CASE STUDY

1. MANILA PRINCE HOTEL, petitioner, vs. GOVERNMENT SERVICE INSURANCE SYSTEM,

MANILA HOTEL CORPORATION COMMITTEE ON PRIVATIZATION and OFFICE OF THE
GOVERNMENT CORPORATE COUNSEL, respondents. (G.R. No. 122156. February 3,
1997)
Facts:

The controversy arose when respondent Government Service Insurance System (GSIS),
pursuant to the privatization program of the Philippine Government under Proclamation No. 50
dated 8 December 1986, decided to sell through public bidding 30% to 51% of the issued and
outstanding shares of respondent MHC. The winning bidder, or the eventual "strategic
partner," is to provide management expertise and/ or an international marketing/ reservation
system, and financial support to strengthen the profitability and performance of the Manila
Hotel. In a close bidding held 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 share, or
P2.42 more than the bid of petitioner.

Pending the declaration on Renong Berhard as the winning bidder/ strategic partner and the
execution of the necessary contracts, petitioner in a letter to respondent GSIS dated 28
September 1995 matched the bid price of P44.00 per share tendered by Renong Berhad. In a
subsequent letter dated 10 October 1995 petitioner sent a manager's check issued by Philtrust
Bank for Thirty-three Million Pesos (P33,000,000,00) as Bid Security to match the bid of the
Malaysian Group, Messrs. Renong Berhad xxxx which respondent GSIS refused to accept.

On 17 October 1995, perhaps apprehensive that respondent GSIS has disregarded the tender of
the matching bid and that the sale of 51% of the MHC may be hastened by respondent GSIS and
consummated with Renong Berhad, petitioner came to this Court on prohibition and
mandamus. On 18 October 1995, the Court issued a temporary restraining order enjoining
respondents from perfecting and consummating the sale to the Malaysian firm.

Issues:
a. Whether or not Section10, second paragraph of Art XI of the 1987 Constitutional is a self
executing provision.
b. Whether or not the Manila Hotel falls under the term "national patrimony".
c. Whether or not the GSIS acted with grave abuse of discretion.
 2. WHITE LIGHT CORPORATION VS CITY OF MANILA

Facts:

On December 3, 1992, City Mayor Alfredo S. Lim (Mayor Lim) signed into law the Ordinance
prohibiting short time admission in hotels, motels, lodging houses, pension houses and similar
establishments in the City of Manila. The Malate Tourist and Development Corporation (MTDC)
questioned the constitutionality of the ordinance. The petitioners White Light Corporation
(WLC), Titanium Corporation (TC) and Sta. Mesa Tourist and Development Corporation (STDC)
intervened on the ground that the Ordinance directly affects their business interests as
operators of drive-in- hotels and motels in Manila.

The Regional Trial Court (RTC) rendered a decision declaring the Ordinance null and void.

The City later filed a petition for review on certiorari with the Supreme Court. 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.

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.

The Ordinance, it is argued, is also a valid exercise of the power of the City under Article IlI,
Section 18 (kk) of the Revised Manila Charter.

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. Hence, the case was elevated to the
Supreme Court.

Issue
a. Whether or not the assailed ordinance is an invalid exercise of police power.