Facts:

The controversy arose when respondent Government Service Insurance System (GSIS), pursuant to
the privatization program of the Philippine Government, decided to sell through public bidding 30% to
51% of the issued and outstanding shares of respondent Manila Hotel Corporation (MHC). The
winning bidder, or the eventual “strategic partner,” will provide management expertise or an
international marketing/reservation system, and financial support to strengthen the profitability and
performance of the Manila Hotel.

In a close bidding held on 18 September 1995 only two (2) bidders participated: petitioner Manila
Prince Hotel Corporation, a Filipino corporation, which offered to buy 51% of the MHC or 15,300,000
shares at P41.58 per share, and Renong Berhad, a Malaysian firm, with ITT-Sheraton as its hotel
operator, which bid for the same number of shares at P44.00 per share, or P2.42 more than the bid
of petitioner. Prior to the declaration of Renong Berhard as the winning bidder, petitioner Manila
Prince Hotel matched the bid price and sent a manager’s check as bid security, which GSIS refused to
accept.

Apprehensive that GSIS has disregarded the tender of the matching bid and that the sale may be
consummated with Renong Berhad, petitioner filed a petition before the Court.

Issues:

1. Whether or not Sec. 10, second par., Art. XII, of the 1987 Constitution is a self-executing
provision.
2. Whether or not the Manila Hotel forms part of the national patrimony.
3. Whether or not the submission of matching bid is premature
4. Whether or not there was grave abuse of discretion on the part of the respondents in refusing
the matching bid of the petitioner.

Rulings:

In the resolution of the case, the Court held that:

1. It is a self-executing provision.
1. Since the Constitution is the fundamental, paramount and supreme law of the nation, it is
deemed written in every statute and contract. A provision which lays down a general
principle, such as those found in Art. II of the 1987 Constitution, is usually not self-
executing. But a provision which is complete in itself and becomes operative without the aid
of supplementary or enabling legislation, or that which supplies sufficient rule by means of
which the right it grants may be enjoyed or protected, is self-executing.
2. A constitutional provision is self-executing if the nature and extent of the right conferred and
the liability imposed are fixed by the constitution itself, so that they can be determined by an
 examination and construction of its terms, and there is no language indicating that the subject
is referred to the legislature for action. Unless it is expressly provided that a legislative act is
necessary to enforce a constitutional mandate, the presumption now is that all provisions of
the constitution are self-executing. If the constitutional provisions are treated as requiring
legislation instead of self-executing, the legislature would have the power to ignore and
practically nullify the mandate of the fundamental law.
3. 10, second par., Art. XII of the 1987 Constitution is a mandatory, positive command which is
complete in itself and which needs no further guidelines or implementing laws or rules for its
enforcement. From its very words the provision does not require any legislation to put it in
operation. It is per sejudicially enforceable. When our Constitution mandates that in the grant
of rights, privileges, and concessions covering national economy and patrimony, the State
shall give preference to qualified Filipinos, it means just that – qualified Filipinos shall be
preferred. And when our Constitution declares that a right exists in certain specified
circumstances an action may be maintained to enforce such right notwithstanding the
absence of any legislation on the subject; consequently, if there is no statute especially
enacted to enforce such constitutional right, such right enforces itself by its own inherent
potency and puissance, and from which all legislations must take their bearings. Where there
is a right there is a remedy. Ubi jus ibi remedium.
2. The Court agree.
1. In its plain and ordinary meaning, the term patrimony pertains to heritage. When the
Constitution speaks of national patrimony, it refers not only to the natural resources of the
Philippines, as the Constitution could have very well used the term natural resources, but
also to the cultural heritage of the Filipinos.
2. It also refers to Filipino’s intelligence in arts, sciences and letters. In the present case, Manila
Hotel has become a landmark, a living testimonial of Philippine heritage. While it was
restrictively an American hotel when it first opened in 1912, a concourse for the elite, it has
since then become the venue of various significant events which have shaped Philippine
history.
3. Verily, Manila Hotel has become part of our national economy and patrimony. For sure, 51%
of the equity of the MHC comes within the purview of the constitutional shelter for it
comprises the majority and controlling stock, so that anyone who acquires or owns the 51%
will have actual control and management of the hotel. In this instance, 51% of the MHC
cannot be disassociated from the hotel and the land on which the hotel edifice stands.
3. It is not premature.
1. In the instant case, where a foreign firm submits the highest bid in a public bidding
concerning the grant of rights, privileges and concessions covering the national economy and
patrimony, thereby exceeding the bid of a Filipino, there is no question that the Filipino will
have to be allowed to match the bid of the foreign entity. And if the Filipino matches the bid
of a foreign firm the award should go to the Filipino. It must be so if the Court is to give life
 and meaning to the Filipino First Policy provision of the 1987 Constitution. For, while this
may neither be expressly stated nor contemplated in the bidding rules, the constitutional fiat
is omnipresent to be simply disregarded. To ignore it would be to sanction a perilous skirting
of the basic law.
2. The Court does not discount the apprehension that this policy may discourage foreign
investors. But the Constitution and laws of the Philippines are understood to be always open
to public scrutiny. These are given factors which investors must consider when venturing into
business in a foreign jurisdiction. Any person therefore desiring to do business in the
Philippines or with any of its agencies or instrumentalities is presumed to know his rights and
obligations under the Constitution and the laws of the forum.
4. There was grave abuse of discretion.
1. To insist on selling the Manila Hotel to foreigners when there is a Filipino group willing to
match the bid of the foreign group is to insist that government be treated as any other
ordinary market player, and bound by its mistakes or gross errors of judgement, regardless
of the consequences to the Filipino people. The miscomprehension of the Constitution is
regrettable. Thus, the Court would rather remedy the indiscretion while there is still an
opportunity to do so than let the government develop the habit of forgetting that the
Constitution lays down the basic conditions and parameters for its actions.
2. Since petitioner has already matched the bid price tendered by Renong Berhad pursuant to
the bidding rules, respondent GSIS is left with no alternative but to award to petitioner the
block of shares of MHC and to execute the necessary agreements and documents to effect
the sale in accordance not only with the bidding guidelines and procedures but with the
Constitution as well. The refusal of respondent GSIS to execute the corresponding
documents with petitioner as provided in the bidding rules after the latter has matched the
bid of the Malaysian firm clearly constitutes grave abuse of discretion.

Hence, respondents GOVERNMENT SERVICE INSURANCE SYSTEM, MANILA HOTEL CORPORATION,

COMMITTEE ON PRIVATIZATION and OFFICE OF THE GOVERNMENT CORPORATE COUNSEL are
directed to CEASE and DESIST from selling 51% of the shares of the Manila Hotel Corporation to
RENONG BERHAD, and to ACCEPT the matching bid of petitioner MANILA PRINCE HOTEL
CORPORATION to purchase the subject 51% of the shares of the Manila Hotel Corporation at P44.00
per share and thereafter to execute the necessary agreements and documents to effect the sale, to
issue the necessary clearances and to do such other acts and deeds as may be necessary for the
purpose.

Facts:
Petitioners are foreign corporations organized under US laws not doing business
in the Philippines and registered owners of symbols ‘MARK VII,’ ‘MARK TEN,’
and ‘LARK’ used in their cigarette products. Petitioners moved to enjoin
respondent Fortune Tobacco from manufacturing and selling cigarettes bearing
the symbol ‘MARK’ asserting that it is identical or confusingly similar with their
trademarks. Petitioners relied on Section 21-A of the Trademark Law to bring
their suit and the Paris Convention to protect their trademarks. The court denied
the prayer for injunction stating that since petitioners are not doing business in
the Philippines, respondent’s cigarettes would not cause irreparable damage to
petitioner. CA granted the injunction but on a subsequent motion, dissolved the
writ.

Issues:

(1) Whether or not petitioner’s mark may be afforded protection under said laws;

(2) Whether or not petitioner may be granted injunctive relief.

Ruling:

(1) NO. Yet, insofar as this discourse is concerned, there is no necessity to treat
the matter with an extensive response because adherence of the Philippines to
the 1965 international covenant due to pact sunt servanda had been acknowledged
in La Chemise. Given these confluence of existing laws amidst the cases involving
trademarks, there can be no disagreement to the guiding principle in commercial
law that foreign corporations not engaged in business in the Philippines may
maintain a cause of action for infringement primarily because of Section 21-A of
the Trademark Law when the legal standing to sue is alleged, which petitioners
have done in the case at hand.
Petitioners may have the capacity to sue for infringement irrespective of lack of
business activity in the Philippines on account of Section 21-A of the Trademark
Law but the question whether they have an exclusive right over their symbol as
to justify issuance of the controversial writ will depend on actual use of their
trademarks in the Philippines in line with Sections 2 and 2-A of the same law. It is
thus incongruous for petitioners to claim that when a foreign corporation not
licensed to do business in Philippines files a complaint for infringement, the entity
need not be actually using its trademark in commerce in the Philippines. Such a
foreign corporation may have the personality to file a suit for infringement but it
may not necessarily be entitled to protection due to absence of actual use of the
emblem in the local market.

(2) NO.  More telling are the allegations of petitioners in their complaint as well as
in the very petition filed with this Court indicating that they are not doing business
in the Philippines, for these frank representations are inconsistent and
incongruent with any pretense of a right which can breached. Indeed, to be
entitled to an injunctive writ, petitioner must show that there exists a right to be
protected and that the facts against which injunction is directed are violative of
said right. On the economic repercussion of this case, we are extremely bothered
by the thought of having to participate in throwing into the streets Filipino workers
engaged in the manufacture and sale of private respondent’s “MARK” cigarettes
who might be retrenched and forced to join the ranks of the many unemployed
and unproductive as a result of the issuance of a simple writ of preliminary
injunction and this, during the pendency of the case before the trial court, not to
mention the diminution of tax revenues represented to be close to a quarter
million pesos annually. On the other hand, if the status quo is maintained, there
will be no damage that would be suffered by petitioners inasmuch as they are not
doing business in the Philippines. In view of the explicit representation of
petitioners in the complaint that they are not engaged in business in the
Philippines, it inevitably follows that no conceivable damage can be suffered by
them not to mention the foremost consideration heretofore discussed on the
absence of their “right” to be protected.

FACTS:
Exec. Secretary Hechanova authorised the importation of foreign rice to be purchased from private
sources. Gonzales filed a petition opposing the said implementation because RA No. 3542 which
allegedly repeals or amends RA No. 2207, prohibits the importation of rice and corn "by the Rice and
Corn Administration or any other government agency."
Respondents alleged that the importation permitted in RA 2207 is to be authorized by the President of the
Philippines, and by or on behalf of the Government of the Philippines. They add that after enjoining the
Rice and Corn administration and any other government agency from importing rice and corn, S. 10 of RA
3542 indicates that only private parties may import rice under its provisions. They contended that the
government has already constitute valid executive agreements with Vietnam and Burma, that in case of
conflict between RA 2207 and 3542, the latter should prevail and the conflict be resolved under the
American jurisprudence.

ISSUE:
W/N the executive agreements may be validated in our courts.

RULING:
No. The Court is not satisfied that the status of said tracts as alleged executive agreements has been
sufficiently established. Even assuming that said contracts may properly considered as executive
agreements, the same are unlawful, as well as null and void, from a constitutional viewpoint, said
agreements being inconsistent with the provisions of Republic Acts Nos. 2207 and 3452. Although the
President may, under the American constitutional system enter into executive agreements without
previous legislative authority, he may not, by executive agreement, enter into a transaction which is
prohibited by statutes enacted prior thereto.

Under the Constitution, the main function of the Executive is to enforce laws enacted by Congress. He
may not interfere in the performance of the legislative powers of the latter, except in the exercise of his
veto power. He may not defeat legislative enactments that have acquired the status of law, by indirectly
repealing the same through an executive agreement providing for the performance of the very act
prohibited by said laws.

ICHONG VS HERNANDEZ

G.R. No. L-7995             May 31, 1957

LAO H. ICHONG, in his own behalf and in behalf of other alien residents, corporations and
partnerships adversely affected. by Republic Act No. 1180, petitioner,
vs.
JAIME HERNANDEZ, Secretary of Finance, and MARCELINO SARMIENTO, City Treasurer of Manila,
respondents.

 
 

 
Facts:

Driven by aspirations for economic independence and national security, the Congress enacted Act No.
1180 entitled “An Act to Regulate the Retail Business.” The main provisions of the Act, among others,
are:

(1) Prohibition against persons, not citizens of the Philippines, and against associations, among
others, from engaging directly or indirectly in the retail trade; and

(2) Prohibition against the establishment or opening by aliens actually engaged in the retail business
of additional stores or branches of retail business.

Lao H. Ichong, in his own behalf and on behalf of other alien residents, corporations and partnerships
adversely affected by the said Act, brought an action to obtain a judicial declaration, and to enjoin the
Secretary of Finance, Jaime Hernandez, and all other persons acting under him, particularly city and
municipal treasurers, from enforcing its provisions. Petitioner attacked the constitutionality of the
Act, contending that:

 It denies to alien residents the equal protection of the laws and deprives of their liberty and
property without due process of law.
 The subject of the Act is not expressed or comprehended in the title thereof.
 The Act violates international and treaty obligations of the Republic of the Philippines.

Issue/s:

Whether or not a law may invalidate or supersede treaties or generally accepted principles.

Discussions:

A generally accepted principle of international law, should be observed by us in good faith. If a treaty
would be in conflict with a statute then the statute must be upheld because it represented an
exercise of the police power which, being inherent could not be bargained away or surrendered
through the medium of a treaty.

 
 

Ruling/s:

Yes, a law may supersede a treaty or a generally accepted principle. In this case, the Supreme Court
saw no conflict between the raised generally accepted principle and with RA 1180. The equal
protection of the law clause “does not demand absolute equality amongst residents; it merely
requires that all persons shall be treated alike, under like circumstances and conditions both as to
privileges conferred and liabilities enforced”; and, that the equal protection clause “is not infringed by
legislation which applies only to those persons falling within a specified class, if it applies alike to all
persons within such class, and reasonable grounds exist for making a distinction between those who
fall within such class and those who do not.”

RULE:
If there is conflict between the stipulations of a treaty and the requirements of a law, the latter must
control.  A treaty is primarily a contract between two or more independent nations, and is so
regarded by writers on public law. For the infraction of its provisions a remedy must be sought by the
injured party through reclamations upon the other. When the stipulations are not self-executing they
can only be enforced pursuant to legislation to carry them into effect, and such legislation is as much
subject to modification and repeal by Congress as legislation upon any other subject.   If the treaty
contains stipulations which are self-executing, that is, require no legislation to make them operative,
to that extent they have the force and effect of a legislative enactment.  Congress may modify such
provisions, so far as they bind the United States, or supersede them altogether.  By the Constitution
a treaty is placed on the same footing, and made of like obligation, with an act of legislation. Both
are declared by that instrument to be the supreme law of the land, and no superior efficacy is given
to either over the other.

FACTS:
Merchants, who imported sugars from San Domingo into the United States, alleged that they should
not have had to pay duties on their imported products because the sugars were similar to goods
imported from the Hawaiian Islands, which were exempt from duties. 

ISSUE:
Did the treaty with the Dominican Republic preclude defendant from exacting collections?

ANSWER:
No.

CONCLUSION:
The court held that the treaty between the United States and the Dominican Republic did not provide
for any concessions of special privileges, which exempted the imported sugar from duties, and the
Court affirmed the circuit court's judgment in favor of the collector of the port. The court held that the
treaty did not cover concessions like those made to the Hawaiian Islands for a valuable
consideration. The treaty imposed an obligation upon both countries to avoid hostile legislation that
would discriminate against one country's goods in favor of goods of like character imported from any
other country. However, the treaties were not intended to interfere with special arrangements with
other countries founded upon a concession of special privileges.