G.R. No.

97764 August 10, 1992

vending areas, under certain terms and conditions.

LEVY D. MACASIANO, Brigadier General/PNP Superintendent, Metropolitan

Traffic Command, petitioner,
vs.
HONORABLE ROBERTO C. DIOKNO, Presiding Judge, Branch 62, Regional
Trial Court of Makati, Metro Manila, MUNICIPALITY OF PARAAQUE,
METRO MANILA, PALANYAG KILUSANG BAYAN FOR SERVICE,
respondents.

On July 20, 1990, the Metropolitan Manila Authority approved Ordinance No.
86, s. 1990 of the municipal council of respondent municipality subject to the
following conditions:

Ceferino, Padua Law Office for Palanyag Kilusang Bayan for service.

2.
That the 2-meter middle road to be used as flea market/vending area
shall be marked distinctly, and that the 2 meters on both sides of the road shall be
used by pedestrians;

Manuel de Guia for Municipality of Paraaque.

1.
That the aforenamed streets are not used for vehicular traffic, and that
the majority of the residents do not oppose the establishment of the flea
market/vending areas thereon;

3.
That the time during which the vending area is to be used shall be clearly
designated;
MEDIALDEA, J.:
This is a petition for certiorari under Rule 65 of the Rules of Court seeking the
annulment of the decision of the Regional Trial Court of Makati, Branch 62,
which granted the writ of preliminary injunction applied for by respondents
Municipality of Paraaque and Palanyag Kilusang Bayan for Service (Palanyag
for brevity) against petitioner herein.
The antecedent facts are as follows:
On June 13, 1990, the respondent municipality passed Ordinance No. 86, Series
of 1990 which authorized the closure of J. Gabriel, G.G. Cruz, Bayanihan, Lt.
Garcia Extension and Opena Streets located at Baclaran, Paraaque, Metro
Manila and the establishment of a flea market thereon. The said ordinance was
approved by the municipal council pursuant to MMC Ordinance No. 2, Series of
1979, authorizing and regulating the use of certain city and/or municipal streets,
roads and open spaces within Metropolitan Manila as sites for flea market and/or
On September 13, 1990, petitioner Brig. Gen. Macasiano, PNP Superintendent of the
Metropolitan Traffic Command, ordered the destruction and confiscation of stalls
along G.G. Cruz and J. Gabriel St. in Baclaran. These stalls were later returned to
respondent Palanyag.
On October 16, 1990, petitioner Brig. General Macasiano wrote a letter to respondent
Palanyag giving the latter ten (10) days to discontinue the flea market; otherwise, the
market stalls shall be dismantled.
Hence, on October 23, 1990, respondents municipality and Palanyag filed with the trial

4.
That the use of the vending areas shall be temporary and shall be closed
once the reclaimed areas are developed and donated by the Public Estate
Authority.
On June 20, 1990, the municipal council of Paraaque issued a resolution
authorizing Paraaque Mayor Walfrido N. Ferrer to enter into contract with any
service cooperative for the establishment, operation, maintenance and
management of flea markets and/or vending areas.
On August 8, 1990, respondent municipality and respondent Palanyag, a service
cooperative, entered into an agreement whereby the latter shall operate, maintain
and manage the flea market in the aforementioned streets with the obligation to
remit dues to the treasury of the municipal government of Paraaque.
Consequently, market stalls were put up by respondent Palanyag on the said
streets.
court a joint petition for prohibition and mandamus with damages and prayer for
preliminary injunction, to which the petitioner filed his memorandum/opposition to the
issuance of the writ of preliminary injunction.
On October 24, 1990, the trial court issued a temporary restraining order to enjoin
petitioner from enforcing his letter-order of October 16, 1990 pending the hearing on
the motion for writ of preliminary injunction.
On December 17, 1990, the trial court issued an order upholding the validity of
Ordinance No. 86 s. 1990 of the Municipality' of Paraaque and enjoining petitioner

Brig. Gen. Macasiano from enforcing his letter-order against respondent Palanyag.
Hence, this petition was filed by the petitioner thru the Office of the Solicitor General
alleging grave abuse of discretion tantamount to lack or excess of jurisdiction on the
part of the trial judge in issuing the assailed order.
The sole issue to be resolved in this case is whether or not an ordinance or resolution
issued by the municipal council of Paraaque authorizing the lease and use of public
streets or thoroughfares as sites for flea markets is valid.
The Solicitor General, in behalf of petitioner, contends that municipal roads are used
for public service and are therefore public properties; that as such, they cannot be
subject to private appropriation or private contract by any person, even by the
respondent Municipality of Paraaque. Petitioner submits that a property already
dedicated to public use cannot be used for another public purpose and that absent a
clear showing that the Municipality of Paraaque has been granted by the legislature
specific authority to convert a property already in public use to another public use,
respondent municipality is, therefore, bereft of any authority to close municipal roads
for the establishment of a flea market. Petitioner also submits that assuming that the
respondent municipality is authorized to close streets, it failed to comply with the
conditions set forth by the Metropolitan Manila Authority for the approval of the
ordinance providing for the establishment of flea markets on public streets. Lastly,
petitioner contends that by allowing the municipal streets to be used by market vendors
the municipal council of respondent municipality violated its duty under the Local
Government Code to promote the general welfare of the residents of the municipality.
In upholding the legality of the disputed ordinance, the trial court ruled:
. . . that Chanter II Section 10 of the Local Government Code is a statutory grant of
power given to local government units, the Municipality of Paraaque as such, is
empowered under that law to close its roads, streets or alley subject to limitations
stated therein (i.e., that it is in accordance with existing laws and the provisions of this
code).
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The actuation of the respondent Brig. Gen. Levi Macasiano, though apparently within
its power is in fact an encroachment of power legally vested to the municipality,
precisely because when the municipality enacted the ordinance in question the
authority of the respondent as Police Superintendent ceases to be operative on the
ground that the streets covered by the ordinance ceases to be a public thoroughfare.
(pp. 33-34, Rollo)

We find the petition meritorious. In resolving the question of whether the disputed
municipal ordinance authorizing the flea market on the public streets is valid, it is
necessary to examine the laws in force during the time the said ordinance was enacted,
namely, Batas Pambansa Blg. 337, otherwise known as Local Government Code, in
connection with established principles embodied in the Civil Code an property and
settled jurisprudence on the matter.
The property of provinces, cities and municipalities is divided into property for public
use and patrimonial property (Art. 423, Civil Code). As to what consists of property
for public use, Article 424 of Civil Code states:
Art. 424.
Property for public use, in the provinces, cities and municipalities,
consists of the provincial roads, city streets, the squares, fountains, public waters,
promenades, and public works for public service paid for by said provinces, cities or
municipalities.
All other property possessed by any of them is patrimonial and shall be governed by
this Code, without prejudice to the provisions of special laws.
Based on the foregoing, J. Gabriel G.G. Cruz, Bayanihan, Lt. Garcia Extension and
Opena streets are local roads used for public service and are therefore considered
public properties of respondent municipality. Properties of the local government which
are devoted to public service are deemed public and are under the absolute control of
Congress (Province of Zamboanga del Norte v. City of Zamboanga, L-24440, March
28, 1968, 22 SCRA 1334). Hence, local governments have no authority whatsoever to
control or regulate the use of public properties unless specific authority is vested upon
them by Congress. One such example of this authority given by Congress to the local
governments is the power to close roads as provided in Section 10, Chapter II of the
Local Government Code, which states:
Sec. 10. Closure of roads. A local government unit may likewise, through its head
acting pursuant to a resolution of its sangguniang and in accordance with existing law
and the provisions of this Code, close any barangay, municipal, city or provincial road,
street, alley, park or square. No such way or place or any part of thereof shall be close
without indemnifying any person prejudiced thereby. A property thus withdrawn from
public use may be used or conveyed for any purpose for which other real property
belonging to the local unit concerned might be lawfully used or conveyed. (Emphasis
ours).
However, the aforestated legal provision which gives authority to local government
units to close roads and other similar public places should be read and interpreted in
accordance with basic principles already established by law. These basic principles
have the effect of limiting such authority of the province, city or municipality to close

a public street or thoroughfare. Article 424 of the Civil Code lays down the basic
principle that properties of public dominion devoted to public use and made available
to the public in general are outside the commerce of man and cannot be disposed of or
leased by the local government unit to private persons. Aside from the requirement of
due process which should be complied with before closing a road, street or park, the
closure should be for the sole purpose of withdrawing the road or other public property
from public use when circumstances show that such property is no longer intended or
necessary for public use or public service. When it is already withdrawn from public
use, the property then becomes patrimonial property of the local government unit
concerned (Article 422, Civil Code; Cebu Oxygen, etc. et al. v. Bercilles, et al., G.R.
No. L-40474, August 29, 1975, 66 SCRA 481). It is only then that the respondent
municipality can "use or convey them for any purpose for which other real property
belonging to the local unit concerned might be lawfully used or conveyed" in
accordance with the last sentence of Section 10, Chapter II of Blg. 337, known as
Local Government Code. In one case, the City Council of Cebu, through a resolution,
declared the terminal road of M. Borces Street, Mabolo, Cebu City as an abandoned
road, the same not being included in the City Development Plan. Thereafter, the City
Council passes another resolution authorizing the sale of the said abandoned road
through public bidding. We held therein that the City of Cebu is empowered to close a
city street and to vacate or withdraw the same from public use. Such withdrawn
portion becomes patrimonial property which can be the object of an ordinary contract
(Cebu Oxygen and Acetylene Co., Inc. v. Bercilles, et al., G.R. No.
L-40474, August 29, 1975, 66 SCRA 481). However, those roads and streets which are
available to the public in general and ordinarily used for vehicular traffic are still
considered public property devoted to public use. In such case, the local government
has no power to use it for another purpose or to dispose of or lease it to private
persons. This limitation on the authority of the local government over public properties
has been discussed and settled by this Court en banc in "Francisco V. Dacanay,
petitioner v. Mayor Macaria Asistio, Jr., et al., respondents, G.R. No. 93654, May 6,
1992." This Court ruled:
There is no doubt that the disputed areas from which the private respondents' market
stalls are sought to be evicted are public streets, as found by the trial court in Civil
Case No. C-12921. A public street is property for public use hence outside the
commerce of man (Arts. 420, 424, Civil Code). Being outside the commerce of man, it
may not be the subject of lease or others contract (Villanueva, et al. v. Castaeda and
Macalino, 15 SCRA 142 citing the Municipality of Cavite v. Rojas, 30 SCRA 602;
Espiritu v. Municipal Council of Pozorrubio, 102 Phil. 869; And Muyot v. De la
Fuente, 48 O.G. 4860).
As the stallholders pay fees to the City Government for the right to occupy portions of
the public street, the City Government, contrary to law, has been leasing portions of
the streets to them. Such leases or licenses are null and void for being contrary to law.

The right of the public to use the city streets may not be bargained away through
contract. The interests of a few should not prevail over the good of the greater number
in the community whose health, peace, safety, good order and general welfare, the
respondent city officials are under legal obligation to protect.
The Executive Order issued by acting Mayor Robles authorizing the use of Heroes del
'96 Street as a vending area for stallholders who were granted licenses by the city
government contravenes the general law that reserves city streets and roads for public
use. Mayor Robles' Executive Order may not infringe upon the vested right of the
public to use city streets for the purpose they were intended to serve: i.e., as arteries of
travel for vehicles and pedestrians.
Even assuming, in gratia argumenti, that respondent municipality has the authority to
pass the disputed ordinance, the same cannot be validly implemented because it cannot
be considered approved by the Metropolitan Manila Authority due to non-compliance
by respondent municipality of the conditions imposed by the former for the approval
of the ordinance, to wit:
1.
That the aforenamed streets are not used for vehicular traffic, and that the
majority of the residents do(es) not oppose the establishment of the flea
market/vending areas thereon;
2.
That the 2-meter middle road to be used as flea market/vending area shall be
marked distinctly, and that the 2 meters on both sides of the road shall be used by
pedestrians;
3.
That the time during which the vending area is to be used shall be clearly
designated;
4.
That the use of the vending areas shall be temporary and shall be closed once
the reclaimed areas are developed and donated by the Public Estate Authority. (p. 38,
Rollo)
Respondent municipality has not shown any iota of proof that it has complied with the
foregoing conditions precedent to the approval of the ordinance. The allegations of
respondent municipality that the closed streets were not used for vehicular traffic and
that the majority of the residents do not oppose the establishment of a flea market on
said streets are unsupported by any evidence that will show that this first condition has
been met. Likewise, the designation by respondents of a time schedule during which
the flea market shall operate is absent.
Further, it is of public notice that the streets along Baclaran area are congested with
people, houses and traffic brought about by the proliferation of vendors occupying the

streets. To license and allow the establishment of a flea market along J. Gabriel, G.G.
Cruz, Bayanihan, Lt. Garcia Extension and Opena streets in Baclaran would not help
in solving the problem of congestion. We take note of the other observations of the
Solicitor General when he said:
. . . There have been many instances of emergencies and fires where ambulances and
fire engines, instead of using the roads for a more direct access to the fire area, have to
maneuver and look for other streets which are not occupied by stalls and vendors
thereby losing valuable time which could, otherwise, have been spent in saving
properties and lives.
Along G.G. Cruz Street is a hospital, the St. Rita Hospital. However, its ambulances
and the people rushing their patients to the hospital cannot pass through G.G. Cruz
because of the stalls and the vendors. One can only imagine the tragedy of losing a life
just because of a few seconds delay brought about by the inaccessibility of the streets
leading to the hospital.
The children, too, suffer. In view of the occupancy of the roads by stalls and vendors,
normal transportation flow is disrupted and school children have to get off at a distance
still far from their schools and walk, rain or shine.
Indeed one can only imagine the garbage and litter left by vendors on the streets at the
end of the day. Needless to say, these cause further pollution, sickness and
deterioration of health of the residents therein. (pp. 21-22, Rollo)
Respondents do not refute the truth of the foregoing findings and observations of
petitioners. Instead, respondents want this Court to focus its attention solely on the
argument that the use of public spaces for the establishment of a flea market is well
within the powers granted by law to a local government which should not be interfered
with by the courts.
Verily, the powers of a local government unit are not absolute. They are subject to
limitations laid down by toe Constitution and the laws such as our Civil Code.
Moreover, the exercise of such powers should be subservient to paramount
considerations of health and well-being of the members of the community. Every local
government unit has the sworn obligation to enact measures that will enhance the
public health, safety and convenience, maintain peace and order, and promote the
general prosperity of the inhabitants of the local units. Based on this objective, the
local government should refrain from acting towards that which might prejudice or
adversely affect the general welfare.
As what we have said in the Dacanay case, the general public have a legal right to
demand the demolition of the illegally constructed stalls in public roads and streets and

the officials of respondent municipality have the corresponding duty arising from
public office to clear the city streets and restore them to their specific public purpose.
The instant case as well as the Dacanay case, involves an ordinance which is void and
illegal for lack of basis and authority in laws applicable during its time. However, at
this point, We find it worthy to note that Batas Pambansa Blg. 337, known as Local
Government Lode, has already been repealed by Republic Act No. 7160 known as
Local Government Code of 1991 which took effect on January 1, 1992. Section 5(d) of
the new Code provides that rights and obligations existing on the date of effectivity of
the new Code and arising out of contracts or any other source of prestation involving a
local government unit shall be governed by the original terms and conditions of the
said contracts or the law in force at the time such rights were vested.
ACCORDINGLY, the petition is GRANTED and the decision of the respondent
Regional Trial Court dated December 17, 1990 which granted the writ of preliminary
injunction enjoining petitioner as PNP Superintendent, Metropolitan Traffic Command
from enforcing the demolition of market stalls along J. Gabriel, G.G. Cruz, Bayanihan,
Lt. Garcia Extension and Opena streets is hereby RESERVED and SET ASIDE.
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.

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:

Aquilino G. Pimentel, Jr. and Associates for petitioners.

R.R. Torralba & Associates for private respondent.

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

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.

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.

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:

WHEREAS, the City Council established a policy as early as 1990 against CASINO
under its Resolution No. 2295;

ORDINANCE NO. 3353

WHEREAS, on October 14, 1992, the City Council passed another Resolution No.
2673, reiterating its policy against the establishment of CASINO;

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.

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;

4.
The questioned Ordinances are discriminatory to casino and partial to
cockfighting and are therefore invalid on that point.

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.

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:

all kinds of gambling within their territories, including the operation of casinos.
(1)
Approve ordinances and pass resolutions necessary for an efficient and
effective city government, and in this connection, shall:
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(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, gambling and 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 all forms 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

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;
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(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 "modified pro 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 locallyfunded 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.

contravention here.
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

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. 337593 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.
G.R. No. L-38429
June 30, 1988

CARLOS BALACUIT, LAMBERTO TAN and SERGIO YU CARCEL, petitionersappellants,

vs.
COURT OF FIRST INSTANCE OF AGUSAN DEL NORTE AND BUTUAN CITY,
Branch 11, and the CITY OF BUTUAN, respondents-appellees.

imprisonment in the discretion of the Court.

If the violator be a firm or corporation the penalty shall be imposed upon the Manager,
Agent or Representative of such firm or corporation.
SECTION 3This ordinance shall take effect upon its approval.

Romeo B. Sanchez, Eduardo Deza Mercado and Wilfred D. Asis for petitioners.
The City Legal Officer for respondents-appeliees.

GANCAYCO, J.:
At issue in the petition for review before Us is the validity and constitutionality of
Ordinance No. 640 passed by the Municipal Board of the City of Butuan on April 21,
1969, the title and text of which are reproduced below:

Petitioners are Carlos Balacuit Lamberto Tan, and Sergio Yu Carcel managers of the
Maya and Dalisay Theaters, the Crown Theater, and the Diamond Theater,
respectively. Aggrieved by the effect of Ordinance No. 640, they filed a complaint
before the Court of First Instance of Agusan del Norte and Butuan City docketed as
Special Civil Case No. 237 on June 30, 1969 praying, inter alia, that the subject
ordinance be declared unconstitutional and, therefore, void and unenforceable. 1
Upon motion of the petitioners, 2 a temporary restraining order was issued on July 14,
1969 by the court a quo enjoining the respondent City of Butuan and its officials from
enforcing Ordinance No. 640. 3 On July 29, 1969, respondents filed their answer
sustaining the validity of the ordinance. 4

ORDINANCE--640
ORDINANCE PENALIZING ANY PERSON, GROUP OF PERSONS, ENTITY OR
CORPORATION ENGAGED IN THE BUSINESS OF SELLING ADMISSION
TICKETS TO ANY MOVIE OR OTHER PUBLIC EXHIBITIONS, GAMES,
CONTESTS OR OTHER PERFORMANCES TO REQUIRE CHILDREN
BETWEEN SEVEN (7) AND TWELVE (12) YEARS OF AGE TO PAY FULL
PAYMENT FOR TICKETS INTENDED FOR ADULTS BUT SHOULD CHARGE
ONLY ONE-HALF OF THE SAID TICKET
xxx

xxx

xxx

Be it ordained by the Municipal Board of the City of Butuan in session assembled,

that:
SECTION 1It shall be unlawful for any person, group of persons, entity, or
corporation engaged in the business of selling admission tickets to any movie or other
public exhibitions, games, contests, or other performances to require children between
seven (7) and twelve (12) years of age to pay full payment for admission tickets
intended for adults but should charge only one-half of the value of the said tickets.
SECTION 2Any person violating the provisions of this Ordinance shall upon
conviction be punished by a fine of not less than TWO HUNDRED PESOS (P200.00)
but not more than SIX HUNDRED PESOS (P600.00) or an imprisonment of not less
than TWO (2) MONTHS or not more than SIX (6) MONTHS or both such firm and

On January 30, 1973, the litigants filed their stipulation of facts. 5 On June 4, 1973, the
respondent court rendered its decision, 6 the dispositive part of which reads:
IN THE LIGHT OF ALL THE FOREGOING, the Court hereby adjudges in favor of
the respondents and against the petitioners, as follows:
1.
Declaring Ordinance No. 640 of the City of Butuan constitutional and valid:
Provided, however, that the fine for a single offense shall not exceed TWO
HUNDRED PESOS, as prescribed in the aforequoted Section 15 (nn) of Rep. Act No.
523;
2.

Dissolving the restraining order issued by this Court; and;

3.

Dismissing the complaint, with costs against the petitioners.

4.

SO ORDERED. 7

Petitioners filed their motion for reconsideration 8 of the decision of the court a quo
which was denied in a resolution of the said court dated November 10, 1973. 9
Hence, this petition.
Petitioners attack the validity and constitutionality of Ordinance No. 640 on the
grounds that it is ultra vires and an invalid exercise of police power.

Petitioners contend that Ordinance No. 640 is not within the power of' the Municipal
Board to enact as provided for in Section 15(n) of Republic Act No. 523, the Charter
of the City of Butuan, which states:
Sec. 15. General powers and duties of the Board Except as otherwise provided by
law, and subject to the conditions and limitations thereof, the Municipal Board shall
have the following legislative powers:
xxx

xxx

xxx

(n)
To regulate and fix the amount of the license fees for the following; . . .
theaters, theatrical performances, cinematographs, public exhibitions and all other
performances and places of amusements ...
xxx

xxx

xxx

Respondent City of Butuan, on the other hand, attempts to justify the enactment of the
ordinance by invoking the general welfare clause embodied in Section 15 (nn) of the
cited law, which provides:
(nn)
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 may be necessary to carry into effect and discharge the powers and
duties conferred by this Act, and to fix the penalties for the violation of the ordinances,
which shall not exceed a two hundred peso fine or six months imprisonment, or both
such fine and imprisonment, for a single offense.
We can see from the aforecited Section 15(n) that the power to regulate and fix the
amount of license fees for theaters, theatrical performances, cinematographs, public
exhibitions and other places of amusement has been expressly granted to the City of
Butuan under its charter. But the question which needs to be resolved is this: does this
power to regulate include the authority to interfere in the fixing of prices of admission
to these places of exhibition and amusement whether under its general grant of power
or under the general welfare clause as invoked by the City?
This is the first time this Court is confronted with the question of direct interference by
the local government with the operation of theaters, cinematographs and the like to the
extent of fixing the prices of admission to these places. Previous decisions of this
Court involved the power to impose license fees upon businesses of this nature as a
corollary to the power of the local government to regulate them. Ordinances which
required moviehouses or theaters to increase the price of their admission tickets

supposedly to cover the license fees have been held to be invalid for these impositions
were considered as not merely license fees but taxes for purposes of revenue and not
regulation which the cities have no power to exact, 10 unless expressly granted by its
charter. 11
Applying the ruling in Kwong Sing v. City of Manila, 12 where the word "regulate"
was interpreted to include the power to control, to govern and to restrain, it would
seem that under its power to regulate places of exhibitions and amusement, the
Municipal Board of the City of Butuan could make proper police regulations as to the
mode in which the business shall be exercised.
While in a New York case, 13 an ordinance which regulates the business of selling
admission tickets to public exhibitions or performances by virtue of the power of cities
under the General City Law "to maintain order, enforce the laws, protect property and
preserve and care for the safety, health, comfort and general welfare of the inhabitants
of the city and visitors thereto; and for any of said purposes, to regulate and license
occupations" was considered not to be within the scope of any duty or power implied
in the charter. It was held therein that the power of regulation of public exhibitions and
places of amusement within the city granted by the charter does not carry with it any
authority to interfere with the price of admission to such places or the resale of tickets
or tokens of admission.
In this jurisdiction, it is already settled that the operation of theaters, cinematographs
and other places of public exhibition are subject to regulation by the municipal council
in the exercise of delegated police power by the local government. 14 Thus, in People
v. Chan, 15 an ordinance of the City of Manila prohibiting first run cinematographs
from selling tickets beyond their seating capacity was upheld as constitutional for
being a valid exercise of police power. Still in another case, 16 the validity of an
ordinance of the City of Bacolod prohibiting admission of two or more persons in
moviehouses and other amusement places with the use of only one ticket was sustained
as a valid regulatory police measure not only in the interest of preventing fraud in so
far as municipal taxes are concerned but also in accordance with public health, public
safety, and the general welfare.
The City of Butuan, apparently realizing that it has no authority to enact the ordinance
in question under its power to regulate embodied in Section 15(n), now invokes the
police power as delegated to it under the general welfare clause to justify the
enactment of said ordinance.
To invoke the exercise of police power, not only must it appear that the interest of the
public generally requires an interference with private rights, but the means adopted
must be reasonably necessary for the accomplishment of the purpose and not unduly
oppressive upon individuals. 17 The legislature may not, under the guise of protecting

the public interest, arbitrarily interfere with private business, or impose unusual and
unnecessary restrictions upon lawful occupations. In other words, the determination as
to what is a proper exercise of its police power is not final or conclusive, but is subject
to the supervision of the courts. 18
Petitioners maintain that Ordinance No. 640 violates the due process clause of the
Constitution for being oppressive, unfair, unjust, confiscatory, and an undue restraint
of trade, and violative of the right of persons to enter into contracts, considering that
the theater owners are bound under a contract with the film owners for just admission
prices for general admission, balcony and lodge.
In Homeowners' Association of the Philippines, Inc. v. Municipal Board of the City of
Manila, 19 this Court held:
The authority of municipal corporations to regulate is essentially police power,
Inasmuch as the same generally entails a curtailment of the liberty, the rights and/or
the property of persons, which are protected and even guaranteed by the Constitution,
the exercise of police power is necessarily subject to a qualification, limitation or
restriction demanded by the regard, the respect and the obedience due to the
prescriptions of the fundamental law, particularly those forming part of the
Constitution of Liberty, otherwise known as the Bill of Rights the police power
measure must be reasonable. In other words, individual rights may be adversely
affected by the exercise of police power to the extent only and only to the extent-that may be fairly required by the legitimate demands of public interest or public
welfare.

determine not only what the interests of the public require, but what measures are
necessary for the protection of such interests. 20 The methods or means used to protect
the public health, morals, safety or welfare, must have some relation to the end in
view, for under the guise of the police power, personal rights and those pertaining to
private property will not be permitted to be arbitralily invaded by the legislative
department. 21
We agree with petitioners that the ordinance is not justified by any necessity for the
public interest. The police power legislation must be firmly grounded on public
interest and welfare, and a reasonable relation must exist between purposes and means.
22 The evident purpose of the ordinance is to help ease the burden of cost on the part
of parents who have to shell out the same amount of money for the admission of their
children, as they would for themselves, A reduction in the price of admission would
mean corresponding savings for the parents; however, the petitioners are the ones
made to bear the cost of these savings. The ordinance does not only make the
petitioners suffer the loss of earnings but it likewise penalizes them for failure to
comply with it. Furthermore, as petitioners point out, there will be difficulty in its
implementation because as already experienced by petitioners since the effectivity of
the ordinance, children over 12 years of age tried to pass off their age as below 12
years in order to avail of the benefit of the ordinance. The ordinance does not provide a
safeguard against this undesirable practice and as such, the respondent City of Butuan
now suggests that birth certificates be exhibited by movie house patrons to prove the
age of children. This is, however, not at all practicable. We can see that the ordinance
is clearly unreasonable if not unduly oppressive upon the business of petitioners.
Moreover, there is no discernible relation between the ordinance and the promotion of
public health, safety, morals and the general welfare.

What is the reason behind the enactment of Ordinance No. 640?

A reading of the minutes of the regular session of the Municipal Board when the
ordinance in question was passed shows that a certain Councilor Calo, the proponent
of the measure, had taken into account the complaints of parents that for them to pay
the full price of admission for their children is too financially burdensome.
The trial court advances the view that "even if the subject ordinance does not spell out
its raison d'etre in all probability the respondents were impelled by the awareness that
children are entitled to share in the joys of their elders, but that considering that, apart
from size, children between the ages of seven and twelve cannot fully grasp the nuance
of movies or other public exhibitions, games, contests or other performances, the
admission prices with respect to them ought to be reduced. 19a
We must bear in mind that there must be public necessity which demands the adoption
of proper measures to secure the ends sought to be attained by the enactment of the
ordinance, and the large discretion is necessarily vested in the legislative authority to

Respondent City of Butuan claims that it was impelled to protect the youth from the
pernicious practice of movie operators and other public exhibitions promoters or the
like of demanding equal price for their admission tickets along with the adults. This
practice is allegedly repugnant and unconscionable to the interest of the City in the
furtherance of the prosperity, peace, good order, comfort, convenience and the general
well-being of its inhabitants.
There is nothing pernicious in demanding equal price for both children and adults. The
petitioners are merely conducting their legitimate businesses. The object of every
business entrepreneur is to make a profit out of his venture. There is nothing immoral
or injurious in charging the same price for both children and adults. In fact, no person
is under compulsion to purchase a ticket. It is a totally voluntary act on the part of the
purchaser if he buys a ticket to such performances.
Respondent City of Butuan claims that Ordinance No. 640 is reasonable and necessary
to lessen the economic burden of parents whose minor children are lured by the

attractive nuisance being maintained by the petitioners. Respondent further alleges that
by charging the full price, the children are being exploited by movie house operators.
We fail to see how the children are exploited if they pay the full price of admission.
They are treated with the same quality of entertainment as the adults. The supposition
of the trial court that because of their age children cannot fully grasp the nuances of
such entertainment as adults do fails to convince Us that the reduction in admission
ticket price is justifiable. In fact, by the very claim of respondent that movies and the
like are attractive nuisances, it is difficult to comprehend why the municipal board
passed the subject ordinance. How can the municipal authorities consider the movies
an attractive nuisance and yet encourage parents and children to patronize them by
lowering the price of admission for children? Perhaps, there is some ,truth to the
argument of petitioners that Ordinance No. 640 is detrimental to the public good and
the general welfare of society for it encourages children of tender age to frequent the
movies, rather than attend to their studies in school or be in their homes.
Moreover, as a logical consequence of the ordinance, movie house and theater
operators will be discouraged from exhibiting wholesome movies for general
patronage, much less children's pictures if only to avoid compliance with the ordinance
and still earn profits for themselves. For after all, these movie house and theater
operators cannot be compelled to exhibit any particular kind of film except those films
which may be dictated by public demand and those which are restricted by censorship
laws. So instead of children being able to share in the joys of their elders as envisioned
by the trial court, there will be a dearth of wholesome and educational movies for them
to enjoy.
There are a number of cases decided by the Supreme Court and the various state courts
of the United States which upheld the right of the proprietor of a theater to fix the price
of an admission ticket as against the right of the state to interfere in this regard and
which We consider applicable to the case at bar.
A theater ticket has been described to be either a mere license, revocable at the will of
the proprietor of the theater or it may be evidence of a contract whereby, for a valuable
consideration, the purchaser has acquired the right to enter the theater and observe the
performance on condition that he behaves properly. 23 Such ticket, therefore,
represents a right, Positive or conditional, as the case may be, according to the terms of
the original contract of sale. This right is clearly a right of property. The ticket which
represents that right is also, necessarily, a species of property. As such, the owner
thereof, in the absence of any condition to the contrary in the contract by which he
obtained it, has the clear right to dispose of it, to sell it to whom he pleases and at such
price as he can obtain. 24 So that an act prohibiting the sale of tickets to theaters or
other places of amusement at more than the regular price was held invalid as
conflicting with the state constitution securing the right of property. 25

In Collister vs. Hayman, 26 it was held:

The defendants were conducting a private business, which, even if clothed with a
public interest, was without a franchise to accommodate the public, and they had the
right to control it, the same as the proprietors of any other business, subject to such
obligations as were placed upon them by statute. Unlike a carrier of passengers, for
instance, with a franchise from the state, and hence under obligation to transport
anyone who applies and to continue the business year in and year out, the proprietors
of a theater can open and close their place at will, and no one can make a lawful
complaint. They can charge what they choose for admission to their theater. They can
limit the number admitted. They can refuse to sell tickets and collect the price of
admission at the door. They can preserve order and enforce quiet while the
performance is going on. They can make it a part of the contract and condition of
admission, by giving due notice and printing the condition in the ticket that no one
shall be admitted under 21 years of age, or that men only or women only shall be
admitted, or that a woman cannot enter unless she is accompanied by a male escort,
and the like. The proprietors, in the control of their business, may regulate the terms of
admission in any reasonable way. If those terms are not satisfactory, no one is obliged
to buy a ticket or make the contract. If the terms are satisfactory, and the contract is
made, the minds of the parties meet upon the condition, and the purchaser impliedly
promises to perform it.
In Tyson and Bro. United Theater Ticket Officers, Inc. vs. Banton, 27 the United
States Supreme Court held:
... And certainly a place of entertainment is in no legal sense a public utility; and quite
as certainly, its activities are not such that their enjoyment can be regarded under any
conditions from the point of view of an emergency.
The interest of the public in theaters and other places of entertainment may be more
nearly, and with better reason, assimilated to the like interest in provision stores and
markets and in the rental of houses and apartments for residence purposes; although in
importance it fails below such an interest in the proportion that food and shelter are of
more moment than amusement or instruction. As we have shown there is no legislative
power to fix the prices of provisions or clothing, or the rental charges for houses and
apartments, in the absence of some controlling emergency; and we are unable to
perceive any dissimilarities of such quality or degree as to justify a different rule in
respect of amusements and entertainment ...
We are in consonance with the foregoing observations and conclusions of American
courts. In this jurisdiction, legislation had been passed controlling the prices of goods
commodities and drugs during periods of emergency, 28 limiting the net profits of
public utility 29 as well as regulating rentals of residential apartments for a limited

period, 30 as a matter of national policy in the interest of public health and safety,
economic security and the general welfare of the people. And these laws cannot be
impugned as unconstitutional for being violative of the due process clause.
However, the same could not be said of theaters, cinematographs and other
exhibitions. In no sense could these businesses be considered public utilities. The State
has not found it appropriate as a national policy to interfere with the admission prices
to these performances. This does not mean however, that theaters and exhibitions are
not affected with public interest even to a certain degree. Motion pictures have been
considered important both as a medium for the communication of Ideas and expression
of the artistic impulse. Their effects on the perceptions by our people of issues and
public officials or public figures as well as the prevailing cultural traits are
considerable. 31 People of all ages flock to movie houses, games and other public
exhibitions for recreation and relaxation. The government realizing their importance
has seen it fit to enact censorship laws to regulate the movie industry. 32 Their
aesthetic entertainment and even educational values cannot be underestimated. Even
police measures regulating the operation of these businesses have been upheld in order
to safeguard public health and safety.
Nonetheless, as to the question of the subject ordinance being a valid exercise of police
power, the same must be resolved in the negative. While it is true that a business may
be regulated, it is equally true that such regulation must be within the bounds of
reason, that is, the regulatory ordinance must be reasonable, and its provisions cannot
be oppressive amounting to an arbitrary interference with the business or calling
subject of regulation. A lawful business or calling may not, under the guise of
regulation, be unreasonably interfered with even by the exercise of police power. 33 A
police measure for the regulation of the conduct, control and operation of a business
should not encroach upon the legitimate and lawful exercise by the citizens of their
property rights. 34 The right of the owner to fix a price at which his property shall be
sold or used is an inherent attribute of the property itself and, as such, within the
protection of the due process clause."" Hence, the proprietors of a theater have a right
to manage their property in their own way, to fix what prices of admission they think
most for their own advantage, and that any person who did not approve could stay
away. 36
Respondent City of Butuan argues that the presumption is always in favor of the
validity of the ordinance. This maybe the rule but it has already been held that
although the presumption is always in favor of the validity or reasonableness of the
ordinance, such presumption must nevertheless be set aside when the invalidity or
unreasonableness appears on the face of the ordinance itself or is established by proper
evidence. 37 The exercise of police power by the local government is valid unless it
contravenes the fundamental law of the land, or an act of the legislature, or unless it is
against public policy or is unreasonable, oppressive, partial, discriminating or in

derogation of a common right. 38

Ordinance No. 640 clearly invades the personal and property rights of petitioners for
even if We could assume that, on its face, the interference was reasonable, from the
foregoing considerations, it has been fully shown that it is an unwarranted and
unlawful curtailment of the property and personal rights of citizens. For being
unreasonable and an undue restraint of trade, it cannot, under the guise of exercising
police power, be upheld as valid.
WHEREFORE, the decision of the trial court in Special Civil Case No. 237 is hereby
REVERSED and SET ASIDE and a new judgment is hereby rendered declaring
Ordinance No. 640 unconstitutional and, therefore, null and void. This decision is
immediately executory.
SO ORDERED.

G.R. No. L-24670

December 14, 1979

ORTIGAS & CO., LIMITED PARTNERSHIP, plaintiff-appellant,

vs.
FEATI BANK AND TRUST CO., defendant-appellee.
Ramirez & Ortigas for appellant.
Taada, Teehankee & Carreon for appellee.

SANTOS, J.:
An appeal interposed on June 23, 1965 by plaintiff-appellant, Ortigas & Co., Limited
Partnership, from the decision of the Court of First Instance of Rizal, Branch VI, at
Pasig, Hon. Andres Reyes presiding, which dismissed its complaint in Civil Case No.
7706, entitled, "Ortigas & Company, Limited Partnership, plaintiff, v. Feati Bank and
Trust Company, defendant," for lack of merit.
The following facts a reproduction of the lower court's findings, which, in turn, are
based on a stipulation of facts entered into by the parties are not disputed. Plaintiff
(formerly known as "Ortigas, Madrigal y Cia") is a limited partnership and defendant
Feati Bank and Trust Co., is a corporation duly organized and existing in accordance
with the laws of the Philippines. Plaintiff is engaged in real estate business, developing
and selling lots to the public, particularly the Highway Hills Subdivision along
Epifanio de los Santos Avenue, Mandaluyong, Rizal. 1
On March 4, 1952, plaintiff, as vendor, and Augusto Padilla y Angeles and Natividad
Angeles, as vendees, entered into separate agreements of sale on installments over two
parcels of land, known as Lots Nos. 5 and 6, Block 31, of the Highway Hills
Subdivision, situated at Mandaluyong, Rizal. On July 19, 1962, the said vendees
transferred their rights and interests over the aforesaid lots in favor of one Emma
Chavez. Upon completion of payment of the purchase price, the plaintiff executed the
corresponding deeds of sale in favor of Emma Chavez. Both the agreements (of sale on
installment) and the deeds of sale contained the stipulations or restrictions that:
1.
The parcel of land subject of this deed of sale shall be used the Buyer
exclusively for residential purposes, and she shall not be entitled to take or remove
soil, stones or gravel from it or any other lots belonging to the Seller.
2.
All buildings and other improvements (except the fence) which may be
constructed at any time in said lot must be, (a) of strong materials and properly

painted, (b) provided with modern sanitary installations connected either to the public
sewer or to an approved septic tank, and (c) shall not be at a distance of less than two
(2) meters from its boundary lines. 2
The above restrictions were later annotated in TCT Nos. 101509 and 101511 of the
Register of Deeds of Rizal, covering the said lots and issued in the name of Emma
Chavez. 3
Eventually, defendant-appellee acquired Lots Nos. 5 and 6, with TCT Nos. 101613 and
106092 issued in its name, respectively and the building restrictions were also
annotated therein. 4 Defendant-appellee bought Lot No. 5 directly from Emma
Chavez, "free from all liens and encumbrances as stated in Annex 'D', 5 while Lot No.
6 was acquired from Republic Flour Mills through a "Deed of Exchange," Annex "E".
6 TCT No. 101719 in the name of Republic Flour Mills likewise contained the same
restrictions, although defendant-appellee claims that Republic Flour Mills purchased
the said Lot No. 6 "in good faith. free from all liens and encumbrances," as stated in
the Deed of Sale, Annex "F" 7 between it and Emma Chavez.
Plaintiff-appellant claims that the restrictions annotated on TCT Nos. 101509, 101511,
101719, 101613, and 106092 were imposed as part of its general building scheme
designed for the beautification and development of the Highway Hills Subdivision
which forms part of the big landed estate of plaintiff-appellant where commercial and
industrial sites are also designated or established. 8
Defendant-appellee, upon the other hand, maintains that the area along the western
part of Epifanio de los Santos Avenue (EDSA) from Shaw Boulevard to Pasig River,
has been declared a commercial and industrial zone, per Resolution No. 27, dated
February 4, 1960 of the Municipal Council of Mandaluyong, Rizal. 9 It alleges that
plaintiff-appellant 'completely sold and transferred to third persons all lots in said
subdivision facing Epifanio de los Santos Avenue" 10 and the subject lots thereunder
were acquired by it "only on July 23, 1962 or more than two (2) years after the area ...
had been declared a commercial and industrial zone ... 11
On or about May 5, 1963, defendant-appellee began laying the foundation and
commenced the construction of a building on Lots Nos. 5 and 6, to be devoted to
banking purposes, but which defendant-appellee claims could also be devoted to, and
used exclusively for, residential purposes. The following day, plaintiff-appellant
demanded in writing that defendant-appellee stop the construction of the commerical
building on the said lots. The latter refused to comply with the demand, contending
that the building was being constructed in accordance with the zoning regulations,
defendant-appellee having filed building and planning permit applications with the
Municipality of Mandaluyong, and it had accordingly obtained building and planning
permits to proceed with the construction. 12

Plaintiff-appellant alleges in its brief that the trial court erred

On the basis of the foregoing facts, Civil Case No. 7706, supra, was submitted in the
lower court for decision. The complaint sought, among other things, the issuance of "a
writ of preliminary injunction ... restraining and enjoining defendant, its agents,
assigns, and those acting on its or their behalf from continuing or completing the
construction of a commercial bank building in the premises ... involved, with the view
to commanding the defendant to observe and comply with the building restrictions
annotated in the defendant's transfer certificate of title."
In deciding the said case, the trial court considered, as the fundamental issue, whether
or not the resolution of the Municipal Council of Mandaluyong declaring Lots Nos. 5
and 6, among others, as part of the commercial and industrial zone of the municipality,
prevailed over the building restrictions imposed by plaintiff-appellant on the lots in
question. 13 The records do not show that a writ of preliminary injunction was issued.
The trial court upheld the defendant-appellee and dismissed the complaint, holding
that the subject restrictions were subordinate to Municipal Resolution No. 27, supra. It
predicated its conclusion on the exercise of police power of the said municipality, and
stressed that private interest should "bow down to general interest and welfare. " In
short, it upheld the classification by the Municipal Council of the area along Epifanio
de los Santos Avenue as a commercial and industrial zone, and held that the same
rendered "ineffective and unenforceable" the restrictions in question as against
defendant-appellee. 14 The trial court decision further emphasized that it "assumes
said resolution to be valid, considering that there is no issue raised by either of the
parties as to whether the same is null and void. 15
On March 2, 1965, plaintiff-appellant filed a motion for reconsideration of the above
decision, 16 which motion was opposed by defendant-appellee on March 17, 1965. 17
It averred, among others, in the motion for reconsideration that defendant- appellee
"was duty bound to comply with the conditions of the contract of sale in its favor,
which conditions were duly annotated in the Transfer Certificates of Title issued in her
(Emma Chavez) favor." It also invited the trial court's attention to its claim that the
Municipal Council had (no) power to nullify the contractual obligations assumed by
the defendant corporation." 18

I.
When it sustained the view that Resolution No. 27, series of 1960 of the
Municipal Council of Mandaluyong, Rizal declaring Lots Nos. 5 and 6, among others,
as part of the commercial and industrial zone, is valid because it did so in the exercise
of its police power; and
II.
When it failed to consider whether or not the Municipal Council had the
power to nullify the contractual obligations assumed by defendant-appellee and when
it did not make a finding that the building was erected along the property line, when it
should have been erected two meters away from said property line. 23
The defendant-appellee submitted its counter-assignment of errors. In this connection,
We already had occasion to hold in Relativo v. Castro 24 that "(I)t is not incumbent on
the appellee, who occupies a purely defensive position, and is seeking no affirmative
relief, to make assignments of error, "
The only issues to be resolved, therefore, are: (1) whether Resolution No. 27 s-1960 is
a valid exercise of police power; and (2) whether the said Resolution can nullify or
supersede the contractual obligations assumed by defendant-appellee.
1.
The contention that the trial court erred in sustaining the validity of
Resolution No. 27 as an exercise of police power is without merit. In the first place,
the validity of the said resolution was never questioned before it. The rule is that the
question of law or of fact which may be included in the appellant's assignment of
errors must be those which have been raised in the court below, and are within the
issues framed by the parties. 25 The object of requiring the parties to present all
questions and issues to the lower court before they can be presented to the appellate
court is to enable the lower court to pass thereon, so that the appellate court upon
appeal may determine whether or not such ruling was erroneous. The requirement is in
furtherance of justice in that the other party may not be taken by surprise. 26 The rule
against the practice of blowing "hot and cold" by assuming one position in the trial
court and another on appeal will, in the words of Elliot, prevent deception. 27 For it is
well-settled that issues or defenses not raised 28 or properly litigated 29 or pleaded 30
in the Court below cannot be raised or entertained on appeal.

The trial court denied the motion for reconsideration in its order of March 26, 1965. 19
On April 2, 1965 plaintiff-appellant filed its notice of appeal from the decision
dismissing the complaint and from the order of March 26, 1965 denying the motion for
reconsideration, its record on appeal, and a cash appeal bond." 20 On April 14, the
appeal was given due course 21 and the records of the case were elevated directly to
this Court, since only questions of law are raised. 22

In this particular case, the validity of the resolution was admitted at least impliedly, in
the stipulation of facts below. when plaintiff-appellant did not dispute the same. The
only controversy then as stated by the trial court was whether or not the resolution of
the Municipal Council of Mandaluyong ... which declared lots Nos. 4 and 5 among
others, as a part of the commercial and industrial zone of the municipality, prevails
over the restrictions constituting as encumbrances on the lots in question. 31 Having
admitted the validity of the subject resolution below, even if impliedly, plaintiff-

appellant cannot now change its position on appeal.

But, assuming arguendo that it is not yet too late in the day for plaintiff-appellant to
raise the issue of the invalidity of the municipal resolution in question, We are of the
opinion that its posture is unsustainable. Section 3 of R.A. No. 2264, otherwise known
as the Local Autonomy Act," 32 empowers a Municipal Council "to adopt zoning and
subdivision ordinances or regulations"; 33 for the municipality. Clearly, the law does
not restrict the exercise of the power through an ordinance. Therefore, granting that
Resolution No. 27 is not an ordinance, it certainly is a regulatory measure within the
intendment or ambit of the word "regulation" under the provision. As a matter of fact
the same section declares that the power exists "(A)ny provision of law to the contrary
notwithstanding ... "
An examination of Section 12 of the same law 34 which prescribes the rules for its
interpretation likewise reveals that the implied power of a municipality should be
"liberally construed in its favor" and that "(A)ny fair and reasonable doubt as to the
existence of the power should be interpreted in favor of the local government and it
shall be presumed to exist." The same section further mandates that the general welfare
clause be liberally interpreted in case of doubt, so as to give more power to local
governments in promoting the economic conditions, social welfare and material
progress of the people in the community. The only exceptions under Section 12 are
existing vested rights arising out of a contract between "a province, city or
municipality on one hand and a third party on the other," in which case the original
terms and provisions of the contract should govern. The exceptions, clearly, do not
apply in the case at bar.
2. With regard to the contention that said resolution cannot nullify the contractual
obligations assumed by the defendant-appellee referring to the restrictions
incorporated in the deeds of sale and later in the corresponding Transfer Certificates of
Title issued to defendant-appellee it should be stressed, that while non-impairment of
contracts is constitutionally guaranteed, the rule is not absolute, since it has to be
reconciled with the legitimate exercise of police power, i.e., "the power to prescribe
regulations to promote the health, morals, peace, education, good order or safety and
general welfare of the people. 35 Invariably described as "the most essential, insistent,
and illimitable of powers" 36 and "in a sense, the greatest and most powerful attribute
of government, 37 the exercise of the power may be judicially inquired into and
corrected only if it is capricious, 'whimsical, unjust or unreasonable, there having been
a denial of due process or a violation of any other applicable constitutional guarantee.
38 As this Court held through Justice Jose P. Bengzon in Philippine Long Distance
Company vs. City of Davao, et al. 39 police power "is elastic and must be responsive
to various social conditions; it is not, confined within narrow circumscriptions of
precedents resting on past conditions; it must follow the legal progress of a democratic
way of life." We were even more emphatic in Vda. de Genuino vs. The Court of

Agrarian Relations, et al., 40 when We declared: "We do not see why public welfare
when clashing with the individual right to property should not be made to prevail
through the state's exercise of its police power.
Resolution No. 27, s-1960 declaring the western part of highway 54, now E. de los
Santos Avenue (EDSA, for short) from Shaw Boulevard to the Pasig River as an
industrial and commercial zone, was obviously passed by the Municipal Council of
Mandaluyong, Rizal in the exercise of police power to safeguard or promote the
health, safety, peace, good order and general welfare of the people in the locality,
Judicial notice may be taken of the conditions prevailing in the area, especially where
lots Nos. 5 and 6 are located. The lots themselves not only front the highway;
industrial and commercial complexes have flourished about the place. EDSA, a main
traffic artery which runs through several cities and municipalities in the Metro Manila
area, supports an endless stream of traffic and the resulting activity, noise and pollution
are hardly conducive to the health, safety or welfare of the residents in its route.
Having been expressly granted the power to adopt zoning and subdivision ordinances
or regulations, the municipality of Mandaluyong, through its Municipal 'council, was
reasonably, if not perfectly, justified under the circumstances, in passing the subject
resolution.
The scope of police power keeps expanding as civilization advances, stressed this
Court, speaking thru Justice Laurel in the leading case of Calalang v. Williams et al.,
41 ThusAs was said in the case of Dobbins v. Los Angeles (195 US 223, 238 49 L. ed. 169),
'the right to exercise the police power is a continuing one, and a business lawful today
may in the future, because of changed situation, the growth of population or other
causes, become a menace to the public health and welfare, and be required to yield to
the public good.' And in People v. Pomar (46 Phil. 440), it was observed that
'advancing civilization is bringing within the scope of police power of the state today
things which were not thought of as being with in such power yesterday. The
development of civilization), the rapidly increasing population, the growth of public
opinion, with an increasing desire on the part of the masses and of the government to
look after and care for the interests of the individuals of the state, have brought within
the police power many questions for regulation which formerly were not so
considered. 42 (Emphasis, supplied.)
Thus, the state, in order to promote the general welfare, may interfere with personal
liberty, with property, and with business and occupations. Persons may be subjected to
all kinds of restraints and burdens, in order to secure the general comfort health and
prosperity of the state 43 and to this fundamental aim of our Government, the rights of
the individual are subordinated. 44

The need for reconciling the non-impairment clause of the Constitution and the valid
exercise of police power may also be gleaned from Helvering v. Davis 45 wherein Mr.
Justice Cardozo, speaking for the Court, resolved the conflict "between one welfare
and another, between particular and general, thus
Nor is the concept of the general welfare static. Needs that were narrow or parochial a
century ago may be interwoven in our day with the well-being of the nation What is
critical or urgent changes with the times. 46
The motives behind the passage of the questioned resolution being reasonable, and it
being a " legitimate response to a felt public need," 47 not whimsical or oppressive, the
non-impairment of contracts clause of the Constitution will not bar the municipality's
proper exercise of the power. Now Chief Justice Fernando puts it aptly when he
declared: "Police power legislation then is not likely to succumb to the challenge that
thereby contractual rights are rendered nugatory." 48
Furthermore, We restated in Philippine American Life Ins. Co. v. Auditor General 49
that laws and reservation of essential attributes of sovereign power are read into
contracts agreed upon by the parties. Thus
Not only are existing laws read into contracts in order to fix obligations as between the
parties, but the reservation of essential attributes of sovereign power is also read into
contracts as a postulate of the legal order. The policy of protecting contracts against
impairments presupposes the maintenance of a government by virtue of which
contractual relations are worthwhile a government which retains adequate authority
to secure the peace and good order of society.
Again, We held in Liberation Steamship Co., Inc. v. Court of Industrial Relations, 50
through Justice J.B.L. Reyes, that ... the law forms part of, and is read into, every
contract, unless clearly excluded therefrom in those cases where such exclusion is
allowed." The decision in Maritime Company of the Philippines v. Reparations
Commission, 51 written for the Court by Justice Fernando, now Chief Justice, restates
the rule.
One last observation. Appellant has placed unqualified reliance on American
jurisprudence and authorities 52 to bolster its theory that the municipal resolution in
question cannot nullify or supersede the agreement of the parties embodied in the sales
contract, as that, it claims, would impair the obligation of contracts in violation of the
Constitution. Such reliance is misplaced.
In the first place, the views set forth in American decisions and authorities are not per
se controlling in the Philippines, the laws of which must necessarily be construed in
accordance with the intention of its own lawmakers and such intent may be deduced

from the language of each law and the context of other local legislation related thereto.
53 and Burgess, et al v. Magarian, et al., 55 two Of the cases cited by plaintiffappellant, lend support to the conclusion reached by the trial court, i.e. that the
municipal resolution supersedes/supervenes over the contractual undertaking between
the parties. Dolan v. Brown, states that "Equity will not, as a rule, enforce a restriction
upon the use of property by injunction where the property has so changed in character
and environment as to make it unfit or unprofitable for use should the restriction be
enforced, but will, in such a case, leave the complainant to whatever remedy he may
have at law. 56 (Emphasis supplied.) Hence, the remedy of injunction in Dolan vs.
Brown was denied on the specific holding that "A grantor may lawfully insert in his
deed conditions or restrictions which are not against public policy and do not
materially impair the beneficial enjoyment of the estate. 57 Applying the principle just
stated to the present controversy, We can say that since it is now unprofitable, nay a
hazard to the health and comfort, to use Lots Nos. 5 and 6 for strictly residential
purposes, defendants- appellees should be permitted, on the strength of the resolution
promulgated under the police power of the municipality, to use the same for
commercial purposes. In Burgess v. Magarian et al. it was, held that "restrictive
covenants running with the land are binding on all subsequent purchasers ... "
However, Section 23 of the zoning ordinance involved therein contained a proviso
expressly declaring that the ordinance was not intended "to interfere with or abrogate
or annul any easements, covenants or other agreement between parties." 58 In the case
at bar, no such proviso is found in the subject resolution.
It is, therefore, clear that even if the subject building restrictions were assumed by the
defendant-appellee as vendee of Lots Nos. 5 and 6, in the corresponding deeds of sale,
and later, in Transfer Certificates of Title Nos. 101613 and 106092, the contractual
obligations so assumed cannot prevail over Resolution No. 27, of the Municipality of
Mandaluyong, which has validly exercised its police power through the said
resolution. Accordingly, the building restrictions, which declare Lots Nos. 5 and 6 as
residential, cannot be enforced.
IN VIEW OF THE FOREGOING, the decision appealed from, dismissing the
complaint, is hereby AFFIRMED. "without pronouncement as to costs.
SO ORDERED.

G.R. No. 93654 May 6, 1992

FRANCISCO U. DACANAY, petitioner,
vs.
MAYOR MACARIO ASISTIO, JR., CITY ENGR. LUCIANO SARNE, JR. of
Kalookan City, Metro Manila, MILA PASTRANA AND/OR RODOLFO TEOFE,
STALLHOLDERS AND REPRESENTING CO-STALLHOLDERS, respondents.
David D. Advincula, Jr. for petitioner.
Juan P. Banaga for private respondents.

The court issued the writ prayed for. However, on December 20, 1987, it dismissed the
petition and lifted the writ of preliminary injunction which it had earlier issued. The
trial court observed that:
A perusal of Ordinance 2, series of 1979 of the Metropolitan Manila Commission will
show on the title itself that it is an ordinance
Authorizing and regulating the use of certain city and/or municipal streets, roads and
open spaces within Metropolitan Manila as sites for flea market and/or vending areas,
under certain terms and conditions, subject to the approval of the Metropolitan Manila
Commission, and for other purposes
which is further amplified in Section 2 of the said ordinance, quoted hereunder:

GRIO-AQUINO, J.:
May public streets or thoroughfares be leased or licensed to market stallholders by
virtue of a city ordinance or resolution of the Metro Manila Commission? This issue is
posed by the petitioner, an aggrieved Caloocan City resident who filed a special civil
action of mandamus against the incumbent city mayor and city engineer, to compel
these city officials to remove the market stalls from certain city streets which the
aforementioned city officials have designated as flea markets, and the private
respondents (stallholders) to vacate the streets.
On January 5, 1979, MMC Ordinance No. 79-02 was enacted by the Metropolitan
Manila Commission, designating certain city and municipal streets, roads and open
spaces as sites for flea markets. Pursuant, thereto, the Caloocan City mayor opened up
seven (7) flea markets in that city. One of those streets was the "Heroes del '96" where
the petitioner lives. Upon application of vendors Rodolfo Teope, Mila Pastrana,
Carmen Barbosa, Merle Castillo, Bienvenido Menes, Nancy Bugarin, Jose Manuel,
Crisaldo Paguirigan, Alejandro Castron, Ruben Araneta, Juanita and Rafael Malibaran,
and others, the respondents city mayor and city engineer, issued them licenses to
conduct vending activities on said street.
In 1987, Antonio Martinez, as OIC city mayor of Caloocan City, caused the demolition
of the market stalls on Heroes del '96, V. Gozon and Gonzales streets. To stop Mayor
Martinez' efforts to clear the city streets, Rodolfo Teope, Mila Pastrana and other
stallowners filed an action for prohibition against the City of Caloocan, the OIC City
Mayor and the City Engineer and/or their deputies (Civil Case No. C-12921) in the
Regional Trial Court of Caloocan City, Branch 122, praying the court to issue a writ of
preliminary injunction ordering these city officials to discontinue the demolition of
their stalls during the pendency of the action.

Sec. 2. The streets, roads and open spaces to be used as sites for flea markets
(tiangge) or vending areas; the design, measurement or specification of the structures,
equipment and apparatuses to be used or put up; the allowable distances; the days and
time allowed for the conduct of the businesses and/or activities herein authorized; the
rates or fees or charges to be imposed, levied and collected; the kinds of merchandise,
goods and commodities sold and services rendered; and other matters and activities
related to the establishment, maintenance and management and operation of flea
markets and vending areas, shall be determined and prescribed by the mayors of the
cities and municipalities in the Metropolitan Manila where the same are located,
subject to the approval of the Metropolitan Manila Commission and consistent with
the guidelines hereby prescribed.
Further, it is so provided in the guidelines under the said Ordinance No. 2 of the MMC
that
Sec. 6. In the establishment, operation, maintenance and management of flea markets
and vending areas, the following guidelines, among others, shall be observed:
xxx

xxx

xxx

(m)
That the permittee shall remove the equipment, facilities and other
appurtenances used by him in the conduct of his business after the close or termination
of business hours. (Emphasis ours; pp. 15-16, Rollo.)
The trial court found that Heroes del '96, Gozon and Gonzales streets are of public
dominion, hence, outside the commerce of man:
The Heroes del '96 street, V. Gozon street and Gonzales street, being of public
dominion must, therefore, be outside of the commerce of man. Considering the nature

of the subject premises, the following jurisprudence co/principles are applicable on the
matter:
1)
They cannot be alienated or leased or otherwise be the subject matter of
contracts. (Municipality of Cavite vs. Rojas, 30 Phil. 602);
2)
They cannot be acquired by prescription against the state (Insular Government
vs. Aldecoa, 19 Phil. 505). Even municipalities can not acquire them for use as
communal lands against the state (City of Manila vs. Insular Government, 10 Phil.
327);
3)
They are not subject to attachment and execution (Tan Toco vs. Municipal
Council of Iloilo, 49 Phil. 52);
4)
They cannot be burdened by any voluntary easement (2-II Colin & Capitant
520) (Tolentino, Civil Code of the Phils., Vol. II, 1983 Ed. pp. 29-30).

to comply with said Letter of Instruction.

The occupation and use of private individuals of sidewalks and other public places
devoted for public use constitute both public and private nuisances and nuisance per
se, and this applies to even case involving the use or lease of public places under
permits and licenses issued by competent authority, upon the theory that such holders
could not take advantage of their unlawful permits and license and claim that the land
in question is a part of a public street or a public place devoted to public use, hence,
beyond the commerce of man. (Padilla, Civil Code Annotated, Vol. II, p. 59, 6th Ed.,
citing Umali vs. Aquino, IC. A. Rep. 339.)
From the aforequoted jurisprudence/principles, the Court opines that defendants have
the right to demolish the subject stalls of the plaintiffs, more so when Section 185, par.
4 of Batas Pambansa Blg. 337, otherwise known as the Local Government Code
provides that the City Engineer shall:
(4)

In the aforecited case of Municipality of Cavite vs. Rojas, it was held that properties
for public use may not be leased to private individuals. Such a lease is null and void
for the reason that a municipal council cannot withdraw part of the plaza from public
use. If possession has already been given, the lessee must restore possession by
vacating it and the municipality must thereupon restore to him any sums it may have
collected as rent.
In the case of City of Manila vs. Gerardo Garcia, 19 SCRA 413, the Supreme Court
held:

(c)
Prevent the encroachment of private buildings and fences on the streets and
public places;
xxx

This doctrine was reiterated in the case of Baguio Citizens Action Inc. vs. The City
Council, 121 SCRA 368, where it was held that:

xxx

xxx

(j)
Inspect and supervise the construction, repair, removal and safety of private
buildings;
xxx

The property being a public one, the Manila Mayors did not have the authority to give
permits, written or oral, to the squatters, and that the permits granted are therefore
considered null and void.

...

xxx

xxx

(k)
With the previous approval of the City Mayor in each case, order the removal
of materials employed in the construction or repair of any building or structures made
in violation of law or ordinance, and cause buildings and structures dangerous to the
public to made secure or torn down;
xxx

xxx

xxx

An ordinance legalizing the occupancy by squatters of public land is null and void.
The authority of respondent Municipality of Makati to demolish the shanties of the
petitioner's members is mandated by
P.D. 772, and Sec. 1 of Letter of Instruction No. 19 orders certain public officials, one
of whom is the Municipal Mayor to remove all illegal constructions including
buildings on and along esteros and river banks, those along railroad tracks and those
built without permits on public or private property (Zansibarian Residents Association
vs. Mun. of Makati, 135 SCRA 235). The City Engineer is also among those required

Further, the Charter of the City of Caloocan, Republic Act No. 5502, Art. VII, Sec. 27,
par. g, 1 and m, grants the City Engineer similar powers. (Emphasis supplied; pp. 1720, Rollo.)
However, shortly after the decision came out, the city administration in Caloocan City
changed hands. City Mayor Macario Asistio, Jr., as successor of Mayor Martinez, did
not pursue the latter's policy of clearing and cleaning up the city streets.

Invoking the trial court's decision in Civil Case No. C-12921, Francisco U. Dacanay, a
concerned citizen, taxpayer and registered voter of Barangay 74, Zone 7, District II of
Caloocan City, who resides on Heroes del '96 Street, one of the affected streets, wrote
a letter dated March 7, 1988 to Mayor Asistio, Jr., calling his attention to the illegallyconstructed stalls on Heroes del '96 Street and asked for their demolition.
Dacanay followed up that letter with another one dated April 7, 1988 addressed to the
mayor and the city engineer, Luciano Sarne, Jr. (who replaced Engineer Arturo
Samonte), inviting their attention to the Regional Trial Court's decision in Civil Case
No. 12921. There was still no response.
Dacanay sought President Corazon C. Aquino's intervention by writing her a letter on
the matter. His letter was referred to the city mayor for appropriate action. The acting
Caloocan City secretary, Asuncion Manalo, in a letter dated August 1, 1988, informed
the Presidential Staff Director that the city officials were still studying the issue of
whether or not to proceed with the demolition of the market stalls.
Dacanay filed a complaint against Mayor Asistio and Engineer Sarne (OMB-0-890146) in the Office of the OMBUDSMAN. In their letter-comment dated April 3,
1989, said city officials explained that in view of the huge number of stallholders
involved, not to mention their dependents, it would be harsh and inhuman to eject
them from the area in question, for their relocation would not be an easy task.

On August 16, 1990, the public respondents, through the City Legal Officer, filed their
Comment' on the petition. The Office of the Solicitor General asked to be excused
from filing a separate Comment in behalf of the public respondents. The City Legal
Officer alleged that the vending area was transferred to Heroes del '96 Street to
decongest Malonzo Street, which is comparatively a busier thoroughfare; that the
transfer was made by virtue of Barangay Resolution No. 30 s'78 dated January 15,
1978; that while the resolution was awaiting approval by the Metropolitan Manila
Commission, the latter passed Ordinance No. 79-2, authorizing the use of certain
streets and open spaces as sites for flea markets and/or vending areas; that pursuant
thereto, Acting MMC Mayor Virgilio P. Robles issued Executive Order No. 135 dated
January 10, 1979, ordering the establishment and operation of flea markets in specified
areas and created the Caloocan City Flea Market Authority as a regulatory body; and
that among the sites chosen and approved by the Metro Manila Commission, Heroes
del '96 Street has considered "most viable and progressive, lessening unemployment in
the city and servicing the residents with affordable basic necessities."
The petition for mandamus is meritorious.

In reply, Dacanay maintained that respondents have been derelict in the performance
of their duties and through manifest partiality constituting a violation of Section 3(e) of
R.A. 3019, have caused undue injury to the Government and given unwarranted
benefits to the stallholders.

There is no doubt that the disputed areas from which the private respondents' market
stalls are sought to be evicted are public streets, as found by the trial court in Civil
Case No. C-12921. A public street is property for public use hence outside the
commerce of man (Arts. 420, 424, Civil Code). Being outside the commerce of man, it
may not be the subject of lease or other contract (Villanueva et al. vs. Castaeda and
Macalino, 15 SCRA 142, citing the Municipality of Cavite vs. Rojas, 30 SCRA 602;
Espiritu vs. Municipal Council of Pozorrubio, 102 Phil. 869; and Muyot vs. De la
Fuente, 48 O.G. 4860).

After conducting a preliminary investigation, the OMBUDSMAN rendered a final

evaluation and report on August 28, 1989, finding that the respondents' inaction is
purely motivated by their perceived moral and social responsibility toward their
constituents, but "the fact remains that there is an omission of an act which ought to be
performed, in clear violation of Sections 3(e) and (f) of Republic Act 3019." (pp. 8384, Rollo.) The OMBUDSMAN recommended the filing of the corresponding
information in court.

As the stallholders pay fees to the City Government for the right to occupy portions of
the public street, the City Government, contrary to law, has been leasing portions of
the streets to them. Such leases or licenses are null and void for being contrary to law.
The right of the public to use the city streets may not be bargained away through
contract. The interests of a few should not prevail over the good of the greater number
in the community whose health, peace, safety, good order and general welfare, the
respondent city officials are under legal obligation to protect.

As the stallholders continued to occupy Heroes del '96 Street, through the tolerance of
the public respondents, and in clear violation of the decision it Civil Case No. C12921, Dacanay filed the present petition for mandamus on June 19, 1990, praying that
the public respondents be ordered to enforce the final decision in Civil Case No. C12921 which upheld the city mayor's authority to order the demolition of market stalls
on V. Gozon, Gonzales and Heroes del '96 Streets and to enforce P.D. No. 772 and
other pertinent laws.

The Executive Order issued by Acting Mayor Robles authorizing the use of Heroes del
'96 Street as a vending area for stallholders who were granted licenses by the city
government contravenes the general law that reserves city streets and roads for public
use. Mayor Robles' Executive Order may not infringe upon the vested right of the
public to use city streets for the purpose they were intended to serve: i.e., as arteries of
travel for vehicles and pedestrians. As early as 1989, the public respondents bad started
to look for feasible alternative sites for flea markets. They have had more than ample

time to relocate the street vendors.

WHEREFORE, it having been established that the petitioner and the general public
have a legal right to the relief demanded and that the public respondents have the
corresponding duty, arising from public office, to clear the city streets and restore them
to their specific public purpose (Enriquez vs. Bidin, 47 SCRA 183; City of Manila vs.
Garcia et al., 19 SCRA, 413 citing Unson vs. Lacson, 100 Phil. 695), the respondents
City Mayor and City Engineer of Caloocan City or their successors in office are hereby
ordered to immediately enforce and implement the decision in Civil Case No. C-1292
declaring that Heroes del '96, V. Gozon, and Gonzales Streets are public streets for
public use, and they are ordered to remove or demolish, or cause to be removed or
demolished, the market stalls occupying said city streets with utmost dispatch within
thirty (30)days from notice of this decision. This decision is immediately executory.
SO ORDERED.

CITY OF MANILA, petitioner,

vs.
GENARO N. TEOTICO and COURT OF APPEALS, respondents.

his treatment, plaintiff was under constant fear and anxiety for the welfare of his minor
children since he was their only support. Due to the filing of this case, plaintiff has
obligated himself to pay his counsel the sum of P2,000.00.

City Fiscal Manuel T. Reyes for petitioner.

Sevilla, Daza and Associates for respondents.

On the other hand, the defense presented evidence, oral and documentary, to prove that
the Storm Drain Section, Office of the City Engineer of Manila, received a report of
the uncovered condition of a catchbasin at the corner of P. Burgos and Old Luneta
Streets, Manila, on January 24, 1958, but the same was covered on the same day
(Exhibit 4); that again the iron cover of the same catch basin was reported missing on
January 30, 1958, but the said cover was replaced the next day (Exhibit 5); that the
Office of the City Engineer never received any report to the effect that the catchbasin
in question was not covered between January 25 and 29, 1968; that it has always been
a policy of the said office, which is charged with the duty of installation, repair and
care of storm drains in the City of Manila, that whenever a report is received from
whatever source of the loss of a catchbasin cover, the matter is immediately attended
to, either by immediately replacing the missing cover or covering the catchbasin with
steel matting that because of the lucrative scrap iron business then prevailing, stealing
of iron catchbasin covers was rampant; that the Office of the City Engineer has filed
complaints in court resulting from theft of said iron covers; that in order to prevent
such thefts, the city government has changed the position and layout of catchbasins in
the City by constructing them under the sidewalks with concrete cement covers and
openings on the side of the gutter; and that these changes had been undertaken by the
city from time to time whenever funds were available.

CONCEPCION, C.J.:
Appeal by certiorari from a decision of the Court of Appeals.
On January 27, 1958, at about 8:00 p.m., Genaro N. Teotico was at the corner of the
Old Luneta and P. Burgos Avenue, Manila, within a "loading and unloading" zone,
waiting for a jeepney to take him down town. After waiting for about five minutes, he
managed to hail a jeepney that came along to a stop. As he stepped down from the curb
to board the jeepney, and took a few steps, he fell inside an uncovered and unlighted
catch basin or manhole on P. Burgos Avenue. Due to the fall, his head hit the rim of the
manhole breaking his eyeglasses and causing broken pieces thereof to pierce his left
eyelid. As blood flowed therefrom, impairing his vision, several persons came to his
assistance and pulled him out of the manhole. One of them brought Teotico to the
Philippine General Hospital, where his injuries were treated, after which he was taken
home. In addition to the lacerated wound in his left upper eyelid, Teotico suffered
contusions on the left thigh, the left upper arm, the right leg and the upper lip apart
from an abrasion on the right infra-patella region. These injuries and the allergic
eruption caused by anti-tetanus injections administered to him in the hospital, required
further medical treatment by a private practitioner who charged therefor P1,400.00.
As a consequence of the foregoing occurrence, Teotico filed, with the Court of First
Instance of Manila, a complaint which was, subsequently, amended for damages
against the City of Manila, its mayor, city engineer, city health officer, city treasurer
and chief of police. As stated in the decision of the trial court, and quoted with
approval by the Court of Appeals,
At the time of the incident, plaintiff was a practicing public accountant, a businessman
and a professor at the University of the East. He held responsible positions in various
business firms like the Philippine Merchandising Co., the A.U. Valencia and Co., the
Silver Swan Manufacturing Company and the Sincere Packing Corporation. He was
also associated with several civic organizations such as the Wack Wack Golf Club, the
Chamber of Commerce of the Philippines, Y's Men Club of Manila and the Knights of
Rizal. As a result of the incident, plaintiff was prevented from engaging in his
customary occupation for twenty days. Plaintiff has lost a daily income of about
P50.00 during his incapacity to work. Because of the incident, he was subjected to
humiliation and ridicule by his business associates and friends. During the period of

After appropriate proceedings the Court of First Instance of Manila rendered the
aforementioned decision sustaining the theory of the defendants and dismissing the
amended complaint, without costs.
On appeal taken by plaintiff, this decision was affirmed by the Court of Appeals,
except insofar as the City of Manila is concerned, which was sentenced to pay
damages in the aggregate sum of P6,750.00. 1 Hence, this appeal by the City of
Manila.
The first issue raised by the latter is whether the present case is governed by Section 4
of Republic Act No. 409 (Charter of the City of Manila) reading:
The city shall not be liable or held for damages or injuries to persons or property
arising from the failure of the Mayor, the Municipal Board, or any other city officer, to
enforce the provisions of this chapter, or any other law or ordinance, or from
negligence of said Mayor, Municipal Board, or other officers while enforcing or
attempting to enforce said provisions.
or by Article 2189 of the Civil Code of the Philippines which provides:

Provinces, cities and municipalities shall be liable for damages for the death of, or
injuries suffered by, any person by reason of defective conditions of road, streets,
bridges, public buildings, and other public works under their control or supervision.
Manila maintains that the former provision should prevail over the latter, because
Republic Act 409, is a special law, intended exclusively for the City of Manila,
whereas the Civil Code is a general law, applicable to the entire Philippines.
The Court of Appeals, however, applied the Civil Code, and, we think, correctly. It is
true that, insofar as its territorial application is concerned, Republic Act No. 409 is a
special law and the Civil Code a general legislation; but, as regards the subject-matter
of the provisions above quoted, Section 4 of Republic Act 409 establishes a general
rule regulating the liability of the City of Manila for: "damages or injury to persons or
property arising from the failure of" city officers "to enforce the provisions of" said
Act "or any other law or ordinance, or from negligence" of the city "Mayor, Municipal
Board, or other officers while enforcing or attempting to enforce said provisions."
Upon the other hand, Article 2189 of the Civil Code constitutes a particular
prescription making "provinces, cities and municipalities . . . liable for damages for the
death of, or injury suffered by any person by reason" specifically "of the
defective condition of roads, streets, bridges, public buildings, and other-public works
under their control or supervision." In other words, said section 4 refers to liability
arising from negligence, in general, regardless of the object thereof, whereas Article
2189 governs liability due to "defective streets," in particular. Since the present action
is based upon the alleged defective condition of a road, said Article 2189 is decisive
thereon.

for the first time, in its motion for reconsideration of the decision of the Court of
Appeals. Such assertion raised, therefore, a question of fact, which had not been put in
issue in the trial court, and cannot be set up, for the first time, on appeal, much less
after the rendition of the decision of the appellate court, in a motion for the
reconsideration thereof.
At any rate, under Article 2189 of the Civil Code, it is not necessary for the liability
therein established to attach that the defective roads or streets belong to the province,
city or municipality from which responsibility is exacted. What said article requires is
that the province, city or municipality have either "control or supervision" over said
street or road. Even if P. Burgos Avenue were, therefore, a national highway, this
circumstance would not necessarily detract from its "control or supervision" by the
City of Manila, under Republic Act 409. In fact Section 18(x) thereof provides:
Sec. 18. Legislative powers. The Municipal Board shall have the following
legislative powers:
xxx

xxx

xxx

As regards the first issue, we note that it is based upon an allegation of fact not made
in the answer of the City. Moreover, Teotico alleged in his complaint, as well as in his
amended complaint, that his injuries were due to the defective condition of a street
which is "under the supervision and control" of the City. In its answer to the amended
complaint, the City, in turn, alleged that "the streets aforementioned were and have
been constantly kept in good condition and regularly inspected and the storm drains
and manholes thereof covered by the defendant City and the officers concerned" who
"have been ever vigilant and zealous in the performance of their respective functions
and duties as imposed upon them by law." Thus, the City had, in effect, admitted that
P. Burgos Avenue was and is under its control and supervision.

(x) Subject to the provisions of existing law to provide for the laying out, construction
and improvement, and to regulate the use of streets, avenues, alleys, sidewalks,
wharves, piers, parks, cemeteries, and other public places; to provide for lighting,
cleaning, and sprinkling of streets and public places; . . . to provide for the inspection
of, fix the license fees for and regulate the openings in the same for the laying of gas,
water, sewer and other pipes, the building and repair of tunnels, sewers, and drains,
and all structures in and under the same and the erecting of poles and the stringing of
wires therein; to provide for and regulate cross-works, curbs, and gutters therein, . . . to
regulate traffic and sales upon the streets and other public places; to provide for the
abatement of nuisances in the same and punish the authors or owners thereof; to
provide for the construction and maintenance, and regulate the use, of bridges,
viaducts and culverts; to prohibit and regulate ball playing, kite-flying, hoop rolling,
and other amusements which may annoy persons using the streets and public places, or
frighten horses or other animals; to regulate the speed of horses and other animals,
motor and other vehicles, cars, and locomotives within the limits of the city; to
regulate the lights used on all vehicles, cars, and locomotives; . . . to provide for and
change the location, grade, and crossing of railroads, and compel any such railroad to
raise or lower its tracks to conform to such provisions or changes; and to require
railroad companies to fence their property, or any part thereof, to provide suitable
protection against injury to persons or property, and to construct and repair ditches,
drains, sewers, and culverts along and under their tracks, so that the natural drainage of
the streets and adjacent property shall not be obstructed.

Moreover, the assertion to the effect that said Avenue is a national highway was made,

This authority has been neither withdrawn nor restricted by Republic Act No. 917 and

It is urged that the City of Manila cannot be held liable to Teotico for damages: 1)
because the accident involving him took place in a national highway; and 2) because
the City of Manila has not been negligent in connection therewith.

Executive Order No. 113, dated May 2, 1955, upon which the City relies. Said Act
governs the disposition or appropriation of the highway funds and the giving of aid to
provinces, chartered cities and municipalities in the construction of roads and streets
within their respective boundaries, and Executive Order No. 113 merely implements
the provisions of said Republic Act No. 917, concerning the disposition and
appropriation of the highway funds. Moreover, it provides that "the construction,
maintenance and improvement of national primary, national secondary and national aid
provincial and city roads shall be accomplished by the Highway District Engineers and
Highway City Engineers under the supervision of the Commissioner of Public
Highways and shall be financed from such appropriations as may be authorized by the
Republic of the Philippines in annual or special appropriation Acts."
Then, again, the determination of whether or not P. Burgos Avenue is under the control
or supervision of the City of Manila and whether the latter is guilty of negligence, in
connection with the maintenance of said road, which were decided by the Court of
Appeals in the affirmative, is one of fact, and the findings of said Court thereon are not
subject to our review.
WHEREFORE, the decision appealed from should be as it is hereby affirmed, with
costs against the City of Manila. It is so ordered.1wph1.t

FLORENTINA A. GUILATCO, petitioner,

vs.
CITY OF DAGUPAN, and the HONORABLE COURT OF APPEALS, respondents.
Nolan R. Evangelista for petitioner.
The City Legal Officer for respondents.

SARMIENTO, J.:
In a civil action 1 for recovery of damages filed by the petitioner Florentina A.
Guilatco, the following judgment was rendered against the respondent City of
Dagupan:
xxx
(1)
Ordering defendant City of Dagupan to pay plaintiff actual damages in the
amount of P 15,924 (namely P8,054.00 as hospital, medical and other expenses [Exhs.
H to H-60], P 7,420.00 as lost income for one (1) year [Exh. F] and P 450.00 as
bonus). P 150,000.00 as moral damages, P 50,000.00 as exemplary damages, and P
3,000.00 as attorney's fees, and litigation expenses, plus costs and to appropriate
through its Sangguniang Panglunsod (City Council) said amounts for said purpose;
(2)
Dismissing plaintiffs complaint as against defendant City Engr. Alfredo G.
Tangco; and
(3)
Dismissing the counterclaims of defendant City of Dagupan and defendant
City Engr. Alfredo G. Tangco, for lack of merit. 2
The facts found by the trial court are as follows: 3
It would appear from the evidences that on July 25, 1978, herein plaintiff, a Court
Interpreter of Branch III, CFI--Dagupan City, while she was about to board a
motorized tricycle at a sidewalk located at Perez Blvd. (a National Road, under the
control and supervision of the City of Dagupan) accidentally fell into a manhole
located on said sidewalk, thereby causing her right leg to be fractured. As a result
thereof, she had to be hospitalized, operated on, confined, at first at the Pangasinan
Provincial Hospital, from July 25 to August 3, 1978 (or for a period of 16 days). She
also incurred hospitalization, medication and other expenses to the tune of P 8,053.65
(Exh. H to H-60) or a total of P 10,000.00 in all, as other receipts were either lost or
misplaced; during the period of her confinement in said two hospitals, plaintiff

suffered severe or excruciating pain not only on her right leg which was fractured but
also on all parts of her body; the pain has persisted even after her discharge from the
Medical City General Hospital on October 9, 1978, to the present. Despite her
discharge from the Hospital plaintiff is presently still wearing crutches and the Court
has actually observed that she has difficulty in locomotion. From the time of the
mishap on July 25, 1978 up to the present, plaintiff has not yet reported for duty as
court interpreter, as she has difficulty of locomotion in going up the stairs of her office,
located near the city hall in Dagupan City. She earns at least P 720.00 a month
consisting of her monthly salary and other means of income, but since July 25, 1978
up to the present she has been deprived of said income as she has already consumed
her accrued leaves in the government service. She has lost several pounds as a result of
the accident and she is no longer her former jovial self, she has been unable to perform
her religious, social, and other activities which she used to do prior to the incident.
Dr. Norberto Felix and Dr. Dominado Manzano of the Provincial Hospital, as well as
Dr. Antonio Sison of the Medical City General Hospital in Mandaluyong Rizal (Exh. I;
see also Exhs. F, G, G-1 to G-19) have confirmed beyond shadow of any doubt the
extent of the fracture and injuries sustained by the plaintiff as a result of the mishap.
On the other hand, Patrolman Claveria, De Asis and Cerezo corroborated the testimony
of the plaintiff regarding the mishap and they have confirmed the existence of the
manhole (Exhs. A, B, C and sub-exhibits) on the sidewalk along Perez Blvd., at the
time of the incident on July 25, 1978 which was partially covered by a concrete flower
pot by leaving gaping hole about 2 ft. long by 1 1/2 feet wide or 42 cms. wide by 75
cms. long by 150 cms. deep (see Exhs. D and D-1).
Defendant Alfredo Tangco, City Engineer of Dagupan City and admittedly ex-officio
Highway Engineer, City Engineer of the Public Works and Building Official for
Dagupan City, admitted the existence of said manhole along the sidewalk in Perez
Blvd., admittedly a National Road in front of the Luzon Colleges. He also admitted
that said manhole (there are at least 11 in all in Perez Blvd.) is owned by the National
Government and the sidewalk on which they are found along Perez Blvd. are also
owned by the National Government. But as City Engineer of Dagupan City, he
supervises the maintenance of said manholes or drainage system and sees to it that
they are properly covered, and the job is specifically done by his subordinates, Mr.
Santiago de Vera (Maintenance Foreman) and Engr. Ernesto Solermo also a
maintenance Engineer. In his answer defendant Tangco expressly admitted in par. 7-1
thereof, that in his capacity as ex-officio Highway Engineer for Dagupan City he
exercises supervision and control over National roads, including the Perez Blvd. where
the incident happened.
On appeal by the respondent City of Dagupan, the appellate court 4 reversed the lower
court findings on the ground that no evidence was presented by the plaintiff- appellee
to prove that the City of Dagupan had "control or supervision" over Perez Boulevard. 5

The city contends that Perez Boulevard, where the fatal drainage hole is located, is a
national road that is not under the control or supervision of the City of Dagupan.
Hence, no liability should attach to the city. It submits that it is actually the Ministry of
Public Highways that has control or supervision through the Highway Engineer which,
by mere coincidence, is held concurrently by the same person who is also the City
Engineer of Dagupan.
After examination of the findings and conclusions of the trial court and those of the
appellate court, as well as the arguments presented by the parties, we agree with those
of the trial court and of the petitioner. Hence, we grant the petition.
In this review on certiorari, we have simplified the errors assigned by the petitioner to
a single issue: whether or not control or supervision over a national road by the City of
Dagupan exists, in effect binding the city to answer for damages in accordance with
article 2189 of the Civil Code.
The liability of public corporations for damages arising from injuries suffered by
pedestrians from the defective condition of roads is expressed in the Civil Code as
follows:
Article 2189. Provinces, cities and municipalities shall be liable for damages for the
death of, or injuries suffered by, any person by reason of the defective condition of
roads, streets, bridges, public buildings, and other public works under their control or
supervision.
It is not even necessary for the defective road or street to belong to the province, city
or municipality for liability to attach. The article only requires that either control or
supervision is exercised over the defective road or street. 6
In the case at bar, this control or supervision is provided for in the charter of Dagupan
and is exercised through the City Engineer who has the following duties:
Sec. 22. The City Engineer--His powers, duties and compensation-There shall be a city
engineer, who shall be in charge of the department of Engineering and Public Works.
He shall receive a salary of not exceeding three thousand pesos per annum. He shall
have the following duties:
xxx
(j)
He shall have the care and custody of the public system of waterworks and
sewers, and all sources of water supply, and shall control, maintain and regulate the
use of the same, in accordance with the ordinance relating thereto; shall inspect and

regulate the use of all private systems for supplying water to the city and its
inhabitants, and all private sewers, and their connection with the public sewer system.
xxx
The same charter of Dagupan also provides that the laying out, construction and
improvement of streets, avenues and alleys and sidewalks, and regulation of the use
thereof, may be legislated by the Municipal Board . 7 Thus the charter clearly indicates
that the city indeed has supervision and control over the sidewalk where the open
drainage hole is located.
The express provision in the charter holding the city not liable for damages or injuries
sustained by persons or property due to the failure of any city officer to enforce the
provisions of the charter, can not be used to exempt the city, as in the case at bar.8
The charter only lays down general rules regulating the liability of the city. On the
other hand article 2189 applies in particular to the liability arising from "defective
streets, public buildings and other public works." 9
The City Engineer, Mr. Alfredo G. Tangco, admits that he exercises control or
supervision over the said road. But the city can not be excused from liability by the
argument that the duty of the City Engineer to supervise or control the said provincial
road belongs more to his functions as an ex-officio Highway Engineer of the Ministry
of Public Highway than as a city officer. This is because while he is entitled to an
honorarium from the Ministry of Public Highways, his salary from the city
government substantially exceeds the honorarium.
We do not agree.
Alfredo G. Tangco "(i)n his official capacity as City Engineer of Dagupan, as ExOfficio Highway Engineer, as Ex-Officio City Engineer of the Bureau of Public
Works, and, last but not the least, as Building Official for Dagupan City, receives the
following monthly compensation: P 1,810.66 from Dagupan City; P 200.00 from the
Ministry of Public Highways; P 100.00 from the Bureau of Public Works and P 500.00
by virtue of P.D. 1096, respectively." 10 This function of supervision over streets,
public buildings, and other public works pertaining to the City Engineer is coursed
through a Maintenance Foreman and a Maintenance Engineer.11 Although these last
two officials are employees of the National Government, they are detailed with the
City of Dagupan and hence receive instruction and supervision from the city through
the City Engineer.
There is, therefore, no doubt that the City Engineer exercises control or supervision
over the public works in question. Hence, the liability of the city to the petitioner under

article 2198 of the Civil Code is clear.

Be all that as it may, the actual damages awarded to the petitioner in the amount of P
10,000.00 should be reduced to the proven expenses of P 8,053.65 only. The trial court
should not have rounded off the amount. In determining actual damages, the court can
not rely on "speculation, conjecture or guess work" as to the amount. Without the
actual proof of loss, the award of actual damages becomes erroneous. 12
On the other hand, moral damages may be awarded even without proof of pecuniary
loss, inasmuch as the determination of the amount is discretionary on the court.13
Though incapable of pecuniary estimation, moral damages are in the nature of an
award to compensate the claimant for actual injury suffered but which for some reason
can not be proven. However, in awarding moral damages, the following should be
taken into consideration:
(1)

First, the proximate cause of the injury must be the claimee's acts.14

(2)
Second, there must be compensatory or actual damages as satisfactory proof
of the factual basis for damages.15
(3)
Third, the award of moral damages must be predicated on any of the cases
enumerated in the Civil Code. 16
In the case at bar, the physical suffering and mental anguish suffered by the petitioner
were proven. Witnesses from the petitioner's place of work testified to the degeneration
in her disposition-from being jovial to depressed. She refrained from attending social
and civic activities.17
Nevertheless the award of moral damages at P 150,000.00 is excessive. Her handicap
was not permanent and disabled her only during her treatment which lasted for one
year. Though evidence of moral loss and anguish existed to warrant the award of
damages,18 the moderating hand of the law is called for. The Court has time and again
called attention to the reprehensible propensity of trial judges to award damages
without basis,19 resulting in exhorbitant amounts.20

duty and responsibility to their constituents, especially when they are engaged in
construction work or when there are manholes on their sidewalks or streets which are
uncovered, to immediately cover the same, in order to minimize or prevent accidents
to the poor pedestrians.22
Too often in the zeal to put up "public impact" projects such as beautification drives,
the end is more important than the manner in which the work is carried out. Because of
this obsession for showing off, such trivial details as misplaced flower pots betray the
careless execution of the projects, causing public inconvenience and inviting accidents.
Pending appeal by the respondent City of Dagupan from the trial court to the appellate
court, the petitioner was able to secure an order for garnishment of the funds of the
City deposited with the Philippine National Bank, from the then presiding judge, Hon.
Willelmo Fortun. This order for garnishment was revoked subsequently by the
succeeding presiding judge, Hon. Romeo D. Magat, and became the basis for the
petitioner's motion for reconsideration which was also denied. 23
We rule that the execution of the judgment of the trial court pending appeal was
premature. We do not find any good reason to justify the issuance of an order of
execution even before the expiration of the time to appeal .24
WHEREFORE, the petition is GRANTED. The assailed decision and resolution of the
respondent Court of Appeals are hereby REVERSED and SET ASIDE and the decision
of the trial court, dated March 12, 1979 and amended on March 13, 1979, is hereby
REINSTATED with the indicated modifications as regards the amounts awarded:
(1)
Ordering the defendant City of Dagupan to pay the plaintiff actual damages in
the amount of P 15,924 (namely P 8,054.00 as hospital, medical and other expenses; P
7,420.00 as lost income for one (1) year and P 450.00 as bonus); P 20,000.00 as moral
damages and P 10,000.00 as exemplary damages.
The attorney's fees of P 3,000.00 remain the same.
SO ORDERED.

Although the assessment of the amount is better left to the discretion of the trial court
21 under preceding jurisprudence, the amount of moral damages should be reduced to
P 20,000.00.
As for the award of exemplary damages, the trial court correctly pointed out the basis:
To serve as an example for the public good, it is high time that the Court, through this
case, should serve warning to the city or cities concerned to be more conscious of their

CELESTINO TATEL, petitioner,

vs.
MUNICIPALITY OF VIRAC, SALVADOR A. SURTIDA, in his capacity as Mayor of
Virac, Catanduanes; GAVINO V. GUERRERO, in his capacity as Vice-Mayor of
Virac, Catanduanes; JOSE T. BUEBOS, in his capacity as Councilor of Virac,
Catanduanes; ANGELES TABLIZO, in his capacity as Councilor of Virac,
Catanduanes; ELPIDIO T. ZAFE, in his capacity as Councilor of Virac, Catanduanes;
MARIANO ALBERTO, in his capacity as Councilor of Virac, Catanduanes; JULIA A.
GARCIA, in her capacity as Councilor of Virac, Catanduanes; and PEDRO A.
GUERRERO, in his capacity as Councilor of Virac, Catanduanes, respondents.

violation of Ordinance No. 13, series of 1952, prohibiting the construction of

warehouses near a block of houses either in the poblacion or barrios without
maintaining the necessary distance of 200 meters from said block of houses to avoid
loss of lives and properties by accidental fire.
On the other hand, petitioner contends that said ordinance is unconstitutional, contrary
to the due process and equal protection clause of the Constitution and null and void for
not having been passed in accordance with law.
The issue then boils down on whether petitioner's warehouse is a nuisance within the
meaning of Article 694 of the Civil Code and whether Ordinance No. 13, S. 1952 of
the Municipality of Virac is unconstitutional and void.

NOCON, J.:
In a decision dated September 18, 1969, the court a quo ruled as follows:
This is a Petition for Prohibition with Preliminary Injunction with the Court of First
Instance of Catanduanes filed by appellant, Celestino Tatel, a businessman engaged in
the import and export of abaca and other products against the Municipal Council of
Virac, Catanduanes and its municipal officials enjoining them from enforcing
Resolution No 29 1 of the Council, declaring the warehouse of petitioner in barrio Sta.
Elena of the said municipality a public nuisance within the purview of Article 694 of
the Civil Code of the Philippines and directing the petitioner to remove and transfer
said warehouse to a more suitable place within two (2) months from receipt of the said
resolution.
It appears from the records that on the basis of complaints received from the residents
of barrio Sta. Elena on March 18, 1966 against the disturbance caused by the operation
of the abaca bailing machine inside the warehouse of petitioner which affected the
peace and tranquility of the neighborhood due to the smoke, obnoxious odor and dust
emitted by the machine, a committee was appointed by the municipal council of Virac
to investigate the matter. The committee noted the crowded nature of the neighborhood
with narrow roads and the surrounding residential houses, so much so that an
accidental fire within the warehouse of the petitioner occasioned by the continuance of
the activity inside the warehouse and the storing of inflammable materials created a
danger to the lives and properties of the people within the neighborhood.
Resultantly, Resolution No. 29 was passed by the Municipal Council of Virac on April
22, 1966 declaring the warehouse owned and operated by petitioner a public nuisance
within the purview of Article 694 of the New Civil Code. 2

1.
The warehouse in question was legally constructed under a valid permit
issued by the municipality of Virac in accordance with existing regulations and may
not be destroyed or removed from its present location;
2.
Ordinance No. 13, series of 1952, is a legitimate and valid exercise of police
power by the Municipal Council of Virac is not (sic) unconstitutional and void as
claimed by the petitioner;
3.
The storage by the petitioner of abaca and copra in the warehouse is not only
in violation of the provisions of the ordinance but poses a grave danger to the safety of
the lives and properties of the residents of the neighborhood due to accidental fire and
constitutes a public nuisance under the provisions of Article 694 of the New Civil code
of the Philippines and may be abated;
4.
Accordingly, the petitioner is hereby directed to remove from the said
warehouse all abaca and copra and other inflammable articles stored therein which are
prohibited under the provisions of Ordinance No. 13, within a period of two (2)
months from the time this decision becomes final and that henceforth, the petitioner is
enjoined from storing such prohibited articles in the warehouse. With costs against
petitioner.
Seeking appellate review, petitioner raised as errors of the court a quo:

His motion for reconsideration having been denied by the Municipal Council of Virac,
petitioner instituted the present petition for prohibition with preliminary injunction.

1.
In holding that Ordinance No. 13, series of 1952, of the Municipality of Virac,
Catanduanes, is a legitimate and valid exercise of police power of the Municipal
Council, and therefore, constitutional;

Respondent municipal officials contend that petitioner's warehouse was constructed in

2.

In giving the ordinance a meaning other than and different from what it

provided by declaring that petitioner violated the same by using the warehouse for
storage of abaca and copra when what is prohibited and penalized by the ordinance is
the construction of warehouses.
3.
In refusing to take judicial notice of the fact that in the municipality, there are
numerous establishments similarly situated as appellants' warehouses but which are
not prosecuted.

It is strictly prohibited to construct warehouses in any form to any person, persons,

entity, corporation or merchants, wherein to keep or store copra, hemp, gasoline,
petroleum, alcohol, crude oil, oil of turpentine and the like products or materials if not
within the distance of 200 meters from a block of houses either in the poblacion or
barrios to avoid great losses of properties inclusive lives by fire accident.
Section 2 provides: 7

We find no merit in the Petition.

Ordinance No. 13, series of 1952, was passed by the Municipal Council of Virac in the
exercise of its police power. It is a settled principle of law that municipal corporations
are agencies of the State for the promotion and maintenance of local self-government
and as such are endowed with the police powers in order to effectively accomplish and
carry out the declared objects of their creation. 3 Its authority emanates from the
general welfare clause under the Administrative Code, which reads:
The municipal council shall enact such ordinances and make such regulations, not
repugnant to law, as may be necessary to carry into effect and discharge the powers
and duties conferred upon it by law and such as shall seem necessary and proper to
provide for the health and safety, promote the prosperity, improve the morals, peace,
good order, comfort and convenience of the municipality and the inhabitants thereof,
and for the protection of property therein. 4
For an ordinance to be valid, it must not only be within the corporate powers of the
municipality to enact but must also be passed according to the procedure prescribed by
law, and must be in consonance with certain well established and basic principles of a
substantive nature. These principles require that a municipal 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. 5
Ordinance No. 13, Series of 1952, meets these criteria.

Owners of warehouses in any form, are hereby given advice to remove their said
warehouses this ordinance by the Municipal Council, provided however, that if those
warehouses now in existence should no longer be utilized as such warehouse for the
above-described products in Section 1 of this ordinance after a lapse of the time given
for the removal of the said warehouses now in existence, same warehouses shall be
exempted from the spirit of the provision of section 1 of this ordinance, provided
further, that these warehouses now in existence, shall in the future be converted into
non-inflammable products and materials warehouses.
In spite of its fractured syntax, basically, what is regulated by the ordinance is the
construction of warehouses wherein inflammable materials are stored where such
warehouses are located at a distance of 200 meters from a block of houses and not the
construction per se of a warehouse. The purpose is to avoid the loss of life and
property in case of fire which is one of the primordial obligation of the government.
This was also the observation of the trial court:

AN ORDINANCE STRICTLY PROHIBITING THE CONSTRUCTION OF

WAREHOUSE IN ANY FORM NEAR A BLOCK OF HOUSES EITHER IN
POBLACION OR BARRIO WITH NECESSARY DISTANCE TO AVOID GREAT
LOSSES OF PROPERTY AND LIVES BY FIRE ACCIDENT.

A casual glance of the ordinance at once reveals a manifest disregard of the elemental
rules of syntax. Experience, however, will show that this is not uncommon in law
making bodies in small towns where local authorities and in particular the persons
charged with the drafting and preparation of municipal resolutions and ordinances lack
sufficient education and training and are not well grounded even on the basic and
fundamental elements of the English language commonly used throughout the country
in such matters. Nevertheless, if one scrutinizes the terms of the ordinance, it is clear
that what is prohibited is the construction of warehouses by any person, entity or
corporation wherein copra, hemp, gasoline and other inflammable products mentioned
in Section 1 may be stored unless at a distance of not less than 200 meters from a
block of houses either in the poblacion or barrios in order to avoid loss of property and
life due to fire. Under Section 2, existing warehouses for the storage of the prohibited
articles were given one year after the approval of the ordinance within which to
remove them but were allowed to remain in operation if they had ceased to store such
prohibited articles.

Section 1 provides:

The ambiguity therefore is more apparent than real and springs from simple error in

As to the petitioner's second assignment of error, the trial court did not give the
ordinance in question a meaning other than what it says. Ordinance No. 13 passed by
the Municipal Council of Virac on December 29, 1952, 6 reads:

grammatical construction but otherwise, the meaning and intent is clear that what is
prohibited is the construction or maintenance of warehouses for the storage of
inflammable articles at a distance within 200 meters from a block of houses either in
the poblacion or in the barrios. And the purpose of the ordinance is to avoid loss of life
and property in case of accidental fire which is one of the primordial and basic
obligation of any government. 8
Clearly, the lower court did NOT add meaning other than or differrent from what was
provided in the ordinance in question. It merely stated the purpose of the ordinance
and what it intends to prohibit to accomplish its purpose.
As to the third assignment of error, that warehouses similarly situated as that of the
petitioner were not prosecuted, suffice it to say that the mere fact that the municipal
authorities of Virac have not proceeded against other warehouses in the municipality
allegedly violating Ordinance No. 13 is no reason to claim that the ordinance is
discriminatory. A distinction must be made between the law itself and the manner in
which said law is implemented by the agencies in charge with its administration and
enforcement. There is no valid reason for the petitioner to complain, in the absence of
proof that the other bodegas mentioned by him are operating in violation of the
ordinance and that the complaints have been lodged against the bodegas concerned
without the municipal authorities doing anything about it.
The objections interposed by the petitioner to the validity of the ordinance have not
been substantiated. Its purpose is well within the objectives of sound government. No
undue restraint is placed upon the petitioner or for anybody to engage in trade but
merely a prohibition from storing inflammable products in the warehouse because of
the danger of fire to the lives and properties of the people residing in the vicinity. As
far as public policy is concerned, there can be no better policy than what has been
conceived by the municipal government.
As to petitioner's contention of want of jurisdiction by the lower court we find no merit
in the same. The case is a simple civil suit for abatement of a nuisance, the original
jurisdiction of which falls under the then Court of First Instance.
WHEREFORE, for lack of merit, the petition is hereby DISMISSED. Costs against
petitioner.
SO ORDERED.

SALVADOR VILLACORTA as City Engineer of Dagupan City, and JUAN S.

CAGUIOA as Register of Deeds of Dagupan City, petitioners,

vs.
GREGORIO BERNARDO and HON. MACARIO OFILADA as Judge of the Court of
First Instance of Pangasinan respondents.
Victor T. Llamas, Jr. for respondents.

CRUZ, J.:
This is a petition for certiorari against a decision of the Court of First Instance of
Pangasinan annulling an ordinance adopted by the municipal board of Dagupan City.
The ordinance reads in full as follows:
ORDINANCE 22
AN ORDINANCE REGULATING SUBDIVISION PLANS OVER PARCELS OF
LAND IN THE CITY OF DAGUPAN.
Be it ordained by the Municipal Board of Dagupan City in session assembled:
Section 1.
Every proposed subdivision plan over any lot in the City of Dagupan,
shalt before the same is submitted for approval and/or verification by the Bureau of
Lands and/or the Land Registration Commission, be previously submitted to the City
Engineer of the City who shall see to it that no encroachment is made on any portion
of the public domain, that the zoning ordinance and all other pertinent rules and
regulations are observed.
Section 2.
As service fee thereof, an amount equivalent to P0.30 per square
meter of every lot resulting or win result from such subdivision shall be charged by the
City Engineer's Office.
Section 3. It shall be unlawful for the Register of Deeds of Dagupan City to allow the
registration of a subdivision plan unless there is prior written certification issued by the
City Engineer that such plan has already been submitted to his office and that the same
is in order.
Section 4.
Any violation of this ordinance shall be punished by a fine not
exceeding two hundred (P200.00) pesos or imprisonment not exceeding six (6) months
or both in the discretion of the judge.

Section 5. This ordinance shall take effect immediately upon approval.

In declaring the said ordinance null and void, the court a quo declared:
From the above-recited requirements, there is no showing that would justify the
enactment of the questioned ordinance. Section 1 of said ordinance clearly conflicts
with Section 44 of Act 496, because the latter law does not require subdivision plans to
be submitted to the City Engineer before the same is submitted for approval to and
verification by the General Land Registration Office or by the Director of Lands as
provided for in Section 58 of said Act. Section 2 of the same ordinance also
contravenes the provisions of Section 44 of Act 496, the latter being silent on a service
fee of PO.03 per square meter of every lot subject of such subdivision application;
Section 3 of the ordinance in question also conflicts with Section 44 of Act 496,
because the latter law does not mention of a certification to be made by the City
Engineer before the Register of Deeds allows registration of the subdivision plan; and
the last section of said ordinance imposes a penalty for its violation, which Section 44
of Act 496 does not impose. In other words, Ordinance 22 of the City of Dagupan
imposes upon a subdivision owner additional conditions.
xxx

xxx

xxx

The Court takes note of the laudable purpose of the ordinance in bringing to a halt the
surreptitious registration of lands belonging to the government. But as already
intimidated above, the powers of the board in enacting such a laudable ordinance
cannot be held valid when it shall impede the exercise of rights granted in a general
law and/or make a general law subordinated to a local ordinance.
We affirm.
To sustain the ordinance would be to open the floodgates to other ordinances amending
and so violating national laws in the guise of implementing them. Thus, ordinances
could be passed imposing additional requirements for the issuance of marriage
licenses, to prevent bigamy; the registration of vehicles, to minimize carnaping; the
execution of contracts, to forestall fraud; the validation of passports, to deter
imposture; the exercise of freedom of speech, to reduce disorder; and so on. The list is
endless, but the means, even if the end be valid, would be ultra vires.
So many excesses are attempted in the name of the police power that it is time, we
feel, for a brief admonition.
Regulation is a fact of life in any well-ordered community. As society becomes more
and more complex, the police power becomes correspondingly ubiquitous. This has to
be so for the individual must subordinate his interests to the common good, on the time

honored justification of Salus populi est suprema lex.

In this prolix age, practically everything a person does and owns affects the public
interest directly or at least vicariously, unavoidably drawing him within the embrace of
the police power. Increasingly, he is hemmed in by all manner of statutory,
administrative and municipal requirements and restrictions that he may find officious
and even oppressive.
It is necessary to stress that unless the creeping interference of the government in
essentially private matters is moderated, it is likely to destroy that prized and peculiar
virtue of the free society: individualism.
Every member of society, while paying proper deference to the general welfare, must
not be deprived of the right to be left alone or, in the Idiom of the day, "to do his
thing." As long as he does not prejudice others, his freedom as an individual must not
be unduly curtailed.
We therefore urge that proper care attend the exercise of the police power lest it
deteriorate into an unreasonable intrusion into the purely private affairs of the
individual. The so-called "general welfare" is too amorphous and convenient an excuse
for official arbitrariness.
Let it always be remembered that in the truly democratic state, protecting the rights of
the individual is as important as, if not more so than, protecting the rights of the public.
This advice is especially addressed to the local governments which exercise the police
power only by virtue of a valid delegation from the national legislature under the
general welfare clause. In the instant case, Ordinance No. 22 suffers from the
additional defect of violating this authority for legislation in contravention of the
national law by adding to its requirements.
WHEREFORE, the decision of the lower court annulling the challenged ordinance is
AFFIRMED, without any pronouncement as to costs.
SO ORDERED.

VICENTE DE LA CRUZ, RENATO ALIPIO, JOSE TORRES III, LEONCIO

CORPUZ, TERESITA CALOT, ROSALIA FERNANDEZ, ELIZABETH VELASCO,

NANETTE VILLANUEVA, HONORATO BUENAVENTURA, RUBEN DE
CASTRO, VICENTE ROXAS, RICARDO DAMIAN, DOMDINO ROMDINA,
ANGELINA OBLIGACION, CONRADO GREGORIO, TEODORO REYES, LYDIA
ATRACTIVO, NAPOLEON MENDOZA, PERFECTO GUMATAY, ANDRES
SABANGAN, ROSITA DURAN, SOCORRO BERNARDEZ, and PEDRO
GABRIEL, petitioners,
vs.
THE HONORABLE EDGARDO L. PARAS, MATIAS RAMIREZ as the Municipal
Mayor, MARIO MENDOZA as the Municipal Vice-Mayor, and THE MUNICIPAL
COUNCIL OF BOCAUE, BULACAN, respondents.
Federico N. Alday for petitioners.
Dakila F. Castro for respondents.

FERNANDO, C.J.:
The crucial question posed by this certiorari proceeding is whether or not a municipal
corporation, Bocaue, Bulacan, represented by respondents, 1 can, prohibit the exercise
of a lawful trade, the operation of night clubs, and the pursuit of a lawful occupation,
such clubs employing hostesses. It is contended that the ordinance assailed as invalid
is tainted with nullity, the municipality being devoid of power to prohibit a lawful
business, occupation or calling, petitioners at the same time alleging that their rights to
due process and equal protection of the laws were violated as the licenses previously
given to them was in effect withdrawn without judicial hearing. 2
The assailed ordinance 3 is worded as follows: "Section 1. Title of Ordinance.
This Ordinance shall be known and may be cited as the [Prohibition and Closure
Ordinance] of Bocaue, Bulacan. Section 2. Definitions of Terms (a) 'Night Club'
shall include any place or establishment selling to the public food or drinks where
customers are allowed to dance. (b) 'Cabaret' or 'Dance Hall' shall include any place or
establishment where dancing is permitted to the public and where professional
hostesses or hospitality girls and professional dancers are employed. (c) 'Professional
hostesses' or 'hospitality girls' shall include any woman employed by any of the
establishments herein defined to entertain guests and customers at their table or to
dance with them. (d) 'Professional dancer' shall include any woman who dances at any
of the establishments herein defined for a fee or remuneration paid directly or
indirectly by the operator or by the persons she dances with. (e) 'Operator' shall
include the owner, manager, administrator or any person who operates and is
responsible for the operation of any night club, cabaret or dance hall. Section 3.

Prohibition in the Issuance and Renewal of Licenses, Permits. Being the principal
cause in the decadence of morality and because of their other adverse effects on this
community as explained above, no operator of night clubs, cabarets or dance halls
shall henceforth be issued permits/licenses to operate within the jurisdiction of the
municipality and no license/permit shall be issued to any professional hostess,
hospitality girls and professional dancer for employment in any of the aforementioned
establishments. The prohibition in the issuance of licenses/permits to said persons and
operators of said establishments shall include prohibition in the renewal thereof.
Section 4. Revocation of Permits and Licenses. The licenses and permits issued to
operators of night clubs, cabarets or dance halls which are now in operation including
permits issued to professional hostesses, hospitality girls and professional dancers are
hereby revoked upon the expiration of the thirty-day period given them as provided in
Section 8 hereof and thenceforth, the operation of these establishments within the
jurisdiction of the municipality shall be illegal. Section 5. Penalty in case of
violation. Violation of any of the provisions of this Ordinance shall be punishable
by imprisonment not exceeding three (3) months or a fine not exceeding P200.00 or
both at the discretion of the Court. If the offense is committed by a juridical entity, the
person charged with the management and/or operation thereof shall be liable for the
penalty provided herein. Section 6. Separability Clause. If, for any reason, any
section or provision of this Ordinance is held unconstitutional or invalid, no other
section or provision hereof shall be affected thereby. Section 7. Repealing Clause.
All ordinance, resolutions, circulars, memoranda or parts thereof that are inconsistent
with the provisions of this Ordinance are hereby repealed. Section 8. Effectivity.
This Ordinance shall take effect immediately upon its approval; provided, however,
that operators of night clubs, cabarets and dance halls now in operation including
professional hostesses, hospitality girls and professional dancers are given a period of
thirty days from the approval hereof within which to wind up their businesses and
comply with the provisions of this Ordinance." 4
On November 5, 1975, two cases for prohibition with preliminary injunction were
filed with the Court of First Instance of Bulacan. 5 The grounds alleged follow:
1. Ordinance No. 84 is null and void as a municipality has no authority to prohibit a
lawful business, occupation or calling.
2. Ordinance No. 84 is violative of the petitioners' right to due process and the equal
protection of the law, as the license previously given to petitioners was in effect
withdrawn without judicial hearing. 3. That under Presidential Decree No. 189, as
amended, by Presidential Decree No. 259, the power to license and regulate touristoriented businesses including night clubs, has been transferred to the Department of
Tourism." 6 The cases were assigned to respondent Judge, now Associate Justice Paras
of the Intermediate Appellate Court, who issued a restraining order on November 7,
1975. The answers were thereafter filed. It was therein alleged: " 1. That the Municipal

Council is authorized by law not only to regulate but to prohibit the establishment,
maintenance and operation of night clubs invoking Section 2243 of the RAC, CA 601,
Republic Acts Nos. 938, 978 and 1224. 2. The Ordinance No. 84 is not violative of
petitioners' right to due process and the equal protection of the law, since property
rights are subordinate to public interests. 3. That Presidential Decree No. 189, as
amended, did not deprive Municipal Councils of their jurisdiction to regulate or
prohibit night clubs." 7 There was the admission of the following facts as having been
established: "l. That petitioners Vicente de la Cruz, et al. in Civil Case No. 4755-M had
been previously issued licenses by the Municipal Mayor of Bocaue-petitioner Jose
Torres III, since 1958; petitioner Vicente de la Cruz, since 1960; petitioner Renato
Alipio, since 1961 and petitioner Leoncio Corpuz, since 1972; 2. That petitioners had
invested large sums of money in their businesses; 3. That the night clubs are welllighted and have no partitions, the tables being near each other; 4. That the petitioners
owners/operators of these clubs do not allow the hospitality girls therein to engage in
immoral acts and to go out with customers; 5. That these hospitality girls are made to
go through periodic medical check-ups and not one of them is suffering from any
venereal disease and that those who fail to submit to a medical check-up or those who
are found to be infected with venereal disease are not allowed to work; 6. That the
crime rate there is better than in other parts of Bocaue or in other towns of Bulacan." 8
Then came on January 15, 1976 the decision upholding the constitutionality and
validity of Ordinance No. 84 and dismissing the cases. Hence this petition for
certiorari by way of appeal.
In an exhaustive as well as scholarly opinion, the lower court dismissed the petitions.
Its rationale is set forth in the opening paragraph thus: "Those who lust cannot last.
This in essence is why the Municipality of Bocaue, Province of Bulacan, stigmatized
as it has been by innuendos of sexual titillation and fearful of what the awesome future
holds for it, had no alternative except to order thru its legislative machinery, and even
at the risk of partial economic dislocation, the closure of its night clubs and/or
cabarets. This in essence is also why this Court, obedient to the mandates of good
government, and cognizant of the categorical imperatives of the current legal and
social revolution, hereby [upholds] in the name of police power the validity and
constitutionality of Ordinance No. 84, Series of 1975, of the Municipal Council of
Bocaue, Bulacan. The restraining orders heretofore issued in these two cases are
therefore hereby rifted, effective the first day of February, 1976, the purpose of the
grace period being to enable the petitioners herein to apply to the proper appellate
tribunals for any contemplated redress." 9 This Court is, however, unable to agree with
such a conclusion and for reasons herein set forth, holds that reliance on the police
power is insufficient to justify the enactment of the assailed ordinance. It must be
declared null and void.
1. Police power is granted to municipal corporations in general terms as follows:
"General power of council to enact ordinances and make regulations. - The municipal

council shall enact such ordinances and make such regulations, not repugnant to law,
as may be necessary to carry into effect and discharge the powers and duties conferred
upon it by law and such as shall seem necessary and proper to provide for the health
and safety, promote the prosperity, improve the morals, peace, good order, comfort,
and convenience of the municipality and the inhabitants thereof, and for the protection
of property therein." 10 It is practically a reproduction of the former Section 39 of
Municipal Code. 11 An ordinance enacted by virtue thereof, according to Justice
Moreland, speaking for the Court in the leading case of United States v. Abendan 12
"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. Where the power
to legislate upon a given subject, and the mode of its exercise and the details of such
legislation are not prescribed, the ordinance passed pursuant thereto must be a
reasonable exercise of the power, or it will be pronounced invalid." 13 In another
leading case, United States v. Salaveria, 14 the ponente this time being Justice
Malcolm, where the present Administrative Code provision was applied, it was stated
by this Court: "The general welfare clause has two branches: One branch attaches
itself to the main trunk of municipal authority, and relates to such ordinances and
regulations as may be necessary to carry into effect and discharge the powers and
duties conferred upon the municipal council by law. With this class we are not here
directly concerned. The second branch of the clause is much more independent of the
specific functions of the council which are enumerated by law. It authorizes such
ordinances as shall seem necessary and proper to provide for the health and safety,
promote the prosperity, improve the morals, peace, good order, comfort, and
convenience of the municipality and the inhabitants thereof, and for the protection of
property therein.' It is a general rule that ordinances passed by virtue of the implied
power found in the general welfare clause must be reasonable, consonant with the
general powersand purposes of the corporation, and not inconsistent with the laws or
policy of the State." 15 If night clubs were merely then regulated and not prohibited,
certainly the assailed ordinance would pass the test of validity. In the two leading cases
above set forth, this Court had stressed reasonableness, consonant with the general
powers and purposes of municipal corporations, as well as consistency with the laws
or policy of the State. It cannot be said that such a sweeping exercise of a lawmaking
power by Bocaue could qualify under the term reasonable. The objective of fostering
public morals, a worthy and desirable end can be attained by a measure that does not
encompass too wide a field. Certainly the ordinance on its face is characterized by
overbreadth. The purpose sought to be achieved could have been attained by
reasonable restrictions rather than by an absolute prohibition. The admonition in
Salaveria should be heeded: "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." 16 It is clear that in the guise of a police regulation, there was in
this instance a clear invasion of personal or property rights, personal in the case of
those individuals desirous of patronizing those night clubs and property in terms of the

investments made and salaries to be earned by those therein employed.

2. The decision now under review refers to Republic Act No. 938 as amended. 17 It
was originally enacted on June 20, 1953. It is entitled: "AN ACT GRANTING
MUNICIPAL OR CITY BOARDS AND COUNCILS THE POWER TO REGULATE
THE ESTABLISHMENT, MAINTENANCE AND OPERATION OF CERTAIN
PLACES OF AMUSEMENT WITHIN THEIR RESPECTIVE TERRITORIAL
JURISDICTIONS.' 18 Its first section insofar as pertinent reads: "The municipal or
city board or council of each chartered city shall have the power to regulate by
ordinance the establishment, maintenance and operation of night clubs, cabarets,
dancing schools, pavilions, cockpits, bars, saloons, bowling alleys, billiard pools, and
other similar places of amusement within its territorial jurisdiction: ... " 19 Then on
May 21, 1954, the first section was amended to include not merely "the power to
regulate, but likewise "Prohibit ... " 20 The title, however, remained the same. It is
worded exactly as Republic Act No. 938. It is to be admitted that as thus amended, if
only the above portion of the Act were considered, a municipal council may go as far
as to prohibit the operation of night clubs. If that were all, then the appealed decision is
not devoid of support in law. That is not all, however. The title was not in any way
altered. It was not changed one whit. The exact wording was followed. The power
granted remains that of regulation, not prohibition. There is thus support for the view
advanced by petitioners that to construe Republic Act No. 938 as allowing the
prohibition of the operation of night clubs would give rise to a constitutional question.
The Constitution mandates: "Every bill shall embrace only one subject which shall be
expressed in the title thereof. " 21 Since there is no dispute as the title limits the power
to regulating, not prohibiting, it would result in the statute being invalid if, as was done
by the Municipality of Bocaue, the operation of a night club was prohibited. There is a
wide gap between the exercise of a regulatory power "to provide for the health and
safety, promote the prosperity, improve the morals, 22 in the language of the
Administrative Code, such competence extending to all "the great public needs, 23 to
quote from Holmes, and to interdict any calling, occupation, or enterprise. In
accordance with the well-settled principle of constitutional construction that between
two possible interpretations by one of which it will be free from constitutional
infirmity and by the other tainted by such grave defect, the former is to be preferred. A
construction that would save rather than one that would affix the seal of doom
certainly commends itself. We have done so before We do so again. 24
3. There is reinforcement to the conclusion reached by virtue of a specific provision of
the recently-enacted Local Government Code. 25 The general welfare clause, a
reiteration of the Administrative Code provision, is set forth in the first paragraph of
Section 149 defining the powers and duties of the sangguniang bayan. It read as
follows: "(a) Enact such ordinances and issue such regulations as may be necessary to
carry out and discharge the responsibilities conferred upon it by law, and such as shall
be necessary and proper to provide for the health, safety, comfort and convenience,

maintain peace and order, improve public morals, promote the prosperity and general
welfare of the municipality and the inhabitants thereof, and insure the protection of
property therein; ..." 26 There are in addition provisions that may have a bearing on the
question now before this Court. Thus the sangguniang bayan shall "(rr) Regulate cafes,
restaurants, beer-houses, hotels, motels, inns, pension houses and lodging houses,
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 infringing on the taxing or regulatory powers of the municipality;
(ss) Regulate public dancing schools, public dance halls, and sauna baths or massage
parlors; (tt) Regulate the establishment and operation of billiard pools, theatrical
performances, circuses and other forms of entertainment; ..." 27 It is clear that
municipal corporations cannot prohibit the operation of night clubs. They may be
regulated, but not prevented from carrying on their business. It would be, therefore, an
exercise in futility if the decision under review were sustained. All that petitioners
would have to do is to apply once more for licenses to operate night clubs. A refusal to
grant licenses, because no such businesses could legally open, would be subject to
judicial correction. That is to comply with the legislative will to allow the operation
and continued existence of night clubs subject to appropriate regulations. In the
meanwhile, to compel petitioners to close their establishments, the necessary result of
an affirmance, would amount to no more than a temporary termination of their
business. During such time, their employees would undergo a period of deprivation.
Certainly, if such an undesirable outcome can be avoided, it should be. The law should
not be susceptible to the reproach that it displays less than sympathetic concern for the
plight of those who, under a mistaken appreciation of a municipal power, were thus
left without employment. Such a deplorable consequence is to be avoided. If it were
not thus, then the element of arbitrariness enters the picture. That is to pay less, very
much less, than full deference to the due process clause with its mandate of fairness
and reasonableness.
4. The conclusion reached by this Court is not to be interpreted as a retreat from its
resolute stand sustaining police power legislation to promote public morals. The
commitment to such an Ideal forbids such a backward step. Legislation of that
character is deserving of the fullest sympathy from the judiciary. Accordingly, the
judiciary has not been hesitant to lend the weight of its support to measures that can be
characterized as falling within that aspect of the police power. Reference is made by
respondents to Ermita-Malate Hotel and Motel Operators Association, Inc. v. City
Mayor of Manila. 28 There is a misapprehension as to what was decided by this Court.
That was a regulatory measure. Necessarily, there was no valid objection on due
process or equal protection grounds. It did not prohibit motels. It merely regulated the
mode in which it may conduct business in order precisely to put an end to practices
which could encourage vice and immorality. This is an entirely different case. What
was involved is a measure not embraced within the regulatory power but an exercise of

an assumed power to prohibit. Moreover, while it was pointed out in the aforesaid
Ermita-Malate Hotel and Motel Operators Association, Inc. decision that there must be
a factual foundation of invalidity, it was likewise made clear that there is no need to
satisfy such a requirement if a statute were void on its face. That it certainly is if the
power to enact such ordinance is at the most dubious and under the present Local
Government Code non-existent.
WHEREFORE, the writ of certiorari is granted and the decision of the lower court
dated January 15, 1976 reversed, set aside, and nullied. Ordinance No. 84, Series of
1975 of the Municipality of Bocaue is declared void and unconstitutional. The
temporary restraining order issued by this Court is hereby made permanent. No costs.

G.R. No. L-34915

June 24, 1983

CITY GOVERNMENT OF QUEZON CITY and CITY COUNCIL OF QUEZON

CITY, petitioners,
vs.
HON. JUDGE VICENTE G. ERICTA as Judge of the Court of First Instance of Rizal,
Quezon City, Branch XVIII; HIMLAYANG PILIPINO, INC., respondents.

Respondent Himlayang Pilipino reacted by filing with the Court of First Instance of
Rizal Branch XVIII at Quezon City, a petition for declaratory relief, prohibition and
mandamus with preliminary injunction (Sp. Proc. No. Q-16002) seeking to annul
Section 9 of the Ordinance in question The respondent alleged that the same is
contrary to the Constitution, the Quezon City Charter, the Local Autonomy Act, and
the Revised Administrative Code.

City Fiscal for petitioners.

Manuel Villaruel, Jr. and Feliciano Tumale for respondents.

GUTIERREZ, JR., J.:

This is a petition for review which seeks the reversal of the decision of the Court of
First Instance of Rizal, Branch XVIII declaring Section 9 of Ordinance No. 6118, S64, of the Quezon City Council null and void.
Section 9 of Ordinance No. 6118, S-64, entitled "ORDINANCE REGULATING THE
ESTABLISHMENT, MAINTENANCE AND OPERATION OF PRIVATE
MEMORIAL TYPE CEMETERY OR BURIAL GROUND WITHIN THE
JURISDICTION OF QUEZON CITY AND PROVIDING PENALTIES FOR THE
VIOLATION THEREOF" provides:
Sec. 9. At least six (6) percent of the total area of the memorial park cemetery shall be
set aside for charity burial of deceased persons who are paupers and have been
residents of Quezon City for at least 5 years prior to their death, to be determined by
competent City Authorities. The area so designated shall immediately be developed
and should be open for operation not later than six months from the date of approval of
the application.
For several years, the aforequoted section of the Ordinance was not enforced by city
authorities but seven years after the enactment of the ordinance, the Quezon City
Council passed the following resolution:
RESOLVED by the council of Quezon assembled, to request, as it does hereby request
the City Engineer, Quezon City, to stop any further selling and/or transaction of
memorial park lots in Quezon City where the owners thereof have failed to donate the
required 6% space intended for paupers burial.
Pursuant to this petition, the Quezon City Engineer notified respondent Himlayang
Pilipino, Inc. in writing that Section 9 of Ordinance No. 6118, S-64 would be enforced

There being no issue of fact and the questions raised being purely legal both
petitioners and respondent agreed to the rendition of a judgment on the pleadings. The
respondent court, therefore, rendered the decision declaring Section 9 of Ordinance
No. 6118, S-64 null and void.
A motion for reconsideration having been denied, the City Government and City
Council filed the instant petition.
Petitioners argue that the taking of the respondent's property is a valid and reasonable
exercise of police power and that the land is taken for a public use as it is intended for
the burial ground of paupers. They further argue that the Quezon City Council is
authorized under its charter, in the exercise of local police power, " to make such
further ordinances and resolutions not repugnant to law as may be necessary to carry
into effect and discharge the powers and duties conferred by this Act and such as it
shall deem necessary and proper to provide for the health and safety, promote the
prosperity, improve the morals, peace, good order, comfort and convenience of the city
and the inhabitants thereof, and for the protection of property therein."
On the other hand, respondent Himlayang Pilipino, Inc. contends that the taking or
confiscation of property is obvious because the questioned ordinance permanently
restricts the use of the property such that it cannot be used for any reasonable purpose
and deprives the owner of all beneficial use of his property.
The respondent also stresses that the general welfare clause is not available as a source
of power for the taking of the property in this case because it refers to "the power of
promoting the public welfare by restraining and regulating the use of liberty and
property." The respondent points out that if an owner is deprived of his property
outright under the State's police power, the property is generally not taken for public
use but is urgently and summarily destroyed in order to promote the general welfare.
The respondent cites the case of a nuisance per se or the destruction of a house to
prevent the spread of a conflagration.
We find the stand of the private respondent as well as the decision of the respondent
Judge to be well-founded. We quote with approval the lower court's ruling which
declared null and void Section 9 of the questioned city ordinance:

The issue is: Is Section 9 of the ordinance in question a valid exercise of the police
power?
An examination of the Charter of Quezon City (Rep. Act No. 537), does not reveal any
provision that would justify the ordinance in question except the provision granting
police power to the City. Section 9 cannot be justified under the power granted to
Quezon City to tax, fix the license fee, and regulate such other business, trades, and
occupation as may be established or practised in the City.' (Subsections 'C', Sec. 12,
R.A. 537).
The power to regulate does not include the power to prohibit (People vs. Esguerra, 81
PhiL 33, Vega vs. Municipal Board of Iloilo, L-6765, May 12, 1954; 39 N.J. Law, 70,
Mich. 396). A fortiori, the power to regulate does not include the power to confiscate.
The ordinance in question not only confiscates but also prohibits the operation of a
memorial park cemetery, because under Section 13 of said ordinance, 'Violation of the
provision thereof is punishable with a fine and/or imprisonment and that upon
conviction thereof the permit to operate and maintain a private cemetery shall be
revoked or cancelled.' The confiscatory clause and the penal provision in effect deter
one from operating a memorial park cemetery. Neither can the ordinance in question
be justified under sub- section "t", Section 12 of Republic Act 537 which authorizes
the City Council to'prohibit the burial of the dead within the center of population of the city and provide
for their burial in such proper place and in such manner as the council may determine,
subject to the provisions of the general law regulating burial grounds and cemeteries
and governing funerals and disposal of the dead.' (Sub-sec. (t), Sec. 12, Rep. Act No.
537).
There is nothing in the above provision which authorizes confiscation or as
euphemistically termed by the respondents, 'donation'
We now come to the question whether or not Section 9 of the ordinance in question is
a valid exercise of police power. The police power of Quezon City is defined in subsection 00, Sec. 12, Rep. Act 537 which reads as follows:
(00) To make such further ordinance and regulations not repugnant to law as may be
necessary to carry into effect and discharge the powers and duties conferred by this act
and such as it shall deem necessary and proper to provide for the health and safety,
promote, the prosperity, improve the morals, peace, good order, comfort and
convenience of the city and the inhabitants thereof, and for the protection of property
therein; and enforce obedience thereto with such lawful fines or penalties as the City
Council may prescribe under the provisions of subsection (jj) of this section.

We start the discussion with a restatement of certain basic principles. Occupying the
forefront in the bill of rights is the provision which states that 'no person shall be
deprived of life, liberty or property without due process of law' (Art. Ill, Section 1
subparagraph 1, Constitution).
On the other hand, there are three inherent powers of government by which the state
interferes with the property rights, namely-. (1) police power, (2) eminent domain, (3)
taxation. These are said to exist independently of the Constitution as necessary
attributes of sovereignty.
Police power is defined by Freund as 'the power of promoting the public welfare by
restraining and regulating the use of liberty and property' (Quoted in Political Law by
Tanada and Carreon, V-11, p. 50). It is usually exerted in order to merely regulate the
use and enjoyment of property of the owner. If he is deprived of his property outright,
it is not taken for public use but rather to destroy in order to promote the general
welfare. In police power, the owner does not recover from the government for injury
sustained in consequence thereof (12 C.J. 623). It has been said that police power is
the most essential of government powers, at times the most insistent, and always one
of the least limitable of the powers of government (Ruby vs. Provincial Board, 39 PhiL
660; Ichong vs. Hernandez, 1,7995, May 31, 1957). This power embraces the whole
system of public regulation (U.S. vs. Linsuya Fan, 10 PhiL 104). The Supreme Court
has said that police power is so far-reaching in scope that it has almost become
impossible to limit its sweep. As it derives its existence from the very existence of the
state itself, it does not need to be expressed or defined in its scope. Being coextensive
with self-preservation and survival itself, it is the most positive and active of all
governmental processes, the most essential insistent and illimitable Especially it is so
under the modern democratic framework where the demands of society and nations
have multiplied to almost unimaginable proportions. The field and scope of police
power have become almost boundless, just as the fields of public interest and public
welfare have become almost all embracing and have transcended human foresight.
Since the Courts cannot foresee the needs and demands of public interest and welfare,
they cannot delimit beforehand the extent or scope of the police power by which and
through which the state seeks to attain or achieve public interest and welfare. (Ichong
vs. Hernandez, L-7995, May 31, 1957).
The police power being the most active power of the government and the due process
clause being the broadest station on governmental power, the conflict between this
power of government and the due process clause of the Constitution is oftentimes
inevitable.
It will be seen from the foregoing authorities that police power is usually exercised in
the form of mere regulation or restriction in the use of liberty or property for the

promotion of the general welfare. It does not involve the taking or confiscation of
property with the exception of a few cases where there is a necessity to confiscate
private property in order to destroy it for the purpose of protecting the peace and order
and of promoting the general welfare as for instance, the confiscation of an illegally
possessed article, such as opium and firearms.
It seems to the court that Section 9 of Ordinance No. 6118, Series of 1964 of Quezon
City is not a mere police regulation but an outright confiscation. It deprives a person of
his private property without due process of law, nay, even without compensation.
In sustaining the decision of the respondent court, we are not unmindful of the heavy
burden shouldered by whoever challenges the validity of duly enacted legislation
whether national or local As early as 1913, this Court ruled in Case v. Board of Health
(24 PhiL 250) that the courts resolve every presumption in favor of validity and, more
so, where the ma corporation asserts that the ordinance was enacted to promote the
common good and general welfare.
In the leading case of Ermita-Malate Hotel and Motel Operators Association Inc. v.
City Mayor of Manila (20 SCRA 849) the Court speaking through the then Associate
Justice and now Chief Justice Enrique M. Fernando stated
Primarily what calls for a reversal of such a decision is the a of any evidence to offset
the presumption of validity that attaches to a statute or ordinance. As was expressed
categorically by Justice Malcolm 'The presumption is all in favor of validity. ... The
action of the elected representatives of the people cannot be lightly set aside. The
councilors must, in the very nature of things, be familiar with the necessities of their
particular ... municipality and with all the facts and lances which surround the subject
and necessitate action. The local legislative body, by enacting the ordinance, has in
effect given notice that the regulations are essential to the well-being of the people. ...
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. (U.S. v.
Salaveria (1918], 39 Phil. 102, at p. 111. There was an affirmation of the presumption
of validity of municipal ordinance as announced in the leading Salaveria decision in
Ebona v. Daet, [1950]85 Phil. 369.)
We have likewise considered the principles earlier stated in Case v. Board of Health
supra :
... Under the provisions of municipal charters which are known as the general welfare
clauses, a city, by virtue of its police power, may adopt ordinances to the peace, safety,
health, morals and the best and highest interests of the municipality. It is a well-settled
principle, growing out of the nature of well-ordered and society, that every holder of
property, however absolute and may be his title, holds it under the implied liability that

his use of it shall not be injurious to the equal enjoyment of others having an equal
right to the enjoyment of their property, nor injurious to the rights of the community.
An property in the state is held subject to its general regulations, which are necessary
to the common good and general welfare. Rights of property, like all other social and
conventional rights, are subject to such reasonable limitations in their enjoyment as
shall prevent them from being injurious, and to such reasonable restraints and
regulations, established by law, as the legislature, under the governing and controlling
power vested in them by the constitution, may think necessary and expedient. The
state, under the police power, is possessed with plenary power to deal with all matters
relating to the general health, morals, and safety of the people, so long as it does not
contravene any positive inhibition of the organic law and providing that such power is
not exercised in such a manner as to justify the interference of the courts to prevent
positive wrong and oppression.
but find them not applicable to the facts of this case.
There is no reasonable relation between the setting aside of at least six (6) percent of
the total area of an private cemeteries for charity burial grounds of deceased paupers
and the promotion of health, morals, good order, safety, or the general welfare of the
people. The ordinance is actually a taking without compensation of a certain area from
a private cemetery to benefit paupers who are charges of the municipal corporation.
Instead of building or maintaining a public cemetery for this purpose, the city passes
the burden to private cemeteries.
The expropriation without compensation of a portion of private cemeteries is not
covered by Section 12(t) of Republic Act 537, the Revised Charter of Quezon City
which empowers the city council to prohibit the burial of the dead within the center of
population of the city and to provide for their burial in a proper place subject to the
provisions of general law regulating burial grounds and cemeteries. When the Local
Government Code, Batas Pambansa Blg. 337 provides in Section 177 (q) that a
Sangguniang panlungsod may "provide for the burial of the dead in such place and in
such manner as prescribed by law or ordinance" it simply authorizes the city to provide
its own city owned land or to buy or expropriate private properties to construct public
cemeteries. This has been the law and practise in the past. It continues to the present.
Expropriation, however, requires payment of just compensation. The questioned
ordinance is different from laws and regulations requiring owners of subdivisions to
set aside certain areas for streets, parks, playgrounds, and other public facilities from
the land they sell to buyers of subdivision lots. The necessities of public safety, health,
and convenience are very clear from said requirements which are intended to insure
the development of communities with salubrious and wholesome environments. The
beneficiaries of the regulation, in turn, are made to pay by the subdivision developer
when individual lots are sold to home-owners.

As a matter of fact, the petitioners rely solely on the general welfare clause or on
implied powers of the municipal corporation, not on any express provision of law as
statutory basis of their exercise of power. The clause has always received broad and
liberal interpretation but we cannot stretch it to cover this particular taking. Moreover,
the questioned ordinance was passed after Himlayang Pilipino, Inc. had incorporated.
received necessary licenses and permits and commenced operating. The sequestration
of six percent of the cemetery cannot even be considered as having been impliedly
acknowledged by the private respondent when it accepted the permits to commence
operations.
WHEREFORE, the petition for review is hereby DISMISSED. The decision of the
respondent court is affirmed.
SO ORDERED.

G.R. No. 127820 July 20, 1998

Assignment Exchange" executed on June 13, 1990.

MUNICIPALITY OF PARAAQUE, petitioner,
vs.

WHEREFORE, defendant's motion for reconsideration is hereby granted. The order

dated February 4, 1994 is vacated and set aside.

V.M. REALTY CORPORATION, respondent.

This case is hereby dismissed. No pronouncement as to costs.

SO ORDERED. 5

PANGANIBAN, J.:

Factual Antecedents

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.

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

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 Court's 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

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 petitioner's 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 respondent's
motion, its Answer was treated as a motion to dismiss. 14 On March 24, 1991, 15
petitioner filed its opposition, stressing that the trial court's 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. Petitioner's 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 plaintiffappellant.
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 court's
Decision. Respondent Court, in its assailed Resolution promulgated on January 8,
1997, 19 denied petitioner's 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 Court's 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 (Emphasis 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 latter's 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:
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 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 petitioner's 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

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 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

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 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

State a Cause of Action

In its Brief filed before Respondent Court, petitioner argues that its Sangguniang
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 petitioner's Complaint for expropriation filed on
September 23, 1993. It is hornbook doctrine that
. . . 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

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 court's Decision which
dismissed the expropriation suit.

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.

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 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

WHEREFORE, the petition is hereby DENIED without prejudice to petitioner's proper

exercise of its power of eminent domain over subject property. Costs against petitioner.
SO ORDERED.