MMDA v VIRON TRANSPORTATION

G.R. No. 170657; 15 Aug 2007; CARPIO MORALES, J.

Digest by Miguel
I.

FACTS:

1. Recognizing the worsening traffic situation in Metro Manila and nearby

provinces, on February 10, 2003, then-President Gloria Macapagal Arroyo
issued the questioned EO 179, "Providing for the Establishment of Greater
Manila Mass Transport System." Among the salient points of the EO are the
following:
a. In one of the Whereas clauses: The MMDA recommended a plan to
decongest traffic by eliminating the bus terminals now located along major
Metro Manila thoroughfares and providing more convenient access to the
mass transport system by providing common mass transport terminal
facilities, integrating buses and railway systems.
b. Secs. 2 and 3: The project was for four interim common terminals,
focusing initially on North and South Metro Manila. The MMDA would be
designated as the Implementing Agency for the project.
c. For this project, the MMDA would have several functions and
responsibilities:
1. preparation of the project Master Plan
2. coordinating with agencies and landowners for the use of
land/properties for the project
3. supervising and managing construction of structures and facilities.
4. executing necessary contracts for the implementation of the project
in accordance with existing laws and pertinent regulations
5. managing funds as may be necessary for the projects in accordance
with prevailing accounting and audit practice in government
6. enlisting the assistance of any national govenrment agency, office,
or department, including LGUs and GOCCs, as may be necessary
7. assigning and hiring personnel for the above purposes
8. performing such other related functions as necessary to accomplish
the objectives and purposes of EO 179.
2. The MMDA's governing board and policymaking body, the Metro Manila Council
(MMC), issued Resolution No. 03-07 s.2003 expressing full support of the Project. In
particular, the MMC stressed the need to remove the bus terminals along major
Metro Manila thoroughfares.
3. The MMDA then began implementing the EO. Around February 24 of the
same year, two bus companies filed petitions before the RTC of Manila:

a. Viron Transport filed a petition for declaratory relief, alleging that

the MMDA was poised to issue a Memo Circular or Order closing, or
tantamount to closing, all provincial bus terminals along EDSA and in the
whole of Metro Manila. Its terminals in Sampaloc, Manila and in Quezon City
would be among them. They allege that such is outside the authority of the
MMDA to regulate traffic under its charter, RA 7924. In addition, they seek a
ruling on the legality of the said acts alongside the Public Service Act and
related laws which mandate public utilities to provide and maintain their own
terminals as requisite for operating as common carriers.
b. Mencorp Transport filed a similar petition, making similar
allegations as Viron. They also seek that the EO be declared
unconstitutional and illegal for transgressing the possessory rights of owners
and operators of public land transportation units over their respective
terminals.
4. The TC in its original decision ruled in favor of MMDA, holding that the EO
was a valid exercise of police power as it satisfied the subject matter and means
tests. However, they reversed on MR, holding that the EO was an unreasonable
exercise of police power, that MMDA's authority under Sec. 5e of its charter does
not include the power to close the terminals, and that the EO is inconsistent with
the Public Service Act. MMDA's MR being denied, they file the present petition with
the Supreme Court.
II.

ISSUES and ARGUMENTS PER ISSUE:

1. W/N the case presents a justiciable controversy, allowing for a petition for
declaratory relief.
A. PETITIONER MMDA's ARGUMENTS
a. There is no justiciable controversy as nothing in the body of the
EO mentions or orders the closure and elimination of bus terminals. No
evidence was cited apprising the transport groups of an immediate
plan to close down their terminals.
b. Even then, the EO is only an administrative directive to
government agencies to coordinate with the MMDA, and to make
available for use government property along EDSA and SLEX. As such,
the EO only created a relationship between the Chief Executive and the
implementing officials, and not third persons.
B. RESPONDENTS' COUNTER-ARGUMENTS
a. There is a justiciable controversy. They resorted to the Court
because the EO, in one of its whereas clauses (see Facts), set out the
MMDA's plan to eliminate the bus terminals. Viron even alleged that
there is already a diagram laying down the design of one the terminals,
and that such is already being constructed. (the MMDA even affirmed
that they have begun implementing the EO)

2. W/N the MMDA has the authority to order the elimination of the bus
terminals given the law and the Constitution.
A. RESPONDENTS' ARGUMENTS
a. The MMDA has no authority to order the elimination of their bus
terminals under the EO. Such violates the Constitution and the Public
Service Act; they do not even have the necessary authority in their
charter.
B. PETITIONER'S ARGUMENTS
a. The real issue is the President's authority to undertake/cause the
implementation of the project. EO 125 (Reorganizing the Ministry
of Transportation and Communications), her residual power,
and the Revised Administrative Code constitute sufficient
authority.
b. Moreover, the EO is a valid exercise of police power.
3. Assuming arguendo that police power was validly delegated to the MMDA,
W/N the EO was a valid police power measure.
A. RESPONDENTS' ARGUMENTS:
a. No issue as to public purpose. Traffic congestion is a public
concern that needs to be addressed immediately.
b. The exercise of the power was oppressive and transgressed
their rights over their respective terminals (of a confiscatory
character).
B. PETITIONER'S ARGUMENTS:
a. There was a valid exercise of police power.
4. Regardless of the implementing agency, W/N the EO is in line with the
provisions of the Public Service Act.
A. RESPONDENTS' ARGUMENT:
a. The closure of the terminals is not in line with the PSA, which
mandates public utilities to provide and maintain their own
terminals as requisite for the privilege of operating as common
carriers.
B. PETITIONER'S ARGUMENT:
a. The closure is in line with the PSA. The issue is more on the
Presidents authority.
III.

COURTS DISCUSSION:

1. YES, as the EO is already being implemented, and there is already the possibility
of closure of terminals (an event that would make the EO applicable to the
transportation companies)-- such would be ripe for declaratory relief.

- General: The requirements of a petition for declaratory relief under Rule

63 of the Rules of Court are: (1) There must be a justiciable controversy, (2) Such
controversy must be between persons with adverse interests, (3) The party seeking
relief must have a legal interest in the controversy, and (4) The issue invoked must
be ripe for judicial determination.
As to the argument that closure was not contemplated:
- A justiciable controversy is present when an actual legal controversy
exists between the parties, and is before the Court, and the declaration
sought would help in ending the controversy: in other words, where there is
a claim of a right which is actually contested. Moreover, in a petition for
declaratory relief, the action must be brought before the breach or violation
as per Rule 63, Sec. 1 of the Rules of Court.
- The resort to court was prompted by the issuance of the EO. Several
provisions under the EO show an intent to immediately execute the plans
laid therein:
- The EO was made effective immediately.
- Sec. 2 laid down the immediate establishment of common terminals
for north- and south-bound commuters.
- Sec. 8 directed the DBM to allocate funds for the terminals.
- Such resolve is bolstered by the MMC's Resolution 03-07, where it also
stressed the intent to remove bus terminals, and to establish common terminals.
The MMDA even affirmed that they have begun implementing the project.
- This is no longer conjectural or anticipatoryit is an actual, justiciable
controversy. For them to wait for actual issuance of an order of closure would be to
bring the case outside the ambit of declaratory relief.
As to the argument that the EO is unrelated to third persons:
- The provisions of the EO are clear that the MMDA seeks to eliminate
the existing bus terminals, including those owned by the respondents. Said
respondents would have to operate from the common terminals.
- Surely, there would be an adverse effect on them for they stand to be
deprived of their constitutional right to property without due process of law.
2. NO, as (1) the agency with the power to establish and administer integrated
programs for transportation is the DOTC, and (2) even if the MMDA could be
delegated the power, the MMDA's Charter is limited merely to administer and apply
the law.
I. On the part of the President
- Secs. 4, 5, 6, and 22 of EO 125 gave the DOTC the power to
establish and administer comprehensive and integrated programs for

transportation and communications, with the DOTC as the primary entity for
the promotion, development, and regulation of transportation and communications.
- Such power extends to the President through her control of the
executive department, bureaus and offices under Art. VII, Sec. 17 of the
Constitution, and Sec. 1, Bk III and Sec. 38, Chapter 37, Bk IV of the Revised
Administrative Code. The latter even defines supervision and control to include
authority to act directly whenever a specific function is entrusted by law
or regulation to a subordinate.
[Note that such a delegation is a delegation of police power. This is a matter of
importance in related issues.]
II. On the part of the MMDA
- However, EO 125 states that the DOTC is the primary implementing
and administrative entity for transportation. With this alone, EO 125 is ultra
vires by making the MMDA the implementing agency.
- Moreover, RA 7924 does not give authority to the MMDA to eliminate bus
terminals.
- The scope of the MMDA's functions was already settled in MMDA v
Bel-Air, where the Court stressed that they are limited to the delivery of seven
basic services-- one of which is transport and traffic management, including the
mass transport system, and that only certain acts were allowed under their charter:
formulation, coordination, regulation, implementation, preparation, management,
monitoring, setting of policies, installation of systems and administration.
- That scope did not give them anything resembling police or
legislative power, unlike the legislative bodies of LGUs. They cannot order
the elimination of terminals, the act being one of police power.
3. NO, as the means used in lessening traffic congestion were unduly oppressive.
- There are two tests for a valid police power measure.
(1) Public purpose test - the interest of the public generally, as
distinguished from that of a particular class, requires its exercise
(2) Means test - the means employed are reasonably necessary for the
accomplishment of the purpose and not unduly oppressive upon
individuals
- There was no issue as to public purpose, only as to the means
employed. The effect of the EO would necessarily be the closure of the
existing bus terminalsis this oppressive?.
- This is similar to Lucena Grand Central Terminal v JAC Liner, where a
city ordinance requiring all PUVs in Lucena to unload and load at a single

common terminal was struck down due to overbreadth, the Court then
finding that it was beyond what was reasonably necessary to solve the traffic
problem in the city. Worse, the compulsory use of the central terminal was held
oppressive as it subjected its users to additional fees and charges. Surely there
could have been alternatives-- if terminals lack adequate space that drivers have to
load and unload on the streets, then they could impose regulations for terminal
specifications. Worse, the scope is so broad that even entities that may be able to
provide better facilities are barred.
- The same is the case here. There are so many less intrusive measures
that could have been availed of, such as banning colorum vehicles or strictly
enforcing traffic rules. Here, there is certainly an invalid exercise of police power.
- A caveat: the EO cannot said to be confiscatory of properties as their
certificates of public convenience confer no property rights-- they are mere licenses
or privileges that must yield to legislation.
4. NO, as the law recognizes the terminal facilities as a necessary service, with the
elimination of such running contrary to it.
- Paragraph (a), Sec. 13, Chapter II of the Public Service Act (now part of the
LTFRB charter) vested the PSC (now LTFRB) with jurisdiction, supervision and control
over public services (at least for land transport), as well as their franchises,
equipment, and other properties. It may also impose conditions as to construction
and service as the public interest and convenience may require.
- Among these is the power to compel public utilities to furnish safe,
adequate and proper service, including facilities (Sec. 16 of the Public Service Act).
This recognizes the terminals as a necessary service where elimination would run
counter to the law.
PETITION DENIED. EO 179 DECLARED NULL AND VOID FOR BEING ULTRA
VIRES.