ORTIGAS & CO. LTD., petitioner, vs.

THE COURT OF
APPEALS and ISMAEL G. MATHAY III, respondents.
DECISION

xxx
11. No single-family residential building shall be
erecteduntil the building plans, specificationhave
been approved by the SELLER

QUISUMBING, J.:
xxx
This petition seeks to reverse the decision of the Court of
Appeals, dated March 25, 1996, in CA-G.R. SP No. 39193, which
nullified the writ of preliminary injunction issued by the Regional
Trial Court of Pasig City, Branch 261, in Civil Case No. 64931. It
also assails the resolution of the appellate court, dated August 13,
1996, denying petitioners motion for reconsideration.
The facts of this case, as culled from the records, are as
follows:
On August 25, 1976, petitioner Ortigas & Company sold to
Emilia Hermoso, a parcel of land known as Lot 1, Block 21, Psd66759, with an area of 1,508 square meters, located in Greenhills
Subdivision IV, San Juan, Metro Manila, and covered by Transfer
Certificate of Title No. 0737. The contract of sale provided that the
lot:

14....restrictions shall run with the land and shall be

construed as real covenants until December 31,
2025 when they shall cease and terminate[1]
These and the other conditions were duly annotated on the
certificate of title issued to Emilia.
In 1981, the Metropolitan Manila Commission (now
Metropolitan Manila Development Authority) enacted MMC
Ordinance No. 81-01, also known as the Comprehensive Zoning
Area for the National Capital Region. The ordinance reclassified
as a commercial area a portion of Ortigas Avenue from Madison
to Roosevelt Streets of Greenhills Subdivision where the lot is
located.

xxx

On June 8, 1984, private respondent Ismael Mathay III

leased the lot from Emilia Hermoso and J.P. Hermoso Realty
Corp.. The lease contract did not specify the purposes of the
lease. Thereupon, private respondent constructed a single story
commercial building for Greenhills Autohaus, Inc., a car sales
company.

6. The BUYER shall not erectany sign or billboard on

the rooffor advertising purposes

On January 18, 1995, petitioner filed a complaint against

Emilia Hermoso with the Regional Trial Court of Pasig, Branch

1. (1) be used exclusivelyfor residential purposes only,

and not more than one single-family residential
building will be constructed thereon,

261. Docketed as Civil Case No. 64931, the complaint sought the
demolition of the said commercial structure for having violated the
terms and conditions of the Deed of Sale. Complainant prayed for
the issuance of a temporary restraining order and a writ of
preliminary injunction to prohibit petitioner from constructing the
commercial building and/or engaging in commercial activity on
the lot. The complaint was later amended to implead Ismael G.
Mathay III and J.P. Hermoso Realty Corp., which has a ten
percent (10%) interest in the lot.
In his answer, Mathay III denied any knowledge of the
restrictions on the use of the lot and filed a cross-claim against
the Hermosos.
On June 16, 1995, the trial court issued the writ of
preliminary injunction. On June 29, 1995, Mathay III moved to set
aside the injunctive order, but the trial court denied the motion.
Mathay III then filed with the Court of Appeals a special civil
action for certiorari, docketed as CA-G.R. SP No. 39193,
ascribing to the trial court grave abuse of discretion in issuing the
writ of preliminary injunction. He claimed that MMC Ordinance
No. 81-01 classified the area where the lot was located as
commercial area and said ordinance must be read into the August
25, 1976 Deed of Sale as a concrete exercise of police power.
Ortigas and Company averred that inasmuch as the
restrictions on the use of the lot were duly annotated on the title it
issued to Emilia Hermoso, said restrictions must prevail over the
ordinance, specially since these restrictions were agreed upon
before the passage of MMC Ordinance No. 81-01.

On March 25, 1996, the appellate court disposed of the case

as follows:
WHEREFORE, in light of the foregoing, the petition is hereby
GRANTED. The assailed orders are hereby nullified and set
aside.
SO ORDERED.[2]
In finding for Mathay III, the Court of Appeals held that the
MMC Ordinance No. 81-01 effectively nullified the restrictions
allowing only residential use of the property in question.
Ortigas seasonably moved for reconsideration, but the
appellate court denied it on August 13, 1996.
Hence, the instant petition.
In its Memorandum, petitioner now submits that the principal
issue in this case is whether respondent Court of Appeals
correctly set aside the Order dated June 16, 1995 of the trial court
which issued the writ of preliminary injunction on the sole
ground that MMC Ordinance No. 81-01 nullified the building
restriction imposing exclusive residential use on the property in
question.[3] It also asserts that Mathay III lacks legal capacity to
question the validity of conditions of the deed of sale; and he is
barred by estoppel or waiver to raise the same question like his
principals, the owners.[4] Lastly, it avers that the appellate court
unaccountably failed to address several questions of fact.
Principally, we must resolve the issue of whether the Court of
Appeals erred in holding that the trial court committed grave

abuse of discretion when it refused to apply MMC Ordinance

No.81-01 to Civil Case No. 64931.
But first, we must address petitioners allegation that the
Court of Appeals unaccountably failed to address questions of
fact. For basic is the rule that factual issues may not be raised
before this Court in a petition for review and this Court is not dutybound to consider said questions.[5] CA-G.R. SP No. 39193 was a
special civil action for certiorari, and the appellate court only had
to determine if the trial court committed grave abuse of discretion
amounting to want or excess of jurisdiction in issuing the writ of
preliminary injunction. Thus, unless vital to our determination of
the issue at hand, we shall refrain from further consideration of
factual questions.
Petitioner contends that the appellate court erred in limiting
its decision to the cited zoning ordinance. It avers that a
contractual right is not automatically discarded once a claim is
made that it conflicts with police power. Petitioner submits that the
restrictive clauses in the questioned contract is not in conflict with
the zoning ordinance. For one, according to petitioner, the MMC
Ordinance No. 81-01 did not prohibit the construction of
residential buildings. Petitioner argues that even with the zoning
ordinance, the seller and buyer of the re-classified lot can
voluntarily agree to an exclusive residential use thereof. Hence,
petitioner concludes that the Court of Appeals erred in holding
that the condition imposing exclusive residential use was
effectively nullified by the zoning ordinance.
In its turn, private respondent argues that the appellate court
correctly ruled that the trial court had acted with grave abuse of
discretion in refusing to subject the contract to the MMC
Ordinance No. 81-01. He avers that the appellate court properly

held the police power superior to the non-impairment of contract

clause in the Constitution. He concludes that the appellate court
did not err in dissolving the writ of preliminary injunction issued by
the trial court in excess of its jurisdiction.
We note that in issuing the disputed writ of preliminary
injunction, the trial court observed that the contract of sale was
entered into in August 1976, while the zoning ordinance was
enacted only in March 1981. The trial court reasoned that since
private respondent had failed to show that MMC Ordinance No.
81-01 had retroactive effect, said ordinance should be given
prospective application only,[6] citing Co vs. Intermediate
Appellate Court, 162 SCRA 390 (1988).
In general, we agree that laws are to be construed as having
only prospective operation. Lex prospicit, non respicit. Equally
settled, only laws existing at the time of the execution of a
contract are applicable thereto and not later statutes, unless the
latter are specifically intended to have retroactive effect. [7] A later
law which enlarges, abridges, or in any manner changes the
intent of the parties to the contract necessarily impairs the
contract itself[8] and cannot be given retroactive effect without
violating the constitutional prohibition against impairment of
contracts.[9]
But, the foregoing principles do admit of certain
exceptions. One involves police power. A law enacted in the
exercise of police power to regulate or govern certain activities or
transactions could be given retroactive effect and may reasonably
impair vested rights or contracts. Police power legislation is
applicable not only to future contracts, but equally to those
already in existence.[10] Nonimpairment of contracts or vested
rights clauses will have to yield to the superior and legitimate

exercise by the State of police power to promote the health,

morals, peace, education, good order, safety, and general welfare
of the people.[11] Moreover, statutes in exercise of valid police
power must be read into every contract. [12]Noteworthy,
in Sangalang vs. Intermediate Appellate Court, [13] we already
upheld MMC Ordinance No. 81-01 as a legitimate police power
measure.
The trial courts reliance on the Co vs. IAC,[14] is
misplaced. In Co, the disputed area was agricultural and
Ordinance No. 81-01 did not specifically provide that it shall have
retroactive effect so as to discontinue all rights previously
acquired over lands located within the zone which are neither
residential nor light industrial in nature, [15] and stated with respect
to agricultural areas covered that the zoning ordinance should be
given prospective operation only.[16] The area in this case involves
not agricultural but urban residential land.Ordinance No. 81-01
retroactively affected the operation of the zoning ordinance in
Greenhills by reclassifying certain locations therein as
commercial.
Following our ruling in Ortigas & Co., Ltd. vs. Feati Bank &
Trust Co., 94 SCRA 533 (1979), the contractual stipulations
annotated on the Torrens Title, on which Ortigas relies, must yield
to the ordinance. When that stretch of Ortigas Avenue from
Roosevelt Street to Madison Street was reclassified as a
commercial zone by the Metropolitan Manila Commission in
March 1981, the restrictions in the contract of sale between
Ortigas and Hermoso, limiting all construction on the disputed lot
to single-family residential buildings, were deemed extinguished
by the retroactive operation of the zoning ordinance and could no
longer be enforced. While our legal system upholds the sanctity
of contract so that a contract is deemed law between the

contracting parties,[17] nonetheless, stipulations in a contract

cannot contravene law, morals, good customs, public order, or
public policy.[18]Otherwise such stipulations would be deemed null
and void. Respondent court correctly found that the trial court
committed in this case a grave abuse of discretion amounting to
want of or excess of jurisdiction in refusing to treat Ordinance No.
81-01 as applicable to Civil Case No. 64931. In resolving matters
in litigation, judges are not only duty-bound to ascertain the facts
and the applicable laws,[19] they are also bound by their oath of
office to apply the applicable law.[20]
As a secondary issue, petitioner contends that respondent
Mathay III, as a mere lessee of the lot in question, is a total
stranger to the deed of sale and is thus barred from questioning
the conditions of said deed. Petitioner points out that the owners
of the lot voluntarily agreed to the restrictions on the use of the lot
and do not question the validity of these restrictions. Petitioner
argues that Mathay III as a lessee is merely an agent of the
owners, and could not override and rise above the status of his
principals. Petitioner submits that he could not have a higher
interest than those of the owners, the Hermosos, and thus had
no locus standi to file CA-G.R. SP No. 39193 to dissolve the
injunctive writ issued by the RTC of Pasig City.
For his part, private respondent argues that as the lessee
who built the commercial structure, it is he and he alone who
stands to be either benefited or injured by the results of the
judgment in Civil Case No. 64931. He avers he is the party with
real interest in the subject matter of the action, as it would be his
business, not the Hermosos, which would suffer had not the
respondent court dissolved the writ of preliminary injunction.

A real party in interest is defined as the party who stands to

be benefited or injured by the judgment or the party entitled to the
avails of the suit. Interest within the meaning of the rule means
material interest, an interest in issue and to be affected by the
decree, as distinguished from mere interest in the question
involved, or a mere incidental interest. [21] By real interest is meant
a present substantial interest, as distinguished from a mere
expectancy or a future, contingent, subordinate, or consequential
interest.[22]
Tested by the foregoing definition, private respondent in this
case is clearly a real party in interest. It is not disputed that he is
in possession of the lot pursuant to a valid lease. He is a
possessor in the concept of a holder of the thing under Article 525
of the Civil Code.[23] He was impleaded as a defendant in the
amended complaint in Civil Case No. 64931.Further, what
petitioner seeks to enjoin is the building by respondent of a
commercial structure on the lot. Clearly, it is private respondents
acts which are in issue, and his interest in said issue cannot be a
mere incidental interest. In its amended complaint, petitioner
prayed for, among others, judgment ordering the demolition of all
improvements illegally built on the lot in question. [24] These show
that it is petitioner Mathay III, doing business as Greenhills
Autohaus, Inc., and not only the Hermosos, who will be adversely
affected by the courts decree.
Petitioner also cites the rule that a stranger to a contract has
no rights or obligations under it, [25] and thus has no standing to
challenge its validity.[26] But in seeking to enforce the stipulations
in the deed of sale, petitioner impleaded private respondent as a
defendant. Thus petitioner must recognize that where a plaintiff
has impleaded a party as a defendant, he cannot subsequently
question the latters standing in court.[27]

WHEREFORE, the instant petition is DENIED. The

challenged decision of the Court of Appeals dated March 25,
1996, as well as the assailed resolution of August 13, 1996, in
CA-G.R. SP No. 39193 is AFFIRMED. Costs against petitioner.
SO ORDERED.

MMDA Vs. Bel-Air Village [328 SCRA

836; G.R. No. 135962; 27 Mar 2000]
Friday, January 30, 2009 Posted by Coffeeholic Writes
Labels: Case Digests, Political Law

Facts:

Metropolitan

Authority
a Government

(MMDA),

Manila

Development

petitioner herein,

Agency tasked

with

the

is

delivery

ofbasic services in Metro Manila. Bel-Air Village

Association (BAVA), respondent herein, received a

letter of request from the petitioner to open

Issue:

Neptune Street of Bel-Air Village for the use of the

mandate to open Neptune Street to public traffic

public. The said opening of Neptune Street will be

pursuant

Whether
to

its

or

not

regulatory

the

MMDA

and

has

police

the

powers.

for the safe and convenient movement of persons

and to regulate the flow of traffic in Makati City. This
was pursuant to MMDA law or Republic Act No.

Held:

7924. On the same day, the respondent was

have the capacity to exercise police power. Police

appraised that the perimeter wall separating the

power is primarily lodged in the NationalLegislature.

subdivision

However,

and

Kalayaan

Avenue

would

be demolished.

The Court held that the MMDA does not

police

power

government

units.

development

authority

may

be

delegated

Petitioner herein is
and

not

to
a

political

The respondent, to stop the opening of the said

government unit. Therefore, the MMDA cannot

street

exercise

and demolitionof

the

wall,

filed

police

power

because

it

cannot

be

preliminary injunction and a temporary restraining

delegated to them. It is not a legislative unit of the

order. Respondent claimed that the MMDA had no

government. Republic Act

authority to do so and the lower court decided in

empower the MMDA to enact ordinances, approve

favor of the Respondent. Petitioner appealed the

resolutions and appropriate funds for the general

decision of the lower courts and claimed that it has

welfare of the inhabitants of Manila. There is no

the authority to open Neptune Street to public traffic

syllable in the said act that grants MMDA police

because it is an agent of the State that can practice

power.

No.

7924

does

not

police power in the delivery ofbasic services in Metro

Manila.

It is an agency created for the purpose of laying

down policies and coordinating with various national

government agencies, peoples organizations, non-

corporation engaged in the business of

governmental organizations and the private sector

operating hotels, motels, hostels and lodging

for the efficient and expeditious delivery of basic

houses. It built and opened Victoria Court in

services in the vast metropolitan area.

Malate which was licensed as a motel

although duly accredited with the DOT as a

CITY OF MANILA VS. LAGUIO

hotel. On 28 June 1993, MTDC filed a Petition

for Declaratory Relief with Prayer for a Writ

MARCH 30, 2013 ~ VBDIAZ

CITY OF MANILA, HON. ALFREDO S. LIM

as the Mayor of the City of Manila,
HON. JOSELITO L. ATIENZA, in his
capacity as Vice-Mayor of the City of
Manila and Presiding Officer of the City
Council of Manila, et.al vs. HON.
PERFECTO A.S. LAGUIO, JR., as
Presiding Judge, RTC, Manila and
MALATE TOURIST DEVELOPMENT
CORPORATION
G.R. No. 118127, April 12, 2005
FACTS: Private respondent Malate Tourist
Development Corporation (MTDC) is a

of Preliminary Injunction and/or Temporary

Restraining Order7 with the lower court
impleading as defendants, herein petitioners
City of Manila, Hon. Alfredo S. Lim (Lim),
Hon. Joselito L. Atienza, and the members of
the City Council of Manila (City Council).
MTDC prayed that the Ordinance, insofar as
it includes motels and inns as among its
prohibited establishments, be declared
invalid and unconstitutional.
Enacted by the City Council and approved by
petitioner City Mayor, the said Ordinance is
entitled

AN ORDINANCE PROHIBITING THE

establishments, except those specified

ESTABLISHMENT OR OPERATION OF

therein; and

BUSINESSES PROVIDING CERTAIN FORMS OF

(3) It erred in declaring the Ordinance void

AMUSEMENT, ENTERTAINMENT, SERVICES

and unconstitutional.

AND FACILITIES IN THE ERMITA-MALATE

AREA, PRESCRIBING PENALTIES FOR
VIOLATION THEREOF, AND FOR OTHER
PURPOSES.
Judge Laguio rendered the assailed Decision
(in favour of respondent).
On 11 January 1995, petitioners filed the
present Petition, alleging that the following
errors were committed by the lower court in
its ruling:
(1) It erred in concluding that the subject
ordinance is ultra vires, or otherwise, unfair,
unreasonable and oppressive exercise of
police power;
(2) It erred in holding that the questioned
Ordinance contravenes P.D. 499 which
allows operators of all kinds of commercial

ISSUE: WON the ordinance is

unconstitutional.
HELD: The Court is of the opinion, and so
holds, that the lower court did not err in
declaring the Ordinance, as it did, ultra vires
and therefore null and void.
The tests of a valid ordinance are well
established. A long line of decisions 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 must be
passed 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;

The police power granted to LGUs must

(3) must not be partial or discriminatory;

always be exercised with utmost observance

(4) must not prohibit but may regulate trade;

of the rights of the people to due process

(5) must be general and consistent with

and equal protection of the law. Due process

public policy; and

requires the intrinsic validity of the law in

(6) must not be unreasonable.

interfering with the rights of the person to

The Ordinance was passed by the City

his life, liberty and property.

Council in the exercise of its police power,

an enactment of the City Council acting as
agent of Congress. This delegated police
power is found in Section 16 of the LGC,
known as the general welfare clause.
The inquiry in this Petition is concerned with
the validity of the exercise of such delegated
power.
A. The Ordinance contravenes

Requisites for the valid exercise

of Police Power are not met
To successfully invoke the exercise of police
power as the rationale for the enactment of
the Ordinance, and to free it from the
imputation of constitutional infirmity, not
only must it appear that the interests of the
public generally, as distinguished from those

the Constitution

of a particular class, require an interference

The enactment of the Ordinance was an

must be reasonably necessary for the

invalid exercise of delegated power as it is

accomplishment of the purpose and not

unconstitutional and repugnant to general

unduly oppressive upon individuals.60 It

laws.

must be evident that no other alternative for

with private rights, but the means adopted

the accomplishment of the purpose less

employed for the accomplishment thereof

intrusive of private rights can work. A

were unreasonable and unduly oppressive.

reasonable relation must exist between the

purposes of the police 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

The worthy aim of fostering public morals

and the eradication of the communitys
social ills can be achieved through means
less restrictive of private rights; it can be
attained by reasonable restrictions rather

permitted to be arbitrarily invaded.

than by an absolute prohibition. The closing

Lacking a concurrence of these two

conversion into businesses allowed under

requisites, the police measure shall be

the Ordinance have no reasonable relation

struck down as an arbitrary intrusion into

private rights a violation of the due

to the accomplishment of its purposes.

process clause.

enumerated establishments will not per se

The object of the Ordinance was,

accordingly, the promotion and protection of
the social and moral values of the
community. Granting for the sake of
argument that the objectives of the
Ordinance are within the scope of the City
Councils police powers, the means

down and transfer of businesses or their

Otherwise stated, the prohibition of the

protect and promote the social and moral
welfare of the community; it will not in itself
eradicate the alluded social ills of
prostitution, adultery, fornication nor will it
arrest the spread of sexual disease in
Manila.

The enumerated establishments are lawful

achievement of its purposes, the

pursuits which are not per se offensive to

governmental interference itself, infringes

the moral welfare of the community. While a

on the constitutional guarantees of a

motel may be used as a venue for immoral

persons fundamental right to liberty and

sexual activity, it cannot for that reason

property.

alone be punished. It cannot be classified as

a house of ill-repute or as a nuisance per se

Modality employed is

on a mere likelihood or a naked assumption.

unlawful taking

If the City of Manila so desires to put an end

It is an ordinance which permanently

to prostitution, fornication and other social

ills, it can instead impose reasonable
regulations such as daily inspections of the
establishments for any violation of the
conditions of their licenses or permits; it
may exercise its authority to suspend or
revoke their licenses for these violations;
and it may even impose increased license
fees. In other words, there are other means
to reasonably accomplish the desired end.
It is readily apparent that the means
employed by the Ordinance for the

restricts the use of property that it can not

be used for any reasonable purpose goes
beyond regulation and must be recognized
as a taking of the property without
just compensation.78 It is intrusive and
violative of the private property rights of
individuals.
There are two different types of taking that
can be identified. A possessory taking
occurs when the government confiscates or
physically occupies property. A regulatory
taking occurs when the governments

regulation leaves no reasonable

operations amounts to a closure of the

economically viable use of the property.

establishment, a permanent deprivation of

What is crucial in judicial consideration of

regulatory takings is that government
regulation is a taking if it leaves no
reasonable economically viable use of
property in a manner that interferes with
reasonable expectations for use. When the
owner of real property has been called upon
to sacrifice all economically beneficial uses
in the name of the common good, that is, to
leave his property economically idle, he has
suffered a taking.
The Ordinance gives the owners and
operators of the prohibited establishments
three (3) months from its approval within
which to wind up business operations or to
transfer to any place outside of the ErmitaMalate area or convert said businesses to
other kinds of business allowable within the
area. The directive to wind up business

property, and is practically confiscatory.

Unless the owner converts his establishment
to accommodate an allowed business, the
structure which housed the previous
business will be left empty and gathering
dust. It is apparent that the Ordinance
leaves no reasonable economically viable
use of property in a manner that interferes
with reasonable expectations for use.
The second and third options to transfer to
any place outside of the Ermita-Malate area
or to convert into allowed businesses are
confiscatory as well. The penalty of
permanent closure in cases of subsequent
violations found in Section 4 of the
Ordinance is also equivalent to a taking of
private property.
Petitioners cannot take refuge in classifying
the measure as a zoning ordinance. A zoning
ordinance, although a valid exercise of

police power, which limits a wholesome

and invalid. The Ordinance should have

property to a use which can not reasonably

established a rule by which its impartial

be made of it constitutes the taking of such

enforcement could be secured. Similarly, the

property without just compensation. Private

Ordinance does not specify the standards to

property which is not noxious nor intended

ascertain which establishments tend to

for noxious purposes may not, by zoning, be

disturb the community, annoy the

destroyed without compensation. Such

inhabitants, and adversely affect the

principle finds no support in the principles of

social and moral welfare of the community.

justice as we know them. The police powers

of local government units which have always
received broad and liberal interpretation
cannot be stretched to cover this particular

The cited case supports the nullification of

the Ordinance for lack of comprehensible
standards to guide the law enforcers in

taking.

carrying out its provisions.

Further, The Ordinance confers upon the

Petitioners cannot therefore order the

mayor arbitrary and unrestricted power to

close down establishments. Ordinances such
as this, which make possible abuses in its
execution, depending upon no conditions or
qualifications whatsoever other than the
unregulated arbitrary will of the city
authorities as the touchstone by which its
validity is to be tested, are unreasonable

closure of the enumerated establishments

without infringing the due process clause.
These lawful establishments may be
regulated, but not prevented from carrying
on their business.
B. The Ordinance violates Equal
Protection Clause

In the Courts view, there are no substantial

The standard where women are used as

distinctions between motels, inns, pension

houses, hotels, lodging houses or other

tools for entertainment is also

discriminatory as prostitution one of the

similar establishments. By definition, all are

hinted ills the Ordinance aims to banish

commercial establishments providing

not a profession exclusive to women. Both

lodging and usually meals and other

men and women have an equal propensity

services for the public. No reason exists for

to engage in prostitution. Thus, the

prohibiting motels and inns but not pension

discrimination is invalid.

houses, hotels, lodging houses or other

similar establishments. The classification in
the instant case is invalid as similar subjects
are not similarly treated, both as to rights
conferred and obligations imposed. It is
arbitrary as it does not rest on substantial
distinctions bearing a just and fair relation to
the purpose of the Ordinance.
The Court likewise cannot see the logic for
prohibiting the business and operation of
motels in the Ermita-Malate area but not
outside of this area. A noxious establishment
does not become any less noxious if located
outside the area.

is

C. The Ordinance is repugnant

to general laws; it is ultra vires
The Ordinance is in contravention of the
Code (Sec 458) as the latter merely
empowers local government units to
regulate, and not prohibit, the
establishments enumerated in Section 1
thereof.
With respect to cafes, restaurants,
beerhouses, hotels, motels, inns, pension
houses, lodging houses, and other similar
establishments, the only power of the City

Council to legislate relative thereto is to

Not only does the Ordinance contravene the

regulate them to promote the general

Code, it likewise runs counter to the

welfare. The Code still withholds from cities

provisions of P.D. 499. As correctly argued by

the power to suppress and prohibit

MTDC, the statute had already converted

altogether the establishment, operation and

the residential Ermita-Malate area into a

maintenance of such establishments.

commercial area. The decree allowed the

It is well to point out that petitioners also

cannot seek cover under the general welfare
clause authorizing the abatement of
nuisances without judicial proceedings. That
tenet applies to a nuisance per se, or one
which affects the immediate safety of
persons and property and may be summarily
abated under the undefined law of necessity.
It can not be said that motels are injurious to
the rights of property, health or comfort of
the community. It is a legitimate business. If

establishment and operation of all kinds of

commercial establishments except
warehouse or open storage depot, dump or
yard, motor repair shop, gasoline service
station, light industry with any machinery or
funeral establishment. The rule is that for an
ordinance to be valid and to have force and
effect, it must not only be within the powers
of the council to enact but the same must
not be in conflict with or repugnant to the
general law.

it be a nuisance per accidens it may be so

Conclusion

proven in a hearing conducted for that

All considered, the Ordinance invades

purpose. A motel is not per se a nuisance

fundamental personal and property rights

warranting its summary abatement without

and impairs personal privileges. It is

judicial intervention.

constitutionally infirm. The Ordinance

Petitioner applied with the Office of the City Mayor of

Iligan for a business permit. Permit was therefor issued,
subject to certain conditions like prohibition of putting up
an optical clinic, examining and/or prescribing reading
and similar optical glasses, etc. When it was found that
petitioner violated these conditions, its business permit
was cancelled.

contravenes statutes; it is discriminatory

and unreasonable in its operation; it is not
sufficiently detailed and explicit that abuses
may attend the enforcement of its sanctions.
And not to be forgotten, the City Council
under the Code had no power to enact the
Ordinance and is therefore ultra vires, null

ISSUE:

and void.
Petition Denied.

Acebedo Optical Company, Inc. vs. CA

Whether or not the imposition of

special conditions by the public respondents
were acts ultra vires

G.R. No. 100152, March 31, 2000

o

Police Power as exercised by LGUs,

RULING:

restrictions and qualifications

o
Power of city mayor to grant/cancel/revoke

Police Power exercised by LGUs

business permits
o
Granting of business permits vs. granting of

Police power as an inherent attribute of sovereignty is the

permit to practice profession

power to prescribe regulations to promote the health,

FACTS:

general welfare of the people. The State, through the

morals, peace, education, good order or safety and

legislature, has delegated the exercise of police power to

local government units, as agencies of the State, in order

However, the power to grant or issue licenses or business

to effectively accomplish and carry out the declared

permits must always be exercised in accordance with law,

objects of their creation. This delegation of police power

with utmost observance of the rights of all concerned to

is embodied in the general welfare clause of the Local

due process and equal protection of the law.

Government Code xxx

But can city mayor cancel business permits or
The scope of police power has been held to be so

impose special conditions? As aptly discussed by the

comprehensive as to encompass almost all matters

Solicitor General in his Comment, the power to issue

affecting the health, safety, peace, order, morals, comfort

licenses and permits necessarily includes the corollary

and convenience of the community. Police power is

power to revoke, withdraw or cancel the same. And the

essentially regulatory in nature and the power to issue

power to revoke or cancel, likewise includes the power to

licenses or grant business permits, if exercised for a

restrict through the imposition of certain conditions.

regulatory and not revenue-raising purpose, is within the

ambit of this power.

Did the conditions or restrictions imposed amount to a

confiscation of the business?

Power of city mayor to grant business permits

Distinction must be made between the grant of a license
The authority of city mayors to issue or grant licenses

or permit to do business and the issuance of a license to

and business permits is beyond cavil. It is provided for by

engage in the practice of a particular profession. The first

law.

is usually granted by the local authorities and the second

is issued by the Board or Commission tasked to regulate

xxxx

the particular profession. A business permit authorizes

the person, natural or otherwise, to engage in business

or some form of commercial activity. A professional

license, on the other hand, is the grant of authority to a
natural person to engage in the practice or exercise of his
or her profession.
In the case at bar, what is sought by petitioner from
respondent City Mayor is a permit to engage in the
business of running an optical shop. It does not purport to
seek a license to engage in the practice of optometry as
a corporate body or entity, although it does have in its
employ, persons who are duly licensed to practice
optometry by the Board of Examiners in Optometry

Taxicab Operators vs. The Board of

Transportation
GR L-59234, 30 September 1982
En Banc, Melencio-Herrera (J): 12 concur, 2 concur in
the result
FACTS: To insure that only safe and comfortable units
are used as public conveyances and in order that the
commuting public may be assured of comfort,
convenience, and safety, the Board of Transportation
(BOT) issued Memorandum Circular phasing out the
old and dilapidated taxis. Pursuant to OT circular,
respondent Director of the Bureau of Land
Transportation (BLT) issued Implementing Circular
formulating a schedule of phase-out of vehicles to be
allowed and accepted for registration as public
conveyances. The Taxicab Operators of Metro Manila,
Inc., Felicisimo Cabigao and Ace Transportation filed a
petition for "Certiorari, Prohibition and mandamus with
Preliminary Injunction and Temporary Restraining
Order", to declare the nullity of Memorandum Circular
of the BOT and Memorandum Circular of the BLT.
ISSUES: Whether or not the implementation and
enforcement of the assailed memorandum circulars
violate the petitioners' constitutional rights to (1) Equal
protection of the law; (2) Substantive due process; and

(3) Protection against arbitrary and unreasonable

classification and standard.
HELD: On Procedural and Substantive Due Process:
Petitioners cannot justifiably claim that they were
deprived of procedural due process. Neither can they
state with certainty that public respondents had not
availed of other sources of inquiry prior to issuing the
challenged Circulars for the Board gave a wide range
of choice in gathering necessary information or data in
the formulation of any policy, plan or program. It is not
mandatory that it should first call a conference or
require the submission of position papers or other
documents from operators or persons who may be
affected, this being only one of the options open to the
Board, which is given wide discretionary authority.
Furthermore, as public contend it is impractical to
subject every taxicab to constant and recurring
evaluation, not to speak of the fact that it can open
the door to the adoption of multiple standards,
possible collusion, and even graft and corruption. A
reasonable standard must be adopted to apply to an
vehicles affected uniformly, fairly, and justly. The span
of six years supplies that reasonable standard. The
product of experience shows that by that time taxis
have fully depreciated, their cost recovered, and a fair
return on investment obtained. They are also generally
dilapidated and no longer fit for safe and comfortable
service to the public specially considering that they
are in continuous operation practically 24 hours
everyday in three shifts of eight hours per shift. With

that standard of reasonableness and absence of

arbitrariness, the requirement of due process has been
met.
On Equal Protection of the Law: The law being enforced
in Metro Manila only and was directed solely towards
the taxi industry does not violate their right to equal
protection of the law for the traffic conditions are not
the same in every city, a substantial distinction exists
so that infringement of the equal protection clause can
hardly be successfully claimed. The State, in the
exercise, of its police power, can prescribe regulations
to promote the health, morals, peace, good order,
safety and general welfare of the people. It can
prohibit all things hurtful to comfort, safety and
welfare of society. It may also regulate property rights.
In the language of Chief Justice Enrique M. Fernando
"the necessities imposed by public welfare may justify
the exercise of governmental authority to regulate
even if thereby certain groups may plausibly assert
that their interests are disregarded". In so far as the
non-application of the assailed Circulars to other
transportation services is concerned, it need only be
recalled that the equal protection clause does not
imply that the same treatment be accorded all and
sundry. It applies to things or persons identically or
similarly situated. It permits of classification of the
object or subject of the law provided classification is
reasonable or based on substantial distinction, which
make for real differences, and that it must apply
equally to each member of the class. What is required

under the equal protection clause is the uniform

operation by legal means so that all persons under
identical or similar circumstance would be accorded
the same treatment both in privilege conferred and the
liabilities imposed. The challenged Circulars satisfy the
foregoing criteria.
Evident then is the conclusion that the questioned
Circulars do not suffer from any constitutional infirmity.
To declare a law unconstitutional, the infringement of
constitutional right must be clear, categorical and
undeniable. Hence, the Writs prayed for are denied
and was dismissed.

Velasco vs. Villegas [G.R. No. L-24153

(120 SCRA), February 14, 1983]
Post under case digests, Political
by Schizophrenic Mind

Law at Sunday,

February

26,

2012 Posted

Facts: Petitioners herein are members of

the Sta. Cruz BarbershopAssociation. This
is an appeal from the lower court's(LC)
order dismissing their suit for declatory
relief.
They
are
challenging

theconstitutionality of Ord. No. 4964. They

contend that it amounts to deprivation of
properties and their means of livelihood
without due process of law.

The assailed ordinance is worded thus: "It

shall be prohibited for any operator of
any barber shop to conduct the business of
massaging customers or other persons in
any adjacent room
or
rooms
of
saidbarber shop, or in any room or rooms
within
the
same
building
where
the barber shop is located as long as the
operator of the barber shop and the room
where massaging is conducted is the
same person."

Respondent in its reply, said that the

Ordinance No. 4964 is constitutional and
such is just an exercise of the state's
inherent power (police power).

Issue: Whether or not the assailed

Ordinance violated the petitioner's right to
property and their means of livelihood.

Held: Ordinance is Constitutional. Petition

is dismissed, LC decision affirmed.

Enactment of such (Ordinance) is a valid

exercise of Police Power.

The objectives of the Ordinance are:

(1) To impose payment of license fees for

engaging
in
the
business
of
massage clinics, and;

(2) To forestall possible immorality which

might grow from the construction of a
separate room for massaging customers.

This Court has been most liberal in

sustaining ordinances based on the
general welfare clause. And for that
reason, the petitioners rights were not
violated and they are not deprived of
the due processof law.

Magtajas Vs Pryce Properties

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,

FACTS: There was instant opposition when PAGCOR

announced the opening of a casino in Cagayan de Oro
City. Civic organizations angrily denounced the
project.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.he
reaction of the Sangguniang Panlungsod of Cagayan
de Oro City was swift and hostile. On December 7,
1992, it enacted Ordinance No. 3353.Nor was this all.
On January 4, 1993, it adopted a sterner Ordinance No.
3375-93Pryce 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

ISSUE: WON Ordinance 3353 and 3375-93 valid

HELD: No
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 rationale of the requirement that the
ordinances should not contravene a statute is
obvious.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.

Tano vs Socrates

Princesa City from January 1, 1993 to January 1, 1998.

Subsequently the Sangguniang Panlalawigan,
Provincial Government of Palawan enacted a resolution
prohibiting the catching , gathering, possessing,
buying, selling, and shipment of a several species of
live marine coral dwelling aquatic organisms for 5
years, in and coming from Palawan waters.
Petitioners filed a special civil action for certiorari and
prohibition, praying that the court declare the said
ordinances and resolutions as unconstitutional on the
ground that the said ordinances deprived them of the
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.
ISSUE:
Are the challenged ordinances unconstitutional?

Natural and Environmental Laws; Constitutional Law;

Regalian Doctrine
GR No. 110249; August 21, 1997

FACTS:
On Dec 15, 1992, the Sangguniang Panglungsod ng
Puerto Princesa enacted an ordinance banning the
shipment of all live fish and lobster outside Puerto

HELD:
No. The Supreme Court found the petitioners
contentions baseless and held that the challenged
ordinances did not suffer from any infirmity, both
under the Constitution and applicable laws. There is
absolutely no showing that any of the petitioners
qualifies as a subsistence or marginal fisherman.
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. 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.

In addition, one of the devolved powers of the LCG on

devolution is the enforcement of fishery laws in
municipal waters including the conservation of
mangroves. This necessarily includes the enactment of
ordinances to effectively carry out such fishery laws
within the municipal waters. In light of the principles of
decentralization and devolution enshrined in the LGC
and the powers granted therein to LGUs which
unquestionably involve the exercise of police power,
the validity of the questioned ordinances cannot be
doubted.

Ermita Malate v City of Manila 20

SCRA 849 (1967)
J. Fernando

Ermita-Malate Hotel and Motel Operators Association, and one of

its members Hotel del Mar Inc. petitioned for the prohibition of
Ordinance 4670 on June 14, 1963 to be applicable in the city of
Manila.
They claimed that the ordinance was beyond the powers of the
Manila City Board to regulate due to the fact that hotels were not
part of its regulatory powers. They also asserted that Section 1 of
the challenged ordinance was unconstitutional and void for being
unreasonable and violative of due process insofar because it
would impose P6,000.00 license fee per annum for first class
motels and P4,500.00 for second class motels; there was also
the requirement that the guests would fill up a form specifying
their personal information.
There was also a provision that the premises and facilities of such
hotels, motels and lodging houses would be open for inspection
from city authorites. They claimed this to be violative of due
process for being vague.
The law also classified motels into two classes and required the
maintenance of certain minimum facilities in first class motels
such as a telephone in each room, a dining room or, restaurant
and laundry. The petitioners also invoked the lack of due process
on this for being arbitrary.
It was also unlawful for the owner to lease any room or portion
thereof more than twice every 24 hours.
There was also a prohibition for persons below 18 in the hotel.

Facts:

The challenged ordinance also caused the automatic cancellation

of the license of the hotels that violated the ordinance.

The lower court declared the ordinance unconstitutional.

Hence, this appeal by the city of Manila.

Issue:
Whether Ordinance No. 4760 of the City of Manila is violative of
the due process clause?

Held: No. Judgment reversed.

Ratio:
"The presumption is towards the validity of a law. However, the
Judiciary should not lightly set aside legislative action when there
is not a clear invasion of personal or property rights under the
guise of police regulation.
O'Gorman & Young v. Hartford Fire Insurance Co- Case was in
the scope of police power. As underlying questions of fact may
condition the constitutionality of legislation of this character, the
resumption of constitutionality must prevail in the absence of
some factual foundation of record for overthrowing the statute."
No such factual foundation being laid in the present case, the
lower court deciding the matter on the pleadings and the
stipulation of facts, the presumption of validity must prevail and
the judgment against the ordinance set aside.

There is no question but that the challenged ordinance was

precisely enacted to minimize certain practices hurtful to public
morals, particularly fornication and prostitution. Moreover, the
increase in the licensed fees was intended to discourage
"establishments of the kind from operating for purpose other than
legal" and at the same time, to increase "the income of the city
government."
Police power is the power to prescribe regulations to promote the
health, morals, peace, good order, safety and general welfare of
the people. In view of the requirements of due process, equal
protection and other applicable constitutional guaranties,
however, the power must not be unreasonable or violative of due
process.
There is no controlling and precise definition of due process. It
has a standard to which the governmental action should conform
in order that deprivation of life, liberty or property, in each
appropriate case, be valid. What then is the standard of due
process which must exist both as a procedural and a substantive
requisite to free the challenged ordinance from legal infirmity? It is
responsiveness to the supremacy of reason, obedience to the
dictates of justice. Negatively put, arbitrariness is ruled out and
unfairness avoided.
Due process is not a narrow or "technical conception with fixed
content unrelated to time, place and circumstances," decisions
based on such a clause requiring a "close and perceptive inquiry
into fundamental principles of our society." Questions of due
process are not to be treated narrowly or pedantically in slavery
to form or phrase.

Nothing in the petition is sufficient to prove the ordinances nullity

for an alleged failure to meet the due process requirement.
Cu Unjieng case: Licenses for non-useful occupations are also
incidental to the police power and the right to exact a fee may be
implied from the power to license and regulate, but in fixing
amount of the license fees the municipal corporations are allowed
a much wider discretion in this class of cases than in the former,
and aside from applying the well-known legal principle that
municipal ordinances must not be unreasonable, oppressive, or
tyrannical, courts have, as a general rule, declined to interfere
with such discretion. Eg. Sale of liquors.
Lutz v. Araneta- Taxation may be made to supplement the states
police power.
In one case- much discretion is given to municipal corporations
in determining the amount," here the license fee of the operator of
a massage clinic, even if it were viewed purely as a police power
measure.
On the impairment of freedom to contract by limiting duration of
use to twice every 24 hours- It was not violative of due process.
'Liberty' as understood in democracies, is not license; it is 'liberty
regulated by law.' Implied in the term is restraint by law for the
good of the individual and for the greater good of the peace and
order of society and the general well-being.

Laurel- The citizen should achieve the required balance of liberty

and authority in his mind through education and personal
discipline, so that there may be established the resultant
equilibrium, which means peace and order and happiness for all.
The freedom to contract no longer "retains its virtuality as a living
principle, unlike in the sole case of People v Pomar. The policy of
laissez faire has to some extent given way to the assumption by
the government of the right of intervention even in contractual
relations affected with public interest.
What may be stressed sufficiently is that if the liberty involved
were freedom of the mind or the person, the standard for the
validity of governmental acts is much more rigorous and exacting,
but where the liberty curtailed affects at the most rights of
property, the permissible scope of regulatory measure is wider.
On the law being vague on the issue of personal information, the
maintenance of establishments, and the full rate of paymentHolmes- We agree to all the generalities about not supplying
criminal laws with what they omit but there is no canon against
using common sense in construing laws as saying what they
obviously mean."