issued by Acting City Mayor Amado L. Lucero of Puerto Princesa City; and (c) Resolution No.
ALFREDO TANO, BALDOMERO TANO, DANILO TANO, ROMUALDO TANO,
TEOCENES MIDELLO, ANGEL DE MESA, EULOGIO TREMOCHA, FELIPE
ONGONION, JR., ANDRES LINIJAN, ROBERT LIM, VIRGINIA LIM, FELIMON DE
MESA, GENEROSO ARAGON, TEODORICO ANDRE, ROMULO DEL ROSARIO,
CHOLITO ANDRE, ERICK MONTANO, ANDRES OLIVA, VITTORIO SALVADOR,
LEOPOLDO ARAGON, RAFAEL RIBA, ALEJANDRO LEONILA, JOSE
DAMACINTO, RAMIRO MANAEG, RUBEN MARGATE, ROBERTO REYES,
DANILO PANGARUTAN, NOE GOLPAN,ESTANISLAO ROMERO, NICANOR
DOMINGO, ROLDAN TABANG, PANGANIBAN, ADRIANO TABANG, FREDDIE
SACAMAY, MIGUEL TRIMOCHA, PACENCIO LABABIT, PABLO H. OMPAD,
CELESTINO A. ABANO, ALLAN ALMODAL, BILLY D. BARTOLAY, ALBINO D.
LIQUE, MELCHOR J. LAYSON, MELANI AMANTE, CLARO E. YATOC,
MERGELDO B. BALDEO, EDGAR M. ALMASET A., JOSELITO MANAEG,
LIBERATO ANDRADA, JR., ROBERTO BERRY, RONALD VILLANUEVA,
EDUARDO VALMORIA, WILDREDO MENDOZA, NAPOLEON BABANGA,
ROBERTO TADEPA, RUBEN ASINGUA, SILVERIO GABO, JERRY ROMERO,
DAVID PANGAGARUTAN, DANIEL PANGGARUTAN, ROMEO AGAWIN,
FERNANDO EQUIZ, DITO LEQUIZ, RONILO ODERABLE, BENEDICTO TORRES,
ROSITO A. VALDEZ, CRESENCIO A. SAYANG, NICOMEDES S. ACOSTA, ERENEO
A. SEGARINO, JR., WILDREDO A. RAUTO, DIOSDADO A. ACOSTA, BONIFACIO
G. SISMO, TACIO ALUBA, DANIEL B. BATERZAL, ELISEO YBAEZ, DIOSDADO E.
HANCHIC, EDDIE ESCALICAS, ELEAZAR
B. BATERZAL, DOMINADOR HALICHIC, ROOSEVELT RISMO-AN, ROBERT C.
MERCADER, TIRSO ARESGADO, DANIEL CHAVEZ, DANILO CHAVEZ, VICTOR
VILLAROEL, ERNESTO C. YABANEZ, ARMANDO T. SANTILLAN, RUDY S.
SANTILLAN, JODJEN ILUSTRISIMO, NESTOR SALANGRON, ALBERTO
SALANGRON, ROGER L. ROXAS, FRANCISCO T. ANTICANO, PASTOR
SALANGRON, BIENVENIDO SANTILLAN, GILBUENA LADDY, FIDEL BENJAMIN
JOVELITO BELGANO, HONEY PARIOL, ANTONIO SALANGRON, NICASIO
SALANGRON, & AIRLINE SHIPPERS ASSOCIATION OF PALAWAN, petitioners,
vs. GOV. SALVADOR P. SOCRATES, MEMBERS OF SANGGUNIAN
PANLALAWIGAN OF PALAWAN, namely, VICE-GOVERNOR JOEL T. REYES,
JOSE D. ZABALA, ROSALINO R. ACOSTA, JOSELITO A. CADLAON, ANDRES R.
BAACO, NELSON P. PENEYRA, CIPRIANO C. BARROMA, CLARO E. ORDINARIO,
ERNESTO A. LLACUN, RODOLFO C. FLORDELIZA, GILBERT S. BAACO,
WINSTON G. ARZAGA, NAPOLEON F. ORDONEZ and GIL P. ACOSTA, CITY
MAYOR EDWARD HAGEDORN, MEMBERS OF SANGGUNIANG PANLUNGSOD
NG PUERTO PRINCESA, ALL MEMBERS OF BANTAY DAGAT, MEMBERS OF
PHILIPPINE NATIONAL POLICE OF PALAWAN, PROVINCIAL AND CITY
PROSECUTORS OF PALAWAN and PUERTO PRINCESA CITY, and ALL JUDGES
OF PALAWAN, REGIONAL, MUNICIPAL AND METROPOLITAN, respondents.
DECISION
DAVIDE, JR., J.:
Petitioners caption their petition as one for Certiorari, Injunction With Preliminary Mandatory
Injunction,with Prayer for Temporary Restraining Order and pray that this Court: (1) declare as
unconstitutional: (a) Ordinance No. 15-92, dated 15 December 1992, of the Sangguniang
Panlungsod of Puerto Princesa; (b) Office Order No. 23, Series of 1993, dated 22 January 1993,
33, Ordinance No. 2, Series of 1993, dated 19 February 1993, of the Sangguniang
Panlalawigan of Palawan; (2) enjoin the enforcement thereof; and (3) restrain respondents
Provincial and City Prosecutors of Palawan and Puerto Princesa City and Judges of Regional
Trial Courts, Metropolitan Trial Courts[1] and Municipal Circuit Trial Courts in Palawan from
assuming jurisdiction over and hearing cases concerning the violation of the Ordinances and of
the Office Order.
More appropriately, the petition is, and shall be treated as, a special civil action
for certiorari and prohibition.
The following is petitioners summary of the factual antecedents giving rise to the petition:
1. On December 15, 1992, the Sangguniang Panlungsod ng Puerto Princesa City enacted
Ordinance No. 15-92 which took effect on January 1, 1993 entitled: AN ORDINANCE
BANNING THE SHIPMENT OF ALL LIVE FISH AND LOBSTER OUTSIDE PUERTO
PRINCESA CITY FROM JANUARY 1, 1993 TO JANUARY 1, 1998 AND PROVIDING
EXEMPTIONS, PENALTIES AND FOR OTHER PURPOSES THEREOF, the full text of
which reads as follows:
Section 1. Title of the Ordinance. - This Ordinance is entitled: AN ORDINANCE BANNING
THE SHIPMENT OF ALL LIVE FISH AND LOBSTER OUTSIDE PUERTO PRINCESA
CITY FROM JANUARY 1, 1993 TO JANUARY 1, 1998 AND PROVIDING
EXEMPTIONS, PENALTIES AND FOR OTHER PURPOSES THEREOF.
Section 2. Purpose, Scope and Coverage. - To effectively free our City Sea Waters from
Cyanide and other Obnoxious substance, and shall cover all persons and/or entities operating
within and outside the City of Puerto Princesa who is are [sic] directly or indirectly in the
business or shipment of live fish and lobster outside the City.
Section 3. Definition of terms. - For purpose of this Ordinance the following are hereby
defined:
A. SEA BASS - A kind of fish under the family of Centropomidae, better known as APAHAP;
B. CATFISH - A kind of fish under the family of Plotosidae, better known as HITO-HITO;
C. MUDFISH - A kind of fish under the family of Orphicaphalisae better known as DALAG
D. ALL LIVE FISH - All alive, breathing not necessarily moving of all specie[s] use for food
and for aquarium purposes.
E. LIVE LOBSTER - Several relatively, large marine crustaceans of the genus Homarus that
are alive and breathing not necessarily moving.
Section 4. It shall be unlawful [for] any person or any business enterprise or company to ship
out from Puerto Princesa City to any point of destination either via aircraft or seacraft of any
live fish and lobster except SEA BASS, CATFISH, MUDFISH, AND MILKFISH FRIES.
Section 5. Penalty Clause. - Any person/s and or business entity violating this Ordinance shall
be penalized with a fine of not more than P5,000.00 or imprisonment of not more than twelve
(12) months, cancellation of their permit to do business in the City of Puerto Princesa or all of
the herein stated penalties, upon the discretion of the court.
Section 6. If the owner and/or operator of the establishment found vilating the provisions of
this ordinance is a corporation or a partnership, the penalty prescribed in Section 5 hereof shall
be imposed upon its president and/or General Manager or Managing Partner and/or Manager,
as the case maybe [sic].
Section 7. Any existing ordinance or any provision of any ordinance inconsistent to [sic] this
ordinance is deemed repealed.
Section 8. This Ordinance shall take effect on January 1, 1993.
SO ORDAINED.
xxx
2. To implement said city ordinance, then Acting City Mayor Amado L. Lucero issued Office
Order No. 23, Series of 1993 dated January 22, 1993 which reads as follows:
In the interest of public service and for purposes of City Ordinance No. PD426-14-74,
otherwise known as AN ORDINANCE REQUIRING ANY PERSON ENGAGED OR
INTENDING TO ENGAGE IN ANY BUSINESS, TRADE, OCCUPATION, CALLING OR
PROFESSION OR HAVING IN HIS POSSESSION ANY OF THE ARTICLES FOR
WHICH A PERMIT IS REQUIRED TO BE HAD, TO OBTAIN FIRST A MAYORS
PERMIT and City Ordinance No. 15-92, AN ORDINANCE BANNING THE SHIPMENT OF
ALL LIVE FISH AND LOBSTER OUTSIDE PUERTO PRINCESA CITY FROM
JANUARY 1, 1993 TO JANUARY 1, 1998, you are hereby authorized and directed to check
or conduct necessary inspections on cargoes containing live fish and lobster being shipped out
from the Puerto Princesa Airport, Puerto Princesa Wharf or at any port within the jurisdiction
of the City to any point of destinations [sic] either via aircraft or seacraft.
The purpose of the inspection is to ascertain whether the shipper possessed the required
Mayors Permit issued by this Office and the shipment is covered by invoice or clearance
issued by the local office of the Bureau of Fisheries and Aquatic Resources and as to
compliance with all other existing rules and regulations on the matter.
Any cargo containing live fish and lobster without the required documents as stated herein
must be held for proper disposition.
In the pursuit of this Order, you are hereby authorized to coordinate with the PAL Manager,
the PPA Manager, the local PNP Station and other offices concerned for the needed support
and cooperation. Further, that the usual courtesy and diplomacy must be observed at all times
in the conduct of the inspection.
Please be guided accordingly.
xxx
3. On February 19, 1993, the Sangguniang Panlalawigan, Provincial Government of Palawan
enacted Resolution No. 33 entitled: A RESOLUTION PROHIBITING THE CATCHING,
GATHERING, POSSESSING, BUYING, SELLING AND SHIPMENT OF LIVE MARINE
CORAL DWELLING AQUATIC ORGANISMS, TO WIT:
FAMILY: SCARIDAE (MAMENG), EPINE PHELUS
FASCIATUS (SUNO).CROMILEPTES ALTIVELIS (PANTHER OR SENORITA),
LOBSTER BELOW 200 GRAMS AND SPAWNING, TRADACNA
GIGAS(TAKLOBO), PINCTADA MARGARITEFERA (MOTHER PEARL, OYSTERS,
GIANT CLAMS AND OTHER SPECIES), PENAEUS MONODON (TIGER PRAWN-
BREEDER SIZE OR MOTHER), EPINEPHELUS SUILLUS (LOBA OR GREEN
GROUPER) AND FAMILY: BALISTIDAE (TROPICAL AQUARIUM FISHES) FOR A
PERIOD FIVE (5) YEARS IN AND COMING FROM PALAWAN WATERS, the full text of
which reads as follows:
WHEREAS, scientific and factual researches [sic] and studies disclose that only five (5)
percent of the corals of our province remain to be in excellent condition as [a] habitat of
marine coral dwelling aquatic organisms;
WHEREAS, it cannot be gainsaid that the destruction and devastation of the corals of our
province were principally due to illegal fishing activities like dynamite fishing, sodium
cyanide fishing, use of other obnoxious substances and other related activities;
WHEREAS, there is an imperative and urgent need to protect and preserve the existence of the
remaining excellent corals and allow the devastated ones to reinvigorate and regenerate
themselves into vitality within the span of five (5) years;
WHEREAS, Sec. 468, Par. 1, Sub-Par. VI of the [sic] R.A. 7160 otherwise known as the
Local Government Code of 1991 empowers the Sangguniang Panlalawigan to protect the
environment and impose appropriate penalties [upon] acts which endanger the environment
such as dynamite fishing and other forms of destructive fishing, among others.
NOW, THEREFORE, on motion by Kagawad Nelson P. Peneyra and upon unanimous
decision of all the members present;
Be it resolved as it is hereby resolved, to approve Resolution No. 33, Series of 1993 of the
Sangguniang Panlalawigan and to enact Ordinance No. 2 for the purpose, to wit:
ORDINANCE NO. 2
Series of 1993
BE IT ORDAINED BY THE SANGGUNIANG PANLALAWIGAN IN SESSION
ASSEMBLED:
Section 1. TITLE - This Ordinance shall be known as an Ordinance Prohibiting the catching,
gathering, possessing, buying, selling and shipment of live marine coral dwelling aquatic
organisms, to wit: 1. Family: Scaridae (Mameng), 2. Epinephelus Fasciatus (Suno), 3.
Cromileptes altivelis (Panther or Senorita), lobster below 200 grams and spawning),
4. Tridacna Gigas (Taklobo), 5. Pinctada Margaretefera (Mother Pearl, Oysters, Giant Clams
and other species), 6. Penaeus Monodon (Tiger Prawn-breeder size or mother), 7. Epinephelus
Suillus (Loba or Green Grouper) and 8. Family: Balistidae (Topical Aquarium Fishes) for a
period of five (5) years in and coming from Palawan Waters.
Section II. PRELIMINARY CONSIDERATIONS
1. Sec. 2-A (Rep. Act 7160). It is hereby declared, the policy of the state that the territorial and
political subdivisions of the State shall enjoy genuine and meaningful local autonomy to
enable them to attain their fullest development as self reliant communities and make them
more effective partners in the attainment of national goals. Toward this end, the State shall
provide for [a] more responsive and accountable local government structure instituted through
a system of decentralization whereby local government units shall be given more powers,
authority, responsibilities and resources.
2. Sec. 5-A (R.A. 7160). Any provision on a power of [a] local Government Unit shall be
liberaly interpreted in its favor, and in case of doubt, any question thereon shall be resolved in
favor of devolution of powers and of the lower government units. Any fair and reasonable
doubts as to the existence of the power shall be interpreted in favor of the Local Government
Unit concerned.
3. Sec. 5-C (R.A. 7160). The general welfare provisions in this Code shall be liberally
interpreted to give more powers to local government units in accelerating economic
development and upgrading the quality of life for the people in the community.
4. Sec. 16 (R.A. 7160). General Welfare. - Every local government unit shall exercise the
powers expressly granted, those necessarily implied therefrom, as well as powers necessary,
appropriate, or incidental for its efficient and effective governance; and those which are
essential to the promotion of the general welfare.
Section III. DECLARATION OF POLICY. - It is hereby declared to be the policy of the
Province of Palawan to protect and conserve the marine resources of Palawan not only for the
greatest good of the majority of the present generation but with [the] proper perspective and
consideration of [sic] their prosperity, and to attain this end, the Sangguniang Panlalawigan
henceforth declares that is [sic] shall be unlawful for any person or any business entity to
engage in catching, gathering, possessing, buying, selling and shipment of live marine coral
dwelling aquatic organisms as enumerated in Section 1 hereof in and coming out of Palawan
Waters for a period of five (5) years;
Section IV. PENALTY CLAUSE. - Any person and/or business entity violating this
Ordinance shall be penalized with a fine of not more than Five Thousand Pesos (P5,000.00),
Philippine Currency, and/or imprisonment of six (6) months to twelve (12) months and
confiscation and forfeiture of paraphernalias [sic] and equipment in favor of the government at
the discretion of the Court;
Section V. SEPARABILITY CLAUSE. - If for any reason, a Section or provision of this
Ordinance shall be held as unconditional [sic] or invalid, it shall not affect the other provisions
hereof.
Section VI. REPEALING CLAUSE. - Any existing Ordinance or a provision of any ordinance
inconsistent herewith is deemed modified, amended or repealed.
Section VII. EFFECTIVITY. - This Ordinance shall take effect ten (10) days after its
publication.
SO ORDAINED.
xxx
4. The respondents implemented the said ordinances, Annexes A and C hereof thereby
depriving all the fishermen of the whole province of Palawan and the City of Puerto Princesa
of their only means of livelihood and the petitioners Airline Shippers Association of Palawan
and other marine merchants from performing their lawful occupation and trade;
5. Petitioners Alfredo Tano, Baldomero Tano, Teocenes Midello, Angel de Mesa, Eulogio
Tremocha, and Felipe Ongonion, Jr. were even charged criminally under criminal case no. 93-
05-C in the 1st Municipal Circuit Trial Court of Cuyo-Agutaya-Magsaysay, an original carbon
copy of the criminal complaint dated April 12, 1993 is hereto attached as Annex D; while
xerox copies are attached as Annex D to the copies of the petition;
6. Petitioners Robert Lim and Virginia Lim, on the other hand, were charged by the
respondent PNP with the respondent City Prosecutor of Puerto Princesa City, a xerox copy of
the complaint is hereto attached as Annex E;
Without seeking redress from the concerned local government units, prosecutors office and
courts, petitioners directly invoked our original jurisdiction by filing this petition on 4 June
1993. In sum, petitioners contend that:
First, the Ordinances deprived them of due process of law, their livelihood, and unduly restricted
them from the practice of their trade, in violation of Section 2, Article XII and Sections 2 and 7
of Article XIII of the 1987 Constitution.
Second, Office Order No. 23 contained no regulation nor condition under which the Mayors
permit could be granted or denied; in other words, the Mayor had the absolute authority to
determine whether or not to issue permit.
Third, as Ordinance No. 2 of the Province of Palawan altogether prohibited the catching,
gathering, possession, buying, selling and shipping of live marine coral dwelling organisms,
without any distinction whether it was caught or gathered through lawful fishing method, the
Ordinance took away the right of petitioners-fishermen to earn their livelihood in lawful ways;
and insofar as petitioners-members of Airline Shippers Association are concerned, they were
unduly prevented from pursuing their vocation and entering into contracts which are proper,
necessary, and essential to carry out their business endeavors to a successful conclusion.
Finally, as Ordinance No. 2 of the Sangguniang Panlalawigan is null and void, the criminal
cases based thereon against petitioners Tano and the others have to be dismissed.
In the Resolution of 15 June 1993 we required respondents to comment on the petition, and
furnished the Office of the Solicitor General with a copy thereof.
In their comment filed on 13 August 1993, public respondents Governor Socrates and Members
of the Sangguniang Panlalawigan of Palawan defended the validity of Ordinance No.2, Series
of 1993, as a valid exercise of the Provincial Governments power under the general welfare
clause (Section 16 of the Local Government Code of 1991 [hereafter, LGC]), and its specific
power to protect the environment and impose appropriate penalties for acts which endanger the
environment, such as dynamite fishing and other forms of destructive fishing under Section 447
(a) (1) (vi), Section 458 (a) (1) (vi), and Section 468 (a) (1) (vi), of the LGC. They claimed that
in the exercise of such powers, the Province of Palawan had the right and responsibilty to insure
that the remaining coral reefs, where fish dwells [sic], within its territory remain healthy for the
future generation. The Ordinance, they further asserted, covered only live marine coral dwelling
aquatic organisms which were enumerated in the ordinance and excluded other kinds of live
marine aquatic organisms not dwelling in coral reefs; besides the prohibition was for only five
(5) years to protect and preserve the pristine coral and allow those damaged to regenerate.
Aforementioned respondents likewise maintained that there was no violation of due process and
equal protection clauses of the Constitution. As to the former, public hearings were conducted
before the enactment of the Ordinance which, undoubtedly, had a lawful purpose and employed
reasonable means; while as to the latter, a substantial distinction existed between a fisherman
who catches live fish with the intention of selling it live, and a fisherman who catches live fish
with no intention at all of selling it live, i.e., the former uses sodium cyanide while the latter
does not. Further, the Ordinance applied equally to all those belonging to one class.
On 25 October 1993 petitioners filed an Urgent Plea for the Immediate Issuance of a Temporary
Restraining Order claiming that despite the pendency of this case, Branch 50 of the Regional
Trial Court of Palawan was bent on proceeding with Criminal Case No. 11223 against
petitioners Danilo Tano, Alfredo Tano, Eulogio Tremocha, Romualdo Tano, Baldomero Tano,
Andres Lemihan and Angel de Mesa for violation of Ordinance No. 2 of the Sangguniang
Panlalawigan of Palawan. Acting on said plea, we issued on 11 November 1993 a temporary
restraining order directing Judge Angel Miclat of said court to cease and desist from proceeding
with the arraignment and pre-trial of Criminal Case No. 11223.
On 12 July 1994, we excused the Office of the Solicitor General from filing a comment,
considering that as claimed by said office in its Manifestation of 28 June 1994, respondents
were already represented by counsel.
The rest of the respondents did not file any comment on the petition.
In the resolution of 15 September 1994, we resolved to consider the comment on the petition as
the Answer, gave due course to the petition and required the parties to submit their respective
memoranda.[2]
On 22 April 1997 we ordered impleaded as party respondents the Department of Agriculture
and the Bureau of Fisheries and Aquatic Resources and required the Office of the Solicitor
General to comment on their behalf. But in light of the latters motion of 9 July 1997 for an
extension of time to file the comment which would only result in further delay, we dispensed
with said comment.
After due deliberation on the pleadings filed, we resolved to dismiss this petition for want of
merit, on 22 July 1997, and assigned it to the ponente for the writing of the opinion of the Court.
I
There are actually two sets of petitioners in this case. The first is composed of Alfredo Tano,
Baldomero Tano, Danilo Tano, Romualdo Tano, Teocenes Midello, Angel de Mesa, Eulogio
Tremocha, Felipe Ongonion, Jr., Andres Linijan, and Felimon de Mesa, who were criminally
charged with violating Sangguniang Panlalawigan Resolution No. 33 and Ordinance No. 2,
Series of 1993, of the Province of Palawan, in Criminal Case No. 93-05-C of the 1st Municipal
Circuit Trial Court (MCTC) of Palawan;[3] and Robert Lim and Virginia Lim who were charged
with violating City Ordinance No. 15-92 of Puerto Princesa City and Ordinance No. 2, Series
of 1993, of the Province of Palawan before the Office of the City Prosecutor of Puerto
Princesa.[4] All of them, with the exception of Teocenes Midello, Felipe Ongonion, Jr., Felimon
de Mesa, Robert Lim and Virginia Lim, are likewise the accused in Criminal Case No. 11223
for the violation of Ordinance No. 2 of the Sangguniang Panlalawigan of Palawan, pending
before Branch 50 of the Regional Trial Court of Palawan.[5]
The second set of petitioners is composed of the rest of the petitioners numbering seventy-seven
(77), all of whom, except the Airline Shippers Association of Palawan -- an alleged private
association of several marine merchants -- are natural persons who claim to be fishermen.
The primary interest of the first set of petitioners is, of course, to prevent the prosecution, trial
and determination of the criminal cases until the constitutionality or legality of the Ordinances
they allegedly violated shall have been resolved. The second set of petitioners merely claim that
they being fishermen or marine merchants, they would be adversely affected by the ordinances.
As to the first set of petitioners, this special civil for certiorari must fail on the ground of
prematurity amounting to a lack of cause of action. There is no showing that the said petitioners,
as the accused in the criminal cases, have filed motions to quash the informations therein and
that the same were denied. The ground available for such motions is that the facts charged
therein do not constitute an offense because the ordinances in question are unconstitutional.[6] It
cannot then be said that the lower courts acted without or in excess of jurisdiction or with grave
abuse of discretion to justify recourse to the extraordinary remedy of certiorari or prohibition. It
must further be stressed that even if the petitioners did file motions to quash, the denial thereof
would not forthwith give rise to a cause of action under Rule 65 of the Rules of Court. The
general rule is that where a motion to quash is denied, the remedy therefrom is not certiorari, but
for the party aggrieved thereby to go to trial without prejudice to reiterating special defenses
involved in said motion, and if, after trial on the merits of adverse decision is rendered, to appeal
therefrom in the manner authorized by law.[7] And , even where in an exceptional circumstance
such denial may be the subject of a special civil action for certiorari, a motion for
reconsideration must have to be filed to allow the court concerned an opportunity to correct its
errors, unless such motion may be dispensed with because of existing exceptional
circumstances.[8] Finally, even if a motion for reconsideration has been filed and denied, the
remedy under Rule 65 is still unavailable absent any showing of the grounds provided for in
Section 1 thereof.[9] For obvious reasons, the petition at bar does not, and could not have ,
alleged any of such grounds.
As to the second set of petitioners, the instant petition is obviously one for DECLARATORY
RELIEF, i.e., for a declaration that the Ordinances in question are a nullity ... for being
unconstitutional.[10] As such, their petition must likewise fail, as this Court is not possessed of
original jurisdiction over petitions for declaratory relief even if only questions of law are
involved,[11] it being settled that the Court merely exercises appellate jurisdiction over such
petitions.[12]
II
Even granting arguendo that the first set of petitioners have a cause of action ripe for the
extraordinary writ of certiorari, there is here a clear disregard of the hierarchy of courts, and no
special and important reason or exceptional or compelling circumstance has been adduced why
direct recourse to us should be allowed. While we have concurrent jurisdiction with Regional doubt.[16]Where doubt exists, even if well founded, there can be no finding of
Trial courts and with the Court of Appeals to issue writs of certiorari, prohibition, mandamus, unconstitutionality. To doubt is to sustain.[17]
quo warranto, habeas corpus and injunction, such concurrence gives petitioners no unrestricted
freedom of choice of court forum, so we held in People v. Cuaresma:[13] After a scrunity of the challenged Ordinances and the provisions of the Constitution petitioners
claim to have been violated, we find petitioners contentions baseless and so hold that the former
do not suffer from any infirmity, both under the Constitution and applicable laws.
This concurrence of jurisdiction is not to be taken as according to parties seeking any of the
writs an absolute unrestrained freedom of choice of the court to which application therefor will Petitioners specifically point to Section 2, Article XII and Sections 2 and 7, Article XIII of the
be directed. There is after all hierarchy of courts. That hierarchy is determinative of the venue Constitution as having been transgressed by the Ordinances.
of appeals, and should also serve as a general determinant of the appropriate forum for
petitions for the extraordinary writs. A becoming regard for that judicial hierarchy most The pertinent portion of Section 2 of Article XII reads:
certainly indicates that petitions for the issuance of extraordinary writs against first level
(inferior) courts should be filed with the Regional Trial Court, and those against the latter, SEC. 2. x x x
with the Court of Appeals. A direct invocation of the Supreme Courts original jurisdiction to
issue these writs should be allowed only when there are special and important reasons
The State shall protect the nation's marine wealth in its archipelagic waters, territorial sea, and
therefor, clearly and specifically set out in the petition. This is established policy. It is a policy exclusive economic zone, and reserve its use and enjoyment exclusively to Filipino citizens.
necessary to prevent inordinate demands upon the Courts time and attention which are better
devoted to those matters within its exclusive jurisdiction, and to prevent further over-crowding
of the Courts docket. The Congress may, by law, allow small-scale utilization of natural resources by Filipino
citizens, as well as cooperative fish farming, with priority to subsistence fishermen and
fishworkers in rivers, lakes, bays, and lagoons.
The Court feels the need to reaffirm that policy at this time, and to enjoin strict adherence
thereto in the light of what it perceives to be a growing tendency on the part of litigants and
lawyers to have their applications for the so-called extraordinary writs, and sometimes even Sections 2 and 7 of Article XIII provide:
their appeals, passed upon and adjudicated directly and immediately by the highest tribunal of
the land. Sec. 2. The promotion of social justice shall include the commitment to create economic
opportunities based on freedom of initiative and self-reliance.
In Santiago v. Vasquez,[14] this Court forcefully expressed that the propensity of litigants and
lawyers to disregard the hierarchy of courts must be put to a halt, not only because of the xxx
imposition upon the precious time of this Court, but also because of the inevitable and resultant
delay, intended or otherwise, in the adjudication of the case which often has to be remanded or
SEC. 7. The State shall protect the rights of subsistence fishermen, especially of local
referred to the lower court, the proper forum under the rules of procedure, or as better equipped
communities, to the preferential use of the communal marine and fishing resources, both
to resolve the issues since this Court is not a trier of facts. We reiterated the judicial policy that
inland and offshore. It shall provide support to such fishermen through appropriate technology
this Court will not entertain direct resort to it unless the redress desired cannot be obtained in
and research, adequate financial, production, and marketing assistance, and other services. The
the appropriate courts or where exceptional and compelling circumstances justify availment of
State shall also protect, develop, and conserve such resources.The protection shall extend to
a remedy within and calling for the exercise of [its] primary jurisdiction.
offshore fishing grounds of subsistence fishermen against foreign intrusion. Fishworkers shall
III receive a just share from their labor in the utilization of marine and fishing resources.

Notwithstanding the foregoing procedural obstacles against the first set of petitioners, we opt to
There is absolutely no showing that any of the petitioners qualifies as a subsistence or marginal
resolve this case on its merits considering that the lifetime of the challenged Ordinances is about
fisherman. In their petition, petitioner Airline Shippers Association of Palawan is described as
to end. Ordinance No. 15-92 of the City of Puerto Princesa is effective only up to 1 January
a private association composed of Marine Merchants; petitioners Robert Lim and Virginia Lim,
1998, while Ordinance No. 2 of the Province of Palawan, enacted on 19 February 1993, is
as merchants; while the rest of the petitioners claim to be fishermen, without any qualification,
effective for only five (5) years. Besides, these Ordinances were undoubtedly enacted in the
however, as to their status.
exercise of powers under the new LGC relative to the protection and preservation of the
environment and are thus novel and of paramount importance. No further delay then may be Since the Constitution does not specifically provide a definition of the terms subsistence or
allowed in the resolution of the issues raised. marginal fishermen,[18] they should be construed in their general and ordinary sense. A marginal
fisherman is an individual engaged in fishing whose margin of return or reward in his harvest
It is of course settled that laws (including ordinances enacted by local government units) enjoy
of fish as measured by existing price levels is barely sufficient to yield a profit or cover the cost
the presumption of constitutionality.[15] To overthrow this presumption, there must be a clear
of gathering the fish,[19] while a subsistence fisherman is one whose catch yields but the
and unequivocal breach of the Constitution, not merely a doubtful or argumentative
irreducible minimum for his livelihood.[20] Section 131(p) of the LGC (R.A. No. 7160) defines
contradiction. In short, the conflict with the Constitution must be shown beyond reasonable
a marginal farmer or fisherman as an individual engaged in subsistence farming or fishing
which shall be limited to the sale, barter or exchange of agricultural or marine products produced
by himself and his immediate family. It bears repeating that nothing in the record supports a
finding that any petitioner falls within these definitions.
Besides, Section 2 of Article XII aims primarily not to bestow any right to subsistence
fishermen, but to lay stress on the duty of the State to protect the nations marine wealth. What
the provision merely recognizes is that the State may allow, by law, cooperative fish farming,
with priority to subsistence fishermen and fishworkers in rivers, lakes, bays, and lagoons. Our
survey of the statute books reveals that the only provision of law which speaks of the preferential
right of marginal fishermen is Section 149 of the LGC of 1991 which pertinently provides:
SEC. 149. Fishery Rentals, Fees and Charges. -- x x x
(b) The sangguniang bayan may:
(1) Grant fishery privileges to erect fish corrals, oyster, mussels or other aquatic beds or
bangus fry areas, within a definite zone of the municipal waters, as determined by
it: Provided, however, That duly registered organizations and cooperatives of marginal
fishermen shall have preferential right to such fishery privileges ....
In a Joint Administrative Order No. 3, dated 25 April 1996, the Secretary of the Department of
Agriculture and the Secretary of the Department of Interior and Local Government prescribed
the guidelines on the preferential treatment of small fisherfolk relative to the fishery right
mentioned in Section 149. This case, however, does not involve such fishery right.
Anent Section 7 of Article XIII, it speaks not only of the use of communal marine and fishing
resources, but of their protection, development, and conservation. As hereafter shown, the
ordinances in question are meant precisely to protect and conserve our marine resources to the
end that their enjoyment by the people may be guaranteed not only for the present generation,
but also for the generations to come.
The so-called preferential right of subsistence or marginal fishermen to the use of marine
resources is not at all absolute. In accordance with the Regalian Doctrine, marine resources
belong to the State, and, pursuant to the first paragraph of Section 2, Article XII of the
Constitution, their exploration, development and utilization ... shall be under the full control and
supervision of the State. Moreover, their mandated protection, development, and conservation
as necessarily recognized by the framers of the Constitution, imply certain restrictions on
whatever right of enjoyment there may be in favor of anyone. Thus, as to the curtailment of the
preferential treatment of marginal fisherman, the following exchange between Commissioner
Francisco Rodrigo and Commissioner Jose F.S. Bengzon, Jr., took place at the plenary session
of the Constitutional Commission:
MR. RODRIGO:
Let us discuss the implementation of this because I would not raise the hopes of our people,
and afterwards fail in the implementation.How will this be implemented? Will there be a
licensing or giving of permits so that government officials will know that one is really a
marginal fisherman? Or if policeman say that a person is not a marginal fisherman, he can
show his permit, to prove that indeed he is one.
MR. BENGZON:
Certainly, there will be some mode of licensing insofar as this is concerned and this particular
question could be tackled when we discuss the Article on Local Governments -- whether we
will leave to the local governments or to Congress on how these things will be
implemented. But certainly, I think our Congressmen and our local officials will not be bereft
of ideas on how to implement this mandate.
xxx
MR. RODRIGO:
So, once one is licensed as a marginal fisherman, he can go anywhere in the Philippines and
fish in any fishing grounds.
MR. BENGZON:
Subject to whatever rules and regulations and local laws that may be passed, may be existing
or will be passed.[21] (underscoring supplied for emphasis).
What must likewise be borne in mind is the state policy enshrined in the Constitution regarding
the duty of the State to protect and advance the right of the people to a balanced and healthful
ecology in accord with the rhythm and harmony of nature. [22] On this score, in Oposa v.
Factoran,[23] this Court declared:
While the right to balanced and healthful ecology is to be found under the Declaration of
Principles the State Policies and not under the Bill of Rights, it does not follow that it is less
important than any of the civil and political rights enumerated in the latter. Such a right
belongs to a different category of rights altogether for it concerns nothing less than self-
preservation and self-perpetuation - aptly and fittingly stressed by the petitioners - the
advancement of which may even be said to predate all governments and constitutions. As a
matter of fact, these basic rights need not even be written in the Constitution for they are
assumed to exist from the inception of humankind. If they are now explicitly mentioned in the
fundamental charter, it is because of the well-founded fear of its framers that unless the rights
to a balanced and healthful ecology and to health are mandated as state policies by the
Constitution itself, thereby highlighting their continuing importance and imposing upon the
state a solemn obligation to preserve the first and protect and advance the second , the day
would not be too far when all else would be lost not only for the present generation, but also
for those to come - generations which stand to inherit nothing but parched earth incapable of
sustaining life.
The right to a balanced and healthful ecology carries with it a correlative duty to refrain from
impairing the environment ...
The LGC provisions invoked by private respondents merely seek to give flesh and blood to the
right of the people to a balanced and healthful ecology. In fact, the General Welfare Clause,
expressly mentions this right:
SEC. 16. General Welfare.-- Every local government unit shall exercise the powers expressly
granted, those necessarily implied therefrom, as well as powers necessary, appropriate, or
incidental for its efficient and effective governance, and those which are essential to the
promotion of the general welfare. Within their respective territorial jurisdictions, local
government units shall ensure and support, among other things, the preservation and
enrichment of culture, promote health and safety, enhance the right of the people to a balanced
ecology, encourage and support the development of appropriate and self-reliant scientific and
technological capabilities, improve public morals, enhance economic prosperity and social
justice, promote full employment among their residents, maintain peace and order, and
preserve the comfort and convenience of their inhabitants. (underscoring supplied).
Moreover, Section 5(c) of the LGC explicitly mandates that the general welfare provisions of
the LGC shall be liberally interpreted to give more powers to the local government units in
accelerating economic development and upgrading the quality of life for the people of the
community.
The LGC vests municipalities with the power to grant fishery privileges in municipal waters
and to impose rentals, fees or charges therefor; to penalize, by appropriate ordinances, the use
of explosives, noxious or poisonous substances, electricity, muro-ami, and other deleterious
methods of fishing; and to prosecute any violation of the provisions of applicable fishery
laws.[24] Further, the sangguniang bayan, the sangguniang panlungsod and the sangguniang
panlalawigan are directed to enact ordinances for the general welfare of the municipality and
its inhabitants, which shall include, inter alia, ordinances that [p]rotect the environment and
impose appropriate penalties for acts which endanger the environment such as dynamite fishing
and other forms of destructive fishing ... and such other activities which result in pollution,
acceleration of eutrophication of rivers and lakes or of ecological imbalance. [25]
Finally, the centerpiece of LGC is the system of decentralization[26] as expressly mandated by
the Constitution.[27] Indispensable thereto is devolution and the LGC expressly provides that
[a]ny provision on a power of a local government unit shall be liberally interpreted in its favor,
and in case of doubt, any question thereon shall be resolved in favor of devolution of powers
and of the lower local government unit. Any fair and reasonable doubt as to the existence of the
power shall be interpreted in favor of the local government unit concerned,[28] Devolution refers
to the act by which the National Government confers power and authority upon the various local
government units to perform specific functions and responsibilities. [29]
One of the devolved powers enumerated in the section of the LGC on devolution is the
enforcement of fishery laws in municipal waters including the conservation of
mangroves.[30] This necessarily includes enactment of ordinances to effectively carry out such
fishery laws within the municipal waters.
The term municipal waters, in turn, include not only streams, lakes, and tidal waters within the
municipality, not being the subject of private ownership and not comprised within the national
parks, public forest, timber lands, forest reserves, or fishery reserves, but also marine waters
included between two lines drawn perpendicularly to the general coastline from points where
the boundary lines of the municipality or city touch the sea at low tide and a third line parallel
with the general coastline and fifteen kilometers from it.[31] Under P.D. No. 704, the marine
waters included in municipal waters is limited to three nautical miles from the general coastline
using the above perpendicular lines and a third parallel line.
These fishery laws which local government units may enforce under Section 17(b), (2), (i) in
municipal waters include: (1) P.D. No. 704; (2) P.D. No. 1015 which, inter alia, authorizes the
establishment of a closed season in any Philippine water if necessary for conservation or
ecological purposes; (3) P.D. No. 1219 which provides for the exploration, exploitation,
utilization, and conservation of coral resources; (4) R.A. No. 5474, as amended by B.P. Blg. 58,
which makes it unlawful for any person, association, or corporation to catch or cause to be
caught, sell, offer to sell, purchase, or have in possession any of the fish specie
called gobiidaeor ipon during closed season; and (5) R.A. No. 6451 which prohibits and
punishes electrofishing, as well as various issuances of the BFAR.
To those specifically devolved insofar as the control and regulation of fishing in municipal
waters and the protection of its marine environment are concerned, must be added the following:
1. Issuance of permits to construct fish cages within municipal waters;
2. Issuance of permits to gather aquarium fishes within municipal waters;
3. Issuance of permits to gather kapis shells within municipal waters;
4. Issuance of permits to gather/culture shelled mollusks within municipal waters;
5. Issuance of licenses to establish seaweed farms within municipal waters;
6. Issuance of licenses to establish culture pearls within municipal waters;
7. Issuance of auxiliary invoice to transport fish and fishery products; and
8. Establishment of closed season in municipal waters.
These functions are covered in the Memorandum of Agreement of 5 April 1994 between the
Department of Agriculture and the Department of Interior and Local Government.
In light then of the principles of decentralization and devolution enshrined in the LGC and the
powers granted to local government units under Section 16 (the General Welfare Clause), and
under Sections 149, 447 (a) (1) (vi), 458 (a) (1) (vi) and 468 (a) (1) (vi), which unquestionably
involve the exercise of police power, the validity of the questioned Ordinances cannot be
doubted.
Parenthetically, we wish to add that these Ordinances find full support under R.A. No. 7611,
otherwise known as the Strategic Environmental Plan (SEP) for Palawan Act, approved on 19
July 1992. This statute adopts a comprehensive framework for the sustainable development of
Palawan compatible with protecting and enhancing the natural resources and endangered
environment of the province, which shall serve to guide the local government of Palawan and
the government agencies concerned in the formulation and implementation of plans, programs
and projects affecting said province.[32]
At this time then, it would be appropriate to determine the relation between the assailed
Ordinances and the aforesaid powers of the Sangguniang Panlungsod of the City of Puerto
Princesa and the Sangguniang Panlalawigan of the Province of Palawan to protect the
environment. To begin, we ascertain the purpose of the Ordinances as set forth in the statement
of purposes or declaration of policies quoted earlier.
It is clear to the Court that both Ordinances have two principal objectives or purposes: (1) to
establish a closed season for the species of fish or aquatic animals covered therein for a period
of five years, and (2) to protect the corals of the marine waters of the City of Puerto Princesa
and the Province of Palawan from further destruction due to illegal fishing activities.
The accomplishment of the first objective is well within the devolved power to enforce fishery
laws in municipal waters, such as P.D. No. 1015, which allows the establishment of closed
seasons. The devolution of such power has been expressly confirmed in the Memorandum of
Agreement of 5 April 1994 between the Department of Agriculture and the Department of
Interior and Local Government.
The realization of the second objective falls within both the general welfare clause of the LGC
and the express mandate thereunder to cities and provinces to protect the environment and
impose appropriate penalties for acts which endanger the environment.[33]
The destruction of the coral reefs results in serious, if not irreparable, ecological imbalance, for
coral reefs are among the natures life-support systems.[34] They collect, retain, and recycle
nutrients for adjacent nearshore areas such as mangroves, seagrass beds, and reef flats; provide
food for marine plants and animals; and serve as a protective shelter for aquatic organisms.[35] It
is said that [e]cologically, the reefs are to the oceans what forests are to continents: they are
shelter and breeding grounds for fish and plant species that will disappear without them. [36]
The prohibition against catching live fish stems, in part, from the modern phenomenon of live-
fish trade which entails the catching of so-called exotic tropical species of fish not only for
aquarium use in the West, but also for the market for live banquet fish [which] is virtually
insatiable in ever more affluent Asia.[37] These exotic species are coral-dwellers, and fishermen
catch them by diving in shallow water with corraline habitats and squirting sodium cyanide
poison at passing fish directly or onto coral crevices; once affected the fish are immobilized
[merely stunned] and then scooped by hand.[38] The diver then surfaces and dumps his catch into
a submerged net attached to the skiff . Twenty minutes later, the fish can swim normally. Back
on shore, they are placed in holding pens, and within a few weeks, they expel the cyanide from
their system and are ready to be hauled. Then they are placed in saltwater tanks or packaged in
plastic bags filled with seawater for shipment by air freight to major markets for live food
fish.[39]While the fish are meant to survive, the opposite holds true for their former home as
[a]fter the fisherman squirts the cyanide, the first thing to perish is the reef algae, on which fish
feed. Days later, the living coral starts to expire. Soon the reef loses its function as habitat for
the fish, which eat both the algae and invertebrates that cling to the coral. The reef becomes an
underwater graveyard, its skeletal remains brittle, bleached of all color and vulnerable to erosion
from the pounding of the waves.[40] It has been found that cyanide fishing kills most hard and
soft corals within three months of repeated application.[41]
The nexus then between the activities barred by Ordinance No. 15-92 of the City of Puerto
Princesa and the prohibited acts provided in Ordinance No. 2, Series of 1993 of the Province of
Palawan, on one hand, and the use of sodium cyanide, on the other, is painfully obvious. In sum,
the public purpose and reasonableness of the Ordinances may not then be controverted.
As to Office Order No. 23, Series of 1993, issued by Acting City Mayor Amado L. Lucero of
the City of Puerto Princesa, we find nothing therein violative of any constitutional or statutory
provision. The Order refers to the implementation of the challenged ordinance and is not the
Mayors Permit.
The dissenting opinion of Mr. Justice Josue N. Bellosillo relies upon the lack of authority on the
part of the Sangguniang Panlungsod of Puerto Princesa to enact Ordinance No. 15, Series of
1992, on the theory that the subject thereof is within the jurisdiction and responsibility of the
Bureau of Fisheries and Aquatic Resources (BFAR) under P.D. No. 704, otherwise known as
the Fisheries Decree of 1975; and that, in any event, the Ordinance is unenforceable for lack of
approval by the Secretary of the Department of Natural Resources (DNR), likewise in
accordance with P.D. No. 704.
The majority is unable to accommodate this view. The jurisdiction and responsibility of the
BFAR under P. D. no. 704, over the management, conservation, development, protection,
utilization and disposition of all fishery and aquatic resources of the country is not all-
encompassing. First, Section 4 thereof excludes from such jurisdiction and responsibility
municipal waters, which shall be under the municipal or city government concerned, except
insofar as fishpens and seaweed culture in municipal in municipal centers are concerned. This
section provides, however, that all municipal or city ordinances and resolutions affecting fishing
and fisheries and any disposition thereunder shall be submitted to the Secretary of the
Department of Natural Resources for appropriate action and shall have full force and effect only
upon his approval.[42]
Second, it must at once be pointed out that the BFAR is no longer under the Department of
Natural Resources (now Department of Environment and Natural Resources). Executive Order
No. 967 of 30 June 1984 transferred the BFAR from the control and supervision of the Minister
(formerly Secretary) of Natural Resources to the Ministry of Agriculture and Food (MAF) and
converted it into a mere staff agency thereof, integrating its functions with the regional offices
of the MAF.
In Executive Order No. 116 of 30 January 1987, which reorganized the MAF, the BFAR was
retained as an attached agency of the MAF. And under the Administrative Code of 1987, [43] the
BFAR is placed under the Title concerning the Department of Agriculture. [44]
Therefore, it is incorrect to say that the challenged Ordinance of the City of Puerto Princesa is
invalid or unenforceable because it was not approved by the Secretary of the DENR. If at all,
the approval that should be sought would be that of the Secretary of the Department of
Agriculture (not DENR) of municipal ordinances affecting fishing and fisheries in municipal
waters has been dispensed with in view of the following reasons:
(1) Section 534 (Repealing Clause) of the LGC expressly repeals or amends Section 16 and 29
of P.D. No. 704[45] insofar that they are inconsistent with the provisions of the LGC.
(2) As discussed earlier, under the general welfare clause of the LGC, local government units
have the power, inter alia, to enact ordinances to enhance the right of the people to a balanced
ecology. It likewise specifically vests municipalities with the power to grant fishery privileges
in municipal waters, and impose rentals, fees or charges therefor; to penalize, by appropriate
ordinances, the use of explosives, noxious or poisonous substances, electricity, muro-ami, and
other deleterious methods of fishing; and to prosecute other methods of fishing; and to prosecute
any violation of the provisions of applicable fishing laws.[46]Finally, it imposes upon
the sangguniang bayan, the sangguniang panlungsod, and the sangguniang panlalawigan the
duty to enact ordinances to [p]rotect the environment and impose appropriate penalties for acts
which endanger the environment such as dynamite fishing and other forms of destructive fishing
and such other activities which result in pollution, acceleration of eutrophication of rivers and
lakes or of ecological imbalance.[47]
In closing, we commend the Sangguniang Panlungsod of the City of Puerto Princesa
and Sangguniang Panlalawigan of the Province of Palawan for exercising the requisite political
will to enact urgently needed legislation to protect and enhance the marine environment, thereby
sharing in the herculean task of arresting the tide of ecological destruction. We hope that other
local government units shall now be roused from their lethargy and adopt a more vigilant stand
in the battle against the decimation of our legacy to future generations. At this time, the
repercussions of any further delay in their response may prove disastrous, if not, irreversible.
WHEREFORE, the instant petition is DISMISSED for lack of merit and the temporary
restraining order issued on 11 November 1993 is LIFTED.
No pronouncement as to costs.
SO ORDERED.
BATANGAS CATV, INC., petitioner, vs. THE COURT OF APPEALS, THE BATANGAS
CITY SANGGUNIANG PANLUNGSOD and BATANGAS CITY MAYOR, respondents.
DECISION
SANDOVAL-GUTIERREZ, J.:
In the late 1940s, John Walson, an appliance dealer in Pennsylvania, suffered a decline in the
sale of television (tv) sets because of poor reception of signals in his community. Troubled, he
built an antenna on top of a nearby mountain. Using coaxial cable lines, he distributed the tv
signals from the antenna to the homes of his customers. Walsons innovative idea improved his
sales and at the same time gave birth to a new telecommunication system -- the Community
Antenna Television (CATV) or Cable Television.[1]
This technological breakthrough found its way in our shores and, like in its country of origin, it
spawned legal controversies, especially in the field of regulation. The case at bar is just another
occasion to clarify a shady area. Here, we are tasked to resolve the inquiry -- may a local
government unit (LGU) regulate the subscriber rates charged by CATV operators within its
territorial jurisdiction?
This is a petition for review on certiorari filed by Batangas CATV, Inc. (petitioner herein)
against the Sangguniang Panlungsodand the Mayor of Batangas City (respondents herein)
assailing the Court of Appeals (1) Decision[2] dated February 12, 1999 and (2)
Resolution[3] dated May 26, 1999, in CA-G.R. CV No. 52361.[4] The Appellate Court reversed
and set aside the Judgment[5] dated October 29, 1995 of the Regional Trial Court (RTC), Branch
7, Batangas City in Civil Case No. 4254,[6] holding that neither of the respondents has the power
to fix the subscriber rates of CATV operators, such being outside the scope of the LGUs power.
The antecedent facts are as follows:
On July 28, 1986, respondent Sangguniang Panlungsod enacted Resolution No. 210[7] granting
petitioner a permit to construct, install, and operate a CATV system in Batangas City. Section
8 of the Resolution provides that petitioner is authorized to charge its subscribers the maximum
rates specified therein, provided, however, that any increase of rates shall be subject to the
approval of the Sangguniang Panlungsod.[8]
Sometime in November 1993, petitioner increased its subscriber rates from P88.00 to P180.00
per month. As a result, respondent Mayor wrote petitioner a letter[9] threatening to cancel its
permit unless it secures the approval of respondent Sangguniang Panlungsod, pursuant to
Resolution No. 210.
Petitioner then filed with the RTC, Branch 7, Batangas City, a petition for injunction docketed
as Civil Case No. 4254. It alleged that respondent Sangguniang Panlungsod has no authority to
regulate the subscriber rates charged by CATV operators because under Executive Order No.
205, the National Telecommunications Commission (NTC) has the sole authority to regulate the
CATV operation in the Philippines.
On October 29, 1995, the trial court decided in favor of petitioner, thus:
WHEREFORE, as prayed for, the defendants, their representatives, agents, deputies or other
persons acting on their behalf or under their instructions, are hereby enjoined from
canceling plaintiffs permit to operate a Cable Antenna Television (CATV) system in the
City of Batangas or its environs or in any manner, from interfering with the authority
and power of the National Telecommunications Commission to grant franchises to
operate CATV systems to qualified applicants, and the right of plaintiff in fixing its
service rates which needs no prior approval of the Sangguniang Panlungsod of Batangas
City.
The counterclaim of the plaintiff is hereby dismissed. No pronouncement as to costs.
IT IS SO ORDERED.[10]
The trial court held that the enactment of Resolution No. 210 by respondent violates the States
deregulation policy as set forth by then NTC Commissioner Jose Luis A. Alcuaz in his
Memorandum dated August 25, 1989. Also, it pointed out that the sole agency of the government
which can regulate CATV operation is the NTC, and that the LGUs cannot exercise regulatory
power over it without appropriate legislation.
Unsatisfied, respondents elevated the case to the Court of Appeals, docketed as CA-G.R. CV
No. 52361.
On February 12, 1999, the Appellate Court reversed and set aside the trial courts Decision,
ratiocinating as follows:
Although the Certificate of Authority to operate a Cable Antenna Television (CATV)
System is granted by the National Telecommunications Commission pursuant to
Executive Order No. 205, this does not preclude the Sangguniang Panlungsod from
regulating the operation of the CATV in their locality under the powers vested upon it
by Batas Pambansa Bilang 337, otherwise known as the Local Government Code of 1983.
Section 177 (now Section 457 paragraph 3 (ii) of Republic Act 7160) provides:
Section 177. Powers and Duties The Sangguniang Panlungsod shall:
a) Enact such ordinances as may be necessary to carry into effect and discharge the
responsibilities conferred upon it by law, and such as shall be necessary and proper to provide
for health and safety, comfort and convenience, maintain peace and order, improve the morals,
and promote the prosperity and general welfare of the community and the inhabitants thereof,
and the protection of property therein;
xxx
d) Regulate, fix the license fee for, and tax any business or profession being carried on
and exercised within the territorial jurisdiction of the city, except travel agencies, tourist
guides, tourist transports, hotels, resorts, de luxe restaurants, and tourist inns of
international standards which shall remain under the licensing and regulatory power of
the Ministry of Tourism which shall exercise such authority without infringement on the
taxing and regulatory powers of the city government;
Under cover of the General Welfare Clause as provided in this section, Local Government
Units can perform just about any power that will benefit their constituencies. Thus, local
government units can exercise powers that are: (1) expressly granted; (2) necessarily implied
from the power that is expressly granted; (3) necessary, appropriate or incidental for its
efficient and effective governance; and (4) essential to the promotion of the general welfare of
their inhabitants. (Pimentel, The Local Government Code of 1991, p. 46)
Verily, the regulation of businesses in the locality is expressly provided in the Local
Government Code. The fixing of service rates is lawful under the General Welfare
Clause.
Resolution No. 210 granting appellee a permit to construct, install and operate a community
antenna television (CATV) system in Batangas City as quoted earlier in this decision,
authorized the grantee to impose charges which cannot be increased except upon approval of
the Sangguniang Bayan. It further provided that in case of violation by the grantee of the terms
and conditions/requirements specifically provided therein, the City shall have the right to
withdraw the franchise.
Appellee increased the service rates from EIGHTY EIGHT PESOS (P88.00) to ONE
HUNDRED EIGHTY PESOS (P180.00) (Records, p. 25) without the approval of
appellant. Such act breached Resolution No. 210 which gives appellant the right to
withdraw the permit granted to appellee.[11]
Petitioner filed a motion for reconsideration but was denied. [12]
Hence, the instant petition for review on certiorari anchored on the following assignments of
error:
I and services, radio communications systems, wire or wireless telephone or telegraph systems,
THE COURT OF APPEALS ERRED IN HOLDING THAT THE GENERAL
WELFARE CLAUSE OF THE LOCAL GOVERNMENT CODE AUTHORIZES
RESPONDENT SANGGUNIANG PANLUNGSOD TO EXERCISE THE
REGULATORY FUNCTION SOLELY LODGED WITH THE NATIONAL
TELECOMMUNICATIONS COMMISSION UNDER EXECUTIVE ORDER NO. 205,
INCLUDING THE AUTHORITY TO FIX AND/OR APPROVE THE SERVICE
RATES OF CATV OPERATORS; AND
II
THE COURT OF APPEALS ERRED IN REVERSING THE DECISION APPEALED
FROM AND DISMISSING PETITIONERS COMPLAINT.[13]
Petitioner contends that while Republic Act No. 7160, the Local Government Code of 1991,
extends to the LGUs the general power to perform any act that will benefit their constituents,
nonetheless, it does not authorize them to regulate the CATV operation. Pursuant to E.O. No.
205, only the NTC has the authority to regulate the CATV operation, including the fixing of
subscriber rates.
Respondents counter that the Appellate Court did not commit any reversible error in rendering
the assailed Decision. First, Resolution No. 210 was enacted pursuant to Section 177(c) and (d)
of Batas Pambansa Bilang 337, the Local Government Code of 1983, which authorizes LGUs
to regulate businesses. The term businesses necessarily includes the CATV industry.
And second, Resolution No. 210 is in the nature of a contract between petitioner and
respondents, it being a grant to the former of a franchise to operate a CATV system. To hold
that E.O. No. 205 amended its terms would violate the constitutional prohibition against
impairment of contracts.[14]
The petition is impressed with merit.
Earlier, we posed the question -- may a local government unit (LGU) regulate the subscriber
rates charged by CATV operators within its territorial jurisdiction? A review of pertinent laws
and jurisprudence yields a negative answer.
President Ferdinand E. Marcos was the first one to place the CATV industry under the regulatory
power of the national government.[15] On June 11, 1978, he issued Presidential Decree (P.D.)
No. 1512[16] establishing a monopoly of the industry by granting Sining Makulay, Inc., an
exclusive franchise to operate CATV system in any place within the Philippines. Accordingly, it
terminated all franchises, permits or certificates for the operation of CATV system
previously granted by local governments or by any instrumentality or agency of the
national government.[17] Likewise, it prescribed the subscriber rates to be charged by Sining
Makulay, Inc. to its customers.[18]
On July 21, 1979, President Marcos issued Letter of Instruction (LOI) No. 894 vesting upon
the Chairman of the Board of Communications direct supervision over the operations of Sining
Makulay, Inc. Three days after, he issued E.O. No. 546[19]integrating the Board of
Communications[20] and the Telecommunications Control Bureau[21] to form a single entity to
be known as the National Telecommunications Commission. Two of its assigned functions are:
a. Issue Certificate of Public Convenience for the operation of communications utilities
radio and television broadcasting system and other similar public utilities;
b. Establish, prescribe and regulate areas of operation of particular operators of public
service communications; and determine and prescribe charges or rates pertinent to the
operation of such public utility facilities and services except in cases where charges or rates
are established by international bodies or associations of which the Philippines is a
participating member or by bodies recognized by the Philippine Government as the proper
arbiter of such charges or rates;
Although Sining Makulay Inc.s exclusive franchise had a life term of 25 years, it was cut short
by the advent of the 1986 Revolution. Upon President Corazon C. Aquinos assumption of
power, she issued E.O. No. 205[22] opening the CATV industry to all citizens of the
Philippines. It mandated the NTC to grant Certificates of Authority to CATV operators
and to issue the necessary implementing rules and regulations.
On September 9, 1997, President Fidel V. Ramos issued E.O. No. 436[23] prescribing policy
guidelines to govern CATV operation in the Philippines. Cast in more definitive terms, it
restated the NTCs regulatory powers over CATV operations, thus:
SECTION 2. The regulation and supervision of the cable television industry in the
Philippines shall remain vested solely with the National Telecommunications Commission
(NTC).
SECTION 3. Only persons, associations, partnerships, corporations or cooperatives,
granted a Provisional Authority or Certificate of Authority by the Commission may
install, operate and maintain a cable television system or render cable television service within
a service area.
Clearly, it has been more than two decades now since our national government, through the
NTC, assumed regulatory power over the CATV industry. Changes in the political arena did not
alter the trend. Instead, subsequent presidential issuances further reinforced the NTCs power.
Significantly, President Marcos and President Aquino, in the exercise of their legislative power,
issued P.D. No. 1512, E.O. No. 546 and E.O. No. 205. Hence, they have the force and effect of
statutes or laws passed by Congress.[24]That the regulatory power stays with the NTC is also
clear from President Ramos E.O. No. 436 mandating that the regulation and supervision of the
CATV industry shall remain vested solely in the NTC. Blacks Law Dictionary defines sole as
without another or others.[25] The logical conclusion, therefore, is that in light of the above
laws and E.O. No. 436, the NTC exercises regulatory power over CATV operators to the
exclusion of other bodies.
But, lest we be misunderstood, nothing herein should be interpreted as to strip LGUs of their
general power to prescribe regulations under the general welfare clause of the Local
Government Code. It must be emphasized that when E.O. No. 436 decrees that the regulatory
power shall be vested solely in the NTC, it pertains to the regulatory power over those matters
which are peculiarly within the NTCs competence, such as, the: (1) determination of
rates, (2) issuance of certificates of authority, (3)establishment of areas of
operation, (4) examination and assessment of the legal, technical and financial qualifications of
applicant operators, (5) granting of permits for the use of frequencies, (6) regulation of
ownership and operation, (7) adjudication of issues arising from its functions, and (8) other
similar matters.[26] Within these areas, the NTC reigns supreme as it possesses the exclusive
power to regulate -- a power comprising varied acts, such as to fix, establish, or control; to adjust
by rule, method or established mode; to direct by rule or restriction; or to subject to governing
principles or laws.[27]
Coincidentally, respondents justify their exercise of regulatory power over petitioners CATV
operation under the general welfare clause of the Local Government Code of 1983. The Court
of Appeals sustained their stance.
There is no dispute that respondent Sangguniang Panlungsod, like other local legislative bodies,
has been empowered to enact ordinances and approve resolutions under the general welfare
clause of B.P. Blg. 337, the Local Government Code of 1983. That it continues to posses such
power is clear under the new law, R.A. No. 7160 (the Local Government Code of 1991). Section
16 thereof provides:
SECTION 16. General Welfare. Every local government unit shall exercise the powers
expressly granted, those necessarily implied therefrom, as well as powers necessary,
appropriate, or incidental for its efficient and effective governance, and those which are
essential to the promotion of the general welfare. Within their respective territorial
jurisdictions, local government units shall ensure and support, among others, the preservation
and enrichment of culture, promote health and safety, enhance the right of the people to a
balanced ecology, encourage and support the development of appropriate and self-reliant,
scientific and technological capabilities, improve public morals, enhance economic prosperity
and social justice, promote full employment among their residents, maintain peace and order,
and preserve the comfort and convenience of their inhabitants.
In addition, Section 458 of the same Code specifically mandates:
SECTION 458. Powers, Duties, Functions and Compensation. (a) The Sangguniang
Panlungsod, as the legislative body of the city, shall enact ordinances, approve
resolutions and appropriate funds for the general welfare of the city and its inhabitants
pursuant to Section 16 of this Code and in the proper exercise of the corporate powers of the
city as provided for under Section 22 of this Code, x x x:
The general welfare clause is the delegation in statutory form of the police power of the
State to LGUs.[28] Through this, LGUs may prescribe regulations to protect the lives, health,
and property of their constituents and maintain peace and order within their respective territorial
jurisdictions. Accordingly, we have upheld enactments providing, for instance, the regulation
of gambling,[29] the occupation of rig drivers,[30] the installation and operation of pinball
machines,[31] the maintenance and operation of cockpits,[32] the exhumation and transfer of
corpses from public burial grounds,[33] and the operation of hotels, motels, and lodging
houses[34]as valid exercises by local legislatures of the police power under the general welfare
clause.
Like any other enterprise, CATV operation maybe regulated by LGUs under the general welfare
clause. This is primarily because the CATV system commits the indiscretion of crossing public
properties. (It uses public properties in order to reach subscribers.) The physical realities of
constructing CATV system the use of public streets, rights of ways, the founding of
structures, and the parceling of large regions allow an LGU a certain degree of regulation
over CATV operators.[35] This is the same regulation that it exercises over all private
enterprises within its territory.
But, while we recognize the LGUs power under the general welfare clause, we cannot sustain
Resolution No. 210. We are convinced that respondents strayed from the well recognized limits
of its power. The flaws in Resolution No. 210 are: (1) it violates the mandate of existing laws
and (2) it violates the States deregulation policy over the CATV industry.
I.
Resolution No. 210 is an enactment of an LGU acting only as agent of the national legislature.
Necessarily, its act must reflect and conform to the will of its principal. To test its validity, we
must apply the particular requisites of a valid ordinance as laid down by the accepted principles
governing municipal corporations. [36]
Speaking for the Court in the leading case of United States vs. Abendan,[37] Justice Moreland
said: An ordinance enacted by virtue of the general welfare clause is valid, unless it contravenes
the fundamental law of the Philippine Islands, or an Act of the Philippine Legislature, or unless
it is against public policy, or is unreasonable, oppressive, partial, discriminating, or in
derogation of common right. In De la Cruz vs. Paraz,[38] we laid the general rule that ordinances
passed by virtue of the implied power found in the general welfare clause must be reasonable,
consonant with the general powers and purposes of the corporation, and not inconsistent with
the laws or policy of the State.
The apparent defect in Resolution No. 210 is that it contravenes E.O. No. 205 and E.O. No. 436
insofar as it permits respondent Sangguniang Panlungsod to usurp a power exclusively vested
in the NTC, i.e., the power to fix the subscriber rates charged by CATV operators. As earlier
discussed, the fixing of subscriber rates is definitely one of the matters within the NTCs
exclusive domain.
In this regard, it is appropriate to stress that where the state legislature has made provision for
the regulation of conduct, it has manifested its intention that the subject matter shall be fully
covered by the statute, and that a municipality, under its general powers, cannot regulate the
same conduct.[39] In Keller vs. State,[40] it was held that: Where there is no express power in
the charter of a municipality authorizing it to adopt ordinances regulating certain matters
which are specifically covered by a general statute, a municipal ordinance, insofar as it
attempts to regulate the subject which is completely covered by a general statute of the
legislature, may be rendered invalid. x x x Where the subject is of statewide concern, and
the legislature has appropriated the field and declared the rule, its declaration is binding
throughout the State. A reason advanced for this view is that such ordinances are in excess of
the powers granted to the municipal corporation.[41]
Since E.O. No. 205, a general law, mandates that the regulation of CATV operations shall be
exercised by the NTC, an LGU cannot enact an ordinance or approve a resolution in violation
of the said law.
It is a fundamental principle that municipal ordinances are inferior in status and subordinate to
the laws of the state. An ordinance in conflict with a state law of general character and statewide
application is universally held to be invalid.[42] The principle is frequently expressed in the
declaration that municipal authorities, under a general grant of power, cannot adopt ordinances
which infringe the spirit of a state law or repugnant to the general policy of the state.[43] In every
power to pass ordinances given to a municipality, there is an implied restriction that the
ordinances shall be consistent with the general law.[44] In the language of Justice Isagani Cruz
(ret.), this Court, in Magtajas vs. Pryce Properties Corp., Inc.,[45] ruled that:
The rationale of the requirement that the ordinances should not contravene a statute is obvious.
Municipal governments are only agents of the national government. Local councils exercise
only delegated legislative powers conferred on them by Congress as the national lawmaking
body. The delegate cannot be superior to the principal or exercise powers higher than those of
the latter. It is a heresy to suggest that the local government units can undo the acts of
Congress, from which they have derived their power in the first place, and negate by mere
ordinance the mandate of the statute.
Municipal corporations owe their origin to, and derive their powers and rights wholly from the
legislature. It breathes into them the breath of life, without which they cannot exist. As it
creates, so it may destroy. As it may destroy, it may abridge and control. Unless there is some
constitutional limitation on the right, the legislature might, by a single act, and if we can
suppose it capable of so great a folly and so great a wrong, sweep from existence all of the
municipal corporations in the State, and the corporation could not prevent it. We know of no
limitation on the right so far as to the corporation themselves are concerned. They are, so to
phrase it, the mere tenants at will of the legislature.
This basic relationship between the national legislature and the local government units has not
been enfeebled by the new provisions in the Constitution strengthening the policy of local
autonomy. Without meaning to detract from that policy, we here confirm that Congress retains
control of the local government units although in significantly reduced degree now than under
our previous Constitutions. The power to create still includes the power to destroy. The power
to grant still includes the power to withhold or recall. True, there are certain notable
innovations in the Constitution, like the direct conferment on the local government units of the
power to tax, which cannot now be withdrawn by mere statute. By and large, however, the
national legislature is still the principal of the local government units, which cannot defy
its will or modify or violate it.
Respondents have an ingenious retort against the above disquisition. Their theory is that the
regulatory power of the LGUs is granted by R.A. No. 7160 (the Local Government Code of
1991), a handiwork of the national lawmaking authority. They contend that R.A. No. 7160
repealed E.O. No. 205 (issued by President Aquino). Respondents argument espouses a bad
precedent. To say that LGUs exercise the same regulatory power over matters which are
peculiarly within the NTCs competence is to promote a scenario of LGUs and the NTC locked
in constant clash over the appropriate regulatory measure on the same subject matter. LGUs
must recognize that technical matters concerning CATV operation are within the exclusive
regulatory power of the NTC.
At any rate, we find no basis to conclude that R.A. No. 7160 repealed E.O. No. 205, either
expressly or impliedly. It is noteworthy that R.A. No. 7160 repealing clause, which
painstakingly mentions the specific laws or the parts thereof which are repealed, does not
include E.O. No. 205, thus:
SECTION 534. Repealing Clause. (a) Batas Pambansa Blg. 337, otherwise known as the
Local Government Code." Executive Order No. 112 (1987), and Executive Order No. 319
(1988) are hereby repealed.
(b) Presidential Decree Nos. 684, 1191, 1508 and such other decrees, orders, instructions,
memoranda and issuances related to or concerning the barangay are hereby repealed.
(c) The provisions of Sections 2, 3, and 4 of Republic Act No. 1939 regarding hospital fund;
Section 3, a (3) and b (2) of Republic Act. No. 5447 regarding the Special Education Fund;
Presidential Decree No. 144 as amended by Presidential Decree Nos. 559 and 1741;
Presidential Decree No. 231 as amended; Presidential Decree No. 436 as amended by
Presidential Decree No. 558; and Presidential Decree Nos. 381, 436, 464, 477, 526, 632, 752,
and 1136 are hereby repealed and rendered of no force and effect.
(d) Presidential Decree No. 1594 is hereby repealed insofar as it governs locally-funded
projects.
(e) The following provisions are hereby repealed or amended insofar as they are inconsistent
with the provisions of this Code: Sections 2, 16, and 29 of Presidential Decree No. 704;
Section 12 of Presidential Decree No. 87, as amended; Sections 52, 53, 66, 67, 68, 69, 70, 71,
72, 73, and 74 of Presidential Decree No. 463, as amended; and Section 16 of Presidential
Decree No. 972, as amended, and
(f) All general and special laws, acts, city charters, decrees, executive orders, proclamations
and administrative regulations, or part or parts thereof which are inconsistent with any of the
provisions of this Code are hereby repealed or modified accordingly.
Neither is there an indication that E.O. No. 205 was impliedly repealed by R.A. No. 7160. It is
a settled rule that implied repeals are not lightly presumed in the absence of a clear and
unmistakable showing of such intentions. In Mecano vs. Commission on Audit,[46] we ruled:
Repeal by implication proceeds on the premise that where a statute of later date clearly reveals
an intention on the part of the legislature to abrogate a prior act on the subject, that intention
must be given effect. Hence, before there can be a repeal, there must be a clear showing on the
part of the lawmaker that the intent in enacting the new law was to abrogate the old one. The
intention to repeal must be clear and manifest; otherwise, at least, as a general rule, the later
act is to be construed as a continuation of, and not a substitute for, the first act and will
continue so far as the two acts are the same from the time of the first enactment.
As previously stated, E.O. No. 436 (issued by President Ramos) vests upon the NTC the power
to regulate the CATV operation in this country. So also Memorandum Circular No. 8-9-95, the
Implementing Rules and Regulations of R.A. No. 7925 (the Public Telecommunications Policy
Act of the Philippines). This shows that the NTCs regulatory power over CATV operation is
continuously recognized.
It is a canon of legal hermeneutics that instead of pitting one statute against another in an
inevitably destructive confrontation, courts must exert every effort to reconcile them,
remembering that both laws deserve a becoming respect as the handiwork of coordinate
branches of the government.[47] On the assumption of a conflict between E.O. No. 205 and R.A.
No. 7160, the proper action is not to uphold one and annul the other but to give effect to both
by harmonizing them if possible. This recourse finds application here. Thus, we hold that the
NTC, under E.O. No. 205, has exclusive jurisdiction over matters affecting CATV operation,
including specifically the fixing of subscriber rates, but nothing herein precludes LGUs from
exercising its general power, under R.A. No. 7160, to prescribe regulations to promote the
health, morals, peace, education, good order or safety and general welfare of their constituents.
In effect, both laws become equally effective and mutually complementary.
The grant of regulatory power to the NTC is easily understandable. CATV system is not a mere
local concern. The complexities that characterize this new technology demand that it be
regulated by a specialized agency. This is particularly true in the area of rate-fixing. Rate fixing
involves a series of technical operations.[48] Consequently, on the hands of the regulatory body
lies the ample discretion in the choice of such rational processes as might be appropriate to the
solution of its highly complicated and technical problems. Considering that the CATV industry
is so technical a field, we believe that the NTC, a specialized agency, is in a better position than
the LGU, to regulate it. Notably, in United States vs. Southwestern Cable Co.,[49] the US
Supreme Court affirmed the Federal Communications Commissions (FCCs) jurisdiction over
CATV operation. The Court held that the FCCs authority over cable systems assures the
preservation of the local broadcast service and an equitable distribution of broadcast services
among the various regions of the country.
II.
Resolution No. 210 violated the States deregulation policy.
Deregulation is the reduction of government regulation of business to permit freer markets and
competition.[50] Oftentimes, the State, through its regulatory agencies, carries out a policy of
deregulation to attain certain objectives or to address certain problems. In the field of
telecommunications, it is recognized that many areas in the Philippines are still unserved or
underserved. Thus, to encourage private sectors to venture in this field and be partners of the
government in stimulating the growth and development of telecommunications, the State
promoted the policy of deregulation.
In the United States, the country where CATV originated, the Congress observed, when it
adopted the Telecommunications Act of 1996, that there was a need to provide a pro-
competitive, deregulatory national policy framework designed to accelerate rapidly private
sector deployment of advanced telecommunications and information technologies and services
to all Americans by opening all telecommunications markets to competition. The FCC has
adopted regulations to implement the requirements of the 1996 Act and the intent of the
Congress.
Our country follows the same policy. The fifth Whereas Clause of E.O. No. 436 states:
WHEREAS, professionalism and self-regulation among existing operators, through a
nationally recognized cable television operators association, have enhanced the growth of
the cable television industry and must therefore be maintained along with minimal
reasonable government regulations;
This policy reaffirms the NTCs mandate set forth in the Memorandum dated August 25, 1989
of Commissioner Jose Luis A. Alcuaz, to wit:
In line with the purpose and objective of MC 4-08-88, Cable Television System or
Community Antenna Television (CATV) is made part of the broadcast media to promote the
orderly growth of the Cable Television Industry it being in its developing stage. Being part of
the Broadcast Media, the service rates of CATV are likewise considered deregulated in
accordance with MC 06-2-81 dated 25 February 1981, the implementing guidelines for
the authorization and operation of Radio and Television Broadcasting stations/systems.
Further, the Commission will issue Provisional Authority to existing CATV operators to
authorize their operations for a period of ninety (90) days until such time that the Commission
can issue the regular Certificate of Authority.
When the State declared a policy of deregulation, the LGUs are bound to follow. To rule
otherwise is to render the States policy ineffective. Being mere creatures of the State, LGUs
cannot defeat national policies through enactments of contrary measures. Verily, in the case at
bar, petitioner may increase its subscriber rates without respondents approval.
At this juncture, it bears emphasizing that municipal corporations are bodies politic and
corporate, created not only as local units of local self-government, but as governmental agencies
of the state.[51] The legislature, by establishing a municipal corporation, does not divest the State
of any of its sovereignty; absolve itself from its right and duty to administer the public affairs
of the entire state; or divest itself of any power over the inhabitants of the district which it
possesses before the charter was granted.[52]
Respondents likewise argue that E.O. No. 205 violates the constitutional prohibition against
impairment of contracts, Resolution No. 210 of Batangas City Sangguniang Panlungsod being
a grant of franchise to petitioner.
We are not convinced.
There is no law specifically authorizing the LGUs to grant franchises to operate CATV system.
Whatever authority the LGUs had before, the same had been withdrawn when President Marcos
issued P.D. No. 1512 terminating all franchises, permits or certificates for the operation of
CATV system previously granted by local governments. Today, pursuant to Section 3 of
E.O. No. 436, only persons, associations, partnerships, corporations or cooperatives
granted a Provisional Authority or Certificate of Authority by the NTC may install,
operate and maintain a cable television system or render cable television service within a
service area. It is clear that in the absence of constitutional or legislative authorization,
municipalities have no power to grant franchises.[53] Consequently, the protection of the
constitutional provision as to impairment of the obligation of a contract does not extend to
privileges, franchises and grants given by a municipality in excess of its powers, or ultra
vires.[54]
One last word. The devolution of powers to the LGUs, pursuant to the Constitutional mandate
of ensuring their autonomy, has bred jurisdictional tension between said LGUs and the State.
LGUs must be reminded that they merely form part of the whole. Thus, when the Drafters of
the 1987 Constitution enunciated the policy of ensuring the autonomy of local
governments,[55] it was never their intention to create an imperium in imperio and install an
intra-sovereign political subdivision independent of a single sovereign state.
WHEREFORE, the petition is GRANTED. The assailed Decision of the Court of Appeals
dated February 12, 1999 as well as its Resolution dated May 26, 1999 in CA-G.R. CV No.
52461, are hereby REVERSED. The RTC Decision in Civil Case No. 4254 is AFFIRMED.
No pronouncement as to costs.
SO ORDERED.
G.R. No. 111097 July 20, 1994
MAYOR PABLO P. MAGTAJAS & THE CITY OF CAGAYAN DE
ORO, petitioners, vs. PRYCE PROPERTIES CORPORATION, INC. & PHILIPPINE
AMUSEMENT AND GAMING CORPORATION, respondents.
CRUZ, J.:
There was instant opposition when PAGCOR announced the opening of a casino in
Cagayan de Oro City. Civic organizations angrily denounced the project. The religious elements
echoed the objection and so did the women's groups and the youth. Demonstrations were led by
the mayor and the city legislators. The media trumpeted the protest, describing the casino as an
affront to the welfare of the city.
The trouble arose when in 1992, flush with its tremendous success in several cities,
PAGCOR decided to expand its operations to Cagayan de Oro City. To this end, it leased a
portion of a building belonging to Pryce Properties Corporation, Inc., one of the herein private
respondents, renovated and equipped the same, and prepared to inaugurate its casino there
during the Christmas season.
The reaction of the Sangguniang Panlungsod of Cagayan de Oro City was swift and
hostile. On December 7, 1992, it enacted Ordinance No. 3353 reading as follows:
ORDINANCE NO. 3353
AN ORDINANCE PROHIBITING THE ISSUANCE OF BUSINESS PERMIT AND
CANCELLING EXISTING BUSINESS PERMIT TO ANY ESTABLISHMENT FOR THE
USING AND ALLOWING TO BE USED ITS PREMISES OR PORTION THEREOF FOR
THE OPERATION OF CASINO.
BE IT ORDAINED by the Sangguniang Panlungsod of the City of Cagayan de Oro, in session
assembled that:
Sec. 1. That pursuant to the policy of the city banning the operation of casino within its
territorial jurisdiction, no business permit shall be issued to any person, partnership or
corporation for the operation of casino within the city limits.
Sec. 2. That it shall be a violation of existing business permit by any persons, partnership or
corporation to use its business establishment or portion thereof, or allow the use thereof by
others for casino operation and other gambling activities.
Sec. 3. PENALTIES. Any violation of such existing business permit as defined in the
preceding section shall suffer the following penalties, to wit:
a) Suspension of the business permit for sixty (60) days for the first offense and a fine of
P1,000.00/day
b) Suspension of the business permit for Six (6) months for the second offense, and a fine of
P3,000.00/day
c) Permanent revocation of the business permit and imprisonment of One (1) year, for the third
and subsequent offenses.
Sec. 4. This Ordinance shall take effect ten (10) days from publication thereof.
Nor was this all. On January 4, 1993, it adopted a sterner Ordinance No. 3375-93 reading as
follows:
ORDINANCE NO. 3375-93
AN ORDINANCE PROHIBITING THE OPERATION OF CASINO AND PROVIDING
PENALTY FOR VIOLATION THEREFOR.
WHEREAS, the City Council established a policy as early as 1990 against CASINO under its
Resolution No. 2295;
WHEREAS, on October 14, 1992, the City Council passed another Resolution No. 2673,
reiterating its policy against the establishment of CASINO;
WHEREAS, subsequently, thereafter, it likewise passed Ordinance No. 3353, prohibiting the
issuance of Business Permit and to cancel existing Business Permit to any establishment for the
using and allowing to be used its premises or portion thereof for the operation of CASINO;
WHEREAS, under Art. 3, section 458, No. (4), sub paragraph VI of the Local Government Code
of 1991 (Rep. Act 7160) and under Art. 99, No. (4), Paragraph VI of the implementing rules of
the Local Government Code, the City Council as the Legislative Body shall enact measure to
suppress any activity inimical to public morals and general welfare of the people and/or regulate
or prohibit such activity pertaining to amusement or entertainment in order to protect social and
moral welfare of the community;
NOW THEREFORE,
BE IT ORDAINED by the City Council in session duly assembled that:
Sec. 1. The operation of gambling CASINO in the City of Cagayan de Oro is hereby
prohibited.
Sec. 2. Any violation of this Ordinance shall be subject to the following penalties:
a) Administrative fine of P5,000.00 shall be imposed against the proprietor, partnership or
corporation undertaking the operation, conduct, maintenance of gambling CASINO in the City
and closure thereof;
b) Imprisonment of not less than six (6) months nor more than one (1) year or a fine in the
amount of P5,000.00 or both at the discretion of the court against the manager, supervisor,
and/or any person responsible in the establishment, conduct and maintenance of gambling
CASINO.
Sec. 3. This Ordinance shall take effect ten (10) days after its publication in a local newspaper
of general circulation.
Pryce assailed the ordinances before the Court of Appeals, where it was joined by
PAGCOR as intervenor and supplemental petitioner. Their challenge succeeded. On March 31,
1993, the Court of Appeals declared the ordinances invalid and issued the writ prayed for to
prohibit their enforcement. 1 Reconsideration of this decision was denied on July 13, 1993. 2
Cagayan de Oro City and its mayor are now before us in this petition for review under
Rule 45 of the Rules of Court. 3 They aver that the respondent Court of Appeals erred in holding
that:
1. Under existing laws, the Sangguniang Panlungsod of the City of Cagayan de Oro does not
have the power and authority to prohibit the establishment and operation of a PAGCOR
gambling casino within the City's territorial limits.
2. The phrase "gambling and other prohibited games of chance" found in Sec. 458, par. (a), sub-
par. (1) (v) of R.A. 7160 could only mean "illegal gambling."
3. The questioned Ordinances in effect annul P.D. 1869 and are therefore invalid on that point.
4. The questioned Ordinances are discriminatory to casino and partial to cockfighting and are
therefore invalid on that point.
5. The questioned Ordinances are not reasonable, not consonant with the general powers and
purposes of the instrumentality concerned and inconsistent with the laws or policy of the State.
6. It had no option but to follow the ruling in the case of Basco, et al. v. PAGCOR, G.R. No.
91649, May 14, 1991, 197 SCRA 53 in disposing of the issues presented in this present case.
 PAGCOR is a corporation created directly by P.D. 1869 to help centralize and regulate
all games of chance, including casinos on land and sea within the territorial jurisdiction of the
Philippines. In Basco v. Philippine Amusements and Gaming Corporation, 4 this Court
sustained the constitutionality of the decree and even cited the benefits of the entity to the
national economy as the third highest revenue-earner in the government, next only to the BIR
and the Bureau of Customs.
Cagayan de Oro City, like other local political subdivisions, is empowered to enact
ordinances for the purposes indicated in the Local Government Code. It is expressly vested with
the police power under what is known as the General Welfare Clause now embodied in Section
16 as follows:
Sec. 16. General Welfare. Every local government unit shall exercise the powers expressly
granted, those necessarily implied therefrom, as well as powers necessary, appropriate, or
incidental for its efficient and effective governance, and those which are essential to the
promotion of the general welfare. Within their respective territorial jurisdictions, local
government units shall ensure and support, among other things, the preservation and enrichment
of culture, promote health and safety, enhance the right of the people to a balanced ecology,
encourage and support the development of appropriate and self-reliant scientific and
technological capabilities, improve public morals, enhance economic prosperity and social
justice, promote full employment among their residents, maintain peace and order, and preserve
the comfort and convenience of their inhabitants.
In addition, Section 458 of the said Code specifically declares that:
Sec. 458. Powers, Duties, Functions and Compensation. (a) The Sangguniang Panlungsod,
as the legislative body of the city, shall enact ordinances, approve resolutions and appropriate
funds for the general welfare of the city and its inhabitants pursuant to Section 16 of this Code
and in the proper exercise of the corporate powers of the city as provided for under Section 22
of this Code, and shall:
(1) Approve ordinances and pass resolutions necessary for an efficient and effective city
government, and in this connection, shall:
xxx xxx xxx
(v) Enact ordinances intended to prevent, suppress and impose appropriate penalties for habitual
drunkenness in public places, vagrancy, mendicancy, prostitution, establishment and
maintenance of houses of ill repute, gamblingand other prohibited games of chance, fraudulent
devices and ways to obtain money or property, drug addiction, maintenance of drug dens, drug
pushing, juvenile delinquency, the printing, distribution or exhibition of obscene or
pornographic materials or publications, and such other activities inimical to the welfare and
morals of the inhabitants of the city;
This section also authorizes the local government units to regulate properties and
businesses within their territorial limits in the interest of the general welfare. 5
The petitioners argue that by virtue of these provisions, the Sangguniang Panlungsod
may prohibit the operation of casinos because they involve games of chance, which are
detrimental to the people. Gambling is not allowed by general law and even by the Constitution
itself. The legislative power conferred upon local government units may be exercised over all
kinds of gambling and not only over "illegal gambling" as the respondents erroneously argue.
Even if the operation of casinos may have been permitted under P.D. 1869, the government of
Cagayan de Oro City has the authority to prohibit them within its territory pursuant to the
authority entrusted to it by the Local Government Code.
It is submitted that this interpretation is consonant with the policy of local autonomy
as mandated in Article II, Section 25, and Article X of the Constitution, as well as various other
provisions therein seeking to strengthen the character of the nation. In giving the local
government units the power to prevent or suppress gambling and other social problems, the
Local Government Code has recognized the competence of such communities to determine and
adopt the measures best expected to promote the general welfare of their inhabitants in line with
the policies of the State.
The petitioners also stress that when the Code expressly authorized the local
government units to prevent and suppress gambling and other prohibited games of chance, like
craps, baccarat, blackjack and roulette, it meant allforms of gambling without distinction. Ubi
lex non distinguit, nec nos distinguere debemos. 6 Otherwise, it would have expressly excluded
from the scope of their power casinos and other forms of gambling authorized by special law,
as it could have easily done. The fact that it did not do so simply means that the local government
units are permitted to prohibit all kinds of gambling within their territories, including the
operation of casinos.
The adoption of the Local Government Code, it is pointed out, had the effect of
modifying the charter of the PAGCOR. The Code is not only a later enactment than P.D. 1869
and so is deemed to prevail in case of inconsistencies between them. More than this, the powers
of the PAGCOR under the decree are expressly discontinued by the Code insofar as they do not
conform to its philosophy and provisions, pursuant to Par. (f) of its repealing clause reading as
follows:
(f) All general and special laws, acts, city charters, decrees, executive orders, proclamations and
administrative regulations, or part or parts thereof which are inconsistent with any of the
provisions of this Code are hereby repealed or modified accordingly.
It is also maintained that assuming there is doubt regarding the effect of the Local Government
Code on P.D. 1869, the doubt must be resolved in favor of the petitioners, in accordance with
the direction in the Code calling for its liberal interpretation in favor of the local government
units. Section 5 of the Code specifically provides:
Sec. 5. Rules of Interpretation. In the interpretation of the provisions of this Code, the
following rules shall apply:
(a) Any provision on a power of a local government unit shall be liberally interpreted in its
favor, and in case of doubt, any question thereon shall be resolved in favor of devolution of
powers and of the lower local government unit. Any fair and reasonable doubt as to the existence
of the power shall be interpreted in favor of the local government unit concerned;
xxx xxx xxx
(c) The general welfare provisions in this Code shall be liberally interpreted to give more
powers to local government units in accelerating economic development and upgrading the
quality of life for the people in the community; . . . (Emphasis supplied.)
Finally, the petitioners also attack gambling as intrinsically harmful and cite various
provisions of the Constitution and several decisions of this Court expressive of the general and
official disapprobation of the vice. They invoke the State policies on the family and the proper
upbringing of the youth and, as might be expected, call attention to the old case of U.S. v.
Salaveria,7 which sustained a municipal ordinance prohibiting the playing of panguingue. The
petitioners decry the immorality of gambling. They also impugn the wisdom of P.D. 1869
(which they describe as "a martial law instrument") in creating PAGCOR and authorizing it to
operate casinos "on land and sea within the territorial jurisdiction of the Philippines."
This is the opportune time to stress an important point.
The morality of gambling is not a justiciable issue. Gambling is not illegal per se.
While it is generally considered inimical to the interests of the people, there is nothing in the
Constitution categorically proscribing or penalizing gambling or, for that matter, even
mentioning it at all. It is left to Congress to deal with the activity as it sees fit. In the exercise of
its own discretion, the legislature may prohibit gambling altogether or allow it without limitation
or it may prohibit some forms of gambling and allow others for whatever reasons it may consider
sufficient. Thus, it has prohibited jueteng and monte but permits lotteries, cockfighting and
horse-racing. In making such choices, Congress has consulted its own wisdom, which this Court
has no authority to review, much less reverse. Well has it been said that courts do not sit to
resolve the merits of conflicting theories. 8 That is the prerogative of the political departments.
It is settled that questions regarding the wisdom, morality, or practicibility of statutes are not
addressed to the judiciary but may be resolved only by the legislative and executive departments,
to which the function belongs in our scheme of government. That function is exclusive.
Whichever way these branches decide, they are answerable only to their own conscience and
the constituents who will ultimately judge their acts, and not to the courts of justice.
The only question we can and shall resolve in this petition is the validity of Ordinance
No. 3355 and Ordinance No. 3375-93 as enacted by the Sangguniang Panlungsod of Cagayan
de Oro City. And we shall do so only by the criteria laid down by law and not by our own
convictions on the propriety of gambling.
The tests of a valid ordinance are well established. A long line of decisions 9 has held
that to be valid, an ordinance must conform to the following substantive requirements:
1) It must not contravene the constitution or any statute.
2) It must not be unfair or oppressive.
3) It must not be partial or discriminatory.
4) It must not prohibit but may regulate trade.
5) It must be general and consistent with public policy.
6) It must not be unreasonable.
We begin by observing that under Sec. 458 of the Local Government Code, local
government units are authorized to prevent or suppress, among others, "gambling
and other prohibited games of chance." Obviously, this provision excludes games of chance
which are not prohibited but are in fact permitted by law. The petitioners are less than accurate
in claiming that the Code could have excluded such games of chance but did not. In fact it does.
The language of the section is clear and unmistakable. Under the rule of noscitur a sociis, a
word or phrase should be interpreted in relation to, or given the same meaning of, words with
which it is associated. Accordingly, we conclude that since the word "gambling" is associated
with "and other prohibited games of chance," the word should be read as referring to only illegal
gambling which, like the other prohibited games of chance, must be prevented or suppressed.
We could stop here as this interpretation should settle the problem quite conclusively.
But we will not. The vigorous efforts of the petitioners on behalf of the inhabitants of Cagayan
de Oro City, and the earnestness of their advocacy, deserve more than short shrift from this
Court.
The apparent flaw in the ordinances in question is that they contravene P.D. 1869 and
the public policy embodied therein insofar as they prevent PAGCOR from exercising the power
conferred on it to operate a casino in Cagayan de Oro City. The petitioners have an ingenious
answer to this misgiving. They deny that it is the ordinances that have changed P.D. 1869 for
an ordinance admittedly cannot prevail against a statute. Their theory is that the change has been
made by the Local Government Code itself, which was also enacted by the national lawmaking
authority. In their view, the decree has been, not really repealed by the Code, but merely
"modified pro tanto" in the sense that PAGCOR cannot now operate a casino over the objection
of the local government unit concerned. This modification of P.D. 1869 by the Local
Government Code is permissible because one law can change or repeal another law.
It seems to us that the petitioners are playing with words. While insisting that the
decree has only been "modifiedpro tanto," they are actually arguing that it is already dead,
repealed and useless for all intents and purposes because the Code has shorn PAGCOR of all
power to centralize and regulate casinos. Strictly speaking, its operations may now be not only
prohibited by the local government unit; in fact, the prohibition is not only discretionary
but mandated by Section 458 of the Code if the word "shall" as used therein is to be given its
accepted meaning. Local government units have now no choice but to prevent and suppress
gambling, which in the petitioners' view includes both legal and illegal gambling. Under this
construction, PAGCOR will have no more games of chance to regulate or centralize as they
must all be prohibited by the local government units pursuant to the mandatory duty imposed
upon them by the Code. In this situation, PAGCOR cannot continue to exist except only as a
toothless tiger or a white elephant and will no longer be able to exercise its powers as a prime
source of government revenue through the operation of casinos.
It is noteworthy that the petitioners have cited only Par. (f) of the repealing clause,
conveniently discarding the rest of the provision which painstakingly mentions the specific laws
or the parts thereof which are repealed (or modified) by the Code. Significantly, P.D. 1869 is
not one of them. A reading of the entire repealing clause, which is reproduced below, will
disclose the omission:
Sec. 534. Repealing Clause. (a) Batas Pambansa Blg. 337, otherwise known as the "Local
Government Code," Executive Order No. 112 (1987), and Executive Order No. 319 (1988) are
hereby repealed.
(b) Presidential Decree Nos. 684, 1191, 1508 and such other decrees, orders, instructions,
memoranda and issuances related to or concerning the barangay are hereby repealed.
(c) The provisions of Sections 2, 3, and 4 of Republic Act No. 1939 regarding hospital fund;
Section 3, a (3) and b (2) of Republic Act. No. 5447 regarding the Special Education Fund;
Presidential Decree No. 144 as amended by Presidential Decree Nos. 559 and 1741; Presidential
Decree No. 231 as amended; Presidential Decree No. 436 as amended by Presidential Decree
No. 558; and Presidential Decree Nos. 381, 436, 464, 477, 526, 632, 752, and 1136 are hereby
repealed and rendered of no force and effect.
(d) Presidential Decree No. 1594 is hereby repealed insofar as it governs locally-funded projects.
(e) The following provisions are hereby repealed or amended insofar as they are inconsistent
with the provisions of this Code: Sections 2, 16, and 29 of Presidential Decree No. 704; Sections
12 of Presidential Decree No. 87, as amended; Sections 52, 53, 66, 67, 68, 69, 70, 71, 72, 73,
and 74 of Presidential Decree No. 463, as amended; and Section 16 of Presidential Decree No.
972, as amended, and
(f) All general and special laws, acts, city charters, decrees, executive orders, proclamations and
administrative regulations, or part or parts thereof which are inconsistent with any of the
provisions of this Code are hereby repealed or modified accordingly.
Furthermore, it is a familiar rule that implied repeals are not lightly presumed in the
absence of a clear and unmistakable showing of such intention. In Lichauco & Co. v.
Apostol, 10 this Court explained:
The cases relating to the subject of repeal by implication all proceed on the assumption
that if the act of later date clearly reveals an intention on the part of the lawmaking power to
abrogate the prior law, this intention must be given effect; but there must always be a sufficient
revelation of this intention, and it has become an unbending rule of statutory construction that
the intention to repeal a former law will not be imputed to the Legislature when it appears that
the two statutes, or provisions, with reference to which the question arises bear to each other the
relation of general to special.
There is no sufficient indication of an implied repeal of P.D. 1869. On the contrary,
as the private respondent points out, PAGCOR is mentioned as the source of funding in two
later enactments of Congress, to wit, R.A. 7309, creating a Board of Claims under the
Department of Justice for the benefit of victims of unjust punishment or detention or of violent
crimes, and R.A. 7648, providing for measures for the solution of the power crisis. PAGCOR
revenues are tapped by these two statutes. This would show that the PAGCOR charter has not
been repealed by the Local Government Code but has in fact been improved as it were to make
the entity more responsive to the fiscal problems of the government.
It is a canon of legal hermeneutics that instead of pitting one statute against another
in an inevitably destructive confrontation, courts must exert every effort to reconcile them,
remembering that both laws deserve a becoming respect as the handiwork of a coordinate branch
of the government. On the assumption of a conflict between P.D. 1869 and the Code, the proper
action is not to uphold one and annul the other but to give effect to both by harmonizing them
if possible. This is possible in the case before us. The proper resolution of the problem at hand
is to hold that under the Local Government Code, local government units may (and indeed must)
prevent and suppress all kinds of gambling within their territories except only those allowed by
statutes like P.D. 1869. The exception reserved in such laws must be read into the Code, to make
both the Code and such laws equally effective and mutually complementary.
This approach would also affirm that there are indeed two kinds of gambling, to wit,
the illegal and those authorized by law. Legalized gambling is not a modern concept; it is
probably as old as illegal gambling, if not indeed more so. The petitioners' suggestion that the
Code authorizes them to prohibit all kinds of gambling would erase the distinction between
these two forms of gambling without a clear indication that this is the will of the legislature.
Plausibly, following this theory, the City of Manila could, by mere ordinance, prohibit the
Philippine Charity Sweepstakes Office from conducting a lottery as authorized by R.A. 1169
and B.P. 42 or stop the races at the San Lazaro Hippodrome as authorized by R.A. 309 and R.A.
983.
In light of all the above considerations, we see no way of arriving at the conclusion
urged on us by the petitioners that the ordinances in question are valid. On the contrary, we find
that the ordinances violate P.D. 1869, which has the character and force of a statute, as well as
the public policy expressed in the decree allowing the playing of certain games of chance despite
the prohibition of gambling in general.
The rationale of the requirement that the ordinances should not contravene a statute is
obvious. Municipal governments are only agents of the national government. Local councils
exercise only delegated legislative powers conferred on them by Congress as the national
lawmaking body. The delegate cannot be superior to the principal or exercise powers higher
than those of the latter. It is a heresy to suggest that the local government units can undo the acts
of Congress, from which they have derived their power in the first place, and negate by mere
ordinance the mandate of the statute.
Municipal corporations owe their origin to, and derive their powers and rights wholly
from the legislature. It breathes into them the breath of life, without which they cannot exist. As
it creates, so it may destroy. As it may destroy, it may abridge and control. Unless there is some
constitutional limitation on the right, the legislature might, by a single act, and if we can suppose
it capable of so great a folly and so great a wrong, sweep from existence all of the municipal
corporations in the State, and the corporation could not prevent it. We know of no limitation on
the right so far as to the corporation themselves are concerned. They are, so to phrase it, the
mere tenants at will of the legislature. 11
This basic relationship between the national legislature and the local government units
has not been enfeebled by the new provisions in the Constitution strengthening the policy of
local autonomy. Without meaning to detract from that policy, we here confirm that Congress
retains control of the local government units although in significantly reduced degree now than
under our previous Constitutions. The power to create still includes the power to destroy. The
power to grant still includes the power to withhold or recall. True, there are certain notable
innovations in the Constitution, like the direct conferment on the local government units of the
power to tax, 12 which cannot now be withdrawn by mere statute. By and large, however, the
national legislature is still the principal of the local government units, which cannot defy its will
or modify or violate it.
The Court understands and admires the concern of the petitioners for the welfare of
their constituents and their apprehensions that the welfare of Cagayan de Oro City will be
endangered by the opening of the casino. We share the view that "the hope of large or easy gain,
obtained without special effort, turns the head of the workman" 13 and that "habitual gambling
is a cause of laziness and ruin." 14 In People v. Gorostiza, 15 we declared: "The social scourge
of gambling must be stamped out. The laws against gambling must be enforced to the limit."
George Washington called gambling "the child of avarice, the brother of iniquity and the father
of mischief." Nevertheless, we must recognize the power of the legislature to decide, in its own
wisdom, to legalize certain forms of gambling, as was done in P.D. 1869 and impliedly affirmed
in the Local Government Code. That decision can be revoked by this Court only if it contravenes
the Constitution as the touchstone of all official acts. We do not find such contravention here.
We hold that the power of PAGCOR to centralize and regulate all games of chance,
including casinos on land and sea within the territorial jurisdiction of the Philippines, remains
unimpaired. P.D. 1869 has not been modified by the Local Government Code, which empowers
the local government units to prevent or suppress only those forms of gambling prohibited by
law.
Casino gambling is authorized by P.D. 1869. This decree has the status of a statute
that cannot be amended or nullified by a mere ordinance. Hence, it was not competent for the
Sangguniang Panlungsod of Cagayan de Oro City to enact Ordinance No. 3353 prohibiting the
use of buildings for the operation of a casino and Ordinance No. 3375-93 prohibiting the
operation of casinos. For all their praiseworthy motives, these ordinances are contrary to P.D.
1869 and the public policy announced therein and are therefore ultra vires and void.
WHEREFORE, the petition is DENIED and the challenged decision of the respondent
Court of Appeals is AFFIRMED, with costs against the petitioners. It is so ordered.
Separate Opinions
PADILLA, J., concurring:
I concur with the majority holding that the city ordinances in question cannot modify
much less repeal PAGCOR's general authority to establish and maintain gambling casinos
anywhere in the Philippines under Presidential Decree No. 1869.
In Basco v. Philippine Amusement and Gaming Corporation (PAGCOR), 197 SCRA
52, I stated in a separate opinion that:
. . . I agree with the decision insofar as it holds that the prohibition, control, and regulation of
the entire activity known as gambling properly pertain to "state policy". It is, therefore, the
political departments of government, namely, the legislative and the executive that should
decide on what government should do in the entire area of gambling, and assume full
responsibility to the people for such policy." (Emphasis supplied)
However, despite the legality of the opening and operation of a casino in Cagayan de
Oro City by respondent PAGCOR, I wish to reiterate my view that gambling in any form runs
counter to the government's own efforts to re-establish and resurrect the Filipino moral character
which is generally perceived to be in a state of continuing erosion.
It is in the light of this alarming perspective that I call upon government to carefully
weigh the advantages and disadvantages of setting up more gambling facilities in the country.
That the PAGCOR contributes greatly to the coffers of the government is not enough reason for
setting up more gambling casinos because, undoubtedly, this will not help improve, but will
cause a further deterioration in the Filipino moral character.
It is worth remembering in this regard that, 1) what is legal is not always moral and
2) the ends do not always justify the means.
As in Basco, I can easily visualize prostitution at par with gambling. And yet,
legalization of the former will not render it any less reprehensible even if substantial revenue
for the government can be realized from it. The same is true of gambling.
In the present case, it is my considered view that the national government (through
PAGCOR) should re-examine and re-evaluate its decision of imposing the gambling casino on
the residents of Cagayan de Oro City; for it is abundantly clear that public opinion in the city is
very much against it, and again the question must be seriously deliberated: will the prospects of
revenue to be realized from the casino outweigh the further destruction of the Filipino sense of
values?

DAVIDE, JR., J., concurring:
While I concur in part with the majority, I wish, however, to express my views on
certain aspects of this case.
I.
It must at once be noted that private respondent Pryce Properties Corporation (PRYCE) directly
filed with the Court of Appeals its so-called petition for prohibition, thereby invoking the said
court's original jurisdiction to issue writs of prohibition under Section 9(1) of B.P. Blg. 129. As
I see it, however, the principal cause of action therein is one for declaratory relief: to declare
null and unconstitutional for, inter alia, having been enacted without or in excess of
jurisdiction, for impairing the obligation of contracts, and for being inconsistent with public
policy the challenged ordinances enacted by the Sangguniang Panglungsod of the City of
Cagayan de Oro. The intervention therein of public respondent Philippine Amusement and
Gaming Corporation (PAGCOR) further underscores the "declaratory relief" nature of the
action. PAGCOR assails the ordinances for being contrary to the non-impairment and equal
protection clauses of the Constitution, violative of the Local Government Code, and against the
State's national policy declared in P.D. No. 1869. Accordingly, the Court of Appeals does not
have jurisdiction over the nature of the action. Even assuming arguendo that the case is one
for prohibition, then, under this Court's established policy relative to the hierarchy of courts, the
petition should have been filed with the Regional Trial Court of Cagayan de Oro City. I find no
special or compelling reason why it was not filed with the said court. I do not wish to entertain
the thought that PRYCE doubted a favorable verdict therefrom, in which case the filing of the
petition with the Court of Appeals may have been impelled by tactical considerations. A
dismissal of the petition by the Court of Appeals would have been in order pursuant to our
decisions in People vs. Cuaresma (172 SCRA 415, [1989]) and Defensor-Santiago vs.
Vasquez (217 SCRA 633 [1993]). In Cuaresma, this Court stated:
A last word. This court's original jurisdiction to issue writs of certiorari (as well as
prohibition, mandamus, quo warranto, habeas corpus and injunction) is not exclusive. It is
shared by this Court with Regional Trial Courts (formerly Courts of First Instance), which may
issue the writ, enforceable in any part of their respective regions. It is also shared by this court,
and by the Regional Trial Court, with the Court of Appeals (formerly, Intermediate Appellate
Court), although prior to the effectivity of Batas Pambansa Bilang 129 on August 14, 1981, the
latter's competence to issue the extraordinary writs was restricted by those "in aid of its appellate
jurisdiction." This concurrence of jurisdiction is not, however, to be taken as according to parties
seeking any of the writs an absolute, unrestrained freedom of choice of the court to which
application therefor will be directed. There is after all a hierarchy of courts. That hierarchy is
determinative of the revenue of appeals, and should also serve as a general determinant of the
appropriate forum for petitions for the extraordinary writs. A becoming regard for that judicial
hierarchy most certainly indicates that petitions for the issuance of extraordinary writs against
first level ("inferior") courts should be filed with the Regional Trial Court, and those against the
latter, with the Court of Appeals. A direct invocation of the Supreme Court's original jurisdiction
to issue these writs should be allowed only when there are special and important reasons
therefor, clearly and specifically set out in the petition. This is established policy. It is a policy
that is necessary to prevent inordinate demands upon the Court's time and attention which are
better devoted to those matters within its exclusive jurisdiction, and to prevent further over-
crowding of the Court's docket. Indeed, the removal of the restriction of the jurisdiction of the
Court of Appeals in this regard, supra resulting from the deletion of the qualifying phrase,
"in aid of its appellate jurisdiction" was evidently intended precisely to relieve this Court pro
tanto of the burden of dealing with applications for extraordinary writs which, but for the
expansion of the Appellate Court's corresponding jurisdiction, would have had to be filed with
it. (citations omitted)
And in Vasquez, this Court said:
One final observation. We discern in the proceedings in this case a propensity on the part of
petitioner, and, for that matter, the same may be said of a number of litigants who initiate
recourses before us, to disregard the hierarchy of courts in our judicial system by seeking relief
directly from this Court despite the fact that the same is available in the lower courts in the
exercise of their original or concurrent jurisdiction, or is even mandated by law to be sought
therein. This practice must be stopped, not only because of the imposition upon the previous
time of this Court but also because of the inevitable and resultant delay, intended or otherwise,
in the adjudication of the case which often has to be remanded or referred to the lower court as
the proper forum under the rules of procedure, or as better equipped to resolve the issues since
this Court is not a trier of facts. We, therefore, reiterate the judicial policy that this Court will
not entertain direct resort to it unless the redress desired cannot be obtained in the appropriate
courts or where exceptional and compelling circumstances justify availment of a remedy within
and calling for the exercise of our primary jurisdiction.
II.
The challenged ordinances are (a) Ordinance No. 3353 entitled, "An Ordinance Prohibiting the
Issuance of Business Permit and Canceling Existing Business Permit To Any Establishment for
the Using and Allowing to be Used Its Premises or Portion Thereof for the Operation of Casino,"
and (b) Ordinance No. 3375-93 entitled, "An Ordinance Prohibiting the Operation of Casino
and Providing Penalty for Violation Therefor." They were enacted to implement Resolution No.
2295 entitled, "Resolution Declaring As a Matter of Policy to Prohibit and/or Not to Allow the
Establishment of the Gambling Casino in the City of Cagayan de Oro," which was promulgated
on 19 November 1990 nearly two years before PRYCE and PAGCOR entered into a contract
of lease under which the latter leased a portion of the former's Pryce Plaza Hotel for the
operation of a gambling casino which resolution was vigorously reiterated in Resolution No.
2673 of 19 October 1992.
The challenged ordinances were enacted pursuant to the Sangguniang Panglungsod's express
powers conferred by Section 458, paragraph (a), subparagraphs (1)-(v), (3)-(ii), and (4)-(i), (iv),
and (vii), Local Government Code, and pursuant to its implied power under Section 16 thereof
(the general welfare clause) which reads:
Sec. 16. General Welfare. Every local government unit shall exercise the powers expressly
granted, those necessarily implied therefrom, as well as powers necessary, appropriate, or
incidental for its efficient and effective governance, and those which are essential to the
promotion of the general welfare. Within their respective territorial jurisdictions, local
government units shall ensure and support, among other things, the preservation and enrichment
of culture, promote health and safety, enhance the right of the people to a balanced ecology,
encourage and support the development of appropriate and self-reliant scientific and
technological capabilities, improve public morals, enhance economic prosperity and social
justice, promote full employment among their residents, maintain peace and order, and preserve
the comfort and convenience of their inhabitants.
The issue that necessarily arises is whether in granting local governments (such as the City of
Cagayan de Oro) the above powers and functions, the Local Government Code has, pro tanto,
repealed P.D. No. 1869 insofar as PAGCOR's general authority to establish and maintain
gambling casinos anywhere in the Philippines is concerned.
I join the majority in holding that the ordinances cannot repeal P.D. No. 1869.
III.
The nullification by the Court of Appeals of the challenged ordinances
as unconstitutional primarily because it is in contravention to P.D. No. 1869 is unwarranted. A
contravention of a law is not necessarily a contravention of the constitution. In any case, the
ordinances can still stand even if they be conceded as offending P.D. No. 1869. They can be
reconciled, which is not impossible to do. So reconciled, the ordinances should be construed as
not applying to PAGCOR.

IV.
From the pleadings, it is obvious that the government and the people of Cagayan de Oro City
are, for obvious reasons, strongly against the opening of the gambling casino in their city.
Gambling, even if legalized, would be inimical to the general welfare of the inhabitants of the
City, or of any place for that matter. The PAGCOR, as a government-owned corporation, must
consider the valid concerns of the people of the City of Cagayan de Oro and should not impose
its will upon them in an arbitrary, if not despotic, manner.
G.R. No. 122846 January 20, 2009
WHITE LIGHT CORPORATION, TITANIUM CORPORATION and STA. MESA
TOURIST & DEVELOPMENT CORPORATION, Petitioners, vs. CITY OF MANILA,
represented by DE CASTRO, MAYOR ALFREDO S. LIM, Respondent.
Tinga, J.:
With another city ordinance of Manila also principally involving the tourist district as subject,
the Court is confronted anew with the incessant clash between government power and individual
liberty in tandem with the archetypal tension between law and morality.
In City of Manila v. Laguio, Jr.,1 the Court affirmed the nullification of a city ordinance barring
the operation of motels and inns, among other establishments, within the Ermita-Malate area.
The petition at bar assails a similarly-motivated city ordinance that prohibits those same
establishments from offering short-time admission, as well as pro-rated or "wash up" rates for
such abbreviated stays. Our earlier decision tested the city ordinance against our sacred
constitutional rights to liberty, due process and equal protection of law. The same parameters
apply to the present petition.
This Petition2 under Rule 45 of the Revised Rules on Civil Procedure, which seeks the reversal
of the Decision3 in C.A.-G.R. S.P. No. 33316 of the Court of Appeals, challenges the validity
of Manila City Ordinance No. 7774 entitled, "An Ordinance Prohibiting Short-Time Admission,
Short-Time Admission Rates, and Wash-Up Rate Schemes in Hotels, Motels, Inns, Lodging
Houses, Pension Houses, and Similar Establishments in the City of Manila" (the Ordinance).
I.
The facts are as follows:
On December 3, 1992, City Mayor Alfredo S. Lim (Mayor Lim) signed into law the
Ordinance.4 The Ordinance is reproduced in full, hereunder:
SECTION 1. Declaration of Policy. It is hereby the declared policy of the City Government to
protect the best interest, health and welfare, and the morality of its constituents in general and
the youth in particular.
SEC. 2. Title. This ordinance shall be known as "An Ordinance" prohibiting short time
admission in hotels, motels, lodging houses, pension houses and similar establishments in the
City of Manila.
SEC. 3. Pursuant to the above policy, short-time admission and rate [sic], wash-up rate or other
similarly concocted terms, are hereby prohibited in hotels, motels, inns, lodging houses, pension
houses and similar establishments in the City of Manila.
SEC. 4. Definition of Term[s]. Short-time admission shall mean admittance and charging of
room rate for less than twelve (12) hours at any given time or the renting out of rooms more
than twice a day or any other term that may be concocted by owners or managers of said
establishments but would mean the same or would bear the same meaning.
SEC. 5. Penalty Clause. Any person or corporation who shall violate any provision of this
ordinance shall upon conviction thereof be punished by a fine of Five Thousand (5,000.00)
Pesos or imprisonment for a period of not exceeding one (1) year or both such fine and
imprisonment at the discretion of the court; Provided, That in case of [a] juridical person, the
president, the manager, or the persons in charge of the operation thereof shall be liable:
Provided, further, That in case of subsequent conviction for the same offense, the business
license of the guilty party shall automatically be cancelled.
SEC. 6. Repealing Clause. Any or all provisions of City ordinances not consistent with or
contrary to this measure or any portion hereof are hereby deemed repealed.
SEC. 7. Effectivity. This ordinance shall take effect immediately upon approval.
Enacted by the city Council of Manila at its regular session today, November 10, 1992.
Approved by His Honor, the Mayor on December 3, 1992.
On December 15, 1992, the Malate Tourist and Development Corporation (MTDC) filed a
complaint for declaratory relief with prayer for a writ of preliminary injunction and/or temporary
restraining order ( TRO)5 with the Regional Trial Court (RTC) of Manila, Branch 9 impleading
as defendant, herein respondent City of Manila (the City) represented by Mayor Lim. 6 MTDC
prayed that the Ordinance, insofar as it includes motels and inns as among its prohibited
establishments, be declared invalid and unconstitutional. MTDC claimed that as owner and
operator of the Victoria Court in Malate, Manila it was authorized by Presidential Decree (P.D.)
No. 259 to admit customers on a short time basis as well as to charge customers wash up rates
for stays of only three hours.
On December 21, 1992, petitioners White Light Corporation (WLC), Titanium Corporation
(TC) and Sta. Mesa Tourist and Development Corporation (STDC) filed a motion to intervene
and to admit attached complaint-in-intervention7 on the ground that the Ordinance directly
affects their business interests as operators of drive-in-hotels and motels in Manila.8 The three
companies are components of the Anito Group of Companies which owns and operates several
hotels and motels in Metro Manila.9
On December 23, 1992, the RTC granted the motion to intervene. 10 The RTC also notified the
Solicitor General of the proceedings pursuant to then Rule 64, Section 4 of the Rules of Court.
On the same date, MTDC moved to withdraw as plaintiff.11
On December 28, 1992, the RTC granted MTDC's motion to withdraw. 12 The RTC issued a
TRO on January 14, 1993, directing the City to cease and desist from enforcing the
Ordinance.13 The City filed an Answer dated January 22, 1993 alleging that the Ordinance is a
legitimate exercise of police power.14
On February 8, 1993, the RTC issued a writ of preliminary injunction ordering the city to desist
from the enforcement of the Ordinance.15 A month later, on March 8, 1993, the Solicitor General
filed his Comment arguing that the Ordinance is constitutional.
During the pre-trial conference, the WLC, TC and STDC agreed to submit the case for decision
without trial as the case involved a purely legal question.16 On October 20, 1993, the RTC
rendered a decision declaring the Ordinance null and void. The dispositive portion of the
decision reads:
WHEREFORE, in view of all the foregoing, [O]rdinance No. 7774 of the City of Manila is
hereby declared null and void.
Accordingly, the preliminary injunction heretofor issued is hereby made permanent.
SO ORDERED.17
The RTC noted that the ordinance "strikes at the personal liberty of the individual guaranteed
and jealously guarded by the Constitution."18 Reference was made to the provisions of the
Constitution encouraging private enterprises and the incentive to needed investment, as well as
the right to operate economic enterprises. Finally, from the observation that the illicit
relationships the Ordinance sought to dissuade could nonetheless be consummated by simply
paying for a 12-hour stay, the RTC likened the law to the ordinance annulled in Ynot v.
Intermediate Appellate Court,19 where the legitimate purpose of preventing indiscriminate
slaughter of carabaos was sought to be effected through an inter-province ban on the transport
of carabaos and carabeef.
The City later filed a petition for review on certiorari with the Supreme Court.20 The petition
was docketed as G.R. No. 112471. However in a resolution dated January 26, 1994, the Court
treated the petition as a petition for certiorari and referred the petition to the Court of Appeals.21
Before the Court of Appeals, the City asserted that the Ordinance is a valid exercise of police
power pursuant to Section 458 (4)(iv) of the Local Government Code which confers on cities,
among other local government units, the power:
[To] regulate the establishment, operation and maintenance of cafes, restaurants, beerhouses,
hotels, motels, inns, pension houses, lodging houses and other similar establishments, including
tourist guides and transports.22
The Ordinance, it is argued, is also a valid exercise of the power of the City under Article III,
Section 18(kk) of the Revised Manila Charter, thus:
"to enact all ordinances it may deem necessary and proper for the sanitation and safety, the
furtherance of the prosperity and the promotion of the morality, peace, good order, comfort,
convenience and general welfare of the city and its inhabitants, and such others as be necessary
to carry into effect and discharge the powers and duties conferred by this Chapter; and to fix
penalties for the violation of ordinances which shall not exceed two hundred pesos fine or six
months imprisonment, or both such fine and imprisonment for a single offense. 23
Petitioners argued that the Ordinance is unconstitutional and void since it violates the right to
privacy and the freedom of movement; it is an invalid exercise of police power; and it is an
unreasonable and oppressive interference in their business.
The Court of Appeals reversed the decision of the RTC and affirmed the constitutionality of the
Ordinance.24 First, it held that the Ordinance did not violate the right to privacy or the freedom
of movement, as it only penalizes the owners or operators of establishments that admit
individuals for short time stays. Second, the virtually limitless reach of police power is only
constrained by having a lawful object obtained through a lawful method. The lawful objective
of the Ordinance is satisfied since it aims to curb immoral activities. There is a lawful method
since the establishments are still allowed to operate. Third, the adverse effect on the
establishments is justified by the well-being of its constituents in general. Finally, as held
in Ermita-Malate Motel Operators Association v. City Mayor of Manila, liberty is regulated by
law.
TC, WLC and STDC come to this Court via petition for review on certiorari. 25 In their petition
and Memorandum, petitioners in essence repeat the assertions they made before the Court of
Appeals. They contend that the assailed Ordinance is an invalid exercise of police power.
II.
We must address the threshold issue of petitioners standing. Petitioners allege that as owners
of establishments offering "wash-up" rates, their business is being unlawfully interfered with by
the Ordinance. However, petitioners also allege that the equal protection rights of their clients
are also being interfered with. Thus, the crux of the matter is whether or not these establishments
have the requisite standing to plead for protection of their patrons' equal protection rights.
Standing or locus standi is the ability of a party to demonstrate to the court sufficient connection
to and harm from the law or action challenged to support that party's participation in the case.
More importantly, the doctrine of standing is built on the principle of separation of
powers,26 sparing as it does unnecessary interference or invalidation by the judicial branch of
the actions rendered by its co-equal branches of government.
The requirement of standing is a core component of the judicial system derived directly from
the Constitution.27 The constitutional component of standing doctrine incorporates concepts
which concededly are not susceptible of precise definition.28 In this jurisdiction, the extancy of
"a direct and personal interest" presents the most obvious cause, as well as the standard test for
a petitioner's standing.29 In a similar vein, the United States Supreme Court reviewed and
elaborated on the meaning of the three constitutional standing requirements of injury, causation,
and redressability in Allen v. Wright.30
Nonetheless, the general rules on standing admit of several exceptions such as the overbreadth
doctrine, taxpayer suits, third party standing and, especially in the Philippines, the doctrine of
transcendental importance.31
For this particular set of facts, the concept of third party standing as an exception and the
overbreadth doctrine are appropriate. In Powers v. Ohio,32 the United States Supreme Court
wrote that: "We have recognized the right of litigants to bring actions on behalf of third parties,
provided three important criteria are satisfied: the litigant must have suffered an injury-in-fact,
thus giving him or her a "sufficiently concrete interest" in the outcome of the issue in dispute;
the litigant must have a close relation to the third party; and there must exist some hindrance to
the third party's ability to protect his or her own interests."33 Herein, it is clear that the business
interests of the petitioners are likewise injured by the Ordinance. They rely on the patronage of
their customers for their continued viability which appears to be threatened by the enforcement
of the Ordinance. The relative silence in constitutional litigation of such special interest groups
in our nation such as the American Civil Liberties Union in the United States may also be
construed as a hindrance for customers to bring suit.34
American jurisprudence is replete with examples where parties-in-interest were allowed
standing to advocate or invoke the fundamental due process or equal protection claims of other
persons or classes of persons injured by state action. In Griswold v. Connecticut,35 the United
States Supreme Court held that physicians had standing to challenge a reproductive health
statute that would penalize them as accessories as well as to plead the constitutional protections
available to their patients. The Court held that:
"The rights of husband and wife, pressed here, are likely to be diluted or adversely affected
unless those rights are considered in a suit involving those who have this kind of confidential
relation to them."36
An even more analogous example may be found in Craig v. Boren,37 wherein the United States
Supreme Court held that a licensed beverage vendor has standing to raise the equal protection
claim of a male customer challenging a statutory scheme prohibiting the sale of beer to males
under the age of 21 and to females under the age of 18. The United States High Court explained
that the vendors had standing "by acting as advocates of the rights of third parties who seek
access to their market or function."38
Assuming arguendo that petitioners do not have a relationship with their patrons for the former
to assert the rights of the latter, the overbreadth doctrine comes into play. In overbreadth
analysis, challengers to government action are in effect permitted to raise the rights of third
parties. Generally applied to statutes infringing on the freedom of speech, the overbreadth
doctrine applies when a statute needlessly restrains even constitutionally guaranteed rights.39 In
this case, the petitioners claim that the Ordinance makes a sweeping intrusion into the right to
liberty of their clients. We can see that based on the allegations in the petition, the Ordinance
suffers from overbreadth.
We thus recognize that the petitioners have a right to assert the constitutional rights of their
clients to patronize their establishments for a "wash-rate" time frame.

III.
To students of jurisprudence, the facts of this case will recall to mind not only the recent City of
Manila ruling, but our 1967 decision in Ermita-Malate Hotel and Motel Operations
Association, Inc., v. Hon. City Mayor of Manila.40Ermita-Malate concerned the City ordinance
requiring patrons to fill up a prescribed form stating personal information such as name, gender,
nationality, age, address and occupation before they could be admitted to a motel, hotel or
lodging house. This earlier ordinance was precisely enacted to minimize certain practices
deemed harmful to public morals. A purpose similar to the annulled ordinance in City of
Manila which sought a blanket ban on motels, inns and similar establishments in the Ermita-
Malate area. However, the constitutionality of the ordinance in Ermita-Malate was sustained by
the Court.
The common thread that runs through those decisions and the case at bar goes beyond the
singularity of the localities covered under the respective ordinances. All three ordinances were
enacted with a view of regulating public morals including particular illicit activity in transient
lodging establishments. This could be described as the middle case, wherein there is no
wholesale ban on motels and hotels but the services offered by these establishments have been
severely restricted. At its core, this is another case about the extent to which the State can intrude
into and regulate the lives of its citizens.
The test of a valid ordinance is well established. A long line of decisions including City of
Manila has held that for an ordinance to be valid, it must not only be within the corporate powers
of the local government unit to enact and pass according to the procedure prescribed by law, it
must also conform to the following substantive requirements: (1) must not contravene the
Constitution or any statute; (2) must not be unfair or oppressive; (3) must not be partial or
discriminatory; (4) must not prohibit but may regulate trade; (5) must be general and consistent
with public policy; and (6) must not be unreasonable.41
The Ordinance prohibits two specific and distinct business practices, namely wash rate
admissions and renting out a room more than twice a day. The ban is evidently sought to be
rooted in the police power as conferred on local government units by the Local Government
Code through such implements as the general welfare clause.
A.
Police power, while incapable of an exact definition, has been purposely veiled in general terms
to underscore its comprehensiveness to meet all exigencies and provide enough room for an
efficient and flexible response as the conditions warrant.42 Police power is based upon the
concept of necessity of the State and its corresponding right to protect itself and its
people.43 Police power has been used as justification for numerous and varied actions by the
State. These range from the regulation of dance halls,44 movie theaters,45 gas stations46 and
cockpits.47 The awesome scope of police power is best demonstrated by the fact that in its
hundred or so years of presence in our nations legal system, its use has rarely been denied.
The apparent goal of the Ordinance is to minimize if not eliminate the use of the covered
establishments for illicit sex, prostitution, drug use and alike. These goals, by themselves, are
unimpeachable and certainly fall within the ambit of the police power of the State. Yet the
desirability of these ends do not sanctify any and all means for their achievement. Those means
must align with the Constitution, and our emerging sophisticated analysis of its guarantees to
the people. The Bill of Rights stands as a rebuke to the seductive theory of Macchiavelli, and,
sometimes even, the political majorities animated by his cynicism.
Even as we design the precedents that establish the framework for analysis of due process or
equal protection questions, the courts are naturally inhibited by a due deference to the co-equal
branches of government as they exercise their political functions. But when we are compelled
to nullify executive or legislative actions, yet another form of caution emerges. If the Court were
animated by the same passing fancies or turbulent emotions that motivate many political
decisions, judicial integrity is compromised by any perception that the judiciary is merely the
third political branch of government. We derive our respect and good standing in the annals of
history by acting as judicious and neutral arbiters of the rule of law, and there is no surer way
to that end than through the development of rigorous and sophisticated legal standards through
which the courts analyze the most fundamental and far-reaching constitutional questions of the
day.
B.
The primary constitutional question that confronts us is one of due process, as guaranteed under
Section 1, Article III of the Constitution. Due process evades a precise definition. 48 The purpose
of the guaranty is to prevent arbitrary governmental encroachment against the life, liberty and
property of individuals. The due process guaranty serves as a protection against arbitrary
regulation or seizure. Even corporations and partnerships are protected by the guaranty insofar
as their property is concerned.
The due process guaranty has traditionally been interpreted as imposing two related but distinct
restrictions on government, "procedural due process" and "substantive due process." Procedural
due process refers to the procedures that the government must follow before it deprives a person
of life, liberty, or property.49 Procedural due process concerns itself with government action
adhering to the established process when it makes an intrusion into the private sphere. Examples
range from the form of notice given to the level of formality of a hearing.
If due process were confined solely to its procedural aspects, there would arise absurd situation
of arbitrary government action, provided the proper formalities are followed. Substantive due
process completes the protection envisioned by the due process clause. It inquires whether the
government has sufficient justification for depriving a person of life, liberty, or property. 50
The question of substantive due process, moreso than most other fields of law, has reflected
dynamism in progressive legal thought tied with the expanded acceptance of fundamental
freedoms. Police power, traditionally awesome as it may be, is now confronted with a more
rigorous level of analysis before it can be upheld. The vitality though of constitutional due
process has not been predicated on the frequency with which it has been utilized to achieve a
liberal result for, after all, the libertarian ends should sometimes yield to the prerogatives of the
State. Instead, the due process clause has acquired potency because of the sophisticated
methodology that has emerged to determine the proper metes and bounds for its application.
C.
The general test of the validity of an ordinance on substantive due process grounds is best tested
when assessed with the evolved footnote 4 test laid down by the U.S. Supreme Court in U.S. v.
Carolene Products.51 Footnote 4 of the Carolene Products case acknowledged that the judiciary
would defer to the legislature unless there is a discrimination against a "discrete and insular"
minority or infringement of a "fundamental right."52 Consequently, two standards of judicial
review were established: strict scrutiny for laws dealing with freedom of the mind or restricting
the political process, and the rational basis standard of review for economic legislation.
A third standard, denominated as heightened or immediate scrutiny, was later adopted by the
U.S. Supreme Court for evaluating classifications based on gender53 and
legitimacy.54 Immediate scrutiny was adopted by the U.S. Supreme Court in Craig, 55 after the
Court declined to do so in Reed v. Reed.56 While the test may have first been articulated in equal
protection analysis, it has in the United States since been applied in all substantive due process
cases as well.
We ourselves have often applied the rational basis test mainly in analysis of equal protection
challenges.57 Using the rational basis examination, laws or ordinances are upheld if they
rationally further a legitimate governmental interest.58 Under intermediate review,
governmental interest is extensively examined and the availability of less restrictive measures
is considered.59 Applying strict scrutiny, the focus is on the presence of compelling, rather than
substantial, governmental interest and on the absence of less restrictive means for achieving that
interest.
In terms of judicial review of statutes or ordinances, strict scrutiny refers to the standard for
determining the quality and the amount of governmental interest brought to justify the regulation
of fundamental freedoms.60 Strict scrutiny is used today to test the validity of laws dealing with
the regulation of speech, gender, or race as well as other fundamental rights as expansion from
its earlier applications to equal protection.61 The United States Supreme Court has expanded the
scope of strict scrutiny to protect fundamental rights such as suffrage, 62 judicial access63and
interstate travel.64
If we were to take the myopic view that an Ordinance should be analyzed strictly as to its effect
only on the petitioners at bar, then it would seem that the only restraint imposed by the law
which we are capacitated to act upon is the injury to property sustained by the petitioners, an
injury that would warrant the application of the most deferential standard the rational basis
test. Yet as earlier stated, we recognize the capacity of the petitioners to invoke as well the
constitutional rights of their patrons those persons who would be deprived of availing short
time access or wash-up rates to the lodging establishments in question.
Viewed cynically, one might say that the infringed rights of these customers were are trivial
since they seem shorn of political consequence. Concededly, these are not the sort of cherished
rights that, when proscribed, would impel the people to tear up their cedulas. Still, the Bill of
Rights does not shelter gravitas alone. Indeed, it is those "trivial" yet fundamental freedoms
which the people reflexively exercise any day without the impairing awareness of their
constitutional consequence that accurately reflect the degree of liberty enjoyed by the people.
Liberty, as integrally incorporated as a fundamental right in the Constitution, is not a Ten
Commandments-style enumeration of what may or what may not be done; but rather an
atmosphere of freedom where the people do not feel labored under a Big Brother presence as
they interact with each other, their society and nature, in a manner innately understood by them
as inherent, without doing harm or injury to others.
D.
The rights at stake herein fall within the same fundamental rights to liberty which we upheld in
City of Manila v. Hon. Laguio, Jr. We expounded on that most primordial of rights, thus:
Liberty as guaranteed by the Constitution was defined by Justice Malcolm to include "the right
to exist and the right to be free from arbitrary restraint or servitude. The term cannot be dwarfed
into mere freedom from physical restraint of the person of the citizen, but is deemed to embrace
the right of man to enjoy the facilities with which he has been endowed by his Creator, subject
only to such restraint as are necessary for the common welfare."[ 65] In accordance with this case,
the rights of the citizen to be free to use his faculties in all lawful ways; to live and work where
he will; to earn his livelihood by any lawful calling; and to pursue any avocation are all deemed
embraced in the concept of liberty.[ 66]
The U.S. Supreme Court in the case of Roth v. Board of Regents, sought to clarify the meaning
of "liberty." It said:
While the Court has not attempted to define with exactness the liberty . . . guaranteed [by the
Fifth and Fourteenth Amendments], the term denotes not merely freedom from bodily restraint
but also the right of the individual to contract, to engage in any of the common occupations of
life, to acquire useful knowledge, to marry, establish a home and bring up children, to worship
God according to the dictates of his own conscience, and generally to enjoy those privileges
long recognized . . . as essential to the orderly pursuit of happiness by free men. In a Constitution
for a free people, there can be no doubt that the meaning of "liberty" must be broad
indeed.67 [Citations omitted]
It cannot be denied that the primary animus behind the ordinance is the curtailment of sexual
behavior. The City asserts before this Court that the subject establishments "have gained
notoriety as venue of prostitution, adultery and fornications in Manila since they provide the
necessary atmosphere for clandestine entry, presence and exit and thus became the ideal haven
for prostitutes and thrill-seekers."68 Whether or not this depiction of a mise-en-scene of vice is
accurate, it cannot be denied that legitimate sexual behavior among willing married or
consenting single adults which is constitutionally protected69 will be curtailed as well, as it was
in the City of Manila case. Our holding therein retains significance for our purposes:
The concept of liberty compels respect for the individual whose claim to privacy and
interference demands respect. As the case of Morfe v. Mutuc, borrowing the words of Laski, so
very aptly stated:
Man is one among many, obstinately refusing reduction to unity. His separateness, his isolation,
are indefeasible; indeed, they are so fundamental that they are the basis on which his civic
obligations are built. He cannot abandon the consequences of his isolation, which are, broadly
speaking, that his experience is private, and the will built out of that experience personal to
himself. If he surrenders his will to others, he surrenders himself. If his will is set by the will of
others, he ceases to be a master of himself. I cannot believe that a man no longer a master of
himself is in any real sense free.
Indeed, the right to privacy as a constitutional right was recognized in Morfe, the invasion of
which should be justified by a compelling state interest. Morfe accorded recognition to the right
to privacy independently of its identification with liberty; in itself it is fully deserving of
constitutional protection. Governmental powers should stop short of certain intrusions into the
personal life of the citizen.70
We cannot discount other legitimate activities which the Ordinance would proscribe or impair.
There are very legitimate uses for a wash rate or renting the room out for more than twice a day.
Entire families are known to choose pass the time in a motel or hotel whilst the power is
momentarily out in their homes. In transit passengers who wish to wash up and rest between
trips have a legitimate purpose for abbreviated stays in motels or hotels. Indeed any person or
groups of persons in need of comfortable private spaces for a span of a few hours with purposes
other than having sex or using illegal drugs can legitimately look to staying in a motel or hotel
as a convenient alternative.
E.
That the Ordinance prevents the lawful uses of a wash rate depriving patrons of a product and
the petitioners of lucrative business ties in with another constitutional requisite for the
legitimacy of the Ordinance as a police power measure. It must appear that the interests of the
public generally, as distinguished from those of a particular class, require an interference with
private rights and the means must be reasonably necessary for the accomplishment of the
purpose and not unduly oppressive of private rights.71 It must also be evident that no other
alternative for the accomplishment of the purpose less intrusive of private rights can work. More
importantly, a reasonable relation must exist between the purposes of the measure and the means
employed for its accomplishment, for even under the guise of protecting the public interest,
personal rights and those pertaining to private property will not be permitted to be arbitrarily
invaded.72
Lacking a concurrence of these requisites, the police measure shall be struck down as an
arbitrary intrusion into private rights. As held in Morfe v. Mutuc, the exercise of police power
is subject to judicial review when life, liberty or property is affected. 73 However, this is not in
any way meant to take it away from the vastness of State police power whose exercise enjoys
the presumption of validity.74
Similar to the Comelec resolution requiring newspapers to donate advertising space to
candidates, this Ordinance is a blunt and heavy instrument. 75 The Ordinance makes no
distinction between places frequented by patrons engaged in illicit activities and patrons
engaged in legitimate actions. Thus it prevents legitimate use of places where illicit activities
are rare or even unheard of. A plain reading of section 3 of the Ordinance shows it makes no
classification of places of lodging, thus deems them all susceptible to illicit patronage and
subject them without exception to the unjustified prohibition.
The Court has professed its deep sentiment and tenderness of the Ermita-Malate area, its
longtime home,76 and it is skeptical of those who wish to depict our capital city the Pearl of
the Orient as a modern-day Sodom or Gomorrah for the Third World set. Those still steeped
in Nick Joaquin-dreams of the grandeur of Old Manila will have to accept that Manila like all
evolving big cities, will have its problems. Urban decay is a fact of mega cities such as Manila,
and vice is a common problem confronted by the modern metropolis wherever in the world. The
solution to such perceived decay is not to prevent legitimate businesses from offering a
legitimate product. Rather, cities revive themselves by offering incentives for new businesses
to sprout up thus attracting the dynamism of individuals that would bring a new grandeur to
Manila.
The behavior which the Ordinance seeks to curtail is in fact already prohibited and could in fact
be diminished simply by applying existing laws. Less intrusive measures such as curbing the
proliferation of prostitutes and drug dealers through active police work would be more effective
in easing the situation. So would the strict enforcement of existing laws and regulations
penalizing prostitution and drug use. These measures would have minimal intrusion on the
businesses of the petitioners and other legitimate merchants. Further, it is apparent that the
Ordinance can easily be circumvented by merely paying the whole day rate without any
hindrance to those engaged in illicit activities. Moreover, drug dealers and prostitutes can in fact
collect "wash rates" from their clientele by charging their customers a portion of the rent for
motel rooms and even apartments.
Independent and fair-minded judges themselves are under a moral duty to uphold the
Constitution as the embodiment of the rule of law, by reason of their expression of consent to
do so when they take the oath of office, and because they are entrusted by the people to uphold
the law.81
Even as the implementation of moral norms remains an indispensable complement to
governance, that prerogative is hardly absolute, especially in the face of the norms of due
process of liberty. And while the tension may often be left to the courts to relieve, it is possible
for the government to avoid the constitutional conflict by employing more judicious, less drastic
means to promote morality.
WHEREFORE, the Petition is GRANTED. The Decision of the Court of Appeals
is REVERSED, and the Decision of the Regional Trial Court of Manila, Branch 9,
is REINSTATED. Ordinance No. 7774 is hereby declared UNCONSTITUTIONAL. No
pronouncement as to costs.
SO ORDERED.

IV.
We reiterate that individual rights may be adversely affected only to the extent that may fairly
be required by the legitimate demands of public interest or public welfare. The State is a
leviathan that must be restrained from needlessly intruding into the lives of its citizens. However
well-intentioned the Ordinance may be, it is in effect an arbitrary and whimsical intrusion into
the rights of the establishments as well as their patrons. The Ordinance needlessly restrains the
operation of the businesses of the petitioners as well as restricting the rights of their patrons
without sufficient justification. The Ordinance rashly equates wash rates and renting out a room
more than twice a day with immorality without accommodating innocuous intentions.
The promotion of public welfare and a sense of morality among citizens deserves the full
endorsement of the judiciary provided that such measures do not trample rights this Court is
sworn to protect.77 The notion that the promotion of public morality is a function of the State is
as old as Aristotle.78 The advancement of moral relativism as a school of philosophy does not
de-legitimize the role of morality in law, even if it may foster wider debate on which particular
behavior to penalize. It is conceivable that a society with relatively little shared morality among
its citizens could be functional so long as the pursuit of sharply variant moral perspectives yields
an adequate accommodation of different interests.79
To be candid about it, the oft-quoted American maxim that "you cannot legislate morality" is
ultimately illegitimate as a matter of law, since as explained by Calabresi, that phrase is more
accurately interpreted as meaning that efforts to legislate morality will fail if they are widely at
variance with public attitudes about right and wrong.80 Our penal laws, for one, are founded on
age-old moral traditions, and as long as there are widely accepted distinctions between right and
wrong, they will remain so oriented.
Yet the continuing progression of the human story has seen not only the acceptance of the right-
wrong distinction, but also the advent of fundamental liberties as the key to the enjoyment of
life to the fullest. Our democracy is distinguished from non-free societies not with any more
extensive elaboration on our part of what is moral and immoral, but from our recognition that
the individual liberty to make the choices in our lives is innate, and protected by the State.
G.R. No. 156052 March 7, 2007
SOCIAL JUSTICE SOCIETY (SJS), VLADIMIR ALARIQUE T. CABIGAO, and
BONIFACIO S. TUMBOKON, Petitioners, vs. HON. JOSE L. ATIENZA, JR., in his
capacity as Mayor of the City of Manila, Respondent.
CORONA, J.:
In this original petition for mandamus,1 petitioners Social Justice Society (SJS), Vladimir
Alarique T. Cabigao and Bonifacio S. Tumbokon seek to compel respondent Hon. Jose L.
Atienza, Jr., mayor of the City of Manila, to enforce Ordinance No. 8027.
The antecedents are as follows.
On November 20, 2001, the Sangguniang Panlungsod of Manila enacted Ordinance No.
8027.2 Respondent mayor approved the ordinance on November 28, 2001. 3 It became effective
on December 28, 2001, after its publication.4
Ordinance No. 8027 was enacted pursuant to the police power delegated to local government
units, a principle described as the power inherent in a government to enact laws, within
constitutional limits, to promote the order, safety, health, morals and general welfare of the
society.5 This is evident from Sections 1 and 3 thereof which state:
SECTION 1. For the purpose of promoting sound urban planning and ensuring health, public
safety, and general welfare of the residents of Pandacan and Sta. Ana as well as its adjoining
areas, the land use of [those] portions of land bounded by the Pasig River in the north, PNR
Railroad Track in the east, Beata St. in the south, Palumpong St. in the southwest, and Estero
de Pancacan in the west[,] PNR Railroad in the northwest area, Estero de Pandacan in the
[n]ortheast, Pasig River in the southeast and Dr. M.L. Carreon in the southwest. The area of
Punta, Sta. Ana bounded by the Pasig River, Marcelino Obrero St., Mayo 28 St., and F. Manalo
Street, are hereby reclassified from Industrial II to Commercial I.
xxx xxx xxx
SEC. 3. Owners or operators of industries and other businesses, the operation of which are no
longer permitted under Section 1 hereof, are hereby given a period of six (6) months from the
date of effectivity of this Ordinance within which to cease and desist from the operation of
businesses which are hereby in consequence, disallowed.
Ordinance No. 8027 reclassified the area described therein from industrial to commercial and
directed the owners and operators of businesses disallowed under Section 1 to cease and desist
from operating their businesses within six months from the date of effectivity of the ordinance.
Among the businesses situated in the area are the so-called "Pandacan Terminals" of the oil
companies Caltex (Philippines), Inc., Petron Corporation and Pilipinas Shell Petroleum
Corporation.
However, on June 26, 2002, the City of Manila and the Department of Energy (DOE) entered
into a memorandum of understanding (MOU)6 with the oil companies in which they agreed that
"the scaling down of the Pandacan Terminals [was] the most viable and practicable option."
Under the MOU, the oil companies agreed to perform the following:
Section 1. - Consistent with the objectives stated above, the OIL COMPANIES shall, upon
signing of this MOU, undertake a program to scale down the Pandacan Terminals which shall
include, among others, the immediate removal/decommissioning process of TWENTY EIGHT
(28) tanks starting with the LPG spheres and the commencing of works for the creation of safety
buffer and green zones surrounding the Pandacan Terminals. xxx
Section 2. Consistent with the scale-down program mentioned above, the OIL COMPANIES
shall establish joint operations and management, including the operation of common, integrated
and/or shared facilities, consistent with international and domestic technical, safety,
environmental and economic considerations and standards. Consequently, the joint operations
of the OIL COMPANIES in the Pandacan Terminals shall be limited to the common and
integrated areas/facilities. A separate agreement covering the commercial and operational terms
and conditions of the joint operations, shall be entered into by the OIL COMPANIES.
Section 3. - The development and maintenance of the safety and green buffer zones mentioned
therein, which shall be taken from the properties of the OIL COMPANIES and not from the
surrounding communities, shall be the sole responsibility of the OIL COMPANIES.
The City of Manila and the DOE, on the other hand, committed to do the following:
Section 1. - The City Mayor shall endorse to the City Council this MOU for its appropriate
action with the view of implementing the spirit and intent thereof.
Section 2. - The City Mayor and the DOE shall, consistent with the spirit and intent of this
MOU, enable the OIL COMPANIES to continuously operate in compliance with legal
requirements, within the limited area resulting from the joint operations and the scale down
program.
Section 3. - The DOE and the City Mayor shall monitor the OIL COMPANIES compliance
with the provisions of this MOU.
Section 4. - The CITY OF MANILA and the national government shall protect the safety buffer
and green zones and shall exert all efforts at preventing future occupation or encroachment into
these areas by illegal settlers and other unauthorized parties.
The Sangguniang Panlungsod ratified the MOU in Resolution No. 97.7 In the same resolution,
the Sangguniandeclared that the MOU was effective only for a period of six months starting
July 25, 2002.8 Thereafter, on January 30, 2003, the Sanggunian adopted Resolution No.
139 extending the validity of Resolution No. 97 to April 30, 2003 and authorizing Mayor Atienza
to issue special business permits to the oil companies. Resolution No. 13, s. 2003 also called for
a reassessment of the ordinance.10
Meanwhile, petitioners filed this original action for mandamus on December 4, 2002 praying
that Mayor Atienza be compelled to enforce Ordinance No. 8027 and order the immediate
removal of the terminals of the oil companies.11
The issues raised by petitioners are as follows:
1. whether respondent has the mandatory legal duty to enforce Ordinance No. 8027 and order
the removal of the Pandacan Terminals, and
2. whether the June 26, 2002 MOU and the resolutions ratifying it can amend or repeal
Ordinance No. 8027.12
Petitioners contend that respondent has the mandatory legal duty, under Section 455 (b) (2) of
the Local Government Code (RA 7160),13 to enforce Ordinance No. 8027 and order the removal
of the Pandacan Terminals of the oil companies. Instead, he has allowed them to stay.
Respondents defense is that Ordinance No. 8027 has been superseded by the MOU and the
resolutions.14However, he also confusingly argues that the ordinance and MOU are not
inconsistent with each other and that the latter has not amended the former. He insists that the
ordinance remains valid and in full force and effect and that the MOU did not in any way prevent
him from enforcing and implementing it. He maintains that the MOU should be considered as a from the catastrophic devastation that will surely occur in case of a terrorist attack25 on the
mere guideline for its full implementation.15 Pandacan Terminals. No reason exists why such a protective measure should be delayed.
Under Rule 65, Section 316 of the Rules of Court, a petition for mandamus may be filed when WHEREFORE, the petition is hereby GRANTED. Respondent Hon. Jose L. Atienza, Jr., as
any tribunal, corporation, board, officer or person unlawfully neglects the performance of an act mayor of the City of Manila, is directed to immediately enforce Ordinance No. 8027.
which the law specifically enjoins as a duty resulting from an office, trust or SO ORDERED.
station. Mandamus is an extraordinary writ that is employed to compel the performance, when
refused, of a ministerial duty that is already imposed on the respondent and there is no other
plain, speedy and adequate remedy in the ordinary course of law. The petitioner should have a
well-defined, clear and certain legal right to the performance of the act and it must be the clear
and imperative duty of respondent to do the act required to be done. 17
Mandamus will not issue to enforce a right, or to compel compliance with a duty, which is
questionable or over which a substantial doubt exists. The principal function of the writ
of mandamus is to command and to expedite, not to inquire and to adjudicate; thus, it is neither
the office nor the aim of the writ to secure a legal right but to implement that which is already
established. Unless the right to the relief sought is unclouded, mandamus will not issue.18
To support the assertion that petitioners have a clear legal right to the enforcement of the
ordinance, petitioner SJS states that it is a political party registered with the Commission on
Elections and has its offices in Manila. It claims to have many members who are residents of
Manila. The other petitioners, Cabigao and Tumbokon, are allegedly residents of Manila.
We need not belabor this point. We have ruled in previous cases that when
a mandamus proceeding concerns a public right and its object is to compel a public duty, the
people who are interested in the execution of the laws are regarded as the real parties in interest
and they need not show any specific interest.19 Besides, as residents of Manila, petitioners have
a direct interest in the enforcement of the citys ordinances. Respondent never questioned the
right of petitioners to institute this proceeding.
On the other hand, the Local Government Code imposes upon respondent the duty, as city
mayor, to "enforce all laws and ordinances relative to the governance of the city.">20 One of
these is Ordinance No. 8027. As the chief executive of the city, he has the duty to enforce
Ordinance No. 8027 as long as it has not been repealed by the Sanggunian or annulled by the
courts.21 He has no other choice. It is his ministerial duty to do so. In Dimaporo v. Mitra,
Jr.,22 we stated the reason for this:

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

The question now is whether the MOU entered into by respondent with the oil companies and
the subsequent resolutions passed by the Sanggunian have made the respondents duty to
enforce Ordinance No. 8027 doubtful, unclear or uncertain. This is also connected to the second
issue raised by petitioners, that is, whether the MOU and Resolution Nos. 97, s. 2002 and 13, s.
2003 of the Sanggunian can amend or repeal Ordinance No. 8027.
We need not resolve this issue. Assuming that the terms of the MOU were inconsistent with
Ordinance No. 8027, the resolutions which ratified it and made it binding on the City of Manila
expressly gave it full force and effect only until April 30, 2003. Thus, at present, there is nothing
that legally hinders respondent from enforcing Ordinance No. 8027.24
Ordinance No. 8027 was enacted right after the Philippines, along with the rest of the world,
witnessed the horror of the September 11, 2001 attack on the Twin Towers of the World Trade
Center in New York City. The objective of the ordinance is to protect the residents of Manila

G.R. No. 187836
SOCIAL JUSTICE SOCIETY (SJS) OFFICERS, namely, SAMSON S. ALCANTARA,
and VLADIMIR ALARIQUE T. CABIGAO, Petitioners,
vs. ALFREDO S. LIM, in his capacity as mayor of the City of Manila, Respondent.
x-----------------------x
G.R. No. 187916
JOSE L. ATIENZA, JR., BIENVINIDO M. ABANTE, MA. LOURDES M. ISIP-
GARCIA, RAFAEL P. BORROMEO, JOCELYN DAWIS-ASUNCION, minors
MARIAN REGINA B. TARAN, MACAILA RICCI B. TARAN, RICHARD KENNETH
B. TARAN, represented and joined by their parents RICHARD and MARITES TARAN,
minors CZARINA ALYSANDRA C. RAMOS, CEZARAH ADRIANNA C. RAMOS, and
CRISTEN AIDAN C. RAMOS represented and joined by their mother DONNA C.
RAMOS, minors JAZMIN SYLLITA T. VILA and ANTONIO T. CRUZ IV, represented
and joined by their mother MAUREEN C. TOLENTINO, Petitioners, vs. MAYOR
ALFREDO S. LIM, VICE MAYOR FRANCISCO DOMAGOSO, COUNCILORS
ARLENE W. KOA, MOISES T. LIM, JESUS FAJARDO LOUISITO N. CHUA,
VICTORIANO A. MELENDEZ, JOHN MARVIN C. NIETO, ROLANDO M.
VALERIANO, RAYMUNDO R. YUPANGCO, EDWARD VP MACEDA, RODERICK
D. V ALBUENA, JOSEFINA M. SISCAR, SALVADOR PHILLIP .H. LACUNA,
LUCIANO M. VELOSO, CARLO V. LOPEZ, ERNESTO F. RIVERA, DANILO
VICTOR H. LACUNA, JR., ERNESTO G. ISIP, HONEY H. LACUNA-PANGAN,
ERNESTO M. DIONISO, JR. and ERICK IAN 0. NIEVA, Respondents, CHEVRON
PHILIPPINES INC., PETRON CORPORATION AND PILIPINAS SHELL
PETROLEUM CORPORATION, Intervenors.
RESOLUTION
PEREZ, J.:
In the Decision2 promulgated on 25 November 2014, this Court declared Ordinance No. 8187
UNCONSTITUTIONAL and INVALID with respect to the continued stay of the Pandacan Oil
Terminals. The following timelines were set for the relocation and transfer of the terminals:
[T]he intervenors Chevron Philippines, Inc., Pilipinas Shell Petroleum Corporation, and Petron
Corporation shall, within a non- extendible period of forty-five (45) days, submit to the Regional
Trial Court, Branch 39, Manila an updated comprehensive plan and relocation schedule, which
relocation shall be completed not later than six (6) months from the date the required documents
are submitted. The presiding judge of Branch 39 shall monitor the strict enforcement of this
Decision.3
Now before us are the following submissions of the intervenor oil companies, to wit: (1) Motion
for Reconsideration4of the Decision dated 25 November 2014 filed by intervenor Pilipinas Shell
Petroleum Corporation (Shell); (2) Motion for Clarification 5 filed by intervenor Chevron
Philippines, Inc. (Chevron); and (3) Manifestation of Understanding of the Dispositive Portion
of the Decision of 15 December 20146 (the correct date of promulgation is 25 November 2014)
filed by intervenor Petron Corporation (Petron).
I a shareholder, still maintains the operations through Petron and Shell. Thus:
Shell seeks reconsideration of the Decision based on the following grounds:
1.Erroneous reliance on the factual pronouncements in G.R. No. 156052 entitled "Social Justice
Society v. Atienza," which, it argues, were completely unsupported by competent evidence;
2.Adoption of "imagined fears, causes, surmises and conjectures interposed by the petitioners,"
which it also raises as totally unsupported by evidence because the petitions, which involve
factual issues, were wrongfully filed with this Court;
3.Conclusion that there is no substantial difference between the conditions in 2001 and the
present setup with respect to the oil depots operations; and
4.Failure to dismiss the petitions despite the enactment of Ordinance No. 8187, which, it
maintains, has rendered the cases moot and academic.7
The Motion for Reconsideration must be denied.
It bears stressing that these cases were called in session several times to give the members of
the Court time to study and present their respective positions. Before the Decision was finally
promulgated, the Court had thoroughly deliberated on the arguments of the parties, including
the basic issues herein raised - the rationale for upholding the position of the Court in G.R. No.
156052, on one hand, and the safety measures adopted by the intervenors, including the alleged
"imagined fears, causes, surmises and conjectures interposed by the petitioners," on the other;
the argument of whether or not the petition should have been filed with the trial court or at least
referred to the Court of Appeals to receive evidence; and the issue on whether or not the
enactment of Ordinance No. 8283 has rendered the instant petitions moot and academic. And
for failure to reconcile diverse views on several issues, a Concurring and Dissenting Opinion
was written.
The grounds relied on being mere reiterations of the issues already passed upon by the Court,
there is no need to "cut and paste" pertinent portions of the Decision or re-write the ponencia in
accordance with the outline of the instant motion.
As succinctly put by then Chief Justice Andres R. Narvasa in Ortigas and Co. Ltd. Partnership
v. Judge Velasco8 on the effect and disposition of a motion for reconsideration:
The filing of a motion for reconsideration, authorized by Rule 52 of the Rules of Court, does
not impose on the Court the obligation to deal individually and specifically with the grounds
relied upon therefor, in much the same way that the Court does in its judgment or final order as
regards the issues raised and submitted for decision. This would be a useless formality or ritual
invariably involving merely a reiteration of the reasons already set forth in the judgment or final
order for rejecting the arguments advanced by the movant; and it would be a needless act, too,
with respect to issues raised for the first time, these being, as above stated, deemed waived
because not asserted at the first opportunity. It suffices for the Court to deal generally and
summarily with the motion for reconsideration, and merely state a legal ground for its denial
(Sec. 14, Art. VIII, Constitution); i.e., the motion contains merely a reiteration or rehash of
arguments already submitted to and pronounced without merit by the Court in its judgment, or
the basic issues have already been passed upon, or the motion discloses no substantial argument
or cogent reason to warrant reconsideration or modification of the judgment or final order; or
the arguments in the motion are too unsubstantial to require consideration, etc. 9
II
Chevron, in its Motion for Clarification,10 manifests that it has already ceased using the
Pandacan terminals since June 2014. However, the Pandacan Depot Services, Inc. (PDSI), an
incorporated joint venture of Chevron, Petron and Shell, and of which Chevron continues to be
2.At the outset, CHEVRON respectfully manifests that it has already completed the relocation
of its depot and terminal operations from the Pandacan area, as it ceased using the Pandacan
terminals for its fuel and lubricants operations last June 2014. CHEVRON currently has zero
volume of lubricants and fuel products for commercial use stored at the Pandacan terminals and
the supply requirements of its customers are being withdrawn from the other supply facilities
available to CHEVRON.
3.While CHEVRON has ceased using the Pandacan terminals, it continues to be a shareholder
as well as hold a governance role in Pandacan Depot Services Inc. ("PDSI"), the operator of the
Pandacan terminals for fuels products operations. PDSI is an incorporated joint venture
established pursuant to the joint venture agreements between CHEVRON, Petron and PSPC.
Notwithstanding CHEVRON's ceasing to use the facility, Petron and PSPC continue to use the
Pandacan terminals for their own commercial fuel and lubricant operation. This joint venture
continues to exist until terminated and dissolved by the mutual agreement of CHEVRON,
Petron, and PSP or as provided for in the agreements of the parties.11
With the withdrawal of its products from the Pandacan terminals yet with the continued
operation of the PDSI, Chevron now pleads that this Court review and clarify a portion of the
Decision concerning what it understands as an unqualified statement that "all oil depots, in
general, even those outside of Pandacan, have no place in any densely populated area."12 The
exact wordings in the Decision sought to be clarified read:
Even assuming that the respondents and intervenors were correct, the very nature of the depots
where millions of liters of highly flammable and highly volatile products [are stored], regardless
of whether or not the composition may cause explosions, has no place in a densely populated
area. Surely, any untoward incident in the oil depots, be it related to terrorism of whatever origin
or otherwise, would definitely cause not only destruction to properties within and among the
neighboring communities but certainly mass deaths and injuries.13
Stressing that a judgment should be confined to the lis mota of the case, Chevron posits that the
paragraph sought to be clarified was a sweeping and categorical pronouncement sans factual
basis or evidence against all oil depots inasmuch as the prevailing circumstances, types of
products stored or the safety measures in place vary from one depot to another. If such is left as
is, it claims that it would be tantamount to interference with the policy making of the political
departments of the government.
We differ.
There are overwhelming reasons stated in the Decision to support the Court's pronouncement
that the very nature of depots has no place in a densely populated area, among others, the very
history of the Pandacan terminals where flames spread over the entire City of Manila when fuel
storage dumps were set on fire in December 194114and the other incident of explosion,15 which
were both considered in G.R. No. 156052.
Indeed, the bases of the assailed paragraph were confined to the lis mota of these cases, and no
other depots were considered. But would the situation be different if, given the same
composition of flammable and volatile products, the depots are placed in another densely
populated area?
The answer was well explained in the Decision. Thus:
For, given that the threat sought to be prevented may strike at one point or another, no matter
how remote it is as perceived by one or some, we cannot allow the right to life to be dependent
on the unlikelihood of an event. Statistics and theories of probability have no place in situations
where the very life of not just an individual but of residents of big neighborhoods is at stake. 16
Moreover, the Decision should be taken as a whole and considered in its entirety. The Decision
is clear - it is the City's Ordinance No. 8187 that has been declared unconstitutional and invalid
insofar as the continued stay of the Pandacan Oil Terminals is concerned.
For the same reasons, the allegation of encroachment on the policy making power of the political
departments of the government is bereft of merit.
The prayer that the submission of an updated comprehensive plan and relocation schedule,
including the period for relocation, be deferred until after the Motion is resolved with finality is
denied. The compliance period prescribed in the Decision shall remain.
III
In its Manifestation of Understanding of the Dispositive Portion of the Decision of 15 December
2014,17 (the correct date of promulgation is 25 November 2014) Petron seeks to clarify whether
the dispositive portion thereof on the submission of "updated comprehensive plan and relocation
schedule" within forty-five (45) days is limited to the operation itself and does not include the
removal of the facilities. It ratiocinates that it is the operation, and not the presence of the
facilities, that runs contrary to Ordinance No. 8119 (Manila Comprehensive Land Use Plan and
Zoning Ordinance of 2006).18
Petron should have cited Ordinance No. 8027, the ordinance ordered to be enforced in G.R. No.
156052, instead of Ordinance No. 8119.
To recall, the Court, in G.R. No. 156052, ruled that Ordinance No. 8027 was not impliedly
repealed by Ordinance No. 8119. It explained:
x x x The repealing clause of Ordinance No. 8119 cannot be taken to indicate the legislative
intent to repeal all prior inconsistent laws on the subject matter, including Ordinance No. 8027,
a special enactment, since the aforequoted minutes (an official record of the discussions in the
Sanggunian) actually indicated the clear intent to preserve the provisions of Ordinance No.
8027.
To summarize, the conflict between the two ordinances is more apparent than real. The two
ordinances can be reconciled. Ordinance No. 8027 is applicable to the area particularly
described therein whereas Ordinance No. 8119 is applicable to the entire City of Manila.19
At first blush, the clause "cease and desist" appears to specifically refer only to the operations,
considering that Sec. 3 of Ordinance No. 8027 provides for a period of six (6) months from the
date of its effectivity "within which to cease and desist from the operations of businesses."20
However, in the Decision dated 7 March 2007 in G.R. No. 156052, the Court granted the
petition21 which sought the enforcement of Ordinance No. 8027 and the immediate removal of
the terminals of the oil companies. By so granting the petition, it necessarily follows that the
relocation and transfer it ordered contemplates the complete removal of the facilities.
These cases being a mere sequel to the earlier petition, we so hold that the relocation and transfer
contemplated therein include the removal of the facilities, especially so when the city plans on
building commercial establishments to replace the Pandacan terminals and provide a source of
employment for displaced employees. Accordingly, the comprehensive plan to be submitted
within forty-five (45) days from receipt of the Decision shall also include the removal of the
facilities.
On the matter of the enforcement of the assailed Decision in these cases, Petron further posits
that its first theory, that is, that the removal of the facilities is excluded from the comprehensive
plan to be submitted to the Regional Trial Court, would be in accord with its "Manifestation"
dated 30 November 2010, which it emphasized, the Court noted in the Decision and quoted as
follows:
2. Without prejudice to its position in the instant case as elucidated in its Memorandum, Petron
files this Manifestation to inform this Honorable Court that in accordance with its agreement
with and to honor its commitment to the City of Manila, Petron has decided to cease operation
of its petroleum product storage facilities in Pandacan, Manila within five (5) years or not later
than January 2016 for the following reasons, x x x.22 (Emphasis in the Manifestation of
Understanding x x x)
Let Petron be reminded that the Court did not, by noting its "Manifestation" dated 30 November
2010, consent to consider January 2016 as a separate deadline for compliance with our Decision,
which, to repeat, includes the removal of facilities after cessation of operations. The timelines
prescribed in the assailed Decision shall be observed to the letter.1wphi1

WHEREFORE, the Court hereby resolves to:

1.DENY Shell's Motion for Reconsideration of the Decision dated 25 November 2014;
2.DENY the prayers in the Motion for Clarification of Chevron that:
a) the wordings "the very nature of the depots where millions of liter[s] of highly flammable
and highly volatile products x x x [have] no place in a densely populated area" be removed from
the Decision dated 25 November 2014; and b) the submission of an updated comprehensive plan
and relocation schedule, including the period for relocation, be deferred until after the Motion
is resolved with finality;

3.CLARIFY that the relocation and transfer necessarily include the complete removal of the
facilities from the Pandacan terminals and should be made part of the required comprehensive
plan and relocation schedule; and

4. REMIND Petron that the Court did not, by noting its "Manifestation" dated 30 November
2010, consent to consider January 2016 as a separate deadline for compliance with our Decision,
which, to repeat,
includes the removal of facilities after cessation of operations. The timelines prescribed in the
assailed Decision shall be observed to the letter.

In anticipation of further attempts to delay the enforcement of this Court's Decision dated 25
November 2014, the parties to these cases are hereby REMINDED of the pronouncements in
Ortigas and Co. Ltd. Partnership v. Judge Velasco23 on the import of the denial of a motion for
reconsideration. Thus:
The denial of a motion for reconsideration signifies that the grounds relied upon have been
found, upon due deliberation, to be without merit, as not being of sufficient weight to warrant a
modification of the judgment or final order. It means not only that the grounds relied upon are
lacking in merit but also that any other, not so raised, is deemed waived and may no longer be
set up in a subsequent motion or application to overturn the judgment; and this is true, whatever
may be the title given to such motion or application, whether it be "second motion for
reconsideration" or "motion for clarification" or "plea for due process" or "prayer for a second
look," or "motion to defer, or set aside, entry of judgment," or xxx, etc..24 (Emphasis supplied)

This Resolution is final. Under pain of contempt, no further pleadings, motions or papers in the
guise of the above-enumerated submissions shall, thus, be entertained in these cases.
SO ORDERED.
G.R. No. L-20620 August 15, 1974
REPUBLIC OF THE PHILIPPINES, plaintiff-appellant, vs. CARMEN M. VDA. DE
CASTELLVI, ET AL., defendants-appellees.
ZALDIVAR, J.:p
Appeal from the decision of the Court of First Instance of Pampanga in its Civil Case No. 1623,
an expropriation proceeding.
Plaintiff-appellant, the Republic of the Philippines, (hereinafter referred to as the Republic)
filed, on June 26, 1959, a complaint for eminent domain against defendant-appellee, Carmen
M. Vda. de Castellvi, judicial administratrix of the estate of the late Alfonso de Castellvi
(hereinafter referred to as Castellvi), over a parcel of land situated in the barrio of San Jose,
Floridablanca, Pampanga, described as follows:
A parcel of land, Lot No. 199-B Bureau of Lands Plan Swo 23666. Bounded
on the NE by Maria Nieves Toledo-Gozun; on the SE by national road; on
the SW by AFP reservation, and on the NW by AFP reservation. Containing
an area of 759,299 square meters, more or less, and registered in the name
of Alfonso Castellvi under TCT No. 13631 of the Register of Pampanga ...;
and against defendant-appellee Maria Nieves Toledo Gozun (hereinafter referred to as Toledo-
Gozun over two parcels of land described as follows:
A parcel of land (Portion Lot Blk-1, Bureau of Lands Plan Psd, 26254.
Bounded on the NE by Lot 3, on the SE by Lot 3; on the SW by Lot 1-B,
Blk. 2 (equivalent to Lot 199-B Swo 23666; on the NW by AFP military
reservation. Containing an area of 450,273 square meters, more or less and
registered in the name of Maria Nieves Toledo-Gozun under TCT No. 8708
of the Register of Deeds of Pampanga. ..., and
A parcel of land (Portion of lot 3, Blk-1, Bureau of Lands Plan Psd 26254.
Bounded on the NE by Lot No. 3, on the SE by school lot and national road,
on the SW by Lot 1-B Blk 2 (equivalent to Lot 199-B Swo 23666), on the
NW by Lot 1-B, Blk-1. Containing an area of 88,772 square meters, more
or less, and registered in the name of Maria Nieves Toledo Gozun under
TCT No. 8708 of the Register of Deeds of Pampanga, ....
In its complaint, the Republic alleged, among other things, that the fair market value of the
above-mentioned lands, according to the Committee on Appraisal for the Province of
Pampanga, was not more than P2,000 per hectare, or a total market value of P259,669.10; and
prayed, that the provisional value of the lands be fixed at P259.669.10, that the court authorizes
plaintiff to take immediate possession of the lands upon deposit of that amount with the
Provincial Treasurer of Pampanga; that the court appoints three commissioners to ascertain and
report to the court the just compensation for the property sought to be expropriated, and that the
court issues thereafter a final order of condemnation.
On June 29, 1959 the trial court issued an order fixing the provisional value of the lands at
P259,669.10.
In her "motion to dismiss" filed on July 14, 1959, Castellvi alleged, among other things, that the
land under her administration, being a residential land, had a fair market value of P15.00 per
square meter, so it had a total market value of P11,389,485.00; that the Republic, through the
Armed Forces of the Philippines, particularly the Philippine Air Force, had been, despite
repeated demands, illegally occupying her property since July 1, 1956, thereby preventing her
from using and disposing of it, thus causing her damages by way of unrealized profits. This
defendant prayed that the complaint be dismissed, or that the Republic be ordered to pay her
P15.00 per square meter, or a total of P11,389,485.00, plus interest thereon at 6% per annum
from July 1, 1956; that the Republic be ordered to pay her P5,000,000.00 as unrealized profits,
and the costs of the suit.
By order of the trial court, dated August, 1959, Amparo C. Diaz, Dolores G. viuda de Gil,
Paloma Castellvi, Carmen Castellvi, Rafael Castellvi, Luis Castellvi, Natividad Castellvi de
Raquiza, Jose Castellvi and Consuelo Castellvi were allowed to intervene as parties defendants.
Subsequently, Joaquin V. Gozun, Jr., husband of defendant Nieves Toledo Gozun, was also
allowed by the court to intervene as a party defendant.
After the Republic had deposited with the Provincial Treasurer of Pampanga the amount of
P259,669.10, the trial court ordered that the Republic be placed in possession of the lands. The
Republic was actually placed in possession of the lands on August 10,
1959.1
In her "motion to dismiss", dated October 22, 1959, Toledo-Gozun alleged, among other things,
that her two parcels of land were residential lands, in fact a portion with an area of 343,303
square meters had already been subdivided into different lots for sale to the general public, and
the remaining portion had already been set aside for expansion sites of the already completed
subdivisions; that the fair market value of said lands was P15.00 per square meter, so they had
a total market value of P8,085,675.00; and she prayed that the complaint be dismissed, or that
she be paid the amount of P8,085,675.00, plus interest thereon at the rate of 6% per annum from
October 13, 1959, and attorney's fees in the amount of P50,000.00.
Intervenors Jose Castellvi and Consuelo Castellvi in their answer, filed on February 11, 1960,
and also intervenor Joaquin Gozun, Jr., husband of defendant Maria Nieves Toledo-Gozun, in
his motion to dismiss, dated May 27, 1960, all alleged that the value of the lands sought to be
expropriated was at the rate of P15.00 per square meter.
On November 4, 1959, the trial court authorized the Provincial Treasurer of Pampanga to pay
defendant Toledo-Gozun the sum of P107,609.00 as provisional value of her lands.2 On May
16, 1960 the trial Court authorized the Provincial Treasurer of Pampanga to pay defendant
Castellvi the amount of P151,859.80 as provisional value of the land under her administration,
and ordered said defendant to deposit the amount with the Philippine National Bank under the
supervision of the Deputy Clerk of Court. In another order of May 16, 1960 the trial Court
entered an order of condemnation.3
The trial Court appointed three commissioners: Atty. Amadeo Yuzon, Clerk of Court, as
commissioner for the court; Atty. Felicisimo G. Pamandanan, counsel of the Philippine National
Bank Branch at Floridablanca, for the plaintiff; and Atty. Leonardo F. Lansangan, Filipino legal
counsel at Clark Air Base, for the defendants. The Commissioners, after having qualified
themselves, proceeded to the performance of their duties.
On March 15,1961 the Commissioners submitted their report and recommendation, wherein,
after having determined that the lands sought to be expropriated were residential lands, they
recommended unanimously that the lowest price that should be paid was P10.00 per square
meter, for both the lands of Castellvi and Toledo-Gozun; that an additional P5,000.00 be paid
to Toledo-Gozun for improvements found on her land; that legal interest on the compensation,
computed from August 10, 1959, be paid after deducting the amounts already paid to the owners,
and that no consequential damages be awarded.4 The Commissioners' report was objected to by
all the parties in the case by defendants Castellvi and Toledo-Gozun, who insisted that the
fair market value of their lands should be fixed at P15.00 per square meter; and by the Republic,
which insisted that the price to be paid for the lands should be fixed at P0.20 per square meter. 5
After the parties-defendants and intervenors had filed their respective memoranda, and the
Republic, after several extensions of time, had adopted as its memorandum its objections to the
report of the Commissioners, the trial court, on May 26, 1961, rendered its decision6 the
dispositive portion of which reads as follows:
WHEREFORE, taking into account all the foregoing circumstances, and
that the lands are titled, ... the rising trend of land values ..., and the lowered
purchasing power of the Philippine peso, the court finds that the unanimous
recommendation of the commissioners of ten (P10.00) pesos per square
meter for the three lots of the defendants subject of this action is fair and
just.
xxx xxx xxx
The plaintiff will pay 6% interest per annum on the total value of the lands
of defendant Toledo-Gozun since (sic) the amount deposited as provisional
value from August 10, 1959 until full payment is made to said defendant or
deposit therefor is made in court.
In respect to the defendant Castellvi, interest at 6% per annum will also be
paid by the plaintiff to defendant Castellvi from July 1, 1956 when plaintiff
commenced its illegal possession of the Castellvi land when the instant
action had not yet been commenced to July 10, 1959 when the provisional
value thereof was actually deposited in court, on the total value of the said
(Castellvi) land as herein adjudged. The same rate of interest shall be paid
from July 11, 1959 on the total value of the land herein adjudged minus the
amount deposited as provisional value, or P151,859.80, such interest to run
until full payment is made to said defendant or deposit therefor is made in
court. All the intervenors having failed to produce evidence in support of
their respective interventions, said interventions are ordered dismissed.
The costs shall be charged to the plaintiff.
On June 21, 1961 the Republic filed a motion for a new trial and/or reconsideration, upon the
grounds of newly-discovered evidence, that the decision was not supported by the evidence, and
that the decision was against the law, against which motion defendants Castellvi and Toledo-
Gozun filed their respective oppositions. On July 8, 1961 when the motion of the Republic for
new trial and/or reconsideration was called for hearing, the Republic filed a supplemental
motion for new trial upon the ground of additional newly-discovered evidence. This motion for
new trial and/or reconsideration was denied by the court on July 12, 1961.
On July 17, 1961 the Republic gave notice of its intention to appeal from the decision of May
26, 1961 and the order of July 12, 1961. Defendant Castellvi also filed, on July 17, 1961, her
notice of appeal from the decision of the trial court.
The Republic filed various ex-parte motions for extension of time within which to file its record
on appeal. The Republic's record on appeal was finally submitted on December 6, 1961.
Defendants Castellvi and Toledo-Gozun filed not only a joint opposition to the approval of the
Republic's record on appeal, but also a joint memorandum in support of their opposition. The
Republic also filed a memorandum in support of its prayer for the approval of its record on
appeal. On December 27, 1961 the trial court issued an order declaring both the record on appeal
filed by the Republic, and the record on appeal filed by defendant Castellvi as having been filed
out of time, thereby dismissing both appeals.
On January 11, 1962 the Republic filed a "motion to strike out the order of December 27, 1961
and for reconsideration", and subsequently an amended record on appeal, against which motion
the defendants Castellvi and Toledo-Gozun filed their opposition. On July 26, 1962 the trial
court issued an order, stating that "in the interest of expediency, the questions raised may be
properly and finally determined by the Supreme Court," and at the same time it ordered the
Solicitor General to submit a record on appeal containing copies of orders and pleadings
specified therein. In an order dated November 19, 1962, the trial court approved the Republic's
record on appeal as amended.
Defendant Castellvi did not insist on her appeal. Defendant Toledo-Gozun did not appeal.
The motion to dismiss the Republic's appeal was reiterated by appellees Castellvi and Toledo-
Gozun before this Court, but this Court denied the motion.
In her motion of August 11, 1964, appellee Castellvi sought to increase the provisional value of
her land. The Republic, in its comment on Castellvi's motion, opposed the same. This Court
denied Castellvi's motion in a resolution dated October 2,1964.
The motion of appellees, Castellvi and Toledo-Gozun, dated October 6, 1969, praying that they
be authorized to mortgage the lands subject of expropriation, was denied by this Court or
October 14, 1969.
On February 14, 1972, Attys. Alberto Cacnio, and Associates, counsel for the estate of the late
Don Alfonso de Castellvi in the expropriation proceedings, filed a notice of attorney's lien,
stating that as per agreement with the administrator of the estate of Don Alfonso de Castellvi
they shall receive by way of attorney's fees, "the sum equivalent to ten per centum of whatever
the court may finally decide as the expropriated price of the property subject matter of the case."
---------
Before this Court, the Republic contends that the lower court erred:
1. In finding the price of P10 per square meter of the lands subject of the
instant proceedings as just compensation;
2. In holding that the "taking" of the properties under expropriation
commenced with the filing of this action;
3. In ordering plaintiff-appellant to pay 6% interest on the adjudged value
of the Castellvi property to start from July of 1956;
4. In denying plaintiff-appellant's motion for new trial based on newly
discovered evidence.
In its brief, the Republic discusses the second error assigned as the first issue to be considered.
We shall follow the sequence of the Republic's discussion.
1. In support of the assigned error that the lower court erred in holding that the "taking" of the
properties under expropriation commenced with the filing of the complaint in this case, the
Republic argues that the "taking" should be reckoned from the year 1947 when by virtue of a
special lease agreement between the Republic and appellee Castellvi, the former was granted
the "right and privilege" to buy the property should the lessor wish to terminate the lease, and
that in the event of such sale, it was stipulated that the fair market value should be as of the time
of occupancy; and that the permanent improvements amounting to more that half a million pesos
constructed during a period of twelve years on the land, subject of expropriation, were indicative
of an agreed pattern of permanency and stability of occupancy by the Philippine Air Force in
the interest of national Security.7
Appellee Castellvi, on the other hand, maintains that the "taking" of property under the power
of eminent domain requires two essential elements, to wit: (1) entrance and occupation by
condemn or upon the private property for more than a momentary or limited period, and (2)
devoting it to a public use in such a way as to oust the owner and deprive him of all beneficial
enjoyment of the property. This appellee argues that in the instant case the first element is
wanting, for the contract of lease relied upon provides for a lease from year to year; that the
second element is also wanting, because the Republic was paying the lessor Castellvi a monthly
rental of P445.58; and that the contract of lease does not grant the Republic the "right and
privilege" to buy the premises "at the value at the time of occupancy."8
Appellee Toledo-Gozun did not comment on the Republic's argument in support of the second
error assigned, because as far as she was concerned the Republic had not taken possession of
her lands prior to August 10, 1959.9
In order to better comprehend the issues raised in the appeal, in so far as the Castellvi property
is concerned, it should be noted that the Castellvi property had been occupied by the Philippine
Air Force since 1947 under a contract of lease, typified by the contract marked Exh. 4-Castellvi,
the pertinent portions of which read:
CONTRACT OF LEASE
This AGREEMENT OF LEASE MADE AND ENTERED into by and
between INTESTATE ESTATE OF ALFONSO DE CASTELLVI,
represented by CARMEN M. DE CASTELLVI, Judicial Administratrix ...
hereinafter called the LESSOR and THE REPUBLIC OF THE
PHILIPPINES represented by MAJ. GEN. CALIXTO DUQUE, Chief of
Staff of the ARMED FORCES OF THE PHILIPPINES, hereinafter called
the LESSEE,
WITNESSETH:
1. For and in consideration of the rentals hereinafter reserved and the mutual
terms, covenants and conditions of the parties, the LESSOR has, and by
these presents does, lease and let unto the LESSEE the following described
land together with the improvements thereon and appurtenances
thereof, viz:
Un Terreno, Lote No. 27 del Plano de subdivision Psu 34752, parte de la
hacienda de Campauit, situado en el Barrio de San Jose, Municipio de
Floridablanca Pampanga. ... midiendo una extension superficial de cuatro
milliones once mil cuatro cientos trienta y cinco (4,001,435) [sic] metros
cuadrados, mas o menos.
Out of the above described property, 75.93 hectares thereof are actually
occupied and covered by this contract. .
Above lot is more particularly described in TCT No. 1016, province of
Pampanga ...
of which premises, the LESSOR warrants that he/she/they/is/are the registered owner(s) and
with full authority to execute a contract of this nature.
2. The term of this lease shall be for the period beginning July 1, 1952 the
date the premises were occupied by the PHILIPPINE AIR FORCE, AFP
until June 30, 1953, subject to renewal for another year at the option of the
LESSEE or unless sooner terminated by the LESSEE as hereinafter
provided.
3. The LESSOR hereby warrants that the LESSEE shall have quiet, peaceful
and undisturbed possession of the demised premises throughout the full
term or period of this lease and the LESSOR undertakes without cost to the
LESSEE to eject all trespassers, but should the LESSOR fail to do so, the
 LESSEE at its option may proceed to do so at the expense of the LESSOR.
The LESSOR further agrees that should he/she/they sell or encumber all or
any part of the herein described premises during the period of this lease, any
conveyance will be conditioned on the right of the LESSEE hereunder.
4. The LESSEE shall pay to the LESSOR as monthly rentals under this lease
the sum of FOUR HUNDRED FIFTY-FIVE PESOS & 58/100 (P455.58)
...
5. The LESSEE may, at any time prior to the termination of this lease, use
the property for any purpose or purposes and, at its own costs and expense
make alteration, install facilities and fixtures and errect additions ... which
facilities or fixtures ... so placed in, upon or attached to the said premises
shall be and remain property of the LESSEE and may be removed therefrom
by the LESSEE prior to the termination of this lease. The LESSEE shall
surrender possession of the premises upon the expiration or termination of
this lease and if so required by the LESSOR, shall return the premises in
substantially the same condition as that existing at the time same were first
occupied by the AFP, reasonable and ordinary wear and tear and damages
by the elements or by circumstances over which the LESSEE has no control
excepted: PROVIDED, that if the LESSOR so requires the return of the
premises in such condition, the LESSOR shall give written notice thereof
to the LESSEE at least twenty (20) days before the termination of the lease
and provided, further, that should the LESSOR give notice within the time
specified above, the LESSEE shall have the right and privilege to
compensate the LESSOR at the fair value or the equivalent, in lieu of
performance of its obligation, if any, to restore the premises. Fair value is
to be determined as the value at the time of occupancy less fair wear and
tear and depreciation during the period of this lease.
6. The LESSEE may terminate this lease at any time during the term hereof
by giving written notice to the LESSOR at least thirty (30) days in advance
...
7. The LESSEE should not be responsible, except under special legislation
for any damages to the premises by reason of combat operations, acts of
GOD, the elements or other acts and deeds not due to the negligence on the
part of the LESSEE.
8. This LEASE AGREEMENT supersedes and voids any and all
agreements and undertakings, oral or written, previously entered into
between the parties covering the property herein leased, the same having
been merged herein. This AGREEMENT may not be modified or altered
except by instrument in writing only duly signed by the parties. 10
It was stipulated by the parties, that "the foregoing contract of lease (Exh. 4, Castellvi) is 'similar
in terms and conditions, including the date', with the annual contracts entered into from year to
year between defendant Castellvi and the Republic of the Philippines (p. 17, t.s.n., Vol.
III)". 11 It is undisputed, therefore, that the Republic occupied Castellvi's land from July 1, 1947,
by virtue of the above-mentioned contract, on a year to year basis (from July 1 of each year to
June 30 of the succeeding year) under the terms and conditions therein stated.
Before the expiration of the contract of lease on June 30, 1956 the Republic sought to renew the
same but Castellvi refused. When the AFP refused to vacate the leased premises after the
termination of the contract, on July 11, 1956, Castellvi wrote to the Chief of Staff, AFP,
informing the latter that the heirs of the property had decided not to continue leasing the property
in question because they had decided to subdivide the land for sale to the general public,
demanding that the property be vacated within 30 days from receipt of the letter, and that the
premises be returned in substantially the same condition as before occupancy (Exh. 5
Castellvi). A follow-up letter was sent on January 12, 1957, demanding the delivery and return
of the property within one month from said date (Exh. 6 Castellvi). On January 30, 1957,
Lieutenant General Alfonso Arellano, Chief of Staff, answered the letter of Castellvi, saying
that it was difficult for the army to vacate the premises in view of the permanent installations
and other facilities worth almost P500,000.00 that were erected and already established on the
property, and that, there being no other recourse, the acquisition of the property by means of
expropriation proceedings would be recommended to the President (Exhibit "7" Castellvi).
Defendant Castellvi then brought suit in the Court of First Instance of Pampanga, in Civil Case
No. 1458, to eject the Philippine Air Force from the land. While this ejectment case was pending,
the Republic instituted these expropriation proceedings, and, as stated earlier in this opinion, the
Republic was placed in possession of the lands on August 10, 1959, On November 21, 1959,
the Court of First Instance of Pampanga, dismissed Civil Case No. 1458, upon petition of the
parties, in an order which, in part, reads as follows:
1. Plaintiff has agreed, as a matter of fact has already signed an agreement
with defendants, whereby she has agreed to receive the rent of the lands,
subject matter of the instant case from June 30, 1966 up to 1959 when the
Philippine Air Force was placed in possession by virtue of an order of the
Court upon depositing the provisional amount as fixed by the Provincial
Appraisal Committee with the Provincial Treasurer of Pampanga;
2. That because of the above-cited agreement wherein the administratrix
decided to get the rent corresponding to the rent from 1956 up to 1959 and
considering that this action is one of illegal detainer and/or to recover the
possession of said land by virtue of non-payment of rents, the instant case
now has become moot and academic and/or by virtue of the agreement
signed by plaintiff, she has waived her cause of action in the above-entitled
case. 12
The Republic urges that the "taking " of Castellvi's property should be deemed as of the year
1947 by virtue of afore-quoted lease agreement. In American Jurisprudence, Vol. 26, 2nd
edition, Section 157, on the subject of "Eminent Domain, we read the definition of "taking" (in
eminent domain) as follows:
Taking' under the power of eminent domain may be defined generally as
entering upon private property for more than a momentary period, and,
under the warrant or color of legal authority, devoting it to a public use, or
otherwise informally appropriating or injuriously affecting it in such a way
 as substantially to oust the owner and deprive him of all beneficial
enjoyment thereof. 13
Pursuant to the aforecited authority, a number of circumstances must be present in the "taking"
of property for purposes of eminent domain.
First, the expropriator must enter a private property. This circumstance is present in the instant
case, when by virtue of the lease agreement the Republic, through the AFP, took possession of
the property of Castellvi.
Second, the entrance into private property must be for more than a momentary period.
"Momentary" means, "lasting but a moment; of but a moment's duration" (The Oxford English
Dictionary, Volume VI, page 596); "lasting a very short time; transitory; having a very brief
life; operative or recurring at every moment" (Webster's Third International Dictionary, 1963
edition.) The word "momentary" when applied to possession or occupancy of (real) property
should be construed to mean "a limited period" not indefinite or permanent. The aforecited
lease contract was for a period of one year, renewable from year to year. The entry on the
property, under the lease, is temporary, and considered transitory. The fact that the Republic,
through the AFP, constructed some installations of a permanent nature does not alter the fact
that the entry into the land was transitory, or intended to last a year, although renewable from
year to year by consent of 'The owner of the land. By express provision of the lease agreement
the Republic, as lessee, undertook to return the premises in substantially the same condition as
at the time the property was first occupied by the AFP. It is claimed that the intention of the
lessee was to occupy the land permanently, as may be inferred from the construction of
permanent improvements. But this "intention" cannot prevail over the clear and express terms
of the lease contract. Intent is to be deduced from the language employed by the parties, and the
terms 'of the contract, when unambiguous, as in the instant case, are conclusive in the absence
of averment and proof of mistake or fraud the question being not what the intention was, but
what is expressed in the language used. (City of Manila v. Rizal Park Co., Inc., 53 Phil. 515,
525); Magdalena Estate, Inc. v. Myrick, 71 Phil. 344, 348). Moreover, in order to judge the
intention of the contracting parties, their contemporaneous and subsequent acts shall be
principally considered (Art. 1371, Civil Code). If the intention of the lessee (Republic) in 1947
was really to occupy permanently Castellvi's property, why was the contract of lease entered
into on year to year basis? Why was the lease agreement renewed from year to year? Why did
not the Republic expropriate this land of Castellvi in 1949 when, according to the Republic
itself, it expropriated the other parcels of land that it occupied at the same time as the Castellvi
land, for the purpose of converting them into a jet air base? 14 It might really have been the
intention of the Republic to expropriate the lands in question at some future time, but certainly
mere notice - much less an implied notice of such intention on the part of the Republic to
expropriate the lands in the future did not, and could not, bind the landowner, nor bind the land
itself. The expropriation must be actually commenced in court (Republic vs. Baylosis, et al., 96
Phil. 461, 484).
Third, the entry into the property should be under warrant or color of legal authority. This
circumstance in the "taking" may be considered as present in the instant case, because the
Republic entered the Castellvi property as lessee.
Fourth, the property must be devoted to a public use or otherwise informally appropriated or
injuriously affected. It may be conceded that the circumstance of the property being devoted to
public use is present because the property was used by the air force of the AFP.
Fifth, the utilization of the property for public use must be in such a way as to oust the owner
and deprive him of all beneficial enjoyment of the property. In the instant case, the entry of the
Republic into the property and its utilization of the same for public use did not oust Castellvi
and deprive her of all beneficial enjoyment of the property. Castellvi remained as owner, and
was continuously recognized as owner by the Republic, as shown by the renewal of the lease
contract from year to year, and by the provision in the lease contract whereby the Republic
undertook to return the property to Castellvi when the lease was terminated. Neither was
Castellvi deprived of all the beneficial enjoyment of the property, because the Republic was
bound to pay, and had been paying, Castellvi the agreed monthly rentals until the time when it
filed the complaint for eminent domain on June 26, 1959.
It is clear, therefore, that the "taking" of Catellvi's property for purposes of eminent domain
cannot be considered to have taken place in 1947 when the Republic commenced to occupy the
property as lessee thereof. We find merit in the contention of Castellvi that two essential
elements in the "taking" of property under the power of eminent domain, namely: (1) that the
entrance and occupation by the condemnor must be for a permanent, or indefinite period, and
(2) that in devoting the property to public use the owner was ousted from the property and
deprived of its beneficial use, were not present when the Republic entered and occupied the
Castellvi property in 1947.
Untenable also is the Republic's contention that although the contract between the parties was
one of lease on a year to year basis, it was "in reality a more or less permanent right to occupy
the premises under the guise of lease with the 'right and privilege' to buy the property should the
lessor wish to terminate the lease," and "the right to buy the property is merged as an integral
part of the lease relationship ... so much so that the fair market value has been agreed upon, not,
as of the time of purchase, but as of the time of occupancy" 15 We cannot accept the Republic's
contention that a lease on a year to year basis can give rise to a permanent right to occupy, since
by express legal provision a lease made for a determinate time, as was the lease of Castellvi's
land in the instant case, ceases upon the day fixed, without need of a demand (Article 1669,
Civil Code). Neither can it be said that the right of eminent domain may be exercised by simply
leasing the premises to be expropriated (Rule 67, Section 1, Rules of Court). Nor can it be
accepted that the Republic would enter into a contract of lease where its real intention was to
buy, or why the Republic should enter into a simulated contract of lease ("under the guise of
lease", as expressed by counsel for the Republic) when all the time the Republic had the right
of eminent domain, and could expropriate Castellvi's land if it wanted to without resorting to
any guise whatsoever. Neither can we see how a right to buy could be merged in a contract of
lease in the absence of any agreement between the parties to that effect. To sustain the contention
of the Republic is to sanction a practice whereby in order to secure a low price for a land which
the government intends to expropriate (or would eventually expropriate) it would first negotiate
with the owner of the land to lease the land (for say ten or twenty years) then expropriate the
same when the lease is about to terminate, then claim that the "taking" of the property for the
purposes of the expropriation be reckoned as of the date when the Government started to occupy
the property under the lease, and then assert that the value of the property being expropriated be
reckoned as of the start of the lease, in spite of the fact that the value of the property, for many
good reasons, had in the meantime increased during the period of the lease. This would be
sanctioning what obviously is a deceptive scheme, which would have the effect of depriving the
owner of the property of its true and fair market value at the time when the expropriation
proceedings were actually instituted in court. The Republic's claim that it had the "right and
privilege" to buy the property at the value that it had at the time when it first occupied the
property as lessee nowhere appears in the lease contract. What was agreed expressly in
paragraph No. 5 of the lease agreement was that, should the lessor require the lessee to return
the premises in the same condition as at the time the same was first occupied by the AFP, the
lessee would have the "right and privilege" (or option) of paying the lessor what it would fairly
cost to put the premises in the same condition as it was at the commencement of the lease, in
lieu of the lessee's performance of the undertaking to put the land in said condition. The "fair
value" at the time of occupancy, mentioned in the lease agreement, does not refer to the value
of the property if bought by the lessee, but refers to the cost of restoring the property in the same
condition as of the time when the lessee took possession of the property. Such fair value cannot
refer to the purchase price, for purchase was never intended by the parties to the lease contract.
It is a rule in the interpretation of contracts that "However general the terms of a contract may
be, they shall not be understood to comprehend things that are distinct and cases that are
different from those upon which the parties intended to agree" (Art. 1372, Civil Code).
We hold, therefore, that the "taking" of the Castellvi property should not be reckoned as of the
year 1947 when the Republic first occupied the same pursuant to the contract of lease, and that
the just compensation to be paid for the Castellvi property should not be determined on the basis
of the value of the property as of that year. The lower court did not commit an error when it held
that the "taking" of the property under expropriation commenced with the filing of the complaint
in this case.
Under Section 4 of Rule 67 of the Rules of Court, 16 the "just compensation" is to be determined
as of the date of the filing of the complaint. This Court has ruled that when the taking of the
property sought to be expropriated coincides with the commencement of the expropriation
proceedings, or takes place subsequent to the filing of the complaint for eminent domain, the
just compensation should be determined as of the date of the filing of the complaint. (Republic
vs. Philippine National Bank, L-14158, April 12, 1961, 1 SCRA 957, 961-962). In the instant
case, it is undisputed that the Republic was placed in possession of the Castellvi property, by
authority of the court, on August 10, 1959. The "taking" of the Castellvi property for the
purposes of determining the just compensation to be paid must, therefore, be reckoned as of
June 26, 1959 when the complaint for eminent domain was filed.
Regarding the two parcels of land of Toledo-Gozun, also sought to be expropriated, which had
never been under lease to the Republic, the Republic was placed in possession of said lands,
also by authority of the court, on August 10, 1959, The taking of those lands, therefore, must
also be reckoned as of June 26, 1959, the date of the filing of the complaint for eminent domain.
2. Regarding the first assigned error discussed as the second issue the Republic maintains
that, even assuming that the value of the expropriated lands is to be determined as of June 26,
1959, the price of P10.00 per square meter fixed by the lower court "is not only exhorbitant but
also unconscionable, and almost fantastic". On the other hand, both Castellvi and Toledo-Gozun
maintain that their lands are residential lands with a fair market value of not less than P15.00
per square meter.
The lower court found, and declared, that the lands of Castellvi and Toledo-Gozun are
residential lands. The finding of the lower court is in consonance with the unanimous opinion
of the three commissioners who, in their report to the court, declared that the lands are residential
lands.
The Republic assails the finding that the lands are residential, contending that the plans of the
appellees to convert the lands into subdivision for residential purposes were only on paper, there
being no overt acts on the part of the appellees which indicated that the subdivision project had
been commenced, so that any compensation to be awarded on the basis of the plans would be
speculative. The Republic's contention is not well taken. We find evidence showing that the
lands in question had ceased to be devoted to the production of agricultural crops, that they had
become adaptable for residential purposes, and that the appellees had actually taken steps to
convert their lands into residential subdivisions even before the Republic filed the complaint for
eminent domain. In the case of City of Manila vs. Corrales (32 Phil. 82, 98) this Court laid
down basic guidelines in determining the value of the property expropriated for public purposes.
This Court said:
In determining the value of land appropriated for public purposes, the same
consideration are to be regarded as in a sale of property between private
parties. The inquiry, in such cases, must be what is the property worth in
the market, viewed not merely with reference to the uses to which it is at
the time applied, but with reference to the uses to which it is plainly adapted,
that is to say, What is it worth from its availability for valuable uses?
So many and varied are the circumstances to be taken into account in
determining the value of property condemned for public purposes, that it is
practically impossible to formulate a rule to govern its appraisement in all
cases. Exceptional circumstances will modify the most carefully guarded
rule, but, as a general thing, we should say that the compensation of the
owner is to be estimated by reference to the use for which the property is
suitable, having regard to the existing business or wants of the community,
or such as may be reasonably expected in the immediate future. (Miss. and
Rum River Boom Co. vs. Patterson, 98 U.S., 403).
In expropriation proceedings, therefore, the owner of the land has the right to its value for the
use for which it would bring the most in the market. 17 The owner may thus show every
advantage that his property possesses, present and prospective, in order that the price it could
be sold for in the market may be satisfactorily determined. 18 The owner may also show that the
property is suitable for division into village or town lots. 19
The trial court, therefore, correctly considered, among other circumstances, the proposed
subdivision plans of the lands sought to be expropriated in finding that those lands are residential
lots. This finding of the lower court is supported not only by the unanimous opinion of the
commissioners, as embodied in their report, but also by the Provincial Appraisal Committee of
the province of Pampanga composed of the Provincial Treasurer, the Provincial Auditor and the
District Engineer. In the minutes of the meeting of the Provincial Appraisal Committee, held on
May 14, 1959 (Exh. 13-Castellvi) We read in its Resolution No. 10 the following:
3. Since 1957 the land has been classified as residential in view of its
proximity to the air base and due to the fact that it was not being devoted to
agriculture. In fact, there is a plan to convert it into a subdivision for
residential purposes. The taxes due on the property have been paid based on
its classification as residential land;
The evidence shows that Castellvi broached the idea of subdividing her land into residential lots
as early as July 11, 1956 in her letter to the Chief of Staff of the Armed Forces of the Philippines.
(Exh. 5-Castellvi) As a matter of fact, the layout of the subdivision plan was tentatively
approved by the National Planning Commission on September 7, 1956. (Exh. 8-Castellvi). The
land of Castellvi had not been devoted to agriculture since 1947 when it was leased to the
Philippine Army. In 1957 said land was classified as residential, and taxes based on its
classification as residential had been paid since then (Exh. 13-Castellvi). The location of the
Castellvi land justifies its suitability for a residential subdivision. As found by the trial court, "It
is at the left side of the entrance of the Basa Air Base and bounded on two sides by roads (Exh.
13-Castellvi), paragraphs 1 and 2, Exh. 12-Castellvi), the poblacion, (of Floridablanca) the
municipal building, and the Pampanga Sugar Mills are closed by. The barrio schoolhouse and
chapel are also near (T.S.N. November 23,1960, p. 68)." 20
The lands of Toledo-Gozun (Lot 1-B and Lot 3) are practically of the same condition as the land
of Castellvi. The lands of Toledo-Gozun adjoin the land of Castellvi. They are also contiguous
to the Basa Air Base, and are along the road. These lands are near the barrio schoolhouse, the
barrio chapel, the Pampanga Sugar Mills, and the poblacion of Floridablanca (Exhs. 1, 3 and 4-
Toledo-Gozun). As a matter of fact, regarding lot 1-B it had already been surveyed and
subdivided, and its conversion into a residential subdivision was tentatively approved by the
National Planning Commission on July 8, 1959 (Exhs. 5 and 6 Toledo-Gozun). As early as June,
1958, no less than 32 man connected with the Philippine Air Force among them commissioned
officers, non-commission officers, and enlisted men had requested Mr. and Mrs. Joaquin D.
Gozun to open a subdivision on their lands in question (Exhs. 8, 8-A to 8-ZZ-Toledo-Gozun). 21
We agree with the findings, and the conclusions, of the lower court that the lands that are the
subject of expropriation in the present case, as of August 10, 1959 when the same were taken
possession of by the Republic, were residential lands and were adaptable for use as residential
subdivisions. Indeed, the owners of these lands have the right to their value for the use for which
they would bring the most in the market at the time the same were taken from them. The most
important issue to be resolved in the present case relates to the question of what is the just
compensation that should be paid to the appellees.
The Republic asserts that the fair market value of the lands of the appellees is P.20 per square
meter. The Republic cites the case of Republic vs. Narciso, et al., L-6594, which this Court
decided on May 18, 1956. The Narciso case involved lands that belonged to Castellvi and
Toledo-Gozun, and to one Donata Montemayor, which were expropriated by the Republic in
1949 and which are now the site of the Basa Air Base. In the Narciso case this Court fixed the
fair market value at P.20 per square meter. The lands that are sought to be expropriated in the
present case being contiguous to the lands involved in the Narciso case, it is the stand of the
Republic that the price that should be fixed for the lands now in question should also be at P.20
per square meter.
We can not sustain the stand of the Republic. We find that the price of P.20 per square meter,
as fixed by this Court in the Narciso case, was based on the allegation of the defendants (owners)
in their answer to the complaint for eminent domain in that case that the price of their lands was
P2,000.00 per hectare and that was the price that they asked the court to pay them. This Court
said, then, that the owners of the land could not be given more than what they had asked,
notwithstanding the recommendation of the majority of the Commission on Appraisal which
was adopted by the trial court that the fair market value of the lands was P3,000.00 per
hectare. We also find that the price of P.20 per square meter in the Narciso case was considered
the fair market value of the lands as of the year 1949 when the expropriation proceedings were
instituted, and at that time the lands were classified as sugar lands, and assessed for taxation
purposes at around P400.00 per hectare, or P.04 per square meter. 22 While the lands involved
in the present case, like the lands involved in the Narciso case, might have a fair market value
of P.20 per square meter in 1949, it can not be denied that ten years later, in 1959, when the
present proceedings were instituted, the value of those lands had increased considerably. The
evidence shows that since 1949 those lands were no longer cultivated as sugar lands, and in
1959 those lands were already classified, and assessed for taxation purposes, as residential lands.
In 1959 the land of Castellvi was assessed at P1.00 per square meter. 23
The Republic also points out that the Provincial Appraisal Committee of Pampanga, in its
resolution No. 5 of February 15, 1957 (Exhibit D), recommended the sum of P.20 per square
meter as the fair valuation of the Castellvi property. We find that this resolution was made by
the Republic the basis in asking the court to fix the provisional value of the lands sought to be
expropriated at P259,669.10, which was approved by the court. 24 It must be considered,
however, that the amount fixed as the provisional value of the lands that are being expropriated
does not necessarily represent the true and correct value of the land. The value is only
"provisional" or "tentative", to serve as the basis for the immediate occupancy of the property
being expropriated by the condemnor. The records show that this resolution No. 5 was repealed
by the same Provincial Committee on Appraisal in its resolution No. 10 of May 14, 1959
(Exhibit 13-Castellvi). In that resolution No. 10, the appraisal committee stated that "The
Committee has observed that the value of the land in this locality has increased since 1957 ...",
and recommended the price of P1.50 per square meter. It follows, therefore, that, contrary to the
stand of the Republic, that resolution No. 5 of the Provincial Appraisal Committee can not be
made the basis for fixing the fair market value of the lands of Castellvi and Toledo-Gozun.
The Republic further relied on the certification of the Acting Assistant Provincial Assessor of
Pampanga, dated February 8, 1961 (Exhibit K), to the effect that in 1950 the lands of Toledo-
Gozun were classified partly as sugar land and partly as urban land, and that the sugar land was
assessed at P.40 per square meter, while part of the urban land was assessed at P.40 per square
meter and part at P.20 per square meter; and that in 1956 the Castellvi land was classified as
sugar land and was assessed at P450.00 per hectare, or P.045 per square meter. We can not also
consider this certification of the Acting Assistant Provincial Assessor as a basis for fixing the
fair market value of the lands of Castellvi and Toledo-Gozun because, as the evidence shows,
the lands in question, in 1957, were already classified and assessed for taxation purposes as
residential lands. The certification of the assessor refers to the year 1950 as far as the lands of
Toledo-Gozun are concerned, and to the year 1956 as far as the land of Castellvi is concerned.
Moreover, this Court has held that the valuation fixed for the purposes of the assessment of the
land for taxation purposes can not bind the landowner where the latter did not intervene in fixing
it. 25
On the other hand, the Commissioners, appointed by the court to appraise the lands that were
being expropriated, recommended to the court that the price of P10.00 per square meter would
be the fair market value of the lands. The commissioners made their recommendation on the
basis of their observation after several ocular inspections of the lands, of their own personal
knowledge of land values in the province of Pampanga, of the testimonies of the owners of the
land, and other witnesses, and of documentary evidence presented by the appellees. Both
Castellvi and Toledo-Gozun testified that the fair market value of their respective land was at
P15.00 per square meter. The documentary evidence considered by the commissioners consisted
of deeds of sale of residential lands in the town of San Fernando and in Angeles City, in the
province of Pampanga, which were sold at prices ranging from P8.00 to P20.00 per square meter
(Exhibits 15, 16, 17, 18, 19, 20, 21, 22, 23-Castellvi). The commissioners also considered the
decision in Civil Case No. 1531 of the Court of First Instance of Pampanga, entitled Republic
vs. Sabina Tablante, which was expropriation case filed on January 13, 1959, involving a parcel
of land adjacent to the Clark Air Base in Angeles City, where the court fixed the price at P18.00
per square meter (Exhibit 14-Castellvi). In their report, the commissioners, among other things,
said:
... This expropriation case is specially pointed out, because the
circumstances and factors involved therein are similar in many respects to
the defendants' lands in this case. The land in Civil Case No. 1531 of this
Court and the lands in the present case (Civil Case No. 1623) are both near
the air bases, the Clark Air Base and the Basa Air Base respectively. There
is a national road fronting them and are situated in a first-class municipality.
As added advantage it may be said that the Basa Air Base land is very near
the sugar mill at Del Carmen, Floridablanca, Pampanga, owned by the
Pampanga Sugar Mills. Also just stone's throw away from the same lands is
a beautiful vacation spot at Palacol, a sitio of the town of Floridablanca,
which counts with a natural swimming pool for vacationists on weekends.
These advantages are not found in the case of the Clark Air Base. The
defendants' lands are nearer to the poblacion of Floridablanca then Clark
Air Base is nearer (sic) to the poblacion of Angeles, Pampanga.
The deeds of absolute sale, according to the undersigned commissioners, as
well as the land in Civil Case No. 1531 are competent evidence, because
they were executed during the year 1959 and before August 10 of the same
year. More specifically so the land at Clark Air Base which coincidentally
is the subject matter in the complaint in said Civil Case No. 1531, it having
been filed on January 13, 1959 and the taking of the land involved therein
was ordered by the Court of First Instance of Pampanga on January 15,
1959, several months before the lands in this case were taken by the
plaintiffs ....
From the above and considering further that the lowest as well as the highest
price per square meter obtainable in the market of Pampanga relative to
subdivision lots within its jurisdiction in the year 1959 is very well known
by the Commissioners, the Commission finds that the lowest price that can
be awarded to the lands in question is P10.00 per square meter. 26
The lower court did not altogether accept the findings of the Commissioners based on the
documentary evidence, but it considered the documentary evidence as basis for comparison in
determining land values. The lower court arrived at the conclusion that "the unanimous
recommendation of the commissioners of ten (P10.00) pesos per square meter for the three lots
of the defendants subject of this action is fair and just". 27 In arriving at its conclusion, the lower
court took into consideration, among other circumstances, that the lands are titled, that there is
a rising trend of land values, and the lowered purchasing power of the Philippine peso.
In the case of Manila Railroad Co. vs. Caligsihan, 40 Phil. 326, 328, this Court said:
A court of first instance or, on appeal, the Supreme Court, may change or
modify the report of the commissioners by increasing or reducing the
amount of the award if the facts of the case so justify. While great weight is
attached to the report of the commissioners, yet a court may substitute
therefor its estimate of the value of the property as gathered from the record
in certain cases, as, where the commissioners have applied illegal principles
to the evidence submitted to them, or where they have disregarded a clear
preponderance of evidence, or where the amount allowed is either palpably
inadequate or excessive. 28
The report of the commissioners of appraisal in condemnation proceedings are not binding, but
merely advisory in character, as far as the court is concerned. 29 In our analysis of the report of
the commissioners, We find points that merit serious consideration in the determination of the
just compensation that should be paid to Castellvi and Toledo-Gozun for their lands. It should
be noted that the commissioners had made ocular inspections of the lands and had considered
the nature and similarities of said lands in relation to the lands in other places in the province of
Pampanga, like San Fernando and Angeles City. We cannot disregard the observations of the
commissioners regarding the circumstances that make the lands in question suited for residential
purposes their location near the Basa Air Base, just like the lands in Angeles City that are
near the Clark Air Base, and the facilities that obtain because of their nearness to the big sugar
central of the Pampanga Sugar mills, and to the flourishing first class town of Floridablanca. It
is true that the lands in question are not in the territory of San Fernando and Angeles City, but,
considering the facilities of modern communications, the town of Floridablanca may be
considered practically adjacent to San Fernando and Angeles City. It is not out of place,
therefore, to compare the land values in Floridablanca to the land values in San Fernando and
Angeles City, and form an idea of the value of the lands in Floridablanca with reference to the
land values in those two other communities.
The important factor in expropriation proceeding is that the owner is awarded the just
compensation for his property. We have carefully studied the record, and the evidence, in this
case, and after considering the circumstances attending the lands in question We have arrived
at the conclusion that the price of P10.00 per square meter, as recommended by the
commissioners and adopted by the lower court, is quite high. It is Our considered view that the
price of P5.00 per square meter would be a fair valuation of the lands in question and would
constitute a just compensation to the owners thereof. In arriving at this conclusion We have
particularly taken into consideration the resolution of the Provincial Committee on Appraisal of
the province of Pampanga informing, among others, that in the year 1959 the land of Castellvi
could be sold for from P3.00 to P4.00 per square meter, while the land of Toledo-Gozun could
be sold for from P2.50 to P3.00 per square meter. The Court has weighed all the circumstances
relating to this expropriations proceedings, and in fixing the price of the lands that are being
expropriated the Court arrived at a happy medium between the price as recommended by the
commissioners and approved by the court, and the price advocated by the Republic. This Court
has also taken judicial notice of the fact that the value of the Philippine peso has considerably
gone down since the year 1959. 30 Considering that the lands of Castellvi and Toledo-Gozun are
adjoining each other, and are of the same nature, the Court has deemed it proper to fix the same
price for all these lands.
3. The third issue raised by the Republic relates to the payment of interest.
The Republic maintains that the lower court erred when it ordered the
Republic to pay Castellvi interest at the rate of 6% per annum on the total
amount adjudged as the value of the land of Castellvi, from July 1, 1956 to
July 10, 1959. We find merit in this assignment of error.
In ordering the Republic to pay 6% interest on the total value of the land of Castellvi from July
1, 1956 to July 10, 1959, the lower court held that the Republic had illegally possessed the land
of Castellvi from July 1, 1956, after its lease of the land had expired on June 30, 1956, until
August 10, 1959 when the Republic was placed in possession of the land pursuant to the writ of
possession issued by the court. What really happened was that the Republic continued to occupy
the land of Castellvi after the expiration of its lease on June 30, 1956, so much so that Castellvi
filed an ejectment case against the Republic in the Court of First Instance of
Pampanga. 31 However, while that ejectment case was pending, the Republic filed the complaint
for eminent domain in the present case and was placed in possession of the land on August 10,
1959, and because of the institution of the expropriation proceedings the ejectment case was
later dismissed. In the order dismissing the ejectment case, the Court of First Instance of
Pampanga said:
Plaintiff has agreed, as a matter of fact has already signed an agreement with
defendants, whereby she had agreed to receive the rent of the lands, subject
matter of the instant case from June 30, 1956 up to 1959 when the Philippine
Air Force was placed in possession by virtue of an order of the Court upon
depositing the provisional amount as fixed by the Provincial Appraisal
Committee with the Provincial Treasurer of
Pampanga; ...
If Castellvi had agreed to receive the rentals from June 30, 1956 to August 10, 1959, she should
be considered as having allowed her land to be leased to the Republic until August 10, 1959,
and she could not at the same time be entitled to the payment of interest during the same period
on the amount awarded her as the just compensation of her land. The Republic, therefore, should
pay Castellvi interest at the rate of 6% per annum on the value of her land, minus the provisional
value that was deposited, only from July 10, 1959 when it deposited in court the provisional
value of the land.
4. The fourth error assigned by the Republic relates to the denial by the lower court of its motion
for a new trial based on nearly discovered evidence. We do not find merit in this assignment of
error.
After the lower court had decided this case on May 26, 1961, the Republic filed a motion for a
new trial, supplemented by another motion, both based upon the ground of newly discovered
evidence. The alleged newly discovered evidence in the motion filed on June 21, 1961 was a
deed of absolute sale-executed on January 25, 1961, showing that a certain Serafin Francisco
had sold to Pablo L. Narciso a parcel of sugar land having an area of 100,000 square meters
with a sugar quota of 100 piculs, covered by P.A. No. 1701, situated in Barrio Fortuna,
Floridablanca, for P14,000, or P.14 per square meter.
In the supplemental motion, the alleged newly discovered evidence were: (1) a deed of sale of
some 35,000 square meters of land situated at Floridablanca for P7,500.00 (or about P.21 per
square meter) executed in July, 1959, by the spouses Evelyn D. Laird and Cornelio G. Laird in
favor of spouses Bienvenido S. Aguas and Josefina Q. Aguas; and (2) a deed of absolute sale of
a parcel of land having an area of 4,120,101 square meters, including the sugar quota covered
by Plantation Audit No. 161 1345, situated at Floridablanca, Pampanga, for P860.00 per hectare
(a little less than P.09 per square meter) executed on October 22, 1957 by Jesus Toledo y
Mendoza in favor of the Land Tenure Administration.
We find that the lower court acted correctly when it denied the motions for a new trial.
To warrant the granting of a new trial based on the ground of newly discovered evidence, it
must appear that the evidence was discovered after the trial; that even with the exercise of due
diligence, the evidence could not have been discovered and produced at the trial; and that the
evidence is of such a nature as to alter the result of the case if admitted. 32 The lower court
correctly ruled that these requisites were not complied with.
The lower court, in a well-reasoned order, found that the sales made by Serafin Francisco to
Pablo Narciso and that made by Jesus Toledo to the Land Tenure Administration were
immaterial and irrelevant, because those sales covered sugarlands with sugar quotas, while the
lands sought to be expropriated in the instant case are residential lands. The lower court also
concluded that the land sold by the spouses Laird to the spouses Aguas was a sugar land.
We agree with the trial court. In eminent domain proceedings, in order that evidence as to the
sale price of other lands may be admitted in evidence to prove the fair market value of the land
sought to be expropriated, the lands must, among other things, be shown to be similar.
But even assuming, gratia argumenti, that the lands mentioned in those deeds of sale were
residential, the evidence would still not warrant the grant of a new trial, for said evidence could
have been discovered and produced at the trial, and they cannot be considered newly discovered
evidence as contemplated in Section 1(b) of Rule 37 of the Rules of Court. Regarding this point,
the trial court said:
The Court will now show that there was no reasonable diligence employed.
The land described in the deed of sale executed by Serafin Francisco, copy
of which is attached to the original motion, is covered by a Certificate of
Title issued by the Office of the Register of Deeds of Pampanga. There is
no question in the mind of the court but this document passed through the
Office of the Register of Deeds for the purpose of transferring the title or
annotating the sale on the certificate of title. It is true that Fiscal Lagman
went to the Office of the Register of Deeds to check conveyances which
may be presented in the evidence in this case as it is now sought to be done
by virtue of the motions at bar, Fiscal Lagman, one of the lawyers of the
plaintiff, did not exercise reasonable diligence as required by the rules. The
assertion that he only went to the office of the Register of Deeds 'now and
then' to check the records in that office only shows the half-hazard [sic]
manner by which the plaintiff looked for evidence to be presented during
the hearing before the Commissioners, if it is at all true that Fiscal Lagman
did what he is supposed to have done according to Solicitor Padua. It would
have been the easiest matter for plaintiff to move for the issuance of a
subpoena duces tecum directing the Register of Deeds of Pampanga to
come to testify and to bring with him all documents found in his office
pertaining to sales of land in Floridablanca adjacent to or near the lands in
question executed or recorded from 1958 to the present. Even this
elementary precaution was not done by plaintiff's numerous attorneys.
 The same can be said of the deeds of sale attached to the supplementary
motion. They refer to lands covered by certificate of title issued by the
Register of Deeds of Pampanga. For the same reason they could have been
easily discovered if reasonable diligence has been exerted by the numerous
lawyers of the plaintiff in this case. It is noteworthy that all these deeds of
sale could be found in several government offices, namely, in the Office of
the Register of Deeds of Pampanga, the Office of the Provincial Assessor
of Pampanga, the Office of the Clerk of Court as a part of notarial reports
of notaries public that acknowledged these documents, or in the archives of
the National Library. In respect to Annex 'B' of the supplementary motion
copy of the document could also be found in the Office of the Land Tenure
Administration, another government entity. Any lawyer with a modicum of
ability handling this expropriation case would have right away though [sic]
of digging up documents diligently showing conveyances of lands near or
around the parcels of land sought to be expropriated in this case in the
offices that would have naturally come to his mind such as the offices
mentioned above, and had counsel for the movant really exercised the
reasonable diligence required by the Rule' undoubtedly they would have
been able to find these documents and/or caused the issuance of subpoena
duces tecum. ...
It is also recalled that during the hearing before the Court of the Report and
Recommendation of the Commissioners and objection thereto, Solicitor
Padua made the observation:
I understand, Your Honor, that there was a sale that took place in this place
of land recently where the land was sold for P0.20 which is contiguous to
this land.
(a) the lands of appellees Carmen Vda. de Castellvi and Maria Nieves
Toledo-Gozun, as described in the complaint, are declared expropriated for
public use;
(b) the fair market value of the lands of the appellees is fixed at P5.00 per
square meter;
(c) the Republic must pay appellee Castellvi the sum of P3,796,495.00 as
just compensation for her one parcel of land that has an area of 759,299
square meters, minus the sum of P151,859.80 that she withdrew out of the
amount that was deposited in court as the provisional value of the land, with
interest at the rate of 6% per annum from July 10, 1959 until the day full
payment is made or deposited in court;
(d) the Republic must pay appellee Toledo-Gozun the sum of P2,695,225.00
as the just compensation for her two parcels of land that have a total area of
539,045 square meters, minus the sum of P107,809.00 that she withdrew
out of the amount that was deposited in court as the provisional value of her
lands, with interest at the rate of 6%, per annum from July 10, 1959 until
the day full payment is made or deposited in court; (e) the attorney's lien of
Atty. Alberto Cacnio is enforced; and
(f) the costs should be paid by appellant Republic of the Philippines, as
provided in Section 12, Rule 67, and in Section 13, Rule 141, of the Rules
of Court.
IT IS SO ORDERED.

The Court gave him permission to submit said document subject to the
approval of the Court. ... This was before the decision was rendered, and
later promulgated on May 26, 1961 or more than one month after Solicitor
Padua made the above observation. He could have, therefore, checked up
the alleged sale and moved for a reopening to adduce further evidence. He
did not do so. He forgot to present the evidence at a more propitious time.
Now, he seeks to introduce said evidence under the guise of newly-
discovered evidence. Unfortunately the Court cannot classify it as newly-
discovered evidence, because tinder the circumstances, the correct
qualification that can be given is 'forgotten evidence'. Forgotten however,
is not newly-discovered
evidence. 33

The granting or denial of a motion for new trial is, as a general rule, discretionary with the trial
court, whose judgment should not be disturbed unless there is a clear showing of abuse of
discretion. 34 We do not see any abuse of discretion on the part of the lower court when it denied
the motions for a new trial.

WHEREFORE, the decision appealed from is modified, as follows:

MUNICIPALITY OF PARANAQUE, petitioner, vs. V.M. REALTY
CORPORATION, respondent.
PANGANIBAN, J.:
A local government unit (LGU), like the Municipality of Paraaque, cannot authorize an
expropriation of private property through a mere resolution of its lawmaking body. The Local
Government Code expressly and clearly requires an ordinance or a local law for the purpose. A
resolution that merely expresses the sentiment or opinion of the Municipal Council will not
suffice. On the other hand, the principle of res judicata does not bar subsequent proceedings for
the expropriation of the same property when all the legal requirements for its valid exercise are
complied with.
Statement of the Case
These principles are applied by this Court in resolving this petition for review
on certiorari of the July 22, 1996 Decision[1] of the Court of Appeals[2] in CA GR CV No.
48048, which affirmed in toto[3] the Regional Trial Courts August 9, 1994 Resolution.[4] The
trial court dismissed the expropriation suit as follows:
The right of the plaintiff to exercise the power of eminent domain is not disputed. However,
such right may be exercised only pursuant to an Ordinance (Sec. 19, R.A. No. 7160). In the
instant case, there is no such ordinance passed by the Municipal Council of Paraaque enabling
the Municipality, thru its Chief Executive, to exercise the power of eminent domain. The
complaint, therefore, states no cause of action.
Assuming that plaintiff has a cause of action, the same is barred by a prior judgment. On
September 29, 1987, the plaintiff filed a complaint for expropriation involving the same
parcels of land which was docketed as Civil Case No. 17939 of this Court (page 26,
record). Said case was dismissed with prejudice on May 18, 1988 (page 39, record). The order
of dismissal was not appealed, hence, the same became final. The plaintiff can not be allowed
to pursue the present action without violating the principle of [r]es [j]udicata. While
defendant in Civil Case No. 17939 was Limpan Investment Corporation, the doctrine of res
judicata still applies because the judgment in said case (C.C. No. 17939) is conclusive
between the parties and their successors-in-interest (Vda. de Buncio vs. Estate of the late Anita
de Leon). The herein defendant is the successor-in-interest of Limpan Investment Corporation
as shown by the Deed of Assignment Exchange executed on June 13, 1990.
WHEREFORE, defendants motion for reconsideration is hereby granted. The order dated
February 4, 1994 is vacated and set aside.
This case is hereby dismissed. No pronouncement as to costs.
SO ORDERED.[5]
Factual Antecedents
Pursuant to Sangguniang Bayan Resolution No. 93-95, Series of 1993,[6] the Municipality
of Paraaque filed on September 20, 1993, a Complaint for expropriation [7] against Private
Respondent V.M. Realty Corporation over two parcels of land (Lots 2-A-2 and 2-B-1 of
Subdivision Plan Psd-17917), with a combined area of about 10,000 square meters, located at
Wakas, San Dionisio, Paraaque, Metro Manila, and covered by Torrens Certificate of Title No.
48700. Allegedly, the complaint was filed for the purpose of alleviating the living conditions
of the underprivileged by providing homes for the homeless through a socialized housing
project.[8]Parenthetically, it was also for this stated purpose that petitioner, pursuant to
its Sangguniang Bayan Resolution No. 577, Series of 1991,[9] previously made an offer to enter
into a negotiated sale of the property with private respondent, which the latter did not accept.[10]
Finding the Complaint sufficient in form and substance, the Regional Trial Court of
Makati, Branch 134, issued an Order dated January 10, 1994,[11] giving it due course. Acting on
petitioners motion, said court issued an Order dated February 4, 1994,[12]authorizing petitioner
to take possession of the subject property upon deposit with its clerk of court of an amount
equivalent to 15 percent of its fair market value based on its current tax declaration.
On February 21, 1994, private respondent filed its Answer containing affirmative defenses
and a counterclaim,[13] alleging in the main that (a) the complaint failed to state a cause of action
because it was filed pursuant to a resolution and not to an ordinance as required by RA 7160
(the Local Government Code); and (b) the cause of action, if any, was barred by a prior judgment
or res judicata. On private respondents motion, its Answer was treated as a motion to
dismiss.[14] On March 24, 1994,[15] petitioner filed its opposition, stressing that the trial courts
Order dated February 4, 1994 was in accord with Section 19 of RA 7160, and that the principle
of res judicata was not applicable.
Thereafter, the trial court issued its August 9, 1994 Resolution [16] nullifying its February
4, 1994 Order and dismissing the case.Petitioners motions for reconsideration and transfer of
venue were denied by the trial court in a Resolution dated December 2, 1994.[17] Petitioner then
appealed to Respondent Court, raising the following issues:
1. Whether or not the Resolution of the Paraaque Municipal Council No. 93-95,
Series of 1993 is a substantial compliance of the statutory requirement of
Section 19, R.A. 7180 [sic] in the exercise of the power of eminent
domain by the plaintiff-appellant.
2. Whether or not the complaint in this case states no cause of action.
3. Whether or not the strict adherence to the literal observance to the rule of
procedure resulted in technicality standing in the way of substantial
justice.
4. Whether or not the principle of res judicata is applicable to the present case.[18]
As previously mentioned, the Court of Appeals affirmed in toto the trial courts
Decision. Respondent Court, in its assailed Resolution promulgated on January 8,
1997,[19] denied petitioners Motion for Reconsideration for lack of merit.
Hence, this appeal.[20]
The Issues
Before this Court, petitioner posits two issues, viz.:
1. A resolution duly approved by the municipal council has the same force and effect of an
ordinance and will not deprive an expropriation case of a valid cause of action.
2. The principle of res judicata as a ground for dismissal of case is not applicable when public
interest is primarily involved.[21]
The Courts Ruling
The petition is not meritorious.
First Issue:
Resolution Different from an Ordinance
Petitioner contends that a resolution approved by the municipal council for the purpose of
initiating an expropriation case substantially complies with the requirements of the
law[22] because the terms ordinance and resolution are synonymous for the purpose of bestowing
authority [on] the local government unit through its chief executive to initiate the expropriation
proceedings in court in the exercise of the power of eminent domain. [23] Petitioner seeks to
bolster this contention by citing Article 36, Rule VI of the Rules and Regulations Implementing
the Local Government Code, which provides: If the LGU fails to acquire a private property for
public use, purpose, or welfare through purchase, the LGU may expropriate said property
through a resolution of the Sanggunian authorizing its chief executive to initiate expropriation
proceedings.[24] (Italics supplied.)
The Court disagrees. The power of eminent domain is lodged in the legislative branch of
government, which may delegate the exercise thereof to LGUs, other public entities and public
utilities.[25] An LGU may therefore exercise the power to expropriate private property only when
authorized by Congress and subject to the latters control and restraints, imposed through the law
conferring the power or in other legislations.[26] In this case, Section 19 of RA 7160, which
delegates to LGUs the power of eminent domain, also lays down the parameters for its
exercise. It provides as follows:
Section 19. Eminent Domain. A local government unit may, through its chief executive and
acting pursuant to an ordinance, exercise the power of eminent domain for public use, or
purpose, or welfare for the benefit of the poor and the landless, upon payment of just
compensation, pursuant to the provisions of the Constitution and pertinent
laws: Provided, however, That the power of eminent domain may not be exercised unless a
valid and definite offer has been previously made to the owner, and such offer was not
accepted: Provided, further, That the local government unit may immediately take possession
of the property upon the filing of the expropriation proceedings and upon making a deposit
with the proper court of at least fifteen percent (15%) of the fair market value of the property
based on the current tax declaration of the property to be expropriated: Provided, finally, That,
the amount to be paid for the expropriated property shall be determined by the proper court,
based on the fair market value at the time of the taking of the property. (Emphasis supplied)
Thus, the following essential requisites must concur before an LGU can exercise the
power of eminent domain:
1. An ordinance is enacted by the local legislative council authorizing the local chief
executive, in behalf of the LGU, to exercise the power of eminent domain or
pursue expropriation proceedings over a particular private property.
2. The power of eminent domain is exercised for public use, purpose or welfare, or
for the benefit of the poor and the landless.
3. There is payment of just compensation, as required under Section 9, Article III of
the Constitution, and other pertinent laws.
4. A valid and definite offer has been previously made to the owner of the property
sought to be expropriated, but said offer was not accepted.[27]
In the case at bar, the local chief executive sought to exercise the power of eminent domain
pursuant to a resolution of the municipal council. Thus, there was no compliance with the first
requisite that the mayor be authorized through an ordinance.Petitioner cites Camarines Sur vs.
Court of Appeals[28] to show that a resolution may suffice to support the exercise of eminent
domain by an LGU.[29] This case, however, is not in point because the applicable law at that
time was BP 337,[30] the previous Local Government Code, which had provided that a mere
resolution would enable an LGU to exercise eminent domain. In contrast, RA 7160,[31] the
present Local Government Code which was already in force when the Complaint for
expropriation was filed, explicitly required an ordinance for this purpose.
We are not convinced by petitioners insistence that the terms resolution and ordinance are
synonymous. A municipal ordinance is different from a resolution. An ordinance is a law, but a
resolution is merely a declaration of the sentiment or opinion of a lawmaking body on a specific
matter.[32] An ordinance possesses a general and permanent character, but a resolution is
temporary in nature. Additionally, the two are enacted differently -- a third reading is necessary
for an ordinance, but not for a resolution, unless decided otherwise by a majority of all
the Sanggunian members.[33]
If Congress intended to allow LGUs to exercise eminent domain through a mere
resolution, it would have simply adopted the language of the previous Local Government
Code. But Congress did not. In a clear divergence from the previous Local Government Code,
Section 19 of RA 7160 categorically requires that the local chief executive act pursuant to an
ordinance.Indeed, [l]egislative intent is determined principally from the language of a
statute. Where the language of a statute is clear and unambiguous, the law is applied according
to its express terms, and interpretation would be resorted to only where a literal interpretation
would be either impossible or absurd or would lead to an injustice.[34] In the instant case, there
is no reason to depart from this rule, since the law requiring an ordinance is not at all impossible,
absurd, or unjust.
Moreover, the power of eminent domain necessarily involves a derogation of a
fundamental or private right of the people.[35]Accordingly, the manifest change in the legislative
language -- from resolution under BP 337 to ordinance under RA 7160 -- demands a strict
construction. No species of property is held by individuals with greater tenacity, and is guarded
by the Constitution and laws more sedulously, than the right to the freehold of inhabitants. When
the legislature interferes with that right and, for greater public purposes, appropriates the land
of an individual without his consent, the plain meaning of the law should not be enlarged by
doubtful interpretation.[36]
Petitioner relies on Article 36, Rule VI of the Implementing Rules, which requires only a
resolution to authorize an LGU to exercise eminent domain. This is clearly misplaced, because
Section 19 of RA 7160, the law itself, surely prevails over said rule which merely seeks to
implement it.[37] It is axiomatic that the clear letter of the law is controlling and cannot be
amended by a mere administrative rule issued for its implementation. Besides, what the
discrepancy seems to indicate is a mere oversight in the wording of the implementing rules,
since Article 32, Rule VI thereof, also requires that, in exercising the power of eminent domain,
the chief executive of the LGU must act pursuant to an ordinance.
In this ruling, the Court does not diminish the policy embodied in Section 2, Article X of
the Constitution, which provides that territorial and political subdivisions shall enjoy local
autonomy. It merely upholds the law as worded in RA 7160. We stress that an LGU is created
by law and all its powers and rights are sourced therefrom. It has therefore no power to amend
or act beyond the authority given and the limitations imposed on it by law. Strictly speaking,
the power of eminent domain delegated to an LGU is in reality not eminent but inferior domain,
since it must conform to the limits imposed by the delegation, and thus partakes only of a share
in eminent domain.[38] Indeed, the national legislature is still the principal of the local
government units, which cannot defy its will or modify or violate it. [39]
Complaint Does Not State a Cause of Action
In its Brief filed before Respondent Court, petitioner argues that its Sanguniang
Bayan passed an ordinance on October 11, 1994 which reiterated its Resolution No. 93-35,
Series of 1993, and ratified all the acts of its mayor regarding the subject expropriation. [40]
This argument is bereft of merit. In the first place, petitioner merely alleged the existence
of such an ordinance, but it did not present any certified true copy thereof. In the second
place, petitioner did not raise this point before this Court. In fact, it was mentioned by private
respondent, and only in passing.[41] In any event, this allegation does not cure the inherent defect
of petitioners Complaint for expropriation filed on September 23, 1993. It is hornbook doctrine
that:
x x x in a motion to dismiss based on the ground that the complaint fails to state a cause of
action, the question submitted before the court for determination is the sufficiency of the
allegations in the complaint itself. Whether those allegations are true or not is beside the point,
for their truth is hypothetically admitted by the motion. The issue rather is: admitting them to
be true, may the court render a valid judgment in accordance with the prayer of the
complaint?[42]
reservation. Notwithstanding the grant to individuals, the eminent domain, the highest and most
exact idea of property, remains in the government, or in the aggregate body of the people in
their sovereign capacity; and they have the right to resume the possession of the property
whenever the public interest requires it.[47] Thus, the State or its authorized agent cannot be
forever barred from exercising said right by reason alone of previous non-compliance with any
legal requirement.
While the principle of res judicata does not denigrate the right of the State to exercise
eminent domain, it does apply to specific issues decided in a previous case. For example, a final
judgment dismissing an expropriation suit on the ground that there was no prior offer precludes
another suit raising the same issue; it cannot, however, bar the State or its agent from thereafter
complying with this requirement, as prescribed by law, and subsequently exercising its power
of eminent domain over the same property.[48] By the same token, our ruling that petitioner
cannot exercise its delegated power of eminent domain through a mere resolution will not bar it
from reinstituting similar proceedings, once the said legal requirement and, for that
matter, all others are properly complied with. Parenthetically and by parity of reasoning, the
same is also true of the principle of law of the case. In Republic vs De Knecht,[49] the Court ruled
that the power of the State or its agent to exercise eminent domain is not diminished by the mere
fact that a prior final judgment over the property to be expropriated has become the law of the
case as to the parties. The State or its authorized agent may still subsequently exercise its right
to expropriate the same property, once all legal requirements are complied with. To rule
otherwise will not only improperly diminish the power of eminent domain, but also clearly
defeat social justice.
WHEREFORE, the petition is hereby DENIED without prejudice to petitioners proper
exercise of its power of eminent domain over subject property. Costs against petitioner.
SO ORDERED.

The fact that there is no cause of action is evident from the face of the Complaint for
expropriation which was based on a mere resolution. The absence of an ordinance authorizing
the same is equivalent to lack of cause of action. Consequently, the Court of Appeals committed
no reversible error in affirming the trial courts Decision which dismissed the expropriation suit.
Second Issue:
Eminent Domain Not Barred by Res Judicata
As correctly found by the Court of Appeals[43] and the trial court,[44] all the requisites for
the application of res judicata are present in this case. There is a previous final judgment on the
merits in a prior expropriation case involving identical interests, subject matter and cause of
action, which has been rendered by a court having jurisdiction over it.
Be that as it may, the Court holds that the principle of res judicata, which finds application
in generally all cases and proceedings,[45] cannot bar the right of the State or its agent to
expropriate private property. The very nature of eminent domain, as an inherent power of the
State, dictates that the right to exercise the power be absolute and unfettered even by a prior
judgment or res judicata. The scope of eminent domain is plenary and, like police power, can
reach every form of property which the State might need for public use.[46] All separate interests
of individuals in property are held of the government under this tacit agreement or implied
PERCIVAL MODAY, ZOTICO MODAY (deceased) and LEONORA
MODAY, petitioners, vs. COURT OF APPEALS, JUDGE EVANGELINE S.
YUIPCO OF BRANCH 6, REGIONAL TRIAL COURT, AGUSAN DEL SUR
AND MUNICIPALITY OF BUNAWAN, respondents.
DECISION
ROMERO, J.:
The main issue presented in this case is whether a municipality may expropriate private
property by virtue of a municipal resolution which was disapproved by the Sangguniang
Panlalawigan. Petitioner seeks the reversal of the Court of Appeals decision and resolution,
promulgated on July 15, 1992 and October 22, 1992 respectively[1], and a declaration that
Municipal Resolution No. 43-89 of the Bunawan Sangguniang Bayan is null and void.
On July 23, 1989, the Sangguniang Bayan of the Municipality of Bunawan in Agusan del
Sur passed Resolution No. 43-89, "Authorizing the Municipal Mayor to Initiate the Petition for
Expropriation of a One (1) Hectare Portion of Lot No. 6138-Pls-4 along the National Highway
Owned by Percival Moday for the Site of Bunawan Farmers Center and Other Government
Sports Facilities."[2]
In due time, Resolution No. 43-89 was approved by then Municipal Mayor Anuncio C.
Bustillo and transmitted to the Sangguniang Panlalawigan for its approval. On September 11,
1989, the Sangguniang Panlalawigan disapproved said Resolution and returned it with the
comment that "expropriation is unnecessary considering that there are still available lots in
Bunawan for the establishment of the government center."[3]
The Municipality of Bunawan, herein public respondent, subsequently filed a Petition for
Eminent Domain against petitioner Percival Moday before the Regional Trial Court at
Prosperidad, Agusan del Sur.[4] The complaint was later amended to include the registered
owners, Percival Moday's parents, Zotico and Leonora Moday, as party defendants.
On March 6, 1991, public respondent municipality filed a Motion to Take or Enter Upon
the Possession of Subject Matter of This Case stating that it had already deposited with the
municipal treasurer the necessary amount in accordance with Section 2, Rule 67 of the Revised
Rules of Court and that it would be in the government's best interest for public respondent to be
allowed to take possession of the property.
Despite petitioners' opposition and after a hearing on the merits, the Regional Trial Court
granted respondent municipality's motion to take possession of the land. The lower court held
that the Sangguniang Panlalawigan's failure to declare the resolution invalid leaves it effective.
It added that the duty of the Sangguniang Panlalawigan is merely to review the ordinances and
resolutions passed by the Sangguniang Bayan under Section 208 (l) of B.P. Blg. 337, old Local
Government Code and that the exercise of eminent domain is not one of the two acts enumerated
in Section 19 thereof requiring the approval of the Sangguniang Panlalawigan.[5] The dispositive
portion of the lower court's Order dated July 2, 1991 reads:
"WHEREFORE, it appearing that the amount of P632.39 had been deposited as per Official
Receipt No. 5379647 on December 12, 1989 which this Court now determines as the
provisional value of the land, the Motion to Take or Enter Upon the Possession of the Property
filed by petitioner through counsel is hereby GRANTED. The Sheriff of this Court is ordered
to forthwith place the plaintiff in possession of the property involved.
Let the hearing be set on August 9, 1991 at 8:30 o'clock in the morning for the purpose of
ascertaining the just compensation or fair market value of the property sought to be taken, with
notice to all the parties concerned.
SO ORDERED."[6]
Petitioners' motion for reconsideration was denied by the trial court on October 31, 1991.
Petitioners elevated the case in a petition for certiorari alleging grave abuse of discretion
on the part of the trial court, but the same was dismissed by respondent appellate court on July
15, 1992.[7] The Court of Appeals held that the public purpose for the expropriation is clear from
Resolution No. 43-89 and that since the Sangguniang Panlalawigan of Agusan del Sur did not
declare Resolution No. 43-89 invalid, expropriation of petitioners' property could proceed.
Respondent appellate court also denied petitioners' motion for reconsideration on October
22, 1992.[8]
Meanwhile, the Municipality of Bunawan had erected three buildings on the subject
property: the Association of Barangay Councils (ABC) Hall, the Municipal Motorpool, both
wooden structures, and the Bunawan Municipal Gymnasium, which is made of concrete.
In the instant petition for review filed on November 23, 1992, petitioner seeks the reversal
of the decision and resolution of the Court of Appeals and a declaration that Resolution No. 43-
89 of the Municipality of Bunawan is null and void.
On December 8, 1993, the Court issued a temporary restraining order enjoining and
restraining public respondent Judge Evangeline Yuipco from enforcing her July 2, 1991 Order
and respondent municipality from using and occupying all the buildings constructed and from
further constructing any building on the land subject of this petition. [9]
Acting on petitioners' Omnibus Motion for Enforcement of Restraining Order and for
Contempt, the Court issued a Resolution on March 15, 1995, citing incumbent municipal mayor
Anuncio C. Bustillo for contempt, ordering him to pay the fine and to demolish the
"blocktiendas" which were built in violation of the restraining order.[10]
Former Mayor Anuncio C. Bustillo paid the fine and manifested that he lost in the May 8,
1995 election.[11] The incumbent Mayor Leonardo Barrios, filed a Manifestation, Motion to
Resolve "Urgent Motion for Immediate Dissolution of the Temporary Restraining Order" and
Memorandum on June 11, 1996 for the Municipality of Bunawan.[12]
Petitioners contend that the Court of Appeals erred in upholding the legality of the
condemnation proceedings initiated by the municipality. According to petitioners, the
expropriation was politically motivated and Resolution No. 43-89 was correctly disapproved by
the Sangguniang Panlalawigan, there being other municipal properties available for the purpose.
Petitioners also pray that the former Mayor Anuncio C. Bustillo be ordered to pay damages for
insisting on the enforcement of a void municipal resolution.
The Court of Appeals declared that the Sangguniang Panlalawigan's reason for
disapproving the resolution "could be baseless, because it failed to point out which and where
are 'those available lots.' Respondent court also concluded that since the Sangguniang
Panlalawigan did not declare the municipal board's resolution as invalid, expropriation of
petitioners' property could proceed.[13]
The Court finds no merit in the petition and affirms the decision of the Court of Appeals.
 Eminent domain, the power which the Municipality of Bunawan exercised in the instant
case, is a fundamental State power that is inseparable from sovereignty. [14] It is government's
right to appropriate, in the nature of a compulsory sale to the State, private property for public
use or purpose.[15] Inherently possessed by the national legislature, the power of eminent domain
may be validly delegated to local governments, other public entities and public utilities.[16] For
the taking of private property by the government to be valid, the taking must be for public use
and there must be just compensation.[17]
The Municipality of Bunawan's power to exercise the right of eminent domain is not
disputed as it is expressly provided for in Batas Pambansa Blg. 337, the Local Government
Code[18] in force at the time expropriation proceedings were initiated. Section 9 of said law
states:
"Section 9. Eminent Domain. A local government unit may, through its head and acting
pursuant to a resolution of its sanggunian, exercise the right of eminent domain and institute
condemnation proceedings for public use or purpose."
What petitioners question is the lack of authority of the municipality to exercise this right
since the Sangguniang Panlalawigan disapproved Resolution No. 43-89.
Section 153 of B.P. Blg. 337 provides:
"Sec. 153. Sangguniang Panlalawigan Review. (1) Within thirty days after receiving copies of
approved ordinances, resolutions and executive orders promulgated by the municipal mayor,
the sangguniang panlalawigan shall examine the documents or transmit them to the provincial
attorney, or if there be none, to the provincial fiscal, who shall examine them promptly and
inform the sangguniang panlalawigan in writing of any defect or impropriety which he may
discover therein and make such comments or recommendations as shall appear to him proper.
(2) If the sangguniang panlalawigan shall find that any municipal ordinance, resolution or
executive order is beyond the power conferred upon the sangguniang bayan or the mayor,
it shall declare such ordinance, resolution or executive order invalid in whole or in part,
entering its actions upon the minutes and advising the proper municipal authorities thereof.
The effect of such an action shall be to annul the ordinance, resolution or executive order in
question in whole or in part. The action of the sangguniang panlalawigan shall be final.
xxx xxx xxx." (Emphasis supplied.)
The Sangguniang Panlalawigan's disapproval of Municipal Resolution No. 43-89 is an
infirm action which does not render said resolution null and void. The law, as expressed in
Section 153 of B.P. Blg. 337, grants the Sangguniang Panlalawigan the power to declare a
municipal resolution invalid on the sole ground that it is beyond the power of the Sangguniang
Bayan or the Mayor to issue. Although pertaining to a similar provision of law but different
factual milieu then obtaining, the Court's pronouncements in Velazco v. Blas,[19] where we cited
significant early jurisprudence, are applicable to the case at bar.
"The only ground upon which a provincial board may declare any municipal resolution,
ordinance, or order invalid is when such resolution, ordinance, or order is 'beyond the powers
conferred upon the council or president making the same.' Absolutely no other ground is
recognized by the law. A strictly legal question is before the provincial board in its
consideration of a municipal resolution, ordinance, or order. The provincial (board's)
disapproval of any resolution, ordinance, or order must be premised specifically upon the fact
that such resolution, ordinance, or order is outside the scope of the legal powers conferred by
law. If a provincial board passes these limits, it usurps the legislative functions of the
municipal council or president. Such has been the consistent course of executive authority."[20]
Thus, the Sangguniang Panlalawigan was without the authority to disapprove Municipal
Resolution No. 43-89 for the Municipality of Bunawan clearly has the power to exercise the
right of eminent domain and its Sangguniang Bayan the capacity to promulgate said resolution,
pursuant to the earlier-quoted Section 9 of B.P. Blg. 337. Perforce, it follows that Resolution
No. 43-89 is valid and binding and could be used as lawful authority to petition for the
condemnation of petitioners' property.
As regards the accusation of political oppression, it is alleged that Percival Moday
incurred the ire of then Mayor Anuncio C. Bustillo when he refused to support the latter's
candidacy for mayor in previous elections. Petitioners claim that then incumbent Mayor C.
Bustillo used the expropriation to retaliate by expropriating their land even if there were other
properties belonging to the municipality and available for the purpose. Specifically, they allege
that the municipality owns a vacant seven-hectare property adjacent to petitioners' land,
evidenced by a sketch plan.[21]
The limitations on the power of eminent domain are that the use must be public,
compensation must be made and due process of law must be observed. [22] The Supreme Court,
taking cognizance of such issues as the adequacy of compensation, necessity of the taking and
the public use character or the purpose of the taking[23], has ruled that the necessity of exercising
eminent domain must be genuine and of a public character.[24] Government may not capriciously
choose what private property should be taken.
After a careful study of the records of the case, however, we find no evidentiary support
for petitioners' allegations. The uncertified photocopy of the sketch plan does not conclusively
prove that the municipality does own vacant land adjacent to petitioners' property suited to the
purpose of the expropriation. In the questioned decision, respondent appellate court similarly
held that the pleadings and documents on record have not pointed out any of respondent
municipality's "other available properties available for the same purpose. [25] " The accusations
of political reprisal are likewise unsupported by competent evidence. Consequently, the Court
holds that petitioners' demand that the former municipal mayor be personally liable for damages
is without basis.
WHEREFORE, the instant petition is hereby DENIED. The questioned Decision and
Resolution of the Court of Appeals in the case of "Percival Moday, et al. v. Municipality of
Bunawan, et al." (CA G.R. SP No. 26712) are AFFIRMED. The Temporary Restraining Order
issued by the Court on December 8, 1993 is LIFTED.
SO ORDERED.
DIOSDADO LAGCAO, G.R. No. 155746 City, rendered a decision on April 1, 1998, ordering the squatters to vacate the lot. On appeal,
DOROTEO LAGCAO and the RTC affirmed the MTCCs decision and issued a writ of execution and order of demolition.
URSULA LAGCAO,
Petitioners, Present: However, when the demolition order was about to be implemented, Cebu City Mayor Alvin
DAVIDE, C.J., Garcia wrote two letters[4] to the MTCC, requesting the deferment of the demolition on the
PUNO, ground that the City was still looking for a relocation site for the squatters. Acting on the mayors
PANGANIBAN, request, the MTCC issued two orders suspending the demolition for a period of 120 days from
QUISUMBING, February 22, 1999. Unfortunately for petitioners, during the suspension period,
YNARES-SANTIAGO, the Sangguniang Panlungsod(SP) of Cebu City passed a resolution which identified Lot 1029
- versus - SANDOVAL-GUTIERREZ, as a socialized housing site pursuant to RA 7279.[5] Then, on June 30, 1999, the SP of Cebu City
CARPIO, passed Ordinance No. 1772[6] which included Lot 1029 among the identified sites for socialized
AUSTRIA-MARTINEZ, housing. On July, 19, 2000, Ordinance No. 1843 [7] was enacted by the SP of Cebu City
CORONA, authorizing the mayor of Cebu City to initiate expropriation proceedings for the acquisition of
CARPIO MORALES,* Lot 1029 which was registered in the name of petitioners. The intended acquisition was to be
CALLEJO, SR., used for the benefit of the homeless after its subdivision and sale to the actual occupants thereof.
AZCUNA,* For this purpose, the ordinance appropriated the amount of P6,881,600 for the payment of the
TINGA and subject lot. This ordinance was approved by Mayor Garcia on August 2, 2000.
CHICO-NAZARIO,* JJ.
JUDGE GENEROSA G. LABRA, On August 29, 2000, petitioners filed with the RTC an action for declaration of nullity of
Branch 23, Regional Trial Court, Ordinance No. 1843 for being unconstitutional. The trial court rendered its decision on July 1,
Cebu, and the CITY OF CEBU, 2002 dismissing the complaint filed by petitioners whose subsequent motion for reconsideration
Respondent. Promulgated: was likewise denied on August 26, 2002.

October 13, 2004
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x
DECISION
CORONA, J.:
Before us is a petition for review of the decision dated July 1, 2002 of the Regional
Trial Court, Branch 23, Cebu City[1] upholding the validity of the City of Cebus Ordinance No.
1843, as well as the lower courts order dated August 26, 2002 denying petitioners motion for
reconsideration.
In 1964, the Province of Cebu donated 210 lots to the City of Cebu. One of these lots was Lot
1029, situated in Capitol Hills, Cebu City, with an area of 4,048 square meters. In 1965,
petitioners purchased Lot 1029 on installment basis. But then, in late 1965, the 210 lots,
including Lot 1029, reverted to the Province of Cebu.[2] Consequently, the province tried to
annul the sale of Lot 1029 by the City of Cebu to the petitioners. This prompted the latter to sue
the province for specific performance and damages in the then Court of First Instance.
On July 9, 1986, the court a quo ruled in favor of petitioners and ordered the Province
of Cebu to execute the final deed of sale in favor of petitioners. On June 11, 1992, the Court of
Appeals affirmed the decision of the trial court. Pursuant to the ruling of the appellate court, the
Province of Cebu executed on June 17, 1994 a deed of absolute sale over Lot 1029 in favor of
petitioners. Thereafter, Transfer Certificate of Title (TCT) No. 129306 was issued in the name
of petitioners and Crispina Lagcao.[3]
After acquiring title, petitioners tried to take possession of the lot only to discover that it was
already occupied by squatters. Thus, on June 15, 1997, petitioners instituted ejectment
proceedings against the squatters. The Municipal Trial Court in Cities (MTCC), Branch 1, Cebu
In this appeal, petitioners argue that Ordinance No. 1843 is unconstitutional as it sanctions the
expropriation of their property for the purpose of selling it to the squatters, an endeavor contrary
to the concept of public use contemplated in the Constitution.[8] They allege that it will benefit
only a handful of people. The ordinance, according to petitioners, was obviously passed for
politicking, the squatters undeniably being a big source of votes.
In sum, this Court is being asked to resolve whether or not the intended expropriation by the
City of Cebu of a 4,048-square-meter parcel of land owned by petitioners contravenes the
Constitution and applicable laws.
Under Section 48 of RA 7160,[9] otherwise known as the Local Government Code of
1991,[10] local legislative power shall
be exercised by the Sangguniang Panlungsod of the city. The legislative acts of
the Sangguniang Panlungsod in the exercise of its lawmaking authority are denominated
ordinances.
Local government units have no inherent power of eminent domain and can exercise it only
when expressly authorized by the legislature.[11] By virtue of RA 7160, Congress conferred upon
local government units the power to expropriate. Ordinance No. 1843 was enacted pursuant to
Section 19 of RA 7160:
SEC. 19. Eminent Domain. A local government unit may, through its
chief executive and acting pursuant to an ordinance, exercise the power of
eminent domain for public use, or purpose, or welfare for the benefit of the
poor and the landless, upon payment of just compensation, pursuant to the
provisions of the Constitution and pertinent lawsxxx. (italics supplied).
Ordinance No. 1843 which authorized the expropriation of petitioners lot was enacted by the SP
of Cebu City to provide socialized housing for the homeless and low-income residents of the
City.
However, while we recognize that housing is one of the most serious social problems
of the country, local government units do not possess unbridled authority to exercise their power
of eminent domain in seeking solutions to this problem.
There are two legal provisions which limit the exercise of this power: (1) no person
shall be deprived of life, liberty, or property without due process of law, nor shall any person be
denied the equal protection of the laws;[12] and (2) private property shall not be taken for public
use without just compensation.[13] Thus, the exercise by local government units of the power of
eminent domain is not absolute. In fact, Section 19 of RA 7160 itself explicitly states that such
exercise must comply with the provisions of the Constitution and pertinent laws.
The exercise of the power of eminent domain drastically affects a landowners right to private
property, which is as much a constitutionally-protected right necessary for the preservation and
enhancement of personal dignity and intimately connected with the rights to life and
liberty.[14] Whether directly exercised by the State or by its authorized agents, the exercise of
eminent domain is necessarily in derogation of private rights.[15] For this reason, the need for a
painstaking scrutiny cannot be overemphasized.
The due process clause cannot be trampled upon each time an ordinance orders the expropriation
of a private individualsproperty. The courts cannot even adopt a hands-off policy simply
because public use or public purpose is invoked by an ordinance, or just compensation has been
fixed and determined. In De Knecht vs. Bautista,[16] we said:
It is obvious then that a land-owner is covered by the mantle of protection
due process affords. It is a mandate of reason. It frowns on arbitrariness, it
is the antithesis of any governmental act that smacks of whim or caprice. It
negates state power to act in an oppressive manner. It is, as had been
stressed so often, the embodiment of the sporting idea of fair play. In that
sense, it stands as a guaranty of justice. That is the standard that must be
met by any governmental agency in the exercise of whatever competence is
entrusted to it. As was so emphatically stressed by the present Chief Justice,
Acts of Congress, as well as those of the Executive, can deny due process
only under pain of nullity. xxx.
The foundation of the right to exercise eminent domain is genuine necessity and that necessity
must be of public character.[17] Government may not capriciously or arbitrarily choose which
private property should be expropriated. In this case, there was no showing at all why petitioners
property was singled out for expropriation by the city ordinance or what necessity impelled the
particular choice or selection. Ordinance No. 1843 stated no reason for the choice of petitioners
property as the site of a socialized housing project.
Condemnation of private lands in an irrational or piecemeal fashion or the random
expropriation of small lots to accommodate no more than a few tenants or squatters is certainly
not the condemnation for public use contemplated by the Constitution. This is depriving a citizen
of his property for the convenience of a few without perceptible benefit to the public.[18]
RA 7279 is the law that governs the local expropriation of property for purposes of urban land
reform and housing. Sections 9 and 10 thereof provide:
SEC 9. Priorities in the Acquisition of Land. Lands for socialized housing
shall be acquired in the following order:
(a) Those owned by the Government or any of its subdivisions,
instrumentalities, or agencies, including government-
owned or controlled corporations and their subsidiaries;
(b) Alienable lands of the public domain;
(c) Unregistered or abandoned and idle lands;
(d) Those within the declared Areas or Priority Development,
Zonal Improvement Program sites, and Slum
Improvement and Resettlement Program sites which
have not yet been acquired;
(e) Bagong Lipunan Improvement of Sites and Services or BLISS
which have not yet been acquired; and
(f) Privately-owned lands.
Where on-site development is found more practicable and advantageous to
the beneficiaries, the priorities mentioned in this section shall not apply. The
local government units shall give budgetary priority to on-site development
of government lands. (Emphasis supplied).
SEC. 10. Modes of Land Acquisition. The modes of acquiring lands for
purposes of this Act shall include, among others, community mortgage, land
swapping, land assembly or consolidation, land banking, donation to the
Government, joint venture agreement, negotiated purchase, and
expropriation: Provided, however, That expropriation shall be resorted
to only when other modes of acquisition have been exhausted: Provided
further, That where expropriation is resorted to, parcels of land owned by
small property owners shall be exempted for purposes of this Act: xxx.
(Emphasis supplied).
In the recent case of Estate or Heirs of the Late Ex-Justice Jose B.L. Reyes et al. vs.
City of Manila,[19] we ruled that the above-quoted provisions are strict limitations on the exercise
of the power of eminent domain by local government units, especially with respect to (1) the
order of priority in acquiring land for socialized housing and (2) the resort to expropriation
proceedings as a means to acquiring it. Private lands rank last in the order of priority for purposes
of socialized housing. In the same vein, expropriation proceedings may be resorted to only after
the other modes of acquisition are exhausted. Compliance with these conditions
is mandatory because these are the only safeguards of oftentimes helpless owners of private
property against what may be a tyrannical violation of due process when their property is
forcibly taken from them allegedly for public use.
We have found nothing in the records indicating that the City of Cebu complied
strictly with Sections 9 and 10 of RA 7279. Ordinance No. 1843 sought to expropriate
petitioners property without any attempt to first acquire the lands listed in (a) to (e) of Section
9 of RA 7279. Likewise, Cebu City failed to establish that the other modes of acquisition in
Section 10 of RA 7279 were first exhausted. Moreover, prior to the passage of Ordinance No.
1843, there was no evidence of a valid and definite offer to buy petitioners property as required
by Section 19 of RA 7160.[20] We therefore find Ordinance No. 1843 to be constitutionally SO ORDERED.
infirm for being violative of the petitioners right to due process.

It should also be noted that, as early as 1998, petitioners had already obtained a
favorable judgment of eviction against the illegal occupants of their property. The judgment in
this ejectment case had, in fact, already attained finality, with a writ of execution and an order
of demolition. But Mayor Garcia requested the trial court to suspend the demolition on the
pretext that the City was still searching for a relocation site for the squatters. However, instead
of looking for a relocation site during the suspension period, the city council suddenly enacted
Ordinance No. 1843 for the expropriation of petitioners lot. It was trickery and bad faith, pure
and simple. The unconscionable manner in which the questioned ordinance was passed clearly
indicated that respondent City transgressed the Constitution, RA 7160 and RA 7279.

For an ordinance to be valid, it must not only be within the corporate powers of the
city or municipality to enact but must also be passed according to the procedure prescribed by
law. It must be in accordance with certain well-established basic principles of a substantive
nature. These principles require that an ordinance (1) must not contravene the Constitution or
any statute (2) must not be unfair or oppressive (3) must not be partial or discriminatory (4)
must not prohibit but may regulate trade (5) must be general and consistent with public policy,
and (6) must not be unreasonable.[21]

Ordinance No. 1843 failed to comply with the foregoing substantive requirements. A
clear case of constitutional infirmity having been thus established, this Court is constrained to
nullify the subject ordinance. We recapitulate:

first, as earlier discussed, the questioned ordinance is repugnant to the pertinent

provisions of the Constitution, RA 7279 and RA 7160;

second, the precipitate manner in which it was enacted was plain oppression
masquerading as a pro-poor ordinance;

third, the fact that petitioners small property was singled out for expropriation for the
purpose of awarding it to no more than a few squatters indicated manifest partiality
against petitioners, and

fourth, the ordinance failed to show that there was a reasonable relation between the
end sought and the means adopted. While the objective of the City of Cebu was to
provide adequate housing to slum dwellers, the means it employed in pursuit of such
objective fell short of what was legal, sensible and called for by the circumstances.

Indeed, experience has shown that the disregard of basic liberties and the use of short-
sighted methods in expropriation proceedings have not achieved the desired results. Over the
years, the government has tried to remedy the worsening squatter problem. Far from solving it,
however, governments kid-glove approach has only resulted in the multiplication and
proliferation of squatter colonies and blighted areas. A pro-poor program that is well-studied,
adequately funded, genuinely sincere and truly respectful of everyones basic rights is what this
problem calls for, not the improvident enactment of politics-based ordinances targeting small
private lots in no rational fashion.

WHEREFORE, the petition is hereby GRANTED. The July 1, 2002 decision of

Branch 23 of the Regional Trial Court of Cebu City is REVERSED and SET ASIDE.
THE CITY OF CEBU, petitioner, vs. SPOUSES APOLONIO and BLASA
DEDAMO, respondents.
DECISION
DAVIDE, JR., C.J.:
In its petition for review on certiorari under Rule 45 of the 1997 Rules of Civil Procedure,
petitioner City of Cebu assails the decision of 11 October 1999 of the Court of Appeals in CA-
G.R. CV No. 59204[1] affirming the judgment of 7 May 1996 of the Regional Trial
Court, Branch 13, Cebu City, in Civil Case No. CEB-14632, a case for eminent domain, which
fixed the valuation of the land subject thereof on the basis of the recommendation of the
commissioners appointed by it.
The material operative facts are not disputed.
On 17 September 1993, petitioner City of Cebu filed in Civil Case No. CEB-14632 a
complaint for eminent domain against respondents spouses Apolonio and Blasa Dedamo. The
petitioner alleged therein that it needed the following parcels of land of respondents, to wit:
Lot No. 1527
Area----------------------------1,146 square meters
Tax Declaration---------------03472
Title No.-----------------------31833
Market value------------------P240,660.00
Assessed Value---------------P72,200.00
Lot No. 1528
Area--------------------------------------------------------793 square meters
Area sought to be-----------------------------------------478 square meters
expropriated
Tax Declaration-------------------------------------------03450
Title No. ---------------------------------------------------31832
Market value for the whole lot--------------------------P1,666,530.00
Market value of the Area to be expropriated----------P100,380.00
Assessed Value--------------------------------------------P49,960.00
for a public purpose, i.e., for the construction of a public road which shall serve as an
access/relief road of Gorordo Avenue to extend to the General Maxilum Avenue and the back
of Magellan International Hotel Roads in Cebu City. The lots are the most suitable site for the
purpose.The total area sought to be expropriated is 1,624 square meters with an assessed value
of P1,786,400. Petitioner deposited with the Philippine National Bank the amount of P51,156
representing 15% of the fair market value of the property to enable the petitioner to take
immediate possession of the property pursuant to Section 19 of R.A. No. 7160.[2]
Respondents, filed a motion to dismiss the complaint because the purpose for which their
property was to be expropriated was not for a public purpose but for benefit of a single private
entity, the Cebu Holdings, Inc. Petitioner could simply buy directly from them the property at
its fair market value if it wanted to, just like what it did with the neighboring lots. Besides, the
price offered was very low in light of the consideration of P20,000 per square meter, more or
less, which petitioner paid to the neighboring lots. Finally, respondents alleged that they have
no other land in Cebu City.
A pre-trial was thereafter had.
On 23 August 1994, petitioner filed a motion for the issuance of a writ of possession
pursuant to Section 19 of R.A. No. 7160. The motion was granted by the trial court on 21
September 1994.[3]
On 14 December 1994, the parties executed and submitted to the trial court an
Agreement[4] wherein they declared that they have partially settled the case and in consideration
thereof they agreed:
1. That the SECOND PARTY hereby conforms to the intention to [sic] the FIRST
PARTY in expropriating their parcels of land in the above-cited case as for
public purpose and for the benefit of the general public;
2. That the SECOND PARTY agrees to part with the ownership of the subject
parcels of land in favor of the FIRST PARTY provided the latter will pay just
compensation for the same in the amount determined by the court after due
notice and hearing;
3. That in the meantime the SECOND PARTY agrees to receive the amount of ONE
MILLION SEVEN HUNDRED EIGHTY SIX THOUSAND FOUR
HUNDRED PESOS (1,786,400.00) as provisional payment for the subject
parcels of land, without prejudice to the final valuation as maybe determined by
the court;
4. That the FIRST PARTY in the light of the issuance of the Writ of Possession
Order dated September 21, 1994 issued by the Honorable Court, agreed to take
possession over that portion of the lot sought to be expropriated where the house
of the SECOND PARTY was located only after fifteen (15) days upon the
receipt of the SECOND PARTY of the amount of P1,786,400.00;
5. That the SECOND PARTY upon receipt of the aforesaid provisional amount,
shall turn over to the FIRST PARTY the title of the lot and within the lapse of
the fifteen (15) days grace period will voluntarily demolish their house and the
other structure that may be located thereon at their own expense;
6. That the FIRST PARTY and the SECOND PARTY jointly petition the Honorable
Court to render judgment in said Civil Case No. CEB-14632 in accordance with
this AGREEMENT;
7. That the judgment sought to be rendered under this agreement shall be followed
by a supplemental judgment fixing the just compensation for the property of the
SECOND PARTY after the Commissioners appointed by this Honorable Court
to determine the same shall have rendered their report and approved by the
court.
Pursuant to said agreement, the trial court appointed three commissioners to determine
the just compensation of the lots sought to be expropriated. The commissioners were Palermo
M. Lugo, who was nominated by petitioner and who was designated as Chairman; Alfredo
Cisneros, who was nominated by respondents; and Herbert E. Buot, who was designated by the
trial court. The parties agreed to their appointment.
Thereafter, the commissioners submitted their report, which contained their respective
assessments of and recommendation as to the valuation of the property.
On the basis of the commissioners report and after due deliberation thereon, the trial court
rendered its decision on 7 May 1996,[5] the decretal portion of which reads:
WHEREFORE, in view of the foregoing, judgment is hereby rendered in accordance with the
report of the commissioners.
Plaintiff is directed to pay Spouses Apolonio S. Dedamo and Blasa Dedamo the sum of pesos:
TWENTY FOUR MILLION EIGHT HUNDRED SIXTY-FIVE THOUSAND AND NINE
HUNDRED THIRTY (P24,865.930.00) representing the compensation mentioned in the
Complaint.
Plaintiff and defendants are directed to pay the following commissioners fee;
1. To Palermo Lugo - P21,000.00
2. To Herbert Buot - P19,000.00
3. To Alfredo Cisneros - P19,000.00
Without pronouncement as to cost.
SO ORDERED.
Petitioner filed a motion for reconsideration on the ground that the commissioners report
was inaccurate since it included an area which was not subject to expropriation. More
specifically, it contended that Lot No. 1528 contains 793 square meters but the actual area to be
expropriated is only 478 square meters. The remaining 315 square meters is the subject of a
separate expropriation proceeding in Civil Case No. CEB-8348, then pending before Branch 9
of the Regional Trial Court of Cebu City.
On 16 August 1996, the commissioners submitted an amended assessment for the 478
square meters of Lot No. 1528 and fixed it at P12,824.10 per square meter, or in the amount
of P20,826,339.50. The assessment was approved as the just compensation thereof by the trial
court in its Order of 27 December 1996.[6] Accordingly, the dispositive portion of the decision
was amended to reflect the new valuation.
Petitioner elevated the case to the Court of Appeals, which docketed the case as CA-G.R.
CV No. 59204. Petitioner alleged that the lower court erred in fixing the amount of just
compensation at P20,826,339.50. The just compensation should be based on the prevailing
market price of the property at the commencement of the expropriation proceedings.
The petitioner did not convince the Court of Appeals. In its decision of 11 October
1999,[7] the Court of Appeals affirmed in toto the decision of the trial court.
Still unsatisfied, petitioner filed with us the petition for review in the case at bar. It raises
the sole issue of whether just compensation should be determined as of the date of the filing of
the complaint. It asserts that it should be, which in this case should be 17 September 1993 and
not at the time the property was actually taken in 1994, pursuant to the decision in National
Power Corporation vs. Court of Appeals.[8]
In their Comment, respondents maintain that the Court of Appeals did not err in affirming
the decision of the trial court because (1) the trial court decided the case on the basis of the
agreement of the parties that just compensation shall be fixed by commissioners appointed by
the court; (2) petitioner did not interpose any serious objection to the commissioners report of
12 August 1996 fixing the just compensation of the 1,624-square meter lot at P20,826,339.50;
hence, it was estopped from attacking the report on which the decision was based; and (3) the
determined just compensation fixed is even lower than the actual value of the property at the
time of the actual taking in 1994.
Eminent domain is a fundamental State power that is inseparable from sovereignty. It is
the Governments right to appropriate, in the nature of a compulsory sale to the State, private
property for public use or purpose.[9] However, the Government must pay the owner thereof just
compensation as consideration therefor.
In the case at bar, the applicable law as to the point of reckoning for the determination of
just compensation is Section 19 of R.A. No. 7160, which expressly provides that just
compensation shall be determined as of the time of actual taking. The Section reads as follows:
SECTION 19. Eminent Domain. -- A local government unit may, through its chief executive
and acting pursuant to an ordinance, exercise the power of eminent domain for public use, or
purpose or welfare for the benefit of the poor and the landless, upon payment of just
compensation, pursuant to the provisions of the Constitution and pertinent laws: Provided,
however, That the power of eminent domain may not be exercised unless a valid and definite
offer has been previously made to the owner, and such offer was not accepted: Provided,
further, That the local government unit may immediately take possession of the property upon
the filing of the expropriation proceedings and upon making a deposit with the proper court of
at least fifteen percent (15%) of the fair market value of the property based on the current tax
declaration of the property to be expropriated: Provided finally, That, the amount to be paid
for the expropriated property shall be determined by the proper court, based on the fair market
value at the time of the taking of the property.
The petitioner has misread our ruling in The National Power Corp. vs. Court of
Appeals.[10] We did not categorically rule in that case that just compensation should be
determined as of the filing of the complaint. We explicitly stated therein that although the
general rule in determining just compensation in eminent domain is the value of the property as
of the date of the filing of the complaint, the rule admits of an exception: where this Court fixed
the value of the property as of the date it was taken and not at the date of the commencement of
the expropriation proceedings.
Also, the trial court followed the then governing procedural law on the matter, which was
Section 5 of Rule 67 of the Rules of Court, which provided as follows:
SEC. 5. Ascertainment of compensation. -- Upon the entry of the order of condemnation, the
court shall appoint not more than three (3) competent and disinterested persons as
commissioners to ascertain and report to the court the just compensation for the property
sought to be taken. The order of appointment shall designate the time and place of the first
session of the hearing to be held by the commissioners and specify the time within which their
report is to be filed with the court.
 More than anything else, the parties, by a solemn document freely and voluntarily agreed
upon by them, agreed to be bound by the report of the commission and approved by the trial
court. The agreement is a contract between the parties. It has the force of law between them and
should be complied with in good faith. Article 1159 and 1315 of the Civil Code explicitly
provides:

Art. 1159. Obligations arising from contracts have the force of law between the contracting
parties and should be complied with in good faith.

Art. 1315. Contracts are perfected by mere consent, and from that moment the parties are
bound not only to the fulfillment of what has been expressly stipulated but also to all the
consequences which, according to their nature, may be in keeping with good faith, usage and
law.

Furthermore, during the hearing on 22 November 1996, petitioner did not interpose a
serious objection.[11] It is therefore too late for petitioner to question the valuation now without
violating the principle of equitable estoppel. Estoppel in pais arises when one, by his acts,
representations or admissions, or by his own silence when he ought to speak out, intentionally
or through culpable negligence, induces another to believe certain facts to exist and such other
rightfully relies and acts on such belief, so that he will be prejudiced if the former is permitted
to deny the existence of such facts.[12] Records show that petitioner consented to conform with
the valuation recommended by the commissioners.It cannot detract from its agreement now and
assail correctness of the commissioners assessment.
Finally, while Section 4, Rule 67 of the Rules of Court provides that just compensation
shall be determined at the time of the filing of the complaint for expropriation,[13]such law cannot
prevail over R.A. 7160, which is a substantive law.[14]
WHEREFORE, finding no reversible error in the assailed judgment of the Court of
Appeals in CA-G.R. CV No. 59204, the petition in this case is hereby DENIED.
No pronouncement as to costs.
SO ORDERED.