Act of State

Conflict between municipal law and international law:

Ichong vs. Hernandez, 101 Phil 115

Case Law/ Doctrine: The police power may not be curtailed or surrendered by any treaty or any other
conventional agreement.

Summary: RA 1180 (An Act to Regulate the Retail Business) which limits the power of aliens on the Retail
Industry is the issue in this case. According to Ichiong, this is, among others, in violation of the country’s
international obligations (Charter of the United Nations, the Declaration of the Human Rights adopted by the
United Nations General Assembly and The Treaty of Amity between the Republic of the Philippines and the
Republic of China). The SC ruled in the negative. It believes that this is a proper exercise of police power which
may not be curtailed or surrendered by any treaty or any other conventional agreement.

Facts:
 Lao H. Ichong, in his own behalf and in behalf of other alien residents, corporations and partnerships
adversely affected by RA 1180 files this petition attacking the constitutionality of the said.

 Background of RA 1180:
o The Legislature passed R.A. 1180 (An Act to Regulate the Retail Business). Its purpose was to
prevent persons who are not citizens of the Phil. from having a stranglehold upon the people’s
economic life.
 a. a prohibition against aliens and against associations, partnerships, or corporations the
capital of which are not wholly owned by Filipinos, from engaging directly or indirectly
in the retail trade
 b. aliens actually engaged in the retail business on May 15, 1954 are allowed to continue
their business, unless their licenses are forfeited in accordance with law, until their death
or voluntary retirement. In case of juridical persons, ten years after the approval of the
Act or until the expiration of term.
o Citizens and juridical entities of the United States were exempted from this Act.
 a. provision for the forfeiture of licenses to engage in the retail business for violation of
the laws on nationalization, economic control weights and measures and labor and other
laws relating to trade, commerce and industry.
 b. provision against the establishment or opening by aliens actually engaged in the retail
business of additional stores or branches of retail business
  According to Ichong, Republic Act 1180 is unconstitutional, because:
o a. it denies to alien residents the equal protection of the laws and deprives of their liberty and
property without due process of law ;
o b. the subject of the Act is not expressed or comprehended in the title thereof;
o c. the Act violates international and treaty obligations of the Republic of the Philippines;
o d. the provisions of the Act against the transmission by aliens of their retail business thru
hereditary succession, and those requiring 100% Filipino capitalization for a corporation or
entity to entitle it to engage in the retail business, violate the spirit of Sections 1 and 5, Article
XIII and Section 8 of Article XIV of the Constitution.

 OSG’s ARGUMENTS
o a. the Act was passed in the valid exercise of the police power of the State, which exercise is
authorized in the Constitution in the interest of national economic survival;
o b. the Act has only one subject embraced in the title;
o c. no treaty or international obligations are infringed;
o d. as regards hereditary succession, only the form is affected but the value of the property is not
impaired, and the institution of inheritance is only of statutory origin.

Issue/s:
1. Whether or not RA 1180 violates the international and treaty obligations of the Republic of the
Philippines
2. Whether or not the Act deprives the aliens of the equal protection of the laws and due process because it
is a valid exercise of police power?

Ruling:
1. NO.
o Nations Charter imposes no strict or legal obligations regarding the rights and freedom of their
subjects and the Declaration of Human Rights contains nothing more than a mere
recommendation or a common standard of achievement for all peoples and all nations.
o As to the treaty with China, moreover, All that the treaty guarantees is equality of treatment to
the Chinese nationals "upon the same terms as the nationals of any other country." But the
nationals of China are not discriminating against because nationals of all other countries, except
those of the United States, who are granted special rights by the Constitution, are all prohibited
from engaging in the retail trade.
 o But even supposing that the law infringes upon the said treaty, the treaty is always subject to
qualification or amendment by a subsequent law and the same may never curtail or restrict the
scope of the police power
o It cannot be said to be void for supposed conflict with treaty obligations because no treaty has
actually been entered into on the subject and the police power may not be curtailed or
surrendered by any treaty or any other conventional agreement. Municipal law is higher than
international law.

2. NO. The Court resumed holding that the disputed law was enacted to remedy a real actual threat and
danger to national economy posed by alien dominance and control of the retail business and free citizens
and country from dominance and control. The law does not violate the equal protection clause of the
Constitution because sufficient grounds exist for the distinction between alien and citizen in the exercise
of the occupation regulated, nor the due process of law clause, because the law is prospective in
operation and recognizes the privilege of aliens already engaged in the occupation and reasonably
protects their privilege.
o Official statistics point out to the ever-increasing dominance and control by alien of the retail
trade. It is this domination and control that is the legislature’s target in the enactment of the Act.
o The mere fact of alienage is the root cause of the distinction between the alien and the national as
a trader. The alien is naturally lacking in that spirit of loyalty and enthusiasm for the Phil. where
he temporarily stays and makes his living. The alien owes no allegiance or loyalty to the State,
and the State cannot rely on him/her in times of crisis or emergency.
o While the citizen holds his life, his person and his property subject to the needs of the country,
the alien may become the potential enemy of the State.

ON POLICE POWER: The enactment clearly falls within the scope of the police power of the State, thru
which and by which it protects its own personality and insures its security and future. It has been said the police
power is so far - reaching in scope, and it is almost impossible to limit its sweep. It derives its existence from
the very existence of the State itself, and does not need to be expressed or defined in its scope. It is said to be
coextensive with self-protection and survival, and as such it is the most positive and active of all governmental
processes, the most essential, insistent and illimitable. Therefore, we cannot foresee the needs and demands of
public interest and welfare in this constantly changing and progressive world, so we cannot delimit beforehand
the extent or scope of police power by which and through which the State seeks to attain or achieve interest or
welfare. The Constitution does not define the scope or extent of the police power of the State. The State sets
forth the limitations. The most important limitations are the due process clause and the equal protection clause.
Petition is hereby DENIED.