petitioners have formed an unregistered partnership.
From 1944 - 1954 CIR did treat petitioners as co-owners, not liable to corporate tax, and it was only from 1955 that he
considered them as having formed an unregistered partnership. Petitioners did not only limit themselves to holding
the properties inherited by them, in the material years some of said properties were sold at considerable profit and
that with said profit in the purchase and sale of corporate securities. From the moment petitioners allowed not only the
incomes from their respective shares of the inheritance but even the inherited properties themselves to be used by
Lorenzo T. Oa as a common fund in undertaking several transactions or in business, with the intention of deriving
profit to be shared by them proportionally, such act was tantamount to actually contributing such incomes to a
common fund and, in effect, they thereby formed an unregistered partnership within the purview of the above
mentioned provisions of the Tax Code.



PHILIPPINE PETROLEUM CORPORATION vs. MUNICIPALITY OF PILILLA
Ruling: administrative regulations is inferior/ will give in to the statute that governs it.
Facts:
1. Petitioner, Philippine Petroleum Corporation (PPC for short) is a business enterprise engaged in the manufacture of
lubricated oil basestock which is a petroleum product, with its refinery plant situated at Malaya, Pililla, Rizal,
conducting its business activities within the territorial jurisdiction of the Municipality of Pililla, Rizal.
2. Under Section 142 of the National Internal Revenue Code of 1939, manufactured oils and other fuels are subject to
specific tax.
3. Later, Presidential Decree No. 231, otherwise known as the Local Tax Code was issued by former President
Ferdinand E. Marcos governing the exercise by provinces, cities, municipalities and barrios of their taxing and other
revenue-raising powers. Sections 19 and 19 (a) thereof, provide among others, that the municipality may impose taxes
on business, except on those for which fixed taxes are provided on manufacturers, importers or producers of any
article of commerce of whatever kind or nature, including brewers, distillers, rectifiers, repackers, and compounders of
liquors, distilled spirits and/or wines in accordance with the schedule listed therein.
4. The Secretary of Finance issued a Circular directed to all provincial, city and municipal treasurers to refrain from
collecting any local tax imposed in old or new tax ordinances in the business of manufacturing, wholesaling, retailing,
or dealing in petroleum products subject to the specific tax under the National Internal Revenue Code.
5. Likewise, another Circular was issued by the Secretary of Finance instructing all City Treasurers to refrain from
collecting any local tax imposed in tax ordinances enacted before or after the effectivity of the Local Tax Code on the
businesses of manufacturing, wholesaling, retailing, or dealing in, petroleum products subject to the specific tax under
the National Internal Revenue Code.
6. Meanwhile, Respondent Municipality of Pililla enacted Municipal Tax Ordinance No. 1 otherwise known as "The
Pililla Tax Code of 1974". Sections 9 and 10 of the said ordinance imposed a tax on business, except for those for which
fixed taxes are provided in the Local Tax Code.
7. P.D. 436 was promulgated increasing the specific tax on lubricating oils, gasoline, bunker fuel oil, diesel fuel oil and
other similar petroleum products levied under Sections 142, 144 and 145 of the National Internal Revenue Code, as
amended, and granting provinces, cities and municipalities certain shares in the specific tax on such products in lieu of
local taxes imposed on petroleum products.
8. Provincial Circular No. 6-77 was also issued directing all city and municipal treasurers to refrain from collecting the
so-called storage fee on flammable or combustible materials imposed under the local tax ordinance of their respective
locality, said fee partaking of the nature of a strictly revenue measure or service charge.
9. P.D. 1158 otherwise known as the National Internal Revenue Code of 1977 was enacted, Section 153 of which
specifically imposes specific tax on refined and manufactured mineral oils and motor fuels.
10. Enforcing the provisions of the above-mentioned ordinance, the respondent filed a complaint on April 4, 1986
docketed as Civil Case No. 057-T against PPC for the collection of the business tax from 1979 to 1986; storage permit
fees from 1975 to 1986; mayor's permit and sanitary inspection fees from 1975 to 1984. PPC, however, have already
paid the last-named fees starting 1985 (Rollo, p. 74).

11. The trial court rendered a decision against the petitioner. Hence, the instant petition.

Issue:
Whether petitioner PPC whose oil products are subject to specific tax under the NIRC, is still liable to pay (a) tax on
business and (b) storage fees, considering Provincial Circular No. 6-77; and mayor's permit and sanitary inspection fee
unto the respondent Municipality of Pililla, Rizal, based on Municipal Ordinance No. 1.

Ruling:
Petitioner PPC contends that: (a) Provincial Circular No. 2673 declared as contrary to national economic policy the
imposition of local taxes on the manufacture of petroleum products as they are already subject to specific tax under the
National Internal Revenue Code; (b) the above declaration covers not only old tax ordinances but new ones, as well as
those which may be enacted in the future; (c) both Provincial Circulars (PC) 26-73 and 26 A-73 are still effective, hence,
unless and until revoked, any effort on the part of the respondent to collect the suspended tax on business from the
petitioner would be illegal and unauthorized; and (d) Section 2 of P.D. 436 prohibits the imposition of local taxes on
petroleum products.
There is no question that Pililla's Municipal Tax Ordinance No. 1 imposing the assailed taxes, fees and charges is valid
as it conforms with the mandate of law.
But P.D. No. 426 amending the Local Tax Code is deemed to have repealed Provincial Circulars issued by the Secretary
of Finance when Sections 19 and 19 (a), were carried over into P.D. No. 426 and no exemptions were given to
manufacturers, wholesalers, retailers, or dealers in petroleum products.
Well-settled is the rule that administrative regulations must be in harmony with the provisions of the law. In case of
discrepancy between the basic law and an implementing rule or regulation, the former prevails.
Furthermore, while Section 2 of P.D. 436 prohibits the imposition of local taxes on petroleum products, said decree did
not amend Sections 19 and 19 (a) of P.D. 231 as amended by P.D. 426, wherein the municipality is granted the right to
levy taxes on business of manufacturers, importers, producers of any article of commerce of whatever kind or nature. A
tax on business is distinct from a tax on the article itself. Thus, if the imposition of tax on business of manufacturers,
etc. in petroleum products contravenes a declared national policy, it should have been expressly stated in P.D. No. 436.
The exercise by local governments of the power to tax is ordained by the present Constitution. To allow the continuous
effectivity of the prohibition set forth in PC No. 26-73 (1) would be tantamount to restricting their power to tax by
mere administrative issuances. Under Section 5, Article X of the 1987 Constitution, only guidelines and limitations that
may be established by Congress can define and limit such power of local governments. Thus:
Each local government unit shall have the power to create its own sources of revenues and to levy taxes, fees, and
charges subject to such guidelines and limitations as the Congress may provide, consistent with the basic policy of local
autonomy . . .
Provincial Circular No. 6-77 enjoining all city and municipal treasurers to refrain from collecting the so-called storage
fee on flammable or combustible materials imposed in the local tax ordinance of their respective locality frees
petitioner PPC from the payment of storage permit fee.
The storage permit fee being imposed by Pililla's tax ordinance is a fee for the installation and keeping in storage of any
flammable, combustible or explosive substances. Inasmuch as said storage makes use of tanks owned not by the
municipality of Pililla, but by petitioner PPC, same is obviously not a charge for any service rendered by the
municipality as what is envisioned in Section 37 of the same Code.
Section 10 (z) (13) of Pililla's Municipal Tax Ordinance No. 1 prescribing a permit fee is a permit fee allowed under
Section 36 of the amended Code.
As to the authority of the mayor to waive payment of the mayor's permit and sanitary inspection fees, the trial court
did not err in holding that "since the power to tax includes the power to exempt thereof which is essentially a
legislative prerogative, it follows that a municipal mayor who is an executive officer may not unilaterally withdraw
such an expression of a policy thru the enactment of a tax." The waiver partakes of the nature of an exemption. It is an
ancient rule that exemptions from taxation are construed in strictissimi juris against the taxpayer and liberally in favor
of the taxing authority (Esso Standard Eastern, Inc. v. Acting Commissioner of Customs, 18 SCRA 488 [1966]). Tax
exemptions are looked upon with disfavor (Western Minolco Corp. v. Commissioner of Internal Revenue, 124 SCRA 121
[1983]). Thus, in the absence of a clear and express exemption from the payment of said fees, the waiver cannot be
recognized. As already stated, it is the law-making body, and not an executive like the mayor, who can make an
exemption. Under Section 36 of the Code, a permit fee like the mayor's permit, shall be required before any individual
or juridical entity shall engage in any business or occupation under the provisions of the Code.
However, since the Local Tax Code does not provide the prescriptive period for collection of local taxes, Article 1143 of
the Civil Code applies. Said law provides that an action upon an obligation created by law prescribes within ten (10)
years from the time the right of action accrues. The Municipality of Pililla can therefore enforce the collection of the tax
on business of petitioner PPC due from 1976 to 1986, and NOT the tax that had accrued prior to 1976.



Ratio of the case:
VILLEGAS v. HIU. Requiring a person before he can be employed to get a permit from the City Mayor of Manila who
may withhold or refuse it at will is tantamount to denying him the basic right of the people in the Philippines to engage
in a means of livelihood. While it is true that the Philippines as a State is not obliged to admit aliens within its territory,

once an alien is admitted, he cannot be deprived of life without due process of law. This guarantee includes the means
of livelihood. The shelter of protection under the due process and equal protection clause is given to all persons, both
aliens and citizens.

G.R. No. L-29646 November 10, 1978
MAYOR ANTONIO J. VILLEGAS, petitioner, vs. HIU CHIONG TSAI PAO HO and JUDGE FRANCISCO ARCA, respondents.
Angel C. Cruz, Gregorio A. Ejercito, Felix C. Chaves & Jose Laureta for petitioner.
Sotero H. Laurel for respondents.
FERNANDEZ, J.:
This is a petition for certiorari to review tile decision dated September 17, 1968 of respondent Judge Francisco Arca of
the Court of First Instance of Manila, Branch I, in Civil Case No. 72797, the dispositive portion of winch reads.
Wherefore, judgment is hereby rendered in favor of the petitioner and against the respondents, declaring Ordinance
No. 6 37 of the City of Manila null and void. The preliminary injunction is made permanent. No pronouncement as to
cost.
SO ORDERED.
Manila, Philippines, September 17, 1968.
(SGD.) FRANCISCO ARCA
Judge 1
The controverted Ordinance No. 6537 was passed by the Municipal Board of Manila on February 22, 1968 and signed
by the herein petitioner Mayor Antonio J. Villegas of Manila on March 27, 1968. 2
City Ordinance No. 6537 is entitled:
AN ORDINANCE MAKING IT UNLAWFUL FOR ANY PERSON NOT A CITIZEN OF THE PHILIPPINES TO BE EMPLOYED IN
ANY PLACE OF EMPLOYMENT OR TO BE ENGAGED IN ANY KIND OF TRADE, BUSINESS OR OCCUPATION WITHIN THE
CITY OF MANILA WITHOUT FIRST SECURING AN EMPLOYMENT PERMIT FROM THE MAYOR OF MANILA; AND FOR
OTHER PURPOSES. 3
Section 1 of said Ordinance No. 6537 4 prohibits aliens from being employed or to engage or participate in any position
or occupation or business enumerated therein, whether permanent, temporary or casual, without first securing an
employment permit from the Mayor of Manila and paying the permit fee of P50.00 except persons employed in the
diplomatic or consular missions of foreign countries, or in the technical assistance programs of both the Philippine
Government and any foreign government, and those working in their respective households, and members of religious
orders or congregations, sect or denomination, who are not paid monetarily or in kind.
Violations of this ordinance is punishable by an imprisonment of not less than three (3) months to six (6) months or
fine of not less than P100.00 but not more than P200.00 or both such fine and imprisonment, upon conviction.5
On May 4, 1968, private respondent Hiu Chiong Tsai Pao Ho who was employed in Manila, filed a petition with the
Court of First Instance of Manila, Branch I, denominated as Civil Case No. 72797, praying for the issuance of the writ of
preliminary injunction and restraining order to stop the enforcement of Ordinance No. 6537 as well as for a judgment
declaring said Ordinance No. 6537 null and void. 6
In this petition, Hiu Chiong Tsai Pao Ho assigned the following as his grounds for wanting the ordinance declared null
and void:
1) As a revenue measure imposed on aliens employed in the City of Manila, Ordinance No. 6537 is discriminatory and
violative of the rule of the uniformity in taxation;
2) As a police power measure, it makes no distinction between useful and non-useful occupations, imposing a fixed
P50.00 employment permit, which is out of proportion to the cost of registration and that it fails to prescribe any
standard to guide and/or limit the action of the Mayor, thus, violating the fundamental principle on illegal delegation of
legislative powers:
3) It is arbitrary, oppressive and unreasonable, being applied only to aliens who are thus, deprived of their rights to
life, liberty and property and therefore, violates the due process and equal protection clauses of the Constitution. 7
On May 24, 1968, respondent Judge issued the writ of preliminary injunction and on September 17, 1968 rendered
judgment declaring Ordinance No. 6537 null and void and making permanent the writ of preliminary injunction. 8
Contesting the aforecited decision of respondent Judge, then Mayor Antonio J. Villegas filed the present petition on
March 27, 1969. Petitioner assigned the following as errors allegedly committed by respondent Judge in the latter's
decision of September 17,1968: 9
I
THE RESPONDENT JUDGE COMMITTED A SERIOUS AND PATENT ERROR OF LAW IN RULING THAT ORDINANCE NO.
6537 VIOLATED THE CARDINAL RULE OF UNIFORMITY OF TAXATION.
II
RESPONDENT JUDGE LIKEWISE COMMITTED A GRAVE AND PATENT ERROR OF LAW IN RULING THAT ORDINANCE
NO. 6537 VIOLATED THE PRINCIPLE AGAINST UNDUE DESIGNATION OF LEGISLATIVE POWER.
III
RESPONDENT JUDGE FURTHER COMMITTED A SERIOUS AND PATENT ERROR OF LAW IN RULING THAT ORDINANCE
NO. 6537 VIOLATED THE DUE PROCESS AND EQUAL PROTECTION CLAUSES OF THE CONSTITUTION.
Petitioner Mayor Villegas argues that Ordinance No. 6537 cannot be declared null and void on the ground that it
violated the rule on uniformity of taxation because the rule on uniformity of taxation applies only to purely tax or
revenue measures and that Ordinance No. 6537 is not a tax or revenue measure but is an exercise of the police power
of the state, it being principally a regulatory measure in nature.

The contention that Ordinance No. 6537 is not a purely tax or revenue measure because its principal purpose is
regulatory in nature has no merit. While it is true that the first part which requires that the alien shall secure an
employment permit from the Mayor involves the exercise of discretion and judgment in the processing and approval or
disapproval of applications for employment permits and therefore is regulatory in character the second part which
requires the payment of P50.00 as employee's fee is not regulatory but a revenue measure. There is no logic or
justification in
exacting P50.00 from aliens who have been cleared for employment. It is obvious that the purpose of the ordinance is
to raise money under the guise of regulation.
The P50.00 fee is unreasonable not only because it is excessive but because it fails to consider valid substantial
differences in situation among individual aliens who are required to pay it. Although the equal protection clause of the
Constitution does not forbid classification, it is imperative that the classification should be based on real and
substantial differences having a reasonable relation to the subject of the particular legislation. The same amount of
P50.00 is being collected from every employed alien whether he is casual or permanent, part time or full time or
whether he is a lowly employee or a highly paid executive
Ordinance No. 6537 does not lay down any criterion or standard to guide the Mayor in the exercise of his discretion. It
has been held that where an ordinance of a municipality fails to state any policy or to set up any standard to guide or
limit the mayor's action, expresses no purpose to be attained by requiring a permit, enumerates no conditions for its
grant or refusal, and entirely lacks standard, thus conferring upon the Mayor arbitrary and unrestricted power to grant
or deny the issuance of building permits, such ordinance is invalid, being an undefined and unlimited delegation of
power to allow or prevent an activity per se lawful. 10
In Chinese Flour Importers Association vs. Price Stabilization Board, 11 where a law granted a government agency
power to determine the allocation of wheat flour among importers, the Supreme Court ruled against the interpretation
of uncontrolled power as it vested in the administrative officer an arbitrary discretion to be exercised without a policy,
rule, or standard from which it can be measured or controlled.
It was also held in Primicias vs. Fugoso 12 that the authority and discretion to grant and refuse permits of all classes
conferred upon the Mayor of Manila by the Revised Charter of Manila is not uncontrolled discretion but legal discretion
to be exercised within the limits of the law.
Ordinance No. 6537 is void because it does not contain or suggest any standard or criterion to guide the mayor in the
exercise of the power which has been granted to him by the ordinance.
The ordinance in question violates the due process of law and equal protection rule of the Constitution.
Requiring a person before he can be employed to get a permit from the City Mayor of Manila who may withhold or
refuse it at will is tantamount to denying him the basic right of the people in the Philippines to engage in a means of
livelihood. While it is true that the Philippines as a State is not obliged to admit aliens within its territory, once an alien
is admitted, he cannot be deprived of life without due process of law. This guarantee includes the means of livelihood.
The shelter of protection under the due process and equal protection clause is given to all persons, both aliens and
citizens. 13
The trial court did not commit the errors assigned.
WHEREFORE, the decision appealed from is hereby affirmed, without pronouncement as to costs.
SO ORDERED.
Barredo, Makasiar, Muoz Palma, Santos and Guerrero, JJ., concur.
Castro, C.J., Antonio and Aquino, Fernando, JJ., concur in the result.
Concepcion, Jr., J., took no part.