Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. L-10572 December 21, 1915
FRANCIS A. CHURCHILL and STEWART TAIT, plaintiffs-appellees,
vs.
JAMES J. RAFFERTY, Collector of Internal Revenue, defendant-appellant.
Attorney-General Avancea for appellant.
Aitken and DeSelms for appellees.

TRENT, J.:
The judgment appealed from in this case perpetually restrains and prohibits the defendant and his deputies from collecting
and enforcing against the plaintiffs and their property the annual tax mentioned and described in subsection (b) of section
100 of Act No. 2339, effective July 1, 1914, and from destroying or removing any sign, signboard, or billboard, the
property of the plaintiffs, for the sole reason that such sign, signboard, or billboard is, or may be, offensive to the sight;
and decrees the cancellation of the bond given by the plaintiffs to secure the issuance of the preliminary injunction granted
soon after the commencement of this action.
This case divides itself into two parts and gives rise to two main questions; (1) that relating to the power of the court to
restrain by injunction the collection of the tax complained of, and (2) that relating to the validity of those provisions of
subsection (b) of section 100 of Act No. 2339, conferring power upon the Collector of Internal Revenue to remove any
sign, signboard, or billboard upon the ground that the same is offensive to the sight or is otherwise a nuisance.
The first question is one of the jurisdiction and is of vital importance to the Government. The sections of Act No. 2339,
which bear directly upon the subject, are 139 and 140. The first expressly forbids the use of an injunction to stay the
collection of any internal revenue tax; the second provides a remedy for any wrong in connection with such taxes, and this
remedy was intended to be exclusive, thereby precluding the remedy by injunction, which remedy is claimed to be
constitutional. The two sections, then, involve the right of a dissatisfied taxpayers to use an exceptional remedy to test the
validity of any tax or to determine any other question connected therewith, and the question whether the remedy by
injunction is exceptional.
Preventive remedies of the courts are extraordinary and are not the usual remedies. The origin and history of the writ of
injunction show that it has always been regarded as an extraordinary, preventive remedy, as distinguished from the
common course of the law to redress evils after they have been consummated. No injunction issues as of course, but is
granted only upon the oath of a party and when there is no adequate remedy at law. The Government does, by section 139
and 140, take away the preventive remedy of injunction, if it ever existed, and leaves the taxpayer, in a contest with it, the
same ordinary remedial actions which prevail between citizen and citizen. The Attorney-General, on behalf of the
defendant, contends that there is no provisions of the paramount law which prohibits such a course. While, on the other
hand, counsel for plaintiffs urge that the two sections are unconstitutional because (a) they attempt to deprive aggrieved
taxpayers of all substantial remedy for the protection of their property, thereby, in effect, depriving them of their property
without due process of law, and (b) they attempt to diminish the jurisdiction of the courts, as conferred upon them by Acts
Nos. 136 and 190, which jurisdiction was ratified and confirmed by the Act of Congress of July 1, 1902.
In the first place, it has been suggested that section 139 does not apply to the tax in question because the section, in
speaking of a "tax," means only legal taxes; and that an illegal tax (the one complained of) is not a tax, and, therefore,
does not fall within the inhibition of the section, and may be restrained by injunction. There is no force in this suggestion.
The inhibition applies to all internal revenue taxes imposes, or authorized to be imposed, by Act No. 2339.
(Snyder vs. Marks, 109 U.S., 189.) And, furthermore, the mere fact that a tax is illegal, or that the law, by virtue of which
it is imposed, is unconstitutional, does not authorize a court of equity to restrain its collection by injunction. There must be

a further showing that there are special circumstances which bring the case under some well recognized head of equity
jurisprudence, such as that irreparable injury, multiplicity of suits, or a cloud upon title to real estate will result, and also
that there is, as we have indicated, no adequate remedy at law. This is the settled law in the United States, even in the
absence of statutory enactments such as sections 139 and 140. (Hannewinkle vs. Mayor, etc., of Georgetown, 82 U.S.,
547; Indiana Mfg. Co. vs. Koehne, 188 U.S., 681; Ohio Tax cases, 232 U. S., 576, 587; Pittsburgh C. C. & St. L. R.
Co. vs. Board of Public Works, 172 U. S., 32; Shelton vs. Plat, 139 U.S., 591; State Railroad Tax Cases, 92 U. S., 575.)
Therefore, this branch of the case must be controlled by sections 139 and 140, unless the same be held unconstitutional,
and consequently, null and void.
The right and power of judicial tribunals to declare whether enactments of the legislature exceed the constitutional
limitations and are invalid has always been considered a grave responsibility, as well as a solemn duty. The courts
invariably give the most careful consideration to questions involving the interpretation and application of the Constitution,
and approach constitutional questions with great deliberation, exercising their power in this respect with the greatest
possible caution and even reluctance; and they should never declare a statute void, unless its invalidity is, in their
judgment, beyond reasonable doubt. To justify a court in pronouncing a legislative act unconstitutional, or a provision of a
state constitution to be in contravention of the Constitution of the United States, the case must be so clear to be free from
doubt, and the conflict of the statute with the constitution must be irreconcilable, because it is but a decent respect to the
wisdom, the integrity, and the patriotism of the legislative body by which any law is passed to presume in favor of its
validity until the contrary is shown beyond reasonable doubt. Therefore, in no doubtful case will the judiciary pronounce a
legislative act to be contrary to the constitution. To doubt the constitutionality of a law is to resolve the doubt in favor of
its validity. (6 Ruling Case Law, secs. 71, 72, and 73, and cases cited therein.)
It is also the settled law in the United States that "due process of law" does not always require, in respect to the
Government, the same process that is required between citizens, though it generally implies and includes regular
allegations, opportunity to answer, and a trial according to some well settled course of judicial proceedings. The case with
which we are dealing is in point. A citizen's property, both real and personal, may be taken, and usually is taken, by the
government in payment of its taxes without any judicial proceedings whatever. In this country, as well as in the United
States, the officer charged with the collection of taxes is authorized to seize and sell the property of delinquent taxpayers
without applying to the courts for assistance, and the constitutionality of the law authorizing this procedure never has been
seriously questioned. (City of Philadelphia vs. [Diehl] The Collector, 5 Wall., 720; Nicholl vs. U.S., 7 Wall., 122, and
cases cited.) This must necessarily be the course, because it is upon taxation that the Government chiefly relies to obtain
the means to carry on its operations, and it is of the utmost importance that the modes adopted to enforce the collection of
the taxes levied should be summary and interfered with as little as possible. No government could exist if every litigious
man were permitted to delay the collection of its taxes. This principle of public policy must be constantly borne in mind in
determining cases such as the one under consideration.
With these principles to guide us, we will proceed to inquire whether there is any merit in the two propositions insisted
upon by counsel for the plaintiffs. Section 5 of the Philippine Bill provides: "That no law shall be enacted in said Islands
which shall deprive any person of life, liberty, or property without due process of law, or deny to any person therein the
equal protection of the law."
The origin and history of these provisions are well-known. They are found in substance in the Constitution of the United
States and in that of ever state in the Union.
Section 3224 of the Revised Statutes of the United States, effective since 1867, provides that: "No suit for the purpose of
restraining the assessment or collection of any tax shall be maintained in any court."
Section 139, with which we have been dealing, reads: "No court shall have authority to grant an injunction to restrain the
collection of any internal-revenue tax."
A comparison of these two sections show that they are essentially the same. Both expressly prohibit the restraining of
taxes by injunction. If the Supreme Court of the United States has clearly and definitely held that the provisions of section
3224 do not violate the "due process of law" and "equal protection of the law" clauses in the Constitution, we would be
going too far to hold that section 139 violates those same provisions in the Philippine Bill. That the Supreme Court of the
United States has so held, cannot be doubted.

In Cheatham vs. United States (92 U.S., 85,89) which involved the validity of an income tax levied by an act of Congress
prior to the one in issue in the case of Pollock vs. Farmers' Loan & Trust Co. (157 U.S., 429) the court, through Mr.
Justice Miller, said: "If there existed in the courts, state or National, any general power of impeding or controlling the
collection of taxes, or relieving the hardship incident to taxation, the very existence of the government might be placed in
the power of a hostile judiciary. (Dows vs. The City of Chicago, 11 Wall., 108.) While a free course of remonstrance and
appeal is allowed within the departments before the money is finally exacted, the General Government has wisely made
the payment of the tax claimed, whether of customs or of internal revenue, a condition precedent to a resort to the courts
by the party against whom the tax is assessed. In the internal revenue branch it has further prescribed that no such suit
shall be brought until the remedy by appeal has been tried; and, if brought after this, it must be within six months after the
decision on the appeal. We regard this as a condition on which alone the government consents to litigate the lawfulness of
the original tax. It is not a hard condition. Few governments have conceded such a right on any condition. If the
compliance with this condition requires the party aggrieved to pay the money, he must do it."
Again, in State Railroad Tax Cases (92 U.S., 575, 613), the court said: "That there might be no misunderstanding of the
universality of this principle, it was expressly enacted, in 1867, that "no suit for the purpose of restraining the assessment
or collection of any tax shall be maintained in any court." (Rev, Stat., sec. 3224.) And though this was intended to apply
alone to taxes levied by the United States, it shows the sense of Congress of the evils to be feared if courts of justice
could, in any case, interfere with the process of collecting taxes on which the government depends for its continued
existence. It is a wise policy. It is founded in the simple philosophy derived from the experience of ages, that the payment
of taxes has to be enforced by summary and stringent means against a reluctant and often adverse sentiment; and to do this
successfully, other instrumentalities and other modes of procedure are necessary, than those which belong to courts of
justice."
And again, in Snyder vs. Marks (109 U.S., 189), the court said: "The remedy of a suit to recover back the tax after it is
paid is provided by statute, and a suit to restrain its collection is forbidden. The remedy so given is exclusive, and no other
remedy can be substituted for it. Such has been the current of decisions in the Circuit Courts of the United States, and we
are satisfied it is a correct view of the law."itc-a1f
In the consideration of the plaintiffs' second proposition, we will attempt to show (1) that the Philippine courts never have
had, since the American occupation, the power to restrain by injunction the collection of any tax imposed by the Insular
Government for its own purpose and benefit, and (2) that assuming that our courts had or have such power, this power has
not been diminished or curtailed by sections 139 and 140.
We will first review briefly the former and present systems of taxation. Upon the American occupation of the Philippine,
there was found a fairly complete system of taxation. This system was continued in force by the military authorities, with
but few changes, until the Civil Government assumed charge of the subject. The principal sources of revenue under the
Spanish regime were derived from customs receipts, the so-called industrial taxes, the urbana taxes, the stamp tax, the
personal cedula tax, and the sale of the public domain. The industrial and urbana taxes constituted practically an income
tax of some 5 per cent on the net income of persons engaged in industrial and commercial pursuits and on the income of
owners of improved city property. The sale of stamped paper and adhesive stamp tax. The cedula tax was a graduated tax,
ranging from nothing up to P37.50. The revenue derived from the sale of the public domain was not considered a tax. The
American authorities at once abolished the cedula tax, but later restored it in a modified form, charging for each cedula
twenty centavos, an amount which was supposed to be just sufficient to cover the cost of issuance. The urbana tax was
abolished by Act No. 223, effective September 6, 1901.
The "Municipal Code" (Act No. 82) and the Provincial Government Act (No. 83), both enacted in 1901, authorize
municipal councils and provincial boards to impose an ad valorem tax on real estate. The Municipal Code did not apply to
the city of Manila. This city was given a special charter (Act No. 183), effective August 30, 1901; Under this charter the
Municipal Board of Manila is authorized and empowered to impose taxes upon real estate and, like municipal councils, to
license and regulate certain occupations. Customs matters were completely reorganized by Act No. 355, effective at the
port of Manila on February 7, 1902, and at other ports in the Philippine Islands the day after the receipt of a certified copy
of the Act. The Internal Revenue Law of 1904 (Act No. 1189), repealed all existing laws, ordinances, etc., imposing taxes
upon the persons, objects, or occupations taxed under that act, and all industrial taxes and stamp taxes imposed under the
Spanish regime were eliminated, but the industrial tax was continued in force until January 1, 1905. This Internal Revenue
Law did not take away from municipal councils, provincial boards, and the Municipal Board of the city of Manila the

power to impose taxes upon real estate. This Act (No. 1189), with its amendments, was repealed by Act No. 2339, an act
"revising and consolidating the laws relative to internal revenue."
Section 84 of Act No. 82 provides that "No court shall entertain any suit assailing the validity of a tax assessed under this
act until the taxpayer shall have paid, under protest, the taxes assessed against him, . . . ."
This inhibition was inserted in section 17 of Act No. 83 and applies to taxes imposed by provincial boards. The inhibition
was not inserted in the Manila Charter until the passage of Act No. 1793, effective October 12, 1907. Act No. 355
expressly makes the payment of the exactions claimed a condition precedent to a resort to the courts by dissatisfied
importers. Section 52 of Act No. 1189 provides "That no courts shall have authority to grant an injunction restraining the
collection of any taxes imposed by virtue of the provisions of this Act, but the remedy of the taxpayer who claims that he
is unjustly assessed or taxed shall be by payment under protest of the sum claimed from him by the Collector of Internal
Revenue and by action to recover back the sum claimed to have been illegally collected."
Sections 139 and 140 of Act No. 2339 contain, as we have indicated, the same prohibition and remedy. The result is that
the courts have been expressly forbidden, in every act creating or imposing taxes or imposts enacted by the legislative
body of the Philippines since the American occupation, to entertain any suit assailing the validity of any tax or impost thus
imposed until the tax shall have been paid under protest. The only taxes which have not been brought within the express
inhibition were those included in that part of the old Spanish system which completely disappeared on or before January
1, 1905, and possibly the old customs duties which disappeared in February, 1902.
Section 56 of the Organic Act (No. 136), effective June 16, 1901, provides that "Courts of First Instance shall have
original jurisdiction:
xxx

xxx

xxx

2. In all civil actions which involve the ... legality of any tax, impost, or assessment, . . . .
xxx

xxx

xxx

7. Said courts and their judges, or any of them, shall have power to issue writs of injunction, mandamus,certiorari,
prohibition, quo warranto, and habeas corpus in their respective provinces and districts, in the manner provided in the
Code of Civil Procedure.
The provisions of the Code of Civil Procedure (Act No. 190), effective October 1, 1901, which deals with the subject of
injunctions, are sections 162 to 172, inclusive. Injunctions, as here defined, are of two kinds; preliminary and final. The
former may be granted at any time after the commencement of the action and before final judgment, and the latter at the
termination of the trial as the relief or part of the relief prayed for (sec. 162). Any judge of the Supreme Court may grant a
preliminary injunction in any action pending in that court or in any Court of First Instance. A preliminary injunction may
also be granted by a judge of the Court of First Instance in actions pending in his district in which he has original
jurisdiction (sec. 163). But such injunctions may be granted onlywhen the complaint shows facts entitling the plaintiff to
the relief demanded (sec. 166), and before a final or permanent injunction can be granted, it must appear upon the trial of
the action that the plaintiff is entitled to have commission or continuance of the acts complained of perpetually restrained
(sec. 171). These provisions authorize the institution in Courts of First Instance of what are known as "injunction suits,"
the sole object of which is to obtain the issuance of a final injunction. They also authorize the granting of injunctions as
aiders in ordinary civil actions. We have defined in Davesa vs. Arbes (13 Phil. Rep., 273), an injunction to be "A "special
remedy" adopted in that code (Act 190) from American practice, and originally borrowed from English legal procedure,
which was there issued by the authority and under the seal of a court of equity, and limited, as in other cases where
equitable relief is sought, to those cases where there is no "plain, adequate, and complete remedy at law,"which will not be
granted while the rights between the parties are undetermined, except in extraordinary cases where material and
irreparable injury will be done,"which cannot be compensated in damages . . .
By paragraph 2 of section 56 of Act No. 136, supra, and the provisions of the various subsequent Acts heretofore
mentioned, the Insular Government has consented to litigate with aggrieved persons the validity of any original tax or
impost imposed by it on condition that this be done in ordinary civil actions after the taxes or exactions shall have been
paid. But it is said that paragraph 2 confers original jurisdiction upon Courts of First Instance to hear and determine "all
civil actions" which involve the validity of any tax, impost or assessment, and that if the all-inclusive words "all" and

"any" be given their natural and unrestricted meaning, no action wherein that question is involved can arise over which
such courts do not have jurisdiction. (Barrameda vs. Moir, 25 Phil. Rep., 44.) This is true. But the term "civil actions" had
its well defined meaning at the time the paragraph was enacted. The same legislative body which enacted paragraph 2 on
June 16, 1901, had, just a few months prior to that time, defined the only kind of action in which the legality of any tax
imposed by it might be assailed. (Sec. 84, Act 82, enacted January 31, 1901, and sec. 17, Act No. 83, enacted February 6,
1901.) That kind of action being payment of the tax under protest and an ordinary suit to recover and no other, there can
be no doubt that Courts of First Instance have jurisdiction over all such actions. The subsequent legislation on the same
subject shows clearly that the Commission, in enacting paragraph 2, supra, did not intend to change or modify in any way
section 84 of Act No. 82 and section 17 of Act No. 83, but, on the contrary, it was intended that "civil actions," mentioned
in said paragraph, should be understood to mean, in so far as testing the legality of taxes were concerned, only those of the
kind and character provided for in the two sections above mentioned. It is also urged that the power to restrain by
injunction the collection of taxes or imposts is conferred upon Courts of First Instance by paragraph 7 of section
56, supra. This paragraph does empower those courts to grant injunctions, both preliminary and final, in any civil action
pending in their districts, provided always, that the complaint shows facts entitling the plaintiff to the relief demanded.
Injunction suits, such as the one at bar, are "civil actions," but of a special or extraordinary character. It cannot be said that
the Commission intended to give a broader or different meaning to the word "action," used in Chapter 9 of the Code of
Civil Procedure in connection with injunctions, than it gave to the same word found in paragraph 2 of section 56 of the
Organic Act. The Insular Government, in exercising the power conferred upon it by the Congress of the United States, has
declared that the citizens and residents of this country shall pay certain specified taxes and imposts. The power to tax
necessarily carries with it the power to collect the taxes. This being true, the weight of authority supports the proposition
that the Government may fix the conditions upon which it will consent to litigate the validity of its original taxes.
(Tennessee vs. Sneed, 96 U.S., 69.)
We must, therefore, conclude that paragraph 2 and 7 of section 56 of Act No. 136, construed in the light of the prior and
subsequent legislation to which we have referred, and the legislative and judicial history of the same subject in the United
States with which the Commission was familiar, do not empower Courts of firs Instance to interfere by injunction with the
collection of the taxes in question in this case.1awphil.net
If we are in error as to the scope of paragraph 2 and 7, supra, and the Commission did intend to confer the power upon the
courts to restrain the collection of taxes, it does not necessarily follow that this power or jurisdiction has been taken away
by section 139 of Act No. 2339, for the reason that all agree that an injunction will not issue in any case if there is an
adequate remedy at law. The very nature of the writ itself prevents its issuance under such circumstances. Legislation
forbidding the issuing of injunctions in such cases is unnecessary. So the only question to be here determined is whether
the remedy provided for in section 140 of Act No. 2339 is adequate. If it is, the writs which form the basis of this appeal
should not have been issued. If this is the correct view, the authority to issue injunctions will not have been taken away by
section 139, but rendered inoperative only by reason of an adequate remedy having been made available.
The legislative body of the Philippine Islands has declared from the beginning (Act No. 82) that payment under protest
and suit to recover is an adequate remedy to test the legality of any tax or impost, and that this remedy is exclusive. Can
we say that the remedy is not adequate or that it is not exclusive, or both? The plaintiffs in the case at bar are the first, in
so far as we are aware, to question either the adequacy or exclusiveness of this remedy. We will refer to a few cases in the
United States where statutes similar to sections 139 and 140 have been construed and applied.
In May, 1874, one Bloomstein presented a petition to the circuit court sitting in Nashville, Tennessee, stating that his real
and personal property had been assessed for state taxes in the year 1872 to the amount of $132.60; that he tendered to the
collector this amount in "funds receivable by law for such purposes;" and that the collector refused to receive the same.
He prayed for an alternative writ of mandamus to compel the collector to receive the bills in payment for such taxes, or to
show cause to the contrary. To this petition the collector, in his answer, set up the defense that the petitioner's suit was
expressly prohibited by the Act of the General Assembly of the State of Tennessee, passed in 1873. The petition was
dismissed and the relief prayed for refused. An appeal to the supreme court of the State resulted in the affirmance of the
judgment of the lower court. The case was then carried to the Supreme Court of the United States (Tennessee vs. Sneed,
96 U. S., 69), where the judgment was again affirmed.
The two sections of the Act of [March 21,] 1873, drawn in question in that cases, read as follows:

1. That in all cases in which an officer, charged by law with the collection of revenue due the State, shall institute any
proceeding, or take any steps for the collection of the same, alleged or claimed to be due by said officer from any citizen,
the party against whom the proceeding or step is taken shall, if he conceives the same to be unjust or illegal, or against any
statute or clause of the Constitution of the State, pay the same under protest; and, upon his making said payment, the
officer or collector shall pay such revenue into the State Treasury, giving notice at the time of payment to the Comptroller
that the same was paid under protest; and the party paying said revenue may, at any time within thirty days after making
said payment, and not longer thereafter, sue the said officer having collected said sum, for the recovery thereof. And the
same may be tried in any court having the jurisdiction of the amount and parties; and, if it be determined that the same
was wrongfully collected, as not being due from said party to the State, for any reason going to the merits of the same,
then the court trying the case may certify of record that the same was wrongfully paid and ought to be refunded; and
thereupon the Comptroller shall issue his warrant for the same, which shall be paid in preference to other claims on the
Treasury.
2. That there shall be no other remedy, in any case of the collection of revenue, or attempt to collect revenue illegally, or
attempt to collect revenue in funds only receivable by said officer under the law, the same being other or different funds
than such as the tax payer may tender, or claim the right to pay, than that above provided; and no writ for the prevention of
the collection of any revenue claimed, or to hinder or delay the collection of the same, shall in anywise issue, either
injunction, supersedeas, prohibition, or any other writ or process whatever; but in all cases in which, for any reason, any
person shall claim that the tax so collected was wrongfully or illegally collected, the remedy for said party shall be as
above provided, and in no other manner."
In discussing the adequacy of the remedy provided by the Tennessee Legislature, as above set forth, the Supreme Court of
the United States, in the case just cited, said: "This remedy is simple and effective. A suit at law to recover money
unlawfully exacted is as speedy, as easily tried, and less complicated than a proceeding bymandamus. ... In revenue cases,
whether arising upon its (United States) Internal Revenue Laws or those providing for the collection of duties upon
foreign imports, it (United States) adopts the rule prescribed by the State of Tennessee. It requires the contestant to pay the
amount as fixed by the Government, and gives him power to sue the collector, and in such suit to test the legality of the
tax. There is nothing illegal or even harsh in this. It is a wise and reasonable precaution for the security of the
Government."
Thomas C. Platt commenced an action in the Circuit Court of the United States for the Eastern District of Tennessee to
restrain the collection of a license tax from the company which he represented. The defense was that sections 1 and 2 of
the Act of 1873, supra, prohibited the bringing of that suit. This case also reached the Supreme Court of the United States.
(Shelton vs. Platt, 139 U. 591.) In speaking of the inhibitory provisions of sections 1 and 2 of the Act of 1873, the court
said: "This Act has been sanctioned and applied by the Courts of Tennessee. (Nashville vs. Smith, 86 Tenn., 213;
Louisville & N. R. Co. vs. State, 8 Heisk., 663, 804.) It is, as counsel observe, similar to the Act of Congress forbidding
suit for the purpose of restraining the assessment or collection of taxes under the Internal Revenue Laws, in respect to
which this court held that the remedy by suit to recover back the tax after payment, provided for by the Statute, was
exclusive. (Snyder vs. Marks, of this character has been called for by the embarrassments resulting from the improvident
employment of the writ of injunction in arresting the collection of the public revenue; and, even in its absence, the strong
arm of the court of chancery ought not to be interposed in that direction except where resort to that court is grounded upon
the settled principles which govern its jurisdiction."
In Louisville & N.R. Co. vs. State (8 Heisk. [64 Tenn.], 663, 804), cited by the Supreme Court of the United States in
Shelton vs. Platt, supra, the court said: "It was urged that this statute (sections 1 and 2 of the Act of 1873,supra) is
unconstitutional and void, as it deprives the citizen of the remedy by certiorari, guaranteed by the organic law."
By the 10th section of the sixth article of the Constitution, [Tennessee] it is provided that: "The judges or justices of
inferior courts of law and equity shall have power in all civil cases to issue writs of certiorari, to remove any cause, or the
transcript of the record thereof, from any inferior jurisdiction into such court of law, on sufficient cause, supported by oath
or affirmation."
The court held the act valid as not being in conflict with these provisions of the State constitution.
In Eddy vs. The Township of Lee (73 Mich., 123), the complainants sought to enjoin the collection of certain taxes for the
year 1886. The defendants, in support of their demurrer, insisted that the remedy by injunction had been taken away by

section 107 of the Act of 1885, which section reads as follows: "No injunction shall issue to stay proceedings for the
assessment or collection of taxes under this Act."
It was claimed by the complainants that the above quoted provisions of the Act of 1885 were unconstitutional and void as
being in conflict with article 6, sec. 8, of the Constitution, which provides that: "The circuit courts shall have original
jurisdiction in all matters, civil and criminal, not excepted in this Constitution, and not prohibited by law. ... They shall
also have power to issue writs of habeas corpus, mandamus, injunction, quo warranto, certiorari, and other writs
necessary to carry into effect their orders, judgments, and decrees."
Mr. Justice Champlin, speaking for the court, said: "I have no doubt that the Legislature has the constitutional authority,
where it has provided a plain, adequate, and complete remedy at law to recover back taxes illegally assessed and
collected, to take away the remedy by injunction to restrain their collection."
Section 9 of the Philippine Bill reads in part as follows: "That the Supreme Court and the Courts of First Instance of the
Philippine Islands shall possess and exercise jurisdiction as heretofore provided and such additional jurisdiction as shall
hereafter be prescribed by the Government of said Islands, subject to the power of said Government to change the practice
and method of procedure."
It will be seen that this section has not taken away from the Philippine Government the power to change the practice and
method of procedure. If sections 139 and 140, considered together, and this must always be done, are nothing more than a
mode of procedure, then it would seem that the Legislature did not exceed its constitutional authority in enacting them.
Conceding for the moment that the duly authorized procedure for the determination of the validity of any tax, impost, or
assessment was by injunction suits and that this method was available to aggrieved taxpayers prior to the passage of Act
No. 2339, may the Legislature change this method of procedure? That the Legislature has the power to do this, there can
be no doubt, provided some other adequate remedy is substituted in lieu thereof. In speaking of the modes of enforcing
rights created by contracts, the Supreme Court of the United States, in Tennessee vs. Sneed, supra, said: "The rule seems
to be that in modes of proceedings and of forms to enforce the contract the Legislature has the control, and may enlarge,
limit or alter them, provided that it does not deny a remedy, or so embarrass it with conditions and restrictions as seriously
to impair the value of the right."
In that case the petitioner urged that the Acts of 1873 were laws impairing the obligation of the contract contained in the
charter of the Bank of Tennessee, which contract was entered into with the State in 1838. It was claimed that this was
done by placing such impediments and obstructions in the way of its enforcement, thereby so impairing the remedies as
practically to render the obligation of no value. In disposing of this contention, the court said: "If we assume that prior to
1873 the relator had authority to prosecute his claim against the State bymandamus, and that by the statutes of that year
the further use of that form was prohibited to him, the question remains. whether an effectual remedy was left to him or
provided for him. We think the regulation of the statute gave him an abundant means of enforcing such right as he
possessed. It provided that he might pay his claim to the collector under protest, giving notice thereof to the Comptroller
of the Treasury; that at any time within thirty days thereafter he might sue the officer making the collection; that the case
should be tried by any court having jurisdiction and, if found in favor of the plaintiff on the merits, the court should certify
that the same was wrongfully paid and ought to be refunded and the Comptroller should thereupon issue his warrant
therefor, which should be paid in preference to other claim on the Treasury."
But great stress is laid upon the fact that the plaintiffs in the case under consideration are unable to pay the taxes assessed
against them and that if the law is enforced, they will be compelled to suspend business. This point may be best answered
by quoting from the case of Youngblood vs. Sexton (32 Mich., 406), wherein Judge Cooley, speaking for the court, said:
"But if this consideration is sufficient to justify the transfer of a controversy from a court of law to a court of equity, then
every controversy where money is demanded may be made the subject of equitable cognizance. To enforce against a
dealer a promissory note may in some cases as effectually break up his business as to collect from him a tax of equal
amount. This is not what is known to the law as irreparable injury. The courts have never recognized the consequences of
the mere enforcement of a money demand as falling within that category."
Certain specified sections of Act No. 2339 were amended by Act No. 2432, enacted December 23, 1914, effective January
1, 1915, by imposing increased and additional taxes. Act No. 2432 was amended, were ratified by the Congress of the
United States on March 4, 1915. The opposition manifested against the taxes imposed by Acts Nos. 2339 and 2432 is a
matter of local history. A great many business men thought the taxes thus imposed were too high. If the collection of the

new taxes on signs, signboards, and billboards may be restrained, we see no well-founded reason why injunctions cannot
be granted restraining the collection of all or at least a number of the other increased taxes. The fact that this may be done,
shows the wisdom of the Legislature in denying the use of the writ of injunction to restrain the collection of any tax
imposed by the Acts. When this was done, an equitable remedy was made available to all dissatisfied taxpayers.
The question now arises whether, the case being one of which the court below had no jurisdiction, this court, on appeal,
shall proceed to express an opinion upon the validity of provisions of subsection (b) of section 100 of Act No. 2339,
imposing the taxes complained of. As a general rule, an opinion on the merits of a controversy ought to be declined when
the court is powerless to give the relief demanded. But it is claimed that this case is, in many particulars, exceptional. It is
true that it has been argued on the merits, and there is no reason for any suggestion or suspicion that it is not a bona fide
controversy. The legal points involved in the merits have been presented with force, clearness, and great ability by the
learned counsel of both sides. If the law assailed were still in force, we would feel that an opinion on its validity would be
justifiable, but, as the amendment became effective on January 1, 1915, we think it advisable to proceed no further with
this branch of the case.
The next question arises in connection with the supplementary complaint, the object of which is to enjoin the Collector of
Internal Revenue from removing certain billboards, the property of the plaintiffs located upon private lands in the
Province of Rizal. The plaintiffs allege that the billboards here in question "in no sense constitute a nuisance and are not
deleterious to the health, morals, or general welfare of the community, or of any persons." The defendant denies these
allegations in his answer and claims that after due investigation made upon the complaints of the British and German
Consuls, he "decided that the billboard complained of was and still is offensive to the sight, and is otherwise a nuisance."
The plaintiffs proved by Mr. Churchill that the "billboards were quite a distance from the road and that they were strongly
built, not dangerous to the safety of the people, and contained no advertising matter which is filthy, indecent, or
deleterious to the morals of the community." The defendant presented no testimony upon this point. In the agreed
statement of facts submitted by the parties, the plaintiffs "admit that the billboards mentioned were and still are offensive
to the sight."
The pertinent provisions of subsection (b) of section 100 of Act No. 2339 read: "If after due investigation the Collector of
Internal Revenue shall decide that any sign, signboard, or billboard displayed or exposed to public view is offensive to the
sight or is otherwise a nuisance, he may by summary order direct the removal of such sign, signboard, or billboard, and if
same is not removed within ten days after he has issued such order he my himself cause its removal, and the sign,
signboard, or billboard shall thereupon be forfeited to the Government, and the owner thereof charged with the expenses
of the removal so effected. When the sign, signboard, or billboard ordered to be removed as herein provided shall not
comply with the provisions of the general regulations of the Collector of Internal Revenue, no rebate or refund shall be
allowed for any portion of a year for which the tax may have been paid. Otherwise, the Collector of Internal Revenue may
in his discretion make a proportionate refund of the tax for the portion of the year remaining for which the taxes were
paid. An appeal may be had from the order of the Collector of Internal Revenue to the Secretary of Finance and Justice
whose decision thereon shall be final."
The Attorney-General, on behalf of the defendant, says: "The question which the case presents under this head for
determination, resolves itself into this inquiry: Is the suppression of advertising signs displayed or exposed to public view,
which are admittedly offensive to the sight, conducive to the public interest?"
And cunsel for the plaintiffs states the question thus: "We contend that that portion of section 100 of Act No. 2339,
empowering the Collector of Internal Revenue to remove billboards as nuisances, if objectionable to the sight, is
unconstitutional, as constituting a deprivation of property without due process of law."
From the position taken by counsel for both sides, it is clear that our inquiry is limited to the question whether the
enactment assailed by the plaintiffs was a legitimate exercise of the police power of the Government; for all property is
held subject to that power.
As a consequence of the foregoing, all discussion and authorities cited, which go to the power of the state to authorize
administrative officers to find, as a fact, that legitimate trades, callings, and businesses are, under certain circumstances,
statutory nuisances, and whether the procedure prescribed for this purpose is due process of law, are foreign to the issue
here presented.

There can be no doubt that the exercise of the police power of the Philippine Government belongs to the Legislature and
that this power is limited only by the Acts of Congress and those fundamentals principles which lie at the foundation of all
republican forms of government. An Act of the Legislature which is obviously and undoubtedly foreign to any of the
purposes of the police power and interferes with the ordinary enjoyment of property would, without doubt, be held to be
invalid. But where the Act is reasonably within a proper consideration of and care for the public health, safety, or comfort,
it should not be disturbed by the courts. The courts cannot substitute their own views for what is proper in the premises for
those of the Legislature. In Munn vs. Illinois (94 U.S., 113), the United States Supreme Court states the rule thus: "If no
state of circumstances could exist to justify such statute, then we may declare this one void because in excess of the
legislative power of this state; but if it could, we must presume it did. Of the propriety of legislative interference, within
the scope of the legislative power, a legislature is the exclusive judge."
This rule very fully discussed and declared in Powell vs. Pennsylvania (127 U.S., 678) "oleo-margarine" case. (See
also Crowley vs. Christensen, 137 U.S., 86, 87; Camfield vs. U.S., 167 U.S., 518.) While the state may interfere wherever
the public interests demand it, and in this particular a large discretion is necessarily vested in the legislature to determine,
not only what the interest of the public require, but what measures are necessary for the protection of such interests; yet,
its determination in these matters is not final or conclusive, but is subject to the supervision of the courts.
(Lawton vs. Steele, 152 U.S., 133.) Can it be said judicially that signs, signboards, and billboards, which are admittedly
offensive to the sight, are not with the category of things which interfere with the public safety, welfare, and comfort, and
therefore beyond the reach of the police power of the Philippine Government?
The numerous attempts which have been made to limit by definition the scope of the police power are only interesting as
illustrating its rapid extension within comparatively recent years to points heretofore deemed entirely within the field of
private liberty and property rights. Blackstone's definition of the police power was as follows: "The due regulation and
domestic order of the kingdom, whereby the individuals of the state, like members of a well governed family, are bound to
conform their general behavior to the rules of propriety, good neigborhood, and good manners, to be decent, industrious,
and inoffensive in their respective stations." (Commentaries, vol. 4, p. 162.)
Chanceller Kent considered the police power the authority of the state "to regulate unwholesome trades, slaughter houses,
operations offensive to the senses." Chief Justice Shaw of Massachusetts defined it as follows: "The power vested in the
legislature by the constitution to make, ordain, and establish all manner of wholesome and reasonable laws, statutes, and
ordinances, either with penalties or without, not repugnant to the constitution, as they shall judge to be for the good and
welfare of the commonwealth, and of the subjects of the same." (Com.vs. Alger, 7 Cush., 53.)
In the case of Butchers' Union Slaughter-house, etc. Co. vs. Crescent City Live Stock Landing, etc. Co. (111 U.S., 746), it
was suggested that the public health and public morals are matters of legislative concern of which the legislature cannot
divest itself. (See State vs. Mountain Timber Co. [1913], 75 Wash., 581, where these definitions are collated.)
In Champer vs. Greencastle (138 Ind., 339), it was said: "The police power of the State, so far, has not received a full and
complete definition. It may be said, however, to be the right of the State, or state functionary, to prescribe regulations for
the good order, peace, health, protection, comfort, convenience and morals of the community, which do not ... violate any
of the provisions of the organic law." (Quoted with approval in Hopkins vs. Richmond [Va., 1915], 86 S.E., 139.)
In Com. vs. Plymouth Coal Co. ([1911] 232 Pa., 141), it was said: "The police power of the state is difficult of definition,
but it has been held by the courts to be the right to prescribe regulations for the good order, peace, health, protection,
comfort, convenience and morals of the community, which does not encroach on a like power vested in congress or state
legislatures by the federal constitution, or does not violate the provisions of the organic law; and it has been expressly held
that the fourteenth amendment to the federal constitution was not designed to interfere with the exercise of that power by
the state."
In People vs. Brazee ([Mich., 1914], 149 N.W., 1053), it was said: "It [the police power] has for its object the
improvement of social and economic conditioned affecting the community at large and collectively with a view to bring
about "he greatest good of the greatest number."Courts have consistently and wisely declined to set any fixed limitations
upon subjects calling for the exercise of this power. It is elastic and is exercised from time to time as varying social
conditions demand correction."

In 8 Cyc., 863, it is said: "Police power is the name given to that inherent sovereignty which it is the right and duty of the
government or its agents to exercise whenever public policy, in a broad sense, demands, for the benefit of society at large,
regulations to guard its morals, safety, health, order or to insure in any respect such economic conditions as an advancing
civilization of a high complex character requires." (As quoted with approval in Stettlervs. O'Hara [1914], 69 Ore, 519.)
Finally, the Supreme Court of the United States has said in Noble State Bank vs. Haskell (219 U.S. [1911], 575: "It may
be said in a general way that the police power extends to all the great public needs. It may be put forth in aid of what is
sanctioned by usage, or held by the prevailing morality or strong and preponderant opinion to be greatly and immediately
necessary to the public welfare."
This statement, recent as it is, has been quoted with approval by several courts. (Cunningham vs. Northwestern Imp. Co.
[1911], 44 Mont., 180; State vs. Mountain Timber Co. [1913], 75 Wash., 581; McDavid vs. Bank of Bay Minette [Ala.,
1915], 69 Sou., 452; Hopkins vs. City of Richmond [Va., 1915], 86 S.E., 139; State vs. Philipps [Miss. 1915], 67 Sou.,
651.)
It was said in Com. vs. Alger (7 Cush., 53, 85), per Shaw, C.J., that: "It is much easier to perceive and realize the existence
and sources of this police power than to mark its boundaries, or to prescribe limits to its exercise." In Stone vs. Mississippi
(101 U.S., 814), it was said: "Many attempts have been made in this court and elsewhere to define the police power, but
never with entire success. It is always easier to determine whether a particular case comes within the general scope of the
power, than to give an abstract definition of the power itself, which will be in all respects accurate."
Other courts have held the same vow of efforts to evolve a satisfactory definition of the police power. Manifestly,
definitions which fail to anticipate cases properly within the scope of the police power are deficient. It is necessary,
therefore, to confine our discussion to the principle involved and determine whether the cases as they come up are within
that principle. The basic idea of civil polity in the United States is that government should interfere with individual effort
only to the extent necessary to preserve a healthy social and economic condition of the country. State interference with the
use of private property may be exercised in three ways. First, through the power of taxation, second, through the power of
eminent domain, and third, through the police power. Buy the first method it is assumed that the individual receives the
equivalent of the tax in the form of protection and benefit he receives from the government as such. By the second method
he receives the market value of the property taken from him. But under the third method the benefits he derived are only
such as may arise from the maintenance of a healthy economic standard of society and is often referred to as damnum
absque injuria. (Com. vs. Plymouth Coal Co. 232 Pa., 141; Bemis vs. Guirl Drainage Co., 182 Ind., 36.) There was a time
when state interference with the use of private property under the guise of the police power was practically confined to the
suppression of common nuisances. At the present day, however, industry is organized along lines which make it possible
for large combinations of capital to profit at the expense of the socio-economic progress of the nation by controlling prices
and dictating to industrial workers wages and conditions of labor. Not only this but the universal use of mechanical
contrivances by producers and common carriers has enormously increased the toll of human life and limb in the
production and distribution of consumption goods. To the extent that these businesses affect not only the public health,
safety, and morals, but also the general social and economic life of the nation, it has been and will continue to be
necessary for the state to interfere by regulation. By so doing, it is true that the enjoyment of private property is interfered
with in no small degree and in ways that would have been considered entirely unnecessary in years gone by. The
regulation of rates charged by common carriers, for instance, or the limitation of hours of work in industrial
establishments have only a very indirect bearing upon the public health, safety, and morals, but do bear directly upon
social and economic conditions. To permit each individual unit of society to feel that his industry will bring a fair return;
to see that his work shall be done under conditions that will not either immediately or eventually ruin his health; to
prevent the artificial inflation of prices of the things which are necessary for his physical well being are matters which the
individual is no longer capable of attending to himself. It is within the province of the police power to render assistance to
the people to the extent that may be necessary to safeguard these rights. Hence, laws providing for the regulation of wages
and hours of labor of coal miners (Rail & River Coal Co. vs. Taylor, 234 U.S., 224); requiring payment of employees of
railroads and other industrial concerns in legal tender and requiring salaries to be paid semimonthly (Erie R.R.
Co. vs. Williams, 233 U.S., 685); providing a maximum number of hours of labor for women (Miller vs. Wilson, U.S.
Sup. Ct. [Feb. 23, 1915], Adv. Opns., p. 342); prohibiting child labor (Sturges & Burn vs. Beauchamp, 231 U.S., 320);
restricting the hours of labor in public laundries (In re Wong Wing, 167 Cal., 109); limiting hours of labor in industrial
establishment generally (State vs. Bunting, 71 Ore., 259); Sunday Closing Laws (State vs. Nicholls [Ore., 1915], 151 Pac.,
473; People vs. C. Klinck Packing Co. [N.Y., 1915], 108 N. E., 278; Hiller vs. State [Md., 1914], 92 Atl., 842;

State vs.Penny, 42 Mont., 118; City of Springfield vs. Richter, 257 Ill., 578, 580; State vs. Hondros [S.C., 1915], 84 S.E.,
781); have all been upheld as a valid exercise of the police power. Again, workmen's compensation laws have been quite
generally upheld. These statutes discard the common law theory that employers are not liable for industrial accidents and
make them responsible for all accidents resulting from trade risks, it being considered that such accidents are a legitimate
charge against production and that the employer by controlling the prices of his product may shift the burden to the
community. Laws requiring state banks to join in establishing a depositors' guarantee fund have also been upheld by the
Federal Supreme Court in Noble State Bank vs. Haskell (219 U. S., 104), and Assaria State Bank vs. Dolley (219 U.S.,
121).
Offensive noises and smells have been for a long time considered susceptible of suppression in thickly populated districts.
Barring livery stables from such locations was approved of in Reinman vs. Little Rock (U.S. Sup. Ct. [Apr. 5, 1915], U.S.
Adv. Opns., p. 511). And a municipal ordinance was recently upheld (People vs. Ericsson, 263 Ill., 368), which prohibited
the location of garages within two hundred feet of any hospital, church, or school, or in any block used exclusively for
residential purposes, unless the consent of the majority of the property owners be obtained. Such statutes as these are
usually upheld on the theory of safeguarding the public health. But we apprehend that in point of fact they have little
bearing upon the health of the normal person, but a great deal to do with his physical comfort and convenience and not a
little to do with his peace of mind. Without entering into the realm of psychology, we think it quite demonstrable that sight
is as valuable to a human being as any of his other senses, and that the proper ministration to this sense conduces as much
to his contentment as the care bestowed upon the senses of hearing or smell, and probably as much as both together.
Objects may be offensive to the eye as well as to the nose or ear. Man's esthetic feelings are constantly being appealed to
through his sense of sight. Large investments have been made in theaters and other forms of amusement, in paintings and
spectacular displays, the success of which depends in great part upon the appeal made through the sense of sight. Moving
picture shows could not possible without the sense of sight. Governments have spent millions on parks and boulevards
and other forms of civic beauty, the first aim of which is to appeal to the sense of sight. Why, then, should the Government
not interpose to protect from annoyance this most valuable of man's senses as readily as to protect him from offensive
noises and smells?
The advertising industry is a legitimate one. It is at the same time a cause and an effect of the great industrial age through
which the world is now passing. Millions are spent each year in this manner to guide the consumer to the articles which he
needs. The sense of sight is the primary essential to advertising success. Billboard advertising, as it is now conducted, is a
comparatively recent form of advertising. It is conducted out of doors and along the arteries of travel, and compels
attention by the strategic locations of the boards, which obstruct the range of vision at points where travelers are most
likely to direct their eyes. Beautiful landscapes are marred or may not be seen at all by the traveler because of the gaudy
array of posters announcing a particular kind of breakfast food, or underwear, the coming of a circus, an incomparable
soap, nostrums or medicines for the curing of all the ills to which the flesh is heir, etc. It is quite natural for people to
protest against this indiscriminate and wholesale use of the landscape by advertisers and the intrusion of tradesmen upon
their hours of leisure and relaxation from work. Outdoor life must lose much of its charm and pleasure if this form of
advertising is permitted to continue unhampered until it converts the streets and highways into veritable canyons through
which the world must travel in going to work or in search of outdoor pleasure.
The success of billboard advertising depends not so much upon the use of private property as it does upon the use of the
channels of travel used by the general public. Suppose that the owner of private property, who so vigorously objects to the
restriction of this form of advertising, should require the advertiser to paste his posters upon the billboards so that they
would face the interior of the property instead of the exterior. Billboard advertising would die a natural death if this were
done, and its real dependency not upon the unrestricted use of private property but upon the unrestricted use of the public
highways is at once apparent. Ostensibly located on private property, the real and sole value of the billboard is its
proximity to the public thoroughfares. Hence, we conceive that the regulation of billboards and their restriction is not so
much a regulation of private property as it is a regulation of the use of the streets and other public thoroughfares.
We would not be understood as saying that billboard advertising is not a legitimate business any more than we would say
that a livery stable or an automobile garage is not. Even a billboard is more sightly than piles of rubbish or an open sewer.
But all these businesses are offensive to the senses under certain conditions.
It has been urged against ministering to the sense of sight that tastes are so diversified that there is no safe standard of
legislation in this direction. We answer in the language of the Supreme Court in Noble State Bank vs.Haskell (219 U.S.,

104), and which has already been adopted by several state courts (see supra), that "the prevailing morality or strong and
preponderating opinion" demands such legislation. The agitation against the unrestrained development of the billboard
business has produced results in nearly all the countries of Europe. (Ency. Britannica, vol. 1, pp. 237-240.) Many drastic
ordinances and state laws have been passed in the United States seeking to make the business amenable to regulation. But
their regulation in the United states is hampered by what we conceive an unwarranted restriction upon the scope of the
police power by the courts. If the police power may be exercised to encourage a healthy social and economic condition in
the country, and if the comfort and convenience of the people are included within those subjects, everything which
encroaches upon such territory is amenable to the police power. A source of annoyance and irritation to the public does not
minister to the comfort and convenience of the public. And we are of the opinion that the prevailing sentiment is
manifestly against the erection of billboards which are offensive to the sight.
We do not consider that we are in conflict with the decision in Eubank vs. Richmond (226 U.S., 137), where a municipal
ordinance establishing a building line to which property owners must conform was held unconstitutional. As we have
pointed out, billboard advertising is not so much a use of private property as it is a use of the public thoroughfares. It
derives its value to the power solely because the posters are exposed to the public gaze. It may well be that the state may
not require private property owners to conform to a building line, but may prescribe the conditions under which they shall
make use of the adjoining streets and highways. Nor is the law in question to be held invalid as denying equal protection
of the laws. In Keokee Coke Co. vs. Taylor (234 U.S., 224), it was said: "It is more pressed that the act discriminates
unconstitutionally against certain classes. But while there are differences of opinion as to the degree and kind of
discrimination permitted by the Fourteenth Amendment, it is established by repeated decisions that a statute aimed at what
is deemed an evil, and hitting it presumably where experience shows it to be most felt, is not to be upset by thinking up
and enumerating other instances to which it might have been applied equally well, so far as the court can see. That is for
the legislature to judge unless the case is very clear."
But we have not overlooked the fact that we are not in harmony with the highest courts of a number of the states in the
American Union upon this point. Those courts being of the opinion that statutes which are prompted and inspired by
esthetic considerations merely, having for their sole purpose the promotion and gratification of the esthetic sense, and not
the promotion or protection of the public safety, the public peace and good order of society, must be held invalid and
contrary to constitutional provisions holding inviolate the rights of private property. Or, in other words, the police power
cannot interfere with private property rights for purely esthetic purposes. The courts, taking this view, rest their decisions
upon the proposition that the esthetic sense is disassociated entirely from any relation to the public health, morals,
comfort, or general welfare and is, therefore, beyond the police power of the state. But we are of the opinion, as above
indicated, that unsightly advertisements or signs, signboards, or billboards which are offensive to the sight, are not
disassociated from the general welfare of the public. This is not establishing a new principle, but carrying a well
recognized principle to further application. (Fruend on Police Power, p. 166.)
For the foregoing reasons the judgment appealed from is hereby reversed and the action dismissed upon the merits, with
costs. So ordered.
Arellano, C.J., Torres, Carson, and Araullo, JJ., concur.
DECISION ON THE MOTION FOR A REHEARING, JANUARY 24, 1916.
TRENT, J.:
Counsel for the plaintiffs call our attention to the case of Ex parte Young (209 U.S., 123); and say that they are of the
opinion that this case "is the absolutely determinative of the question of jurisdiction in injunctions of this kind." We did
not refer to this case in our former opinion because we were satisfied that the reasoning of the case is not applicable to
section 100 (b), 139 and 140 of Act No. 2339. The principles announced in the Young case are stated as follows: "It may
therefore be said that when the penalties for disobedience are by fines so enormous and imprisonment so severe as to
intimidate the company and its officers from resorting to the courts to test the validity of the legislation, the result is the
same as if the law in terms prohibited the company from seeking judicial construction of laws which deeply affect its
rights.
It is urged that there is no principle upon which to base the claim that a person is entitled to disobey a statute at least once,
for the purpose of testing its validity without subjecting himself to the penalties for disobedience provided by the statute

in case it is valid. This is not an accurate statement of the case. Ordinarily a law creating offenses in the nature of
misdemeanors or felonies relates to a subject over which the jurisdiction of the legislature is complete in any event. In
these case, however, of the establishment of certain rates without any hearing, the validity of such rates necessarily
depends upon whether they are high enough to permit at least some return upon the investment (how much it is not now
necessary to state), and an inquiry as to that fact is a proper subject of judicial investigation. If it turns out that the rates
are too low for that purpose, then they are illegal. Now, to impose upon a party interested the burden of obtaining a
judicial decision of such a question (no prior hearing having ever been given) only upon the condition that, if
unsuccessful, he must suffer imprisonment and pay fines as provided in these acts, is, in effect, to close up all approaches
to the courts, and thus prevent any hearing upon the question whether the rates as provided by the acts are not too low, and
therefore invalid. The distinction is obvious between a case where the validity of the acts depends upon the existence of a
fact which can be determined only after investigation of a very complicated and technical character, and the ordinary case
of a statute upon a subject requiring no such investigation and over which the jurisdiction of the legislature is complete in
any event.
An examination of the sections of our Internal Revenue Law and of the circumstances under which and the purposes for
which they were enacted, will show that, unlike the statutes under consideration in the above cited case, their enactment
involved no attempt on the part of the Legislature to prevent dissatisfied taxpayers "from resorting to the courts to test the
validity of the legislation;" no effort to prevent any inquiry as to their validity. While section 139 does prevent the testing
of the validity of subsection (b) of section 100 in injunction suits instituted for the purpose of restraining the collection of
internal revenue taxes, section 140 provides a complete remedy for that purpose. And furthermore, the validity of
subsection (b) does not depend upon "the existence of a fact which can be determined only after investigation of a very
complicated and technical character," but the jurisdiction of the Legislature over the subject with which the subsection
deals "is complete in any event." The judgment of the court in the Young case rests upon the proposition that the
aggrieved parties had no adequate remedy at law.
Neither did we overlook the case of General Oil Co. vs. Crain (209 U.S., 211), decided the same day and citing Ex
parte Young, supra. In that case the plaintiff was a Tennessee corporation, with its principal place of business in
Memphis, Tennessee. It was engaged in the manufacture and sale of coal oil, etc. Its wells and plant were located in
Pennsylvania and Ohio. Memphis was not only its place of business, at which place it sold oil to the residents of
Tennessee, but also a distributing point to which oils were shipped from Pennsylvania and Ohio and unloaded into various
tanks for the purpose of being forwarded to the Arkansas, Louisiana, and Mississippi customers. Notwithstanding the fact
that the company separated its oils, which were designated to meet the requirements of the orders from those States, from
the oils for sale in Tennessee, the defendant insisted that he had a right, under the Act of the Tennessee Legislature,
approved April 21, 1899, to inspect all the oils unlocated in Memphis, whether for sale in that State or not, and charge and
collect for such inspection a regular fee of twenty-five cents per barrel. The company, being advised that the defendant
had no such right, instituted this action in the inferior States court for the purpose of enjoining the defendant, upon the
grounds stated in the bill, from inspecting or attempting to inspect its oils. Upon trial, the preliminary injunction which
had been granted at the commencement of the action, was continued in force. Upon appeal, the supreme court of the State
of Tennessee decided that the suit was one against the State and reversed the judgment of the Chancellor. In the Supreme
Court of the United States, where the case was reviewed upon a writ of error, the contentions of the parties were stated by
the court as follows: "It is contended by defendant in error that this court is without jurisdiction because no matter sought
to be litigated by plaintiff in error was determined by the Supreme Court of Tennessee. The court simply held, it is paid,
that, under the laws of the State, it had no jurisdiction to entertain the suit for any purpose. And it is insisted "hat this
holding involved no Federal question, but only the powers and jurisdiction of the courts of the State of Tennessee, in
respect to which the Supreme Court of Tennessee is the final arbiter."
Opposing these contentions, plaintiff in error urges that whether a suit is one against a State cannot depend upon the
declaration of a statute, but depends upon the essential nature ofthe suit, and that the Supreme Court recognized that the
statute "aded nothing to the axiomatic principle that the State, as a sovereign, is not subject to suit save by its own
consent."And it is hence insisted that the court by dismissing the bill gave effect to the law which was attacked. It is
further insisted that the bill undoubtedly present rights under the Constitution of the United States and conditions which
entitle plaintiff in error to an injunction for the protection of such rights, and that a statute of the State which operates to
deny such rights, or such relief, `is itself in conflict with the Constitution of the United States."

That statute of Tennessee, which the supreme court of that State construed and held to be prohibitory of the suit, was an
act passed February 28, 1873, which provides: "That no court in the State of Tennessee has, nor shall hereafter have, any
power, jurisdiction, or authority to entertain any suit against the State, or any officer acting by the authority of the State,
with a view to reach the State, its treasury, funds or property; and all such suits now pending, or hereafter brought, shall be
dismissed as to the State, or such officer, on motion, plea or demurrer of the law officer of the State, or counsel employed
by the State."
The Supreme Court of the United States, after reviewing many cases, said: "Necessarily, to give adequate protection to
constitutional rights a distinction must be made between valid and invalid state laws, as determining the character of the
suit against state officers. And the suit at bar illustrates the necessity. If a suit against state officer is precluded in the
national courts by the Eleventh Amendment to the Constitution, and may be forbidden by a State to its courts, as it is
contended in the case at bar that it may be, without power of review by this court, it must be evident that an easy way is
open to prevent the enforcement of many provisions of the Constitution; and the Fourteenth Amendment, which is
directed at state action, could be nullified as to much of its operation. ... It being then the right of a party to be protected
against a law which violates a constitutional right, whether by its terms or the manner of its enforcement, it is manifest
that a decision which denies such protection gives effect to the law, and the decision is reviewable by this court."
The court then proceeded to consider whether the law of 1899 would, if administered against the oils in question, violate
any constitutional right of the plaintiff and after finding and adjudging that the oils were not in movement through the
States, that they had reached the destination of their first shipment, and were held there, not in necessary delay at means of
transportation but for the business purposes and profit of the company, and resting its judgment upon the taxing power of
the State, affirmed the decree of the supreme court of the State of Tennessee.
From the foregoing it will be seen that the Supreme Court of Tennessee dismissed the case for want of jurisdiction
because the suit was one against the State, which was prohibited by the Tennessee Legislature. The Supreme Court of the
United States took jurisdiction of the controversy for the reasons above quoted and sustained the Act of 1899 as a revenue
law.
The case of Tennessee vs. Sneed (96 U.S., 69), and Shelton vs. Platt (139 U.S., 591), relied upon in our former opinion,
were not cited in General Oil Co. vs. Crain, supra, because the questions presented and the statutes under consideration
were entirely different. The Act approved March 31, 1873, expressly prohibits the courts from restraining the collection of
any tax, leaving the dissatisfied taxpayer to his exclusive remedy payment under protest and suit to recover while
the Act approved February 28, 1873, prohibits suits against the State.
In upholding the statute which authorizes the removal of signboards or billboards upon the sole ground that they are
offensive to the sight, we recognized the fact that we are not in harmony with various state courts in the American Union.
We have just examined the decision of the Supreme Court of the State of Illinois in the recent case (October [December],
1914) of Thomas Cusack Co. vs. City of Chicago (267 Ill., 344), wherein the court upheld the validity of a municipal
ordinances, which reads as follows: "707. Frontage consents required. It shall be unlawful for any person, firm or
corporation to erect or construct any bill-board or sign-board in any block on any public street in which one-half of the
buildings on both sides of the street are used exclusively for residence purposes, without first obtaining the consent, in
writing, of the owners or duly authorized agents of said owners owning a majority of the frontage of the property, on both
sides of the street, in the block in which such bill-board or sign-board is to be erected, constructed or located. Such written
consent shall be filed with the commissioner of buildings before a permit shall be issued for the erection, construction or
location of such bill-board or sign-board."
The evidence which the Illinois court relied upon was the danger of fires, the fact that billboards promote the commission
of various immoral and filthy acts by disorderly persons, and the inadequate police protection furnished to residential
districts. The last objection has no virtue unless one or the other of the other objections are valid. If the billboard industry
does, in fact, promote such municipal evils to noticeable extent, it seems a curious inconsistency that a majority of the
property owners on a given block may legalize the business. However, the decision is undoubtedly a considerable advance
over the views taken by other high courts in the United States and distinguishes several Illinois decisions. It is an advance
because it permits the suppression of billboards where they are undesirable. The ordinance which the court approved will
no doubt cause the virtual suppression of the business in the residential districts. Hence, it is recognized that under certain
circumstances billboards may be suppressed as an unlawful use of private property. Logically, it would seem that the

premise of fact relied upon is not very solid. Objections to the billboard upon police, sanitary, and moral grounds have
been, as pointed out by counsel for Churchill and Tait, duly considered by numerous high courts in the United States, and,
with one exception, have been rejected as without foundation. The exception is the Supreme Court of Missouri, which
advances practically the same line of reasoning as has the Illinois court in this recent case. (St. Louis Gunning Advt.
Co. vs. City of St. Louis, 137 S. W., 929.) In fact, the Illinois court, in Haller Sign Works vs. Physical Culture Training
School (249 Ill., 436), "distinguished" in the recent case, said: "There is nothing inherently dangerous to the health or
safety of the public in structures that are properly erected for advertising purposes."
If a billboard is so constructed as to offer no room for objections on sanitary or moral grounds, it would seem that the
ordinance above quoted would have to be sustained upon the very grounds which we have advanced in sustaining our own
statute.
It might be well to note that billboard legislation in the United States is attempting to eradicate a business which has
already been firmly established. This business was allowed to expand unchecked until its very extent called attention to its
objectionable features. In the Philippine Islands such legislation has almost anticipated the business, which is not yet of
such proportions that it can be said to be fairly established. It may be that the courts in the United States have committed
themselves to a course of decisions with respect to billboard advertising, the full consequences of which were not
perceived for the reason that the development of the business has been so recent that the objectionable features of it did
not present themselves clearly to the courts nor to the people. We, in this country, have the benefit of the experience of the
people of the United States and may make our legislation preventive rather than corrective. There are in this country,
moreover, on every hand in those districts where Spanish civilization has held sway for so many centuries, examples of
architecture now belonging to a past age, and which are attractive not only to the residents of the country but to visitors. If
the billboard industry is permitted without constraint or control to hide these historic sites from the passerby, the country
will be less attractive to the tourist and the people will suffer a district economic loss.
The motion for a rehearing is therefore denied.
Arellano, C.J., Torres, and Carson, JJ., concur.

Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. 197676

February 4, 2014

REMMAN ENTERPRISES, INC. and CHAMBER OF REAL ESTATE AND

BUILDERS'ASSOCIATION, Petitioners,

vs.
PROFESSIONAL REGULATORY BOARD OF REAL ESTATE SERVICE and PROFESSIONAL REGULATION
COMMISSION, Respondents.
DECISION
VILLARAMA, JR., J.:
Assailed in this petition for review under Rule 45 is the Decision 1 dated July 12, 2011 of the Regional Trial Court (RTC)
of Manila, Branch 42 denying the petition to declare as unconstitutional Sections 28(a), 29 and 32 of Republic Act (R.A.)
No. 9646.
R.A. No. 9646, otherwise known as the "Real Estate Service Act of the Philippines" was signed into law on June 29, 2009
by President Gloria Macapagal-Arroyo. It aims to professionalize the real estate service sector under a regulatory scheme
of licensing, registration and supervision of real estate service practitioners (real estate brokers, appraisers, assessors,
consultants and salespersons) in the country. Prior to its enactment, real estate service practitioners were under the
supervision of the Department of Trade and Industry (DTI) through the Bureau of Trade Regulation and Consumer
Protection (BTRCP), in the exercise of its consumer regulation functions. Such authority is now transferred to the
Professional Regulation Commission (PRC) through the Professional Regulatory Board of Real Estate Service (PRBRES)
created under the new law.
The implementing rules and regulations (IRR) of R.A. No. 9646 were promulgated on July 21, 2010 by the PRC and
PRBRES under Resolution No. 02, Series of 2010.
On December 7, 2010, herein petitioners Remman Enterprises, Inc. (REI) and the Chamber of Real Estate and Builders
Association (CREBA) instituted Civil Case No. 10-124776 in the Regional Trial Court of Manila, Branch 42. Petitioners
sought to declare as void and unconstitutional the following provisions of R.A. No. 9646:
SEC. 28. Exemptions from the Acts Constituting the Practice of Real Estate Service. The provisions of this Act and its
rules and regulations shall not apply to the following:
(a) Any person, natural or juridical, who shall directly perform by himself/herself the acts mentioned in Section 3 hereof
with reference to his/her or its own property, except real estate developers;
xxxx
SEC. 29. Prohibition Against the Unauthorized Practice of Real Estate Service. No person shall practice or offer to
practice real estate service in the Philippines or offer himself/herself as real estate service practitioner, or use the title,
word, letter, figure or any sign tending to convey the impression that one is a real estate service practitioner, or advertise
or indicate in any manner whatsoever that one is qualified to practice the profession, or be appointed as real property
appraiser or assessor in any national government entity or local government unit, unless he/she has satisfactorily passed
the licensure examination given by the Board, except as otherwise provided in this Act, a holder of a valid certificate of
registration, and professional identification card or a valid special/temporary permit duly issued to him/her by the Board
and the Commission, and in the case of real estate brokers and private appraisers, they have paid the required bond as
hereto provided.
xxxx
SEC. 32. Corporate Practice of the Real Estate Service. (a) No partnership or corporation shall engage in the business of
real estate service unless it is duly registered with the Securities and Exchange Commission (SEC), and the persons
authorized to act for the partnership or corporation are all duly registered and licensed real estate brokers, appraisers or
consultants, as the case may be. The partnership or corporation shall regularly submit a list of its real estate service
practitioners to the Commission and to the SEC as part of its annual reportorial requirements. There shall at least be one
(1) licensed real estate broker for every twenty (20) accredited salespersons.
(b) Divisions or departments of partnerships and corporations engaged in marketing or selling any real estate development
project in the regular course of business must be headed by full-time registered and licensed real estate brokers.

(c) Branch offices of real estate brokers, appraisers or consultants must be manned by a duly licensed real estate broker,
appraiser or consultant as the case may be.
In case of resignation or termination from employment of a real estate service practitioner, the same shall be reported by
the employer to the Board within a period not to exceed fifteen (15) days from the date of effectivity of the resignation or
termination.
Subject to the provisions of the Labor Code, a corporation or partnership may hire the services of registered and licensed
real estate brokers, appraisers or consultants on commission basis to perform real estate services and the latter shall be
deemed independent contractors and not employees of such corporations. (Emphasis and underscoring supplied.)
According to petitioners, the new law is constitutionally infirm because (1) it violates Article VI, Section 26 (1) of the
1987 Philippine Constitution which mandates that "[e]very bill passed by Congress shall embrace only one subject which
shall be expressed in the title thereof"; (2) it is in direct conflict with Executive Order (E.O.) No. 648 which transferred
the exclusive jurisdiction of the National Housing Authority (NHA) to regulate the real estate trade and business to the
Human Settlements Commission, now the Housing and Land Use Regulatory Board (HLURB), which authority includes
the issuance of license to sell of subdivision owners and developers pursuant to Presidential Decree (P.D.) No. 957; (3) it
violates the due process clause as it impinges on the real estate developers most basic ownership rights, the right to use
and dispose property, which is enshrined in Article 428 of the Civil Code; and (4) Section 28(a) of R.A. No. 9646 violates
the equal protection clause as no substantial distinctions exist between real estate developers and the exempted group
mentioned since both are property owners dealing with their own property.
Additionally, petitioners contended that the lofty goal of nurturing and developing a "corps of technically competent,
reasonable and respected professional real estate service practitioners" is not served by curtailing the right of real estate
developers to conduct their business of selling properties. On the contrary, these restrictions would have disastrous effects
on the real estate industry as the additional cost of commissions would affect the pricing and affordability of real estate
packages. When that happens, petitioners claimed that the millions of jobs and billions in revenues that the real estate
industry generates for the government will be a thing of the past.
After a summary hearing, the trial court denied the prayer for issuance of a writ of preliminary injunction.
On July 12, 2011, the trial court rendered its Decision2 denying the petition. The trial court held that the assailed
provisions are relevant to the title of the law as they are intended to regulate the practice of real estate service in the
country by ensuring that those who engage in it shall either be a licensed real estate broker, or under the latters
supervision. It likewise found no real discord between E.O. No. 648 and R.A. No. 9646 as the latter does not render
nugatory the license to sell granted by the HLURB to real estate developers, which license would still subsist. The only
difference is that by virtue of the new law, real estate developers will now be compelled to hire the services of one
licensed real estate broker for every twenty salespersons to guide and supervise the coterie of salespersons under the
employ of the real estate developers.
On the issue of due process, the trial court said that the questioned provisions do not preclude property owners from using,
enjoying, or disposing of their own property because they can still develop and sell their properties except that they have
to secure the services of a licensed real estate broker who shall oversee the actions of the unlicensed real estate
practitioners under their employ. Since the subject provisions merely prescribe the requirements for the regulation of the
practice of real estate services, these are consistent with a valid exercise of the States police power. The trial court further
ruled that Section 28(a) does not violate the equal protection clause because the exemption of real estate developers was
anchored on reasonable classification aimed at protecting the buying public from the rampant misrepresentations often
committed by unlicensed real estate practitioners, and to prevent unscrupulous and unethical real estate practices from
flourishing considering the large number of consumers in the regular course of business compared to isolated sale
transactions made by private individuals selling their own property.
Hence, this appeal on the following questions of law:
1. Whether there is a justiciable controversy for this Honorable Court to adjudicate;
2. Whether [R.A. No. 9646] is unconstitutional for violating the "one title-one subject" rule under Article VI, Section 26
(1) of the Philippine Constitution;

3. Whether [R.A. No. 9646] is in conflict with PD 957, as amended by EO 648, with respect to the exclusive jurisdiction
of the HLURB to regulate real estate developers;
4. Whether Sections 28(a), 29, and 32 of [R.A. No. 9646], insofar as they affect the rights of real estate developers, are
unconstitutional for violating substantive due process; and
5. Whether Section 28(a), which treats real estate developers differently from other natural or juridical persons who
directly perform acts of real estate service with reference to their own property, is unconstitutional for violating the equal
protection clause.3
The Courts Ruling
The petition has no merit.
Justiciable Controversy
The Constitution4 requires as a condition precedent for the exercise of judicial power the existence of an actual
controversy between litigants. An actual case or controversy involves a conflict of legal rights, an assertion of opposite
legal claims susceptible to judicial resolution. 5 The controversy must be justiciable definite and concrete touching on
the legal relations of parties having adverse legal interests, which may be resolved by a court of law through the
application of a law.6 In other words, the pleadings must show an active antagonistic assertion of a legal right, on the one
hand, and a denial thereof on the other; that is, it must concern a real and not a merely theoretical question or issue. There
ought to be an actual and substantial controversy admitting of specific relief through a decree conclusive in nature, as
distinguished from an opinion advising what the law would be upon a hypothetical state of facts. 7 An actual case is ripe
for adjudication when the act being challenged has a direct adverse effect on the individual challenging it. 8
There is no question here that petitioners who are real estate developers are entities directly affected by the prohibition on
performing acts constituting practice of real estate service without first complying with the registration and licensing
requirements for brokers and agents under R.A. No. 9646. The possibility of criminal sanctions for disobeying the
mandate of the new law is likewise real. Asserting that the prohibition violates their rights as property owners to dispose
of their properties, petitioners challenged on constitutional grounds the implementation of R.A. No. 9646 which the
respondents defended as a valid legislation pursuant to the States police power. The Court thus finds a justiciable
controversy that calls for immediate resolution.
No Violation of One-Title One-Subject Rule
Section 26(1), Article VI of the Constitution states:
SEC. 26 (1). Every bill passed by the Congress shall embrace only one subject which shall be expressed in the title
thereof.
In Farias v. The Executive Secretary,9 the Court explained the provision as follows:
The proscription is aimed against the evils of the so-called omnibus bills and log-rolling legislation as well as surreptitious
and/or unconsidered encroaches. The provision merely calls for all parts of an act relating to its subject finding expression
in its title.
To determine whether there has been compliance with the constitutional requirement that the subject of an act shall be
expressed in its title, the Court laid down the rule that
Constitutional provisions relating to the subject matter and titles of statutes should not be so narrowly construed as to
cripple or impede the power of legislation. The requirement that the subject of an act shall be expressed in its title should
receive a reasonable and not a technical construction. It is sufficient if the title be comprehensive enough reasonably to
include the general object which a statute seeks to effect, without expressing each and every end and means necessary or
convenient for the accomplishing of that object. Mere details need not be set forth. The title need not be an abstract or
index of the Act.10 (Emphasis supplied.)
The Court has previously ruled that the one-subject requirement under the Constitution is satisfied if all the parts of the
statute are related, and are germane to the subject matter expressed in the title, or as long as they are not inconsistent with

or foreign to the general subject and title.11 An act having a single general subject, indicated in the title, may contain any
number of provisions, no matter how diverse they may be, so long as they are not inconsistent with or foreign to the
general subject, and may be considered in furtherance of such subject by providing for the method and means of carrying
out the general object.12
It is also well-settled that the "one title-one subject" rule does not require the Congress to employ in the title of the
enactment language of such precision as to mirror, fully index or catalogue all the contents and the minute details therein.
The rule is sufficiently complied with if the title is comprehensive enough as to include the general object which the
statute seeks to effect.13 Indeed, this Court has invariably adopted a liberal rather than technical construction of the rule
"so as not to cripple or impede legislation."14
R.A. No. 9646 is entitled "An Act Regulating the Practice of Real Estate Service in the Philippines, Creating for the
Purpose a Professional Regulatory Board of Real Estate Service, Appropriating Funds Therefor and For Other Purposes."
Aside from provisions establishing a regulatory system for the professionalization of the real estate service sector, the new
law extended its coverage to real estate developers with respect to their own properties. Henceforth, real estate developers
are prohibited from performing acts or transactions constituting real estate service practice without first complying with
registration and licensing requirements for their business, brokers or agents, appraisers, consultants and salespersons.
Petitioners point out that since partnerships or corporations engaged in marketing or selling any real estate development
project in the regular course of business are now required to be headed by full-time, registered and licensed real estate
brokers, this requirement constitutes limitations on the property rights and business prerogatives of real estate developers
which are not all reflected in the title of R.A. No. 9646. Neither are real estate developers, who are already regulated
under a different law, P.D. No. 957, included in the definition of real estate service practitioners.
We hold that R.A. No. 9646 does not violate the one-title, one-subject rule.
The primary objective of R.A. No. 9646 is expressed as follows:
SEC. 2. Declaration of Policy. The State recognizes the vital role of real estate service practitioners in the social,
political, economic development and progress of the country by promoting the real estate market, stimulating economic
activity and enhancing government income from real property-based transactions. Hence, it shall develop and nurture
through proper and effective regulation and supervision a corps of technically competent, responsible and respected
professional real estate service practitioners whose standards of practice and service shall be globally competitive and will
promote the growth of the real estate industry.
We find that the inclusion of real estate developers is germane to the laws primary goal of developing "a corps of
technically competent, responsible and respected professional real estate service practitioners whose standards of practice
and service shall be globally competitive and will promote the growth of the real estate industry." Since the marketing
aspect of real estate development projects entails the performance of those acts and transactions defined as real estate
service practices under Section 3(g) of R.A. No. 9646, it is logically covered by the regulatory scheme to professionalize
the entire real estate service sector.
No Conflict Between R.A. No. 9646
and P.D. No. 957, as amended by E.O. No. 648
Petitioners argue that the assailed provisions still cannot be sustained because they conflict with P.D. No. 957 which
decreed that the NHA shall have "exclusive jurisdiction to regulate the real estate trade and business." Such jurisdiction
includes the authority to issue a license to sell to real estate developers and to register real estate dealers, brokers or
salesmen upon their fulfillment of certain requirements under the law. By imposing limitations on real estate developers
property rights, petitioners contend that R.A. No. 9646 undermines the licenses to sell issued by the NHA (now the
HLURB) to real estate developers allowing them to sell subdivision lots or condominium units directly to the public.
Because the HLURB has been divested of its exclusive jurisdiction over real estate developers, the result is an implied
repeal of P.D. No. 957 as amended by E.O. No. 648, which is not favored in law.
It is a well-settled rule of statutory construction that repeals by implication are not favored. In order to effect a repeal by
implication, the later statute must be so irreconcilably inconsistent and repugnant with the existing law that they cannot be
made to reconcile and stand together. The clearest case possible must be made before the inference of implied repeal may

be drawn, for inconsistency is never presumed. There must be a showing of repugnance clear and convincing in character.
The language used in the later statute must be such as to render it irreconcilable with what had been formerly enacted. An
inconsistency that falls short of that standard does not suffice. 15 Moreover, the failure to add a specific repealing clause
indicates that the intent was not to repeal any existing law, unless an irreconcilable inconsistency and repugnancy exist in
the terms of the new and old laws.16
There is nothing in R.A. No. 9646 that repeals any provision of P.D. No. 957, as amended by E.O. No. 648. P.D. No. 957,
otherwise known as "The Subdivision and Condominium Buyers Protective Decree," 17 vested the NHA with exclusive
jurisdiction to regulate the real estate trade and business in accordance with its provisions. It empowered the NHA to
register, approve and monitor real estate development projects and issue licenses to sell to real estate owners and
developers. It further granted the NHA the authority to register and issue/revoke licenses of brokers, dealers and salesmen
engaged in the selling of subdivision lots and condominium units.
E.O. No. 648, issued on February 7, 1981, reorganized the Human Settlements Regulatory Commission (HSRC) and
transferred the regulatory functions of the NHA under P.D. 957 to the HSRC. Among these regulatory functions were the
(1) regulation of the real estate trade and business; (2) registration of subdivision lots and condominium projects; (3)
issuance of license to sell subdivision lots and condominium units in the registered units; (4) approval of performance
bond and the suspension of license to sell; (5) registration of dealers, brokers and salesman engaged in the business of
selling subdivision lots or condominium units; and (6) revocation of registration of dealers, brokers and salesmen. 18
E.O. No. 90, issued on December 17, 1986, renamed the HSRC as the Housing and Land Use Regulatory Board
(HLURB) and was designated as the regulatory body for housing and land development under the Housing and Urban
Development Coordinating Council (HUDCC). To date, HLURB continues to carry out its mandate to register real estate
brokers and salesmen dealing in condominium, memorial parks and subdivision projects pursuant to Section 11 of P.D.
No. 957, which reads:
SECTION 11. Registration of Dealers, Brokers and Salesmen. No real estate dealer, broker or salesman shall engage in
the business of selling subdivision lots or condominium units unless he has registered himself with the Authority in
accordance with the provisions of this section.
If the Authority shall find that the applicant is of good repute and has complied with the applicable rules of the Authority,
including the payment of the prescribed fee, he shall register such applicant as a dealer, broker or salesman upon filing a
bond, or other security in lieu thereof, in such sum as may be fixed by the Authority conditioned upon his faithful
compliance with the provisions of this Decree: Provided, that the registration of a salesman shall cease upon the
termination of his employment with a dealer or broker.
Every registration under this section shall expire on the thirty-first day of December of each year. Renewal of registration
for the succeeding year shall be granted upon written application therefore made not less than thirty nor more than sixty
days before the first day of the ensuing year and upon payment of the prescribed fee, without the necessity of filing further
statements or information, unless specifically required by the Authority. All applications filed beyond said period shall be
treated as original applications.
The names and addresses of all persons registered as dealers, brokers, or salesmen shall be recorded in a Register of
Brokers, Dealers and Salesmen kept in the Authority which shall be open to public inspection.
On the other hand, Section 29 of R.A. No. 9646 requires as a condition precedent for all persons who will engage in acts
constituting real estate service, including advertising in any manner ones qualifications as a real estate service
practitioner, compliance with licensure examination and other registration requirements including the filing of a bond for
real estate brokers and private appraisers. While Section 11 of P.D. No. 957 imposes registration requirements for dealers,
brokers and salespersons engaged in the selling of subdivision lots and condominium units, Section 29 of R.A. No. 9646
regulates all real estate service practitioners whether private or government. While P.D. No. 957 seeks to supervise
brokers and dealers who are engaged in the sale of subdivision lots and condominium units, R.A. No. 9646 aims to
regulate the real estate service sector in general by professionalizing their ranks and raising the level of ethical standards
for licensed real estate professionals.
There is no conflict of jurisdiction because the HLURB supervises only those real estate service practitioners engaged in
the sale of subdivision lots and condominium projects, specifically for violations of the provisions of P.D. No. 957, and

not the entire real estate service sector which is now under the regulatory powers of the PRBRES. HLURBs supervision
of brokers and dealers to effectively implement the provisions of P.D. No. 957 does not foreclose regulation of the real
estate service as a profession. Real estate developers already regulated by the HLURB are now further required to comply
with the professional licensure requirements under R.A. No. 9646, as provided in Sections 28, 29 and 32. Plainly, there is
no inconsistency or contradiction in the assailed provisions of R.A. No. 9646 and P.D. No. 957, as amended.
The rule is that every statute must be interpreted and brought into accord with other laws in a way that will form a uniform
system of jurisprudence. The legislature is presumed to have known existing laws on the subject and not to have enacted
conflicting laws.19 Congress, therefore, could not be presumed to have intended Sections 28, 29 and 32 of R.A. No. 9646
to run counter to P.D. No. 957.
No Violation of Due Process
Petitioners contend that the assailed provisions of R.A. No. 9646 are unduly oppressive and infringe the constitutional rule
against deprivation of property without due process of law. They stress that real estate developers are now burdened by
law to employ licensed real estate brokers to sell, market and dispose of their properties. Despite having invested a lot of
money, time and resources in their projects, petitioners aver that real estate developers will still have less control in
managing their business and will be burdened with additional expenses.
The contention has no basis. There is no deprivation of property as no restriction on their use and enjoyment of property is
caused by the implementation of R.A. No. 9646. If petitioners as property owners feel burdened by the new requirement
of engaging the services of only licensed real estate professionals in the sale and marketing of their properties, such is an
unavoidable consequence of a reasonable regulatory measure.
Indeed, no right is absolute, and the proper regulation of a profession, calling, business or trade has always been upheld as
a legitimate subject of a valid exercise of the police power of the State particularly when their conduct affects the
execution of legitimate governmental functions, the preservation of the State, public health and welfare and public
morals.20 In any case, where the liberty curtailed affects at most the rights of property, the permissible scope of regulatory
measures is certainly much wider. To pretend that licensing or accreditation requirements violate the due process clause is
to ignore the settled practice, under the mantle of police power, of regulating entry to the practice of various trades or
professions.21
Here, the legislature recognized the importance of professionalizing the ranks of real estate practitioners by increasing
their competence and raising ethical standards as real property transactions are "susceptible to manipulation and
corruption, especially if they are in the hands of unqualified persons working under an ineffective regulatory system." The
new regulatory regime aimed to fully tap the vast potential of the real estate sector for greater contribution to our gross
domestic income, and real estate practitioners "serve a vital role in spearheading the continuous flow of capital, in
boosting investor confidence, and in promoting overall national progress." 22
We thus find R.A. No. 9646 a valid exercise of the States police power. As we said in another case challenging the
constitutionality of a law granting discounts to senior citizens:
The law is a legitimate exercise of police power which, similar to the power of eminent domain, has general welfare for its
object. Police power is not capable of an exact definition, but has been purposely veiled in general terms to underscore its
comprehensiveness to meet all exigencies and provide enough room for an efficient and flexible response to conditions
and circumstances, thus assuring the greatest benefits. Accordingly, it has been described as "the most essential, insistent
and the least limitable of powers, extending as it does to all the great public needs." It is "[t]he power vested in the
legislature by the constitution to make, ordain, and establish all manner of wholesome and reasonable laws, statutes, and
ordinances, either with penalties or without, not repugnant to the constitution, as they shall judge to be for the good and
welfare of the commonwealth, and of the subjects of the same."
For this reason, when the conditions so demand as determined by the legislature, property rights must bow to the primacy
of police power because property rights, though sheltered by due process, must yield to general welfare.
Police power as an attribute to promote the common good would be diluted considerably if on the mere plea of petitioners
that they will suffer loss of earnings and capital, the questioned provision is invalidated. Moreover, in the absence of

evidence demonstrating the alleged confiscatory effect of the provision in question, there is no basis for its nullification in
view of the presumption of validity which every law has in its favor.23 (Emphasis supplied.)
No Violation of Equal Protection Clause
Section 28 of R.A. No. 9646 exempts from its coverage natural and juridical persons dealing with their own property, and
other persons such as receivers, trustees or assignees in insolvency or bankruptcy proceedings. However, real estate
developers are specifically mentioned as an exception from those enumerated therein. Petitioners argue that this provision
violates the equal protection clause because it unjustifiably treats real estate developers differently from those exempted
persons who also own properties and desire to sell them. They insist that no substantial distinctions exist between ordinary
property owners and real estate developers as the latter, in fact, are more capable of entering into real estate transactions
and do not need the services of licensed real estate brokers.1wphi1 They assail the RTC decision in citing the reported
fraudulent practices as basis for the exclusion of real estate developers from the exempted group of persons under Section
28(a).
We sustain the trial courts ruling that R.A. No. 9646 does not violate the equal protection clause.
In Ichong v. Hernandez,24 the concept of equal protection was explained as follows:
The equal protection of the law clause is against undue favor and individual or class privilege, as well as hostile
discrimination or the oppression of inequality. It is not intended to prohibit legislation, which is limited either in the object
to which it is directed or by territory within which it is to operate. It does not demand absolute equality among residents; it
merely requires that all persons shall be treated alike, under like circumstances and conditions both as to privileges
conferred and liabilities enforced. The equal protection clause is not infringed by legislation which applies only to those
persons falling within such class, and reasonable grounds exists for making a distinction between those who fall within
such class and those who do not. (2 Cooley, Constitutional Limitations, 824-825). 25
Although the equal protection clause of the Constitution does not forbid classification, it is imperative that the
classification should be based on real and substantial differences having a reasonable relation to the subject of the
particular legislation.26 If classification is germane to the purpose of the law, concerns all members of the class, and
applies equally to present and future conditions, the classification does not violate the equal protection guarantee. 27
R.A. No. 9646 was intended to provide institutionalized government support for the development of "a corps of highly
respected, technically competent, and disciplined real estate service practitioners, knowledgeable of internationally
accepted standards and practice of the profession." 28 Real estate developers at present constitute a sector that hires or
employs the largest number of brokers, salespersons, appraisers and consultants due to the sheer number of products (lots,
houses and condominium units) they advertise and sell nationwide. As early as in the 70s, there has been a proliferation
of errant developers, operators or sellers who have reneged on their representation and obligations to comply with
government regulations such as the provision and maintenance of subdivision roads, drainage, sewerage, water system
and other basic requirements. To protect the interest of home and lot buyers from fraudulent acts and manipulations
perpetrated by these unscrupulous subdivision and condominium sellers and operators, P.D. No. 957 was issued to strictly
regulate housing and real estate development projects. Hence, in approving R.A. No. 9646, the legislature rightfully
recognized the necessity of imposing the new licensure requirements to all real estate service practitioners, including and
more importantly, those real estate service practitioners working for real estate developers. Unlike individuals or entities
having isolated transactions over their own property, real estate developers sell lots, houses and condominium units in the
ordinary course of business, a business which is highly regulated by the State to ensure the health and safety of home and
lot buyers.
The foregoing shows that substantial distinctions do exist between ordinary property owners exempted under Section
28(a) and real estate developers like petitioners, and the classification enshrined in R.A. No. 9646 is reasonable and
relevant to its legitimate purpose. The Court thus rules that R.A. No. 9646 is valid and constitutional.
Since every law is presumed valid, the presumption of constitutionality can be overcome only by the clearest showing that
there was indeed an infraction of the Constitution, and only when such a conclusion is reached by the required majority
may the Court pronounce, in the discharge of the duty it cannot escape, that the challenged act must be struck down. 29

Indeed, "all presumptions are indulged in favor of constitutionality; one who attacks a statute, alleging unconstitutionality
must prove its invalidity beyond a reasonable doubt; that a law may work hardship does not render it unconstitutional; that
if any reasonable basis may be conceived which supports the statute, it will be upheld, and the challenger must negate all
possible bases; that the courts are not concerned with the wisdom, justice, policy, or expediency of a statute; and that a
liberal interpretation of the constitution in favor of the constitutionality of legislation should be adopted." 30
WHEREFORE, the petition is DENIED. The Decision dated July 12, 2011 of the Regional Trial Court of Manila, Branch
42 in Civil Case No. 10-124776 is hereby AFFIRMED and UPHELD.
No pronouncement as to costs.
SO ORDERED.
MARTIN S. VILLARAMA, JR.
Associate Justice
WE CONCUR:
MARIA LOURDES P. A. SERENO
Chief Justice

Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. 204429

February 18, 2014

SMART COMMUNICATIONS, INC., Petitioner,

vs.
MUNICIPALITY OF MALVAR, BATANGAS, Respondent.

DECISION
CARPIO, J.:
The Case
This petition for review1 challenges the 26 June 2012 Decision2 and 13 November 2012 Resolution3 of the Court of Tax.
Appeals (CTA) En Banc.
Th e CTA En Banc affirmed the 17 December 2010 Decision4 and 7 April 2011 Resolution5 of the CTA First Division,
which in turn affirmed the 2 December 2008 Decision6 and 21 May 2009 Order7 of the Regional Trial Court of Tanauan
City, Batangas, Branch 6. The trial court declared void the assessment imposed by respondent Municipality of Malvar,
Batangas against petitioner Smart Communications, Inc. for its telecommunications tower for 2001 to July 2003 and
directed respondent to assess petitioner only for the period starting 1 October 2003.
The Facts
Petitioner Smart Communications, Inc. (Smart) is a domestic corporation engaged in the business of providing
telecommunications services to the general public while respondent Municipality of Malvar, Batangas (Municipality) is a
local government unit created by law.
In the course of its business, Smart constructed a telecommunications tower within the territorial jurisdiction of the
Municipality. The construction of the tower was for the purpose of receiving and transmitting cellular communications
within the covered area.
On 30 July 2003, the Municipality passed Ordinance No. 18, series of 2003, entitled "An Ordinance Regulating the
Establishment of Special Projects."
On 24 August 2004, Smart received from the Permit and Licensing Division of the Office of the Mayor of the
Municipality an assessment letter with a schedule of payment for the total amount of P389,950.00 for Smarts
telecommunications tower. The letter reads as follows:
This is to formally submit to your good office your schedule of payments in the Municipal Treasury of the Local
Government Unit of Malvar, province of Batangas which corresponds to the tower of your company built in the premises
of the municipality, to wit:
TOTAL PROJECT COST:

PHP 11,000,000.00

For the Year 2001-2003

50% of 1% of the total project cost
Add: 45% surcharge

Php55,000.00
24,750.00

Php79,750.00
Multiply by 3 yrs. (2001, 2002, 2003)
For the year 2004

Php239,250.00

1% of the total project cost

Php110,000.00

37% surcharge

40,700.00
==========
Php150,700.00
TOTAL

Php389,950.00

Hoping that you will give this matter your preferential attention. 8
Due to the alleged arrears in the payment of the assessment, the Municipality also caused the posting of a closure notice
on the telecommunications tower.
On 9 September 2004, Smart filed a protest, claiming lack of due process in the issuance of the assessment and closure
notice. In the same protest, Smart challenged the validity of Ordinance No. 18 on which the assessment was based.
In a letter dated 28 September 2004, the Municipality denied Smarts protest.
On 17 November 2004, Smart filed with Regional Trial Court of Tanauan City, Batangas, Branch 6, an "Appeal/Petition"
assailing the validity of Ordinance No. 18. The case was docketed as SP Civil Case No. 04-11-1920.
On 2 December 2008, the trial court rendered a Decision partly granting Smarts Appeal/Petition. The trial court confined
its resolution of the case to the validity of the assessment, and did not rule on the legality of Ordinance No. 18. The trial
court held that the assessment covering the period from 2001 to July 2003 was void since Ordinance No. 18 was approved
only on 30 July 2003. However, the trial court declared valid the assessment starting 1 October 2003, citing Article 4 of
the Civil Code of the Philippines,9 in relation to the provisions of Ordinance No. 18 and Section 166 of Republic Act No.
7160 or the Local Government Code of 1991 (LGC).10 The dispositive portion of the trial courts Decision reads:
WHEREFORE, in light of the foregoing, the Petition is partly GRANTED. The assessment dated August 24, 2004 against
petitioner is hereby declared null and void insofar as the assessment made from year 2001 to July 2003 and respondent is
hereby prohibited from assessing and collecting, from petitioner, fees during the said period and the Municipal
Government of Malvar, Batangas is directed to assess Smart Communications, Inc. only for the period starting October 1,
2003.
No costs.
SO ORDERED.11
The trial court denied the motion for reconsideration in its Order of 21 May 2009.
On 8 July 2009, Smart filed a petition for review with the CTA First Division, docketed as CTA AC No. 58.
On 17 December 2010, the CTA First Division denied the petition for review. The dispositive portion of the decision
reads:
WHEREFORE, the Petition for Review is hereby DENIED, for lack of merit. Accordingly, the assailed Decision dated
December 2, 2008 and the Order dated May 21, 2009 of Branch 6 of the Regional Trial Court of Tanauan City, Batangas
in SP. Civil Case No. 04-11-1920 entitled "Smart Communications, Inc. vs. Municipality of Malvar, Batangas" are
AFFIRMED.
SO ORDERED.12

On 7 April 2011, the CTA First Division issued a Resolution denying the motion for reconsideration.
Smart filed a petition for review with the CTA En Banc, which affirmed the CTA First Divisions decision and resolution.
The dispositive portion of the CTA En Bancs 26 June 2012 decision reads:
WHEREFORE, premises considered, the present Petition for Review is hereby DISMISSED for lack of merit.1wphi1
Accordingly, the assailed Decision dated December 17, 2010 and Resolution dated April 7, 2011 are hereby AFFIRMED.
SO ORDERED.13
The CTA En Banc denied the motion for reconsideration.
Hence, this petition.
The Ruling of the CTA En Banc
The CTA En Banc dismissed the petition on the ground of lack of jurisdiction. The CTA En Banc declared that it is a court
of special jurisdiction and as such, it can take cognizance only of such matters as are clearly within its jurisdiction. Citing
Section 7(a), paragraph 3, of Republic Act No. 9282, the CTA En Banc held that the CTA has exclusive appellate
jurisdiction to review on appeal, decisions, orders or resolutions of the Regional Trial Courts in local tax cases originally
resolved by them in the exercise of their original or appellate jurisdiction. However, the same provision does not confer on
the CTA jurisdiction to resolve cases where the constitutionality of a law or rule is challenged.
The Issues
The petition raises the following arguments:
1. The [CTA En Banc Decision and Resolution] should be reversed and set aside for being contrary to law and
jurisprudence considering that the CTA En Banc should have exercised its jurisdiction and declared the Ordinance
as illegal.
2. The [CTA En Banc Decision and Resolution] should be reversed and set aside for being contrary to law and
jurisprudence considering that the doctrine of exhaustion of administrative remedies does not apply in [this case].
3. The [CTA En Banc Decision and Resolution] should be reversed and set aside for being contrary to law and
jurisprudence considering that the respondent has no authority to impose the so-called "fees" on the basis of the
void ordinance.14
The Ruling of the Court
The Court denies the petition.
On whether the CTA has jurisdiction over the present case
Smart contends that the CTA erred in dismissing the case for lack of jurisdiction. Smart maintains that the CTA has
jurisdiction over the present case considering the "unique" factual circumstances involved.
The CTA refuses to take cognizance of this case since it challenges the constitutionality of Ordinance No. 18, which is
outside the province of the CTA.

Jurisdiction is conferred by law. Republic Act No. 1125, as amended by Republic Act No. 9282, created the Court of Tax
Appeals. Section 7, paragraph (a), sub-paragraph (3) 15 of the law vests the CTA with the exclusive appellate jurisdiction
over "decisions, orders or resolutions of the Regional Trial Courts in local tax cases originally decided or resolved by
them in the exercise of their original or appellate jurisdiction."
The question now is whether the trial court resolved a local tax case in order to fall within the ambit of the CTAs
appellate jurisdiction This question, in turn, depends ultimately on whether the fees imposed under Ordinance No. 18 are
in fact taxes.
Smart argues that the "fees" in Ordinance No. 18 are actually taxes since they are not regulatory, but revenue-raising.
Citing Philippine Airlines, Inc. v. Edu,16 Smart contends that the designation of "fees" in Ordinance No. 18 is not
controlling.
The Court finds that the fees imposed under Ordinance No. 18 are not taxes.
Section 5, Article X of the 1987 Constitution provides that "each local government unit shall have the power to create its
own sources of revenues and to levy taxes, fees, and charges subject to such guidelines and limitations as the Congress
may provide, consistent with the basic policy of local autonomy. Such taxes, fees, and charges shall accrue exclusively to
the local government."
Consistent with this constitutional mandate, the LGC grants the taxing powers to each local government unit. Specifically,
Section 142 of the LGC grants municipalities the power to levy taxes, fees, and charges not otherwise levied by provinces.
Section 143 of the LGC provides for the scale of taxes on business that may be imposed by municipalities 17 while Section
14718 of the same law provides for the fees and charges that may be imposed by municipalities on business and
occupation.
The LGC defines the term "charges" as referring to pecuniary liability, as rents or fees against persons or property, while
the term "fee" means "a charge fixed by law or ordinance for the regulation or inspection of a business or activity." 19
In this case, the Municipality issued Ordinance No. 18, which is entitled "An Ordinance Regulating the Establishment of
Special Projects," to regulate the "placing, stringing, attaching, installing, repair and construction of all gas mains, electric,
telegraph and telephone wires, conduits, meters and other apparatus, and provide for the correction, condemnation or
removal of the same when found to be dangerous, defective or otherwise hazardous to the welfare of the
inhabitant[s]."20 It was also envisioned to address the foreseen "environmental depredation" to be brought about by these
"special projects" to the Municipality.21 Pursuant to these objectives, the Municipality imposed fees on various structures,
which included telecommunications towers.
As clearly stated in its whereas clauses, the primary purpose of Ordinance No. 18 is to regulate the "placing, stringing,
attaching, installing, repair and construction of all gas mains, electric, telegraph and telephone wires, conduits, meters and
other apparatus" listed therein, which included Smarts telecommunications tower. Clearly, the purpose of the assailed
Ordinance is to regulate the enumerated activities particularly related to the construction and maintenance of various
structures. The fees in Ordinance No. 18 are not impositions on the building or structure itself; rather, they are impositions
on the activity subject of government regulation, such as the installation and construction of the structures. 22
Since the main purpose of Ordinance No. 18 is to regulate certain construction activities of the identified special projects,
which included "cell sites" or telecommunications towers, the fees imposed in Ordinance No. 18 are primarily regulatory
in nature, and not primarily revenue-raising. While the fees may contribute to the revenues of the Municipality, this effect
is merely incidental. Thus, the fees imposed in Ordinance No. 18 are not taxes.
In Progressive Development Corporation v. Quezon City,23 the Court declared that "if the generating of revenue is the
primary purpose and regulation is merely incidental, the imposition is a tax; but if regulation is the primary purpose, the
fact that incidentally revenue is also obtained does not make the imposition a tax."

In Victorias Milling Co., Inc. v. Municipality of Victorias, 24 the Court reiterated that the purpose and effect of the
imposition determine whether it is a tax or a fee, and that the lack of any standards for such imposition gives the
presumption that the same is a tax.
We accordingly say that the designation given by the municipal authorities does not decide whether the imposition is
properly a license tax or a license fee. The determining factors are the purpose and effect of the imposition as may be
apparent from the provisions of the ordinance. Thus, "[w]hen no police inspection, supervision, or regulation is provided,
nor any standard set for the applicant to establish, or that he agrees to attain or maintain, but any and all persons engaged
in the business designated, without qualification or hindrance, may come, and a license on payment of the stipulated sum
will issue, to do business, subject to no prescribed rule of conduct and under no guardian eye, but according to the
unrestrained judgment or fancy of the applicant and licensee, the presumption is strong that the power of taxation, and not
the police power, is being exercised."
Contrary to Smarts contention, Ordinance No. 18 expressly provides for the standards which Smart must satisfy prior to
the issuance of the specified permits, clearly indicating that the fees are regulatory in nature.
These requirements are as follows:
SECTION 5. Requirements and Procedures in Securing Preliminary Development Permit.
The following documents shall be submitted to the SB Secretary in triplicate:
a) zoning clearance
b) Vicinity Map
c) Site Plan
d) Evidence of ownership
e) Certificate true copy of NTC Provisional Authority in case of Cellsites, telephone or telegraph line, ERB in
case of gasoline station, power plant, and other concerned national agencies
f) Conversion order from DAR is located within agricultural zone.
g) Radiation Protection Evaluation.
h) Written consent from subdivision association or the residence of the area concerned if the special projects is
located within the residential zone.
i) Barangay Council Resolution endorsing the special projects.
SECTION 6. Requirement for Final Development Permit Upon the expiration of 180 days and the proponents of special
projects shall apply for final [development permit] and they are require[d] to submit the following:
a) evaluation from the committee where the Vice Mayor refers the special project
b) Certification that all local fees have been paid.
Considering that the fees in Ordinance No. 18 are not in the nature of local taxes, and Smart is questioning the
constitutionality of the ordinance, the CTA correctly dismissed the petition for lack of jurisdiction. Likewise, Section 187

of the LGC,25 which outlines the procedure for questioning the constitutionality of a tax ordinance, is inapplicable,
rendering unnecessary the resolution of the issue on non-exhaustion of administrative remedies.
On whether the imposition of the fees in Ordinance No. 18 is ultra vire Smart argues that the Municipality exceeded its
power to impose taxes and fees as provided in Book II, Title One, Chapter 2, Article II of the LGC. Smart maintains that
the mayors permit fees in Ordinance No. 18 (equivalent to 1% of the project cost) are not among those expressly
enumerated in the LGC.
As discussed, the fees in Ordinance No.18 are not taxes. Logically, the imposition does not appear in the enumeration of
taxes under Section 143 of the LGC.
Moreover, even if the fees do not appear in Section 143 or any other provision in the LGC, the Municipality is empowered
to impose taxes, fees and charges, not specifically enumerated in the LGC or taxed under the Tax Code or other applicable
law. Section 186 of the LGC, granting local government units wide latitude in imposing fees, expressly provides:
Section 186. Power To Levy Other Taxes, Fees or Charges. - Local government units may exercise the power to levy
taxes, fees or charges on any base or subject not otherwise specifically enumerated herein or taxed under the provisions of
the National Internal Revenue Code, as amended, or other applicable laws: Provided, That the taxes, fees, or charges shall
not be unjust, excessive, oppressive, confiscatory or contrary to declared national policy: Provided, further, That the
ordinance levying such taxes, fees or charges shall not be enacted without any prior public hearing conducted for the
purpose.
Smart further argues that the Municipality is encroaching on the regulatory powers of the National Telecommunications
Commission (NTC). Smart cites Section 5(g) of Republic Act No. 7925 which provides that the National
Telecommunications Commission (NTC), in the exercise of its regulatory powers, shall impose such fees and charges as
may be necessary to cover reasonable costs and expenses for the regulation and supervision of the operations of
telecommunications entities. Thus, Smart alleges that the regulation of telecommunications entities and all aspects of its
operations is specifically lodged by law on the NTC.
To repeat, Ordinance No. 18 aims to regulate the "placing, stringing, attaching, installing, repair and construction of all
gas mains, electric, telegraph and telephone wires, conduits, meters and other apparatus" within the Municipality. The fees
are not imposed to regulate the administrative, technical, financial, or marketing operations of telecommunications
entities, such as Smarts; rather, to regulate the installation and maintenance of physical structures Smarts cell sites or
telecommunications tower. The regulation of the installation and maintenance of such physical structures is an exercise of
the police power of the Municipality. Clearly, the Municipality does not encroach on NTCs regulatory powers.
The Court likewise rejects Smarts contention that the power to fix the fees for the issuance of development permits and
locational clearances is exercised by the Housing and Land Use Regulatory Board (HLURB). Suffice it to state that the
HLURB itself recognizes the local government units power to collect fees related to land use and development.
Significantly, the HLURB issued locational guidelines governing telecommunications infrastructure.1wphi1 Guideline
No. VI relates to the collection of locational clearance fees either by the HLURB or the concerned local government unit,
to wit:
VI. Fees
The Housing and Land Use Regulatory Board in the performance of its functions shall collect the locational clearance fee
based on the revised schedule of fees under the special use project as per Resolution No. 622, series of 1998 or by the
concerned LGUs subject to EO 72.26
On whether Ordinance No. 18 is valid and constitutional

Smart contends that Ordinance No. 18 violates Sections 130(b)(3) 27 and 186 of the LGC since the fees are unjust,
excessive, oppressive and confiscatory. Aside from this bare allegation, Smart did not present any evidence substantiating
its claims. In Victorias Milling Co., Inc. v. Municipality of Victorias, 28 the Court rejected the argument that the fees
imposed by respondent therein are excessive for lack of evidence supporting such claim, to wit:
An ordinance carries with it the presumption of validity. The question of reasonableness though is open to judicial inquiry.
Much should be left thus to the discretion of municipal authorities. Courts will go slow in writing off an ordinance as
unreasonable unless the amount is so excessive as to be prohibitive, arbitrary, unreasonable, oppressive, or confiscatory. A
rule which has gained acceptance is that factors relevant to such an inquiry are the municipal conditions as a whole and
the nature of the business made subject to imposition.
Plaintiff, has however not sufficiently proven that, taking these factors together, the license taxes are unreasonable. The
presumption of validity subsists. For, plaintiff has limited itself to insisting that the amounts levied exceed the cost of
regulation and the municipality has adequate funds for the alleged purposes as evidenced by the municipalitys cash
surplus for the fiscal year ending 1956.
On the constitutionality issue, Smart merely pleaded for the declaration of unconstitutionality of Ordinance No. 18 in the
Prayer of the Petition, without any argument or evidence to support its plea. Nowhere in the body of the Petition was this
issue specifically raised and discussed. Significantly, Smart failed to cite any constitutional provision allegedly violated by
respondent when it issued Ordinance No. 18.
Settled is the rule that every law, in this case an ordinance, is presumed valid. To strike down a law as unconstitutional,
Smart has the burden to prove a clear and unequivocal breach of the Constitution, which Smart miserably failed to do. In
Lawyers Against Monopoly and Poverty (LAMP) v. Secretary of Budget and Management, 29 the Court held, thus:
To justify the nullification of the law or its implementation, there must be a clear and unequivocal, not a doubtful, breach
of the Constitution. In case of doubt in the sufficiency of proof establishing unconstitutionality, the Court must sustain
legislation because "to invalidate [a law] based on xx x baseless supposition is an affront to the wisdom not only of the
legislature that passed it but also of the executive which approved it." This presumption of constitutionality can be
overcome only by the clearest showing that there was indeed an infraction of the Constitution, and only when such a
conclusion is reached by the required majority may the Court pronounce, in the discharge of the duty it cannot escape, that
the challenged act must be struck down.
WHEREFORE, the Court DENIES the petition.
SO ORDERED.
ANTONIO T. CARPIO
Associate Justice
WE CONCUR:
MARIA LOURDES P. A. SERENO
Chief Justice