[G.R. No.

 136762. November 21, 2002.]

ASSOCIATED COMMUNICATIONS and WIRELESS SERVICES, LTD., (ACWS) being operated and
doing business under the trade name UNITED BROADCASTING NETWORK, INC., petitioner, vs.
FIDELO Q. DUMLAO, CONSUELO S. PEREZ and TEODORO Y. YABES in their official capacities as
Acting Commissioner and Deputy Commissioners, respectively of the NATIONAL
TELECOMMUNICATIONS COMMISSION, respondents.

SYNOPSIS

When the National Telecommunications Commission (NTC) was created, it granted the Associated Communications and
Wireless Services, Ltd. (ACWS) renewable permits and licenses for the continued operation of its radio and television broadcasting
systems. Before the expiration of its temporary permit, ACWS applied for its renewal. It was approved by the NTC, conditioned to be
released upon payment of the necessary fees in the total amount of P3,600.00. The stated amount was paid by ACWS. However,
the NTC refused to release the temporary permit and instead it directed ACWS to show cause why its temporary permit to operate
should not be recalled for failure to secure a legislative franchise. The NTC also ordered ACWS to cease and desist from operating
Channel 25. This case was docketed as NTC Administrative Case No. 98-009. Despite the pendency of the said administrative
case, ACWS filed with the Court of Appeals a Petition for Mandamus, Prohibition and Damages. But it was denied by the Court of
Appeals. Hence, this petition. IcEaST

The special civil actions of prohibition and mandamus are extraordinary remedies that a party can resort to only in cases
of extreme necessity where the ordinary forms of procedure are powerless to afford relief and where there is no other clear,
adequate and speedier remedy. In this case, NTC Administrative Case No. 98-009 was the adequate, speedier and less expensive
remedy to secure the reliefs sought.

Moreover, it is basic that a party's failure to exhaust administrative remedies is fatal especially where the case involves
not just issues of law and of fact but of administrative discretion. The available administrative procedures must be pursued until a
definite and final determination is held.

Accordingly, the decision of the Court of Appeals was affirmed.

SYLLABUS

1. POLITICAL LAW; ADMINISTRATIVE LAW; EXHAUSTION OF ADMINISTRATIVE REMEDIES; EXPLAINED. — Before

a party may seek the intervention of the court, he should first avail of all the means afforded him by administrative processes. This
rule on exhaustion of administrative remedies was explained thus: "The underlying principle of the rule on exhaustion of
administrative remedies rests on the presumption that the administrative agency, if afforded a complete chance to pass upon the
matter, will decide the same correctly. There are both legal and practical reasons for the principle. The administrative process is
intended to provide less expensive and more speedy solution to disputes. Where the enabling statute indicates a procedure for
administrative review and provides a system of administrative appeal or reconsideration, the courts — for reasons of law, comity
and convenience — will not entertain a case unless the available administrative remedies have been resorted to and the appropriate
authorities have been given an opportunity to act and correct errors committed in the administrative forum."

2. ID.; ID.; ID.; FAILURE TO COMPLY THEREWITH IS FATAL ESPECIALLY WHERE THE CASE INVOLVES
ADMINISTRATIVE DISCRETION; CASE AT BAR. — Indeed, the issues which administrative agencies such as the NTC are
authorized to decide should not be summarily taken from them and submitted to a court without first giving such administrative
agency the opportunity to dispose of the same after due deliberation. The purpose of the administrative case was precisely to thresh
out the legality of the continued operation of Channel 25. The administrative case was the proper forum for ACWS to ventilate its
side. The administrative case also provides an opportunity for the NTC to correct any actual or fancied errors attributed to it by way
of re-examination of the factual and legal aspects of the case. This is the reason why ACWS was required to file an answer and
hearings were held on the matter. . . . It is basic that a party's failure to exhaust administrative remedies is fatal, especially where
the case involves not just issues of law and of fact but of administrative discretion. The available administrative procedures must be
pursued until a definite and final determination is held.

3. REMEDIAL LAW; SPECIAL CIVIL ACTIONS; PROHIBITION AND MANDAMUS; CAN BE RESORTED TO IN CASES
OF EXTREME NECESSITY ONLY. — The special civil actions of prohibition and mandamus are extraordinary remedies that a party
can resort to only in cases of extreme necessity where the ordinary forms of procedure are powerless to afford relief and where
there is no other clear, adequate and speedier remedy.

4. ID.; CIVIL PROCEDURE; ACTIONS; DUPLICITY OF SUITS WOULD RESULT IN CONFUSION AND THE
POSSIBILITY OF CONFLICTING DECISIONS COULD ARISE. — In its Memorandum filed before this Court on December 14,
1999, ACWS claims that the NTC has already decided NTC Administrative Case No. 98-009. ACWS further claims that it filed an
appeal under the 1997 Rules of Civil Procedure  before the Court of Appeals from the NTC's decision in the administrative case.

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There are in effect two cases pending between the same parties for the same causes of action and reliefs, one in the Court of
Appeals and the other in this Court. If we resolve this case on the merits while ACWS's appeal is pending before the Court of
Appeals, the duplicity of suits would result in confusion and the possibility of conflicting decisions could arise. For an orderly
administration of justice, ACW'S's appeal now pending before the Court of Appeals should be resolved first considering that the
appeal is from a decision of the NTC on the merits of the case.

5. POLITICAL LAW; CONSTITUTIONAL LAW; BILL OF RIGHTS; DUE PROCESS CLAUSE; TWO CONDITIONS TO
CONCUR IN ORDER TO FALL WITHIN THE PROTECTION THEREOF. — In order to fall within the protection of this provision, two
conditions must concur, namely, that there is a deprivation and that such deprivation is done without proper observance of due
process. When one speaks of due process of law, a distinction must be made between matters of procedure and matters of
substance. In essence, procedural due process "refers to the method or manner by which the law is enforced," while substantive
due process "requires that the law itself, not merely the procedures by which the law would be enforced, is fair, reasonable, and
just."

6. ID.; ID.; ID.; ADMINISTRATIVE DUE PROCESS; NOTICE AND HEARING; PROPERLY COMPLIED WITH IN CASE
AT BAR. — Notice and hearing are fundamental requirements of procedural due process when an administrative body exercises its
quasi-judicial functions. Both were complied with in this case. It is of no moment that ACWS did not receive the letter dated
November 17, 1998. What is important is that ACWS received the Order dated February 26, 1998 requiring it to show cause why its
permit to operate Channel 25 should not be cancelled. In any case, the Court has maintained a clear position with regard to the due
process requirements in administrative cases, that is — "(a)s long as a party was given the opportunity to defend his interests in due
course, he cannot be said to have been denied due process of law, for this opportunity to be heard is the very essence of due
process. "Moreover, this constitutional mandate is deemed satisfied if a person is granted an opportunity to seek reconsideration of
the action or ruling complained of." The NTC afforded ACWS an opportunity to be heard by requiring it to submit an answer and by
conducting hearings on the matter. All told, ACWS had an opportunity to seek a reconsideration of the Order dated February 26,
1998 before the NTC. AEcTaS

DECISION

CARPIO, J p:

The Case
This petition for review on certiorari 1 seeks to reverse the Decision 2 of the Court of Appeals dated September 30, 1998
in CA-G.R. SP No. 47675, as well as the Resolution dated December 10, 1998 denying the motion for reconsideration. The Court of
Appeals in its assailed Decision denied the petition for mandamus and prohibition filed by Associated Communications and Wireless
Services, Ltd. against Fidelo Q. Dumlao as Acting Commissioner, and Consuelo S. Perez and Teodoro Y. Yabes as Deputy
Commissioners of the National Telecommunications Commission.

The Facts
Petitioner Associated Communications and Wireless Services, Ltd. ("ACWS" for brevity) is a registered partnership
organized and existing under the laws of the Philippines, doing business under the trade name United Broadcasting Network, Inc.
Initially, ACWS operated several radio and television stations nationwide by virtue of a legislative franchise acquired in 1969
under R.A. No. 4551 through Concurrent Resolution No. 58 of the Sixth Congress of the Philippines. 3 Act No. 3846, 4 as amended,
otherwise known as the Radio Laws of the Philippines, requires a person who operates radio broadcasting stations for commercial
purposes to secure a legislative franchise.

In 1974, Presidential Decree No. 576-A 5 ("PD 576-A" for brevity) took effect providing for the regulation of radio and
television broadcast services in the country. Effective December 31, 1981, PD 576-A 6 terminated all franchises, grants, licenses,
permits, certificates or other forms of authority to operate radio or television broadcasting systems. PD 576-A conferred on the
Board of Communications and the Secretary of Public Works and Communications the power to grant permits to operate radio or TV
broadcast stations. The exercise of this power was made appealable to the Office of the President.

With the termination of its legislative franchise, ACWS continued to operate its radio and television stations through
permits issued by the Board of Communications and the Secretary of Public Works and Communications pursuant to PD 576-A.

In 1979, Executive Order No. 546 7 ("EO 546" for brevity) created the Ministry of Public Works and the Ministry of
Transportation and Communications. EO 546 merged the Board of Communications and the Telecommunications Control Bureau
into a single entity called the National Telecommunications Commission under the Ministry of Transportation and
Communications. 8 EO 546 vested in the NTC the power to grant permits for the operation of radio and television stations.
Specifically, subparagraphs (a) and (c) of EO 546 provide as follows:

"Section 15. Functions of the Commission. — The Commission shall exercise the following
functions:

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 a. Issue Certificate of Public Convenience for the operation of communications utilities and
services, radio communications systems, wire or wireless telephone or telegraph
systems, radio and television broadcasting systems and other similar public utilities;

xxx xxx xxx

b. Grant permits for the use of radio frequencies for wireless telephone and telegraph systems and
radio communications systems including amateur radio stations and radio and television
broadcasting systems;

xxx xxx xxx." 9 (Emphasis supplied)

The NTC granted ACWS renewable temporary permits and licenses for the continued operation of its radio  10 and
television broadcasting systems.

ACWS operates Channel 25 under call sign DWQH-TV in the Ultra High Frequency (UHF) Band as authorized by
temporary permits. The latest temporary permit for Channel 25 was Temporary Permit No. BSD-0828-95 dated July 7, 1995,
effective from June 29, 1995 to June 28, 1997.

ACWS applied for an increase of the transmitter power of Channel 25 from one kilowatt to 25 kilowatts, the application
docketed as NTC Case No. 91-031. In an Order dated May 28, 1996, then NTC Commissioner Simeon Kintanar granted the
application on the ground that ACWS "is legally, financially and technically capable and the proposed increase of power will redound
to the interest of the public." Consequently, ACWS embarked on an expansion program to meet the NTC-approved upgrading of its
facilities.

Before the expiration of Temporary Permit No. BSD-0828-95, ACWS applied for its renewal on June 3, 1997. In a letter
dated January 19, 1998, NTC Senior Executive Assistant III Delilah F. Deles informed ACWS of the approval of its temporary permit
for Channel 25, to be released upon payment of the necessary fees in the total amount of P3,600.00.  11 ACWS paid the amount on
February 4, 1998 as evidenced by Official Receipt No. 0879209. 12

The NTC, however, refused to release to ACWS the approved and paid for temporary permit. Instead, the NTC issued an
Order 13 dated February 26, 1998 directing ACWS to show cause why its temporary permit to operate should not be recalled for
failure to secure a legislative franchise. The NTC also ordered ACWS to cease and desist from operating Channel 25. The order
reads:

"In a letter dated 17 November 1997, a copy of which is hereto attached as Annex "A", this
Commission, thru its Broadcast Service Division, directed above-named respondents to submit, within thirty
(30) days from expiration of its Temporary Permit, a new congressional franchise and failure to do so may
cause a denial of their application for renewal of their Temporary Permits. Despite this directive, respondents
failed to submit a new congressional franchise.

Earlier on, or on 28 October 1997, this Commission, thru the Chief, Broadcast Division, received
from the Committee on Legislative Franchises, a certification, a copy of which is hereto attached as Annex
"B" that respondents were ordered to submit requirements to support their franchise application (House Bill
No. 14345) but respondents failed to do, thus the application was never deliberated upon in the 9th
Congress. In the 10th Congress, no refiled application by the respondents was pending in the Committee on
Legislative Franchise.

IN VIEW THEREOF, respondents are hereby directed to show cause in writing within ten (10) days
from receipt of this order why their assigned frequency, more specifically Channel 25 in the UHF Band,
should not be recalled for lack of the necessary Congressional Franchise as required by Section 1, Act No.
3846, as amended.

Moreover, respondent is hereby directed to cease and desist from operating DWQH-TV, unless
subsequently authorized by the Commission.

SO ORDERED."

The case was docketed as NTC Administrative Case No. 98-009. On March 17, 1998, ACWS filed its Answer praying
among others that the Order dated February 26, 1998 be set aside and the administrative case be dismissed. Petitioner also prayed
that the approved temporary permit to operate Channel 25 be released. Upon ACWS's request, the NTC conducted a hearing on
the matter on April 22, 1998, during which ACWS adduced evidence. ACWS requested a continuance to June 8, 1998.

On May 15, 1998, despite the pendency of NTC Administrative Case No. 98-009 and its request for continuance, ACWS
filed with the Court of Appeals a petition for "Mandamus, Prohibition and Damages with Prayer for Temporary Restraining Order
and/or Writ of Preliminary Prohibitory Injunction." ACWS prayed that the NTC be ordered to release ACWS's already approved and
paid for temporary permit to operate Channel 25 or to issue the corresponding Certificate of Public Convenience pursuant to EO
546. ACWS also sought to enjoin NTC from proceeding with NTC Administrative Case No. 98-009. ACWS likewise sought
reimbursement of its legal expenses amounting to P100,000.00.

In a resolution dated May 22, 1998, the Court of Appeals restrained the NTC from continuing with the proceedings in NTC
Administrative Case No. 98-009. In due course, however, the Court of Appeals rendered its Decision denying ACWS's petition and
its motion to reconsider the same.

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 The Ruling of the Court of Appeals
The Court of Appeals held that mandamus does not lie to compel the exercise of discretion in the grant or release of a
temporary permit to operate a television station. Neither is prohibition proper to enjoin the NTC from proceeding with NTC
Administrative Case No. 98-009. The Court of Appeals explained that even if the renewal of ACWS's temporary permit had been
approved and paid for, the NTC could still inquire whether ACWS complied with the Memorandum of Understanding ("MOU" for
brevity) between the House Committee on Legislative Franchises and the KBP of which ACWS is a member. The MOU provides as
follows:

"The NTC shall continue to issue and grant permits or authorizations to operate radio and
television broadcast stations within their mandate under Section 15 of Executive Order No. 546, provided that
such temporary permits or authorization to operate shall be valid for two (2) years within which the permittee
shall be required to file an application for a legislative franchise with the congress not later than December
31, 1994; provided further, if the application for franchise remains unacted by the Congress without however
being disapproved or denied, such temporary permit or authorization to operate shall be extendible for
another two (2) year period; provided finally, that if the permittee of the temporary permit or authorization to
operate fails to secure the legislative franchise with Congress within this period, the NTC shall not extend or
renew its permit or authorization to operate any further." (Emphasis supplied.)

In view of ACWS's failure to secure a legislative franchise as required by the MOU, the NTC issued its Order of February 26,
1998.
The Court of Appeals then observed that the matters ventilated in the petition were substantially the same as those raised
in ACWS's answer in NTC Administrative Case No. 98-009. Applying the doctrine of primary jurisdiction, the Court of Appeals
declared that the determination of whether ACWS complied with the requisites for the renewal of its permit is best left for the NTC to
decide as the government agency tasked to oversee the operations of radio and television stations. The Court of Appeals concluded
that ACWS cannot at this stage come to the court to enjoin the NTC from excising a power clearly vested in it by law.

Hence, the instant petition.

The Issues
Petitioner claims that the Court of Appeals grievously erred in:

1. FAILING TO APPRECIATE THE TRUE ISSUE PRESENTED BY PETITIONER IN THE PROCEEDINGS

BELOW.

2. FAILING OR REFUSING TO GRASP THE BASIC DIFFERENCE BETWEEN THE MERE RELEASE OF
AN ALREADY APPROVED AND PAID FOR TEMPORARY PERMIT TO OPERATE AND THE
EVALUATION OF PETITIONER'S CAPABILITY TO OPERATE A TELEVISION STATION.

3. RECOGNIZING THE MEMORANDUM OF UNDERSTANDING ENTERED INTO AMONG THE

RESPONDENTS COMPRISING THE NTC, THE HOUSE OF REPRESENTATIVES COMMITTEE
ON LEGISLATIVE FRANCHISES AND THE KAPISANAN NG MGA BRODKASTER SA
PILIPINAS.

4. FINDING THAT THE DOCTRINE OF PRIMARY JURISDICTION APPLIES TO THE CASE AT BAR.

5. NOT ORDERING RESPONDENTS TO REFUND OR REIMBURSE PETITIONER THE ACTUAL

DAMAGES IT SUFFERED ON ACCOUNT OF THEIR REFUSAL TO RELEASE THE ALREADY
APPROVED AND PAID FOR TEMPORARY PERMIT TO OPERATE AS WELL AS THEIR
BASELESS SUSPENSION OF PETITIONER'S OPERATIONS. 14

On the first and second issues, ACWS agrees that the exercise of discretion cannot be compelled by  mandamus. ACWS
likewise agrees that the power to grant a permit or authority to operate a broadcast facility is discretionary. However, ACWS points
out that once the discretionary power has been exercised as in this case where the temporary permit had already been approved,
the simple act of releasing the approved and paid for temporary permit becomes merely ministerial.

On the third issue, ACWS contends that the MOU is contrary to PD 576-A and EO 546 for requiring a legislative franchise
in order to secure a certificate of public convenience. Moreover, the MOU, as executed by a mere Committee of the Lower House
and the KBP encroaches on the exercise of the executive functions of the NTC.

On the fourth issue, ACWS argues that the doctrine of primary jurisdiction is inapplicable to this case considering that the
issue submitted to the Court of Appeals does not call for any "special knowledge, experience and service of the tribunal to
determine technical and intricate matters of fact." The question for resolution of the Court of Appeals is whether the NTC acted in a
whimsical and arbitrary manner in its unjustified refusal to release the already approved and paid for temporary permit and in
immediately ordering the suspension of ACWS's television operations.

Lastly, petitioner argues that it is entitled to a reimbursement of its legal expenses in the amount of P100,000.00 on
account of NTC's capricious, vexing and arbitrary actuations.

In sum, petitioner seeks the following reliefs: (1) the release of its already approved and paid for temporary permit to
operate; (2) the cessation of the administrative proceedings initiated by NTC against petitioner for the purpose of recalling its

4|Page
Channel 25 permit to operate; and (3) damages in the amount of P100,000.00 for the capricious, vexing and arbitrary actuations of
the NTC officials concerned.

The Court's Ruling

We cannot rule on the merits of the petition on the grounds of non-exhaustion of administrative remedies and  litis
pendentia.

NTC Administrative Case No. 98-009 commenced upon NTC's issuance of the Order dated February 26, 1998. The Order
"directed ACWS to show cause in writing within ten (10) days from receipt why their assigned frequency, Channel 25 in the UHF
Band, should not be recalled for lack of the necessary congressional franchise as required by Section 1, Act No. 3846, as
amended." The Order also directed ACWS to cease and desist from operating its television station, unless subsequently authorized
by the Commission. There was no mention of the MOU purportedly executed by the House Committee on Legislative Franchises
and the KBP.

On March 17, 1998, ACWS filed an answer asserting that the frequency assigned to Channel 25 should not be recalled
for the following reasons: (1) Department of Justice Opinion No. 98, Series of 1991, 15 states that EO 546 authorizes an
administrative agency such as the NTC to issue permits for the operation of radio and television broadcasting systems without need
of a prior franchise issued by Congress; (2) NTC is estopped from recalling the assigned frequency since it had previously approved
the application for renewal of the temporary permit which has been paid for; (3) the recall or cancellation is unreasonable, unfair and
oppressive considering that ACWS had commenced upgrading and expanding its facilities, expending millions of pesos purchasing
new equipment after NTC approved its permit to purchase; and (4) the letter dated November 17, 1997 mentioned in the Order
dated February 26, 1998 was never sent nor received by ACWS as validated by the lack of proof of service or at least the registry
receipt or a return card. ACWS sought the dismissal of the administrative case and the release of the temporary permit.

Apparently, the rights asserted and reliefs prayed for by ACWS before the NTC, the Court of Appeals and now before this
Court are identical and based on the same facts. ACWS did not wait for the administrative case to proceed to its appropriate
conclusion before seeking judicial intervention. Hence, the Court of Appeals properly denied the petition for premature invocation of
the court's jurisdiction.

It appears that the NTC issued the Order pursuant to the NTC Rules of Practice and Procedure. Rule 13, Part IV
(Summary Proceedings) of the NTC Rules provides thus:

"PART IV-SUMMARY PROCEEDINGS

Rule 13 — Order to Show Cause

Section 1. When applicable. — Based on the report of an authorized personnel of the Board, or the
credible sworn statement of any offended party, the board instead of acting according to the procedure
indicated for complaints, may issue an order directing a respondent operator to appear before the board
within seventy-two hours from his receipt of a copy of the order and show cause why his certificate should not
be cancelled or suspended for the cause stated in the report or complaint.

This summary proceeding shall apply, in the discretion of the Board, only in cases where the
continued acts of the public's utility operator shall cause serious detriment to public interest.

This summary proceeding shall also be applicable in cases of willful or contumacious refusal by an
operator to comply with an order, rule or regulation of the Board, or any provision of the Public Services Act,
as amended, or any provisions of the Plan.

The Board, for good cause, may prior to the hearing suspend for a period not exceeding thirty (30)
days any certificate or the exercise of any right or authority granted under the Act or Plan by order of the
Board, whenever such step shall in the judgment of the Board be necessary to avoid serious and irreparable
damage or inconvenience to the public or to private interests.

Section 2. Content. — The order to show cause shall include a statement in substance of the
violation reported or complained of, and, whenever practicable, there shall be appended to it a copy of the
report or complaint upon which the order is based."

It is not disputed that ACWS had in fact applied for a franchise with the 9th Congress of the Philippines but failed to
submit the necessary supporting documents. The Committee on Legislative Franchises issued a certification attesting to this fact. It
was then that the NTC, now acting as a three-member commission, inquired why ACWS failed to submit the documents. The NTC
also warned ACWS about the probable recall of its assigned frequency for failure to secure a legislative franchise as required by  Act
No. 3846.

Failure to Exhaust Administrative Remedies is Fatal

Before a party may seek the intervention of the court, he should first avail of all the means afforded him by administrative
processes. 16 This rule on exhaustion of administrative remedies was explained thus:

"The underlying principle of the rule on exhaustion of administrative remedies rests on the

presumption that the administrative agency, if afforded a complete chance to pass upon the matter, will
decide the same correctly. There are both legal and practical reasons for the principle. The administrative
process is intended to provide less expensive and more speedy solution to disputes. Where the enabling

5|Page
 statute indicates a procedure for administrative review and provides a system of administrative appeal or
reconsideration, the courts — for reasons of law, comity and convenience — will not entertain a case unless
the available administrative remedies have been resorted to and the appropriate authorities have been given
an opportunity to act and correct errors committed in the administrative forum." 17 (Emphasis supplied).

Indeed, the issues which administrative agencies such as the NTC are authorized to decide should not be summarily
taken from them and submitted to a court without first giving such administrative agency the opportunity to dispose of the same after
due deliberation. The purpose of the administrative case was precisely to thresh out the legality of the continued operation of
Channel 25.

The administrative case was the proper forum for ACWS to ventilate its side. The administrative case also provides an
opportunity for the NTC to correct any actual or fancied errors attributed to it by way of re-examination of the factual and legal
aspects of the case. This is the reason why ACWS was required to file an answer and hearings were held on the matter.

Resort to Mandamus and Prohibition was Premature

The NTC in its Order dated February 26, 1998 gave ACWS ten days from receipt to file an answer. On March 17, 1998,
ACWS filed an answer. Upon ACWS's request, a hearing was held on April 22, 1998. Upon ACWS's motion, a continuance to June
8, 1998 was granted. ACWS filed a petition for mandamus and prohibition with the Court of Appeals on May 15, 1998, thirteen days
after the first hearing and twenty-four days before the scheduled second hearing. Under these circumstances, the NTC could hardly
be expected to have acted on the issues and corrected itself. Clearly, ACWS filed the petition prematurely.

The special civil actions of prohibition and mandamus are extraordinary remedies that a party can resort to only in cases
of extreme necessity where the ordinary forms of procedure are powerless to afford relief and where there is no other clear,
adequate and speedier remedy. In this case, NTC Administrative Case No. 98-009 was the adequate, speedier and less expensive
remedy to secure the reliefs sought.

It is basic that a party's failure to exhaust administrative remedies is fatal, especially where the case involves not just
issues of law and of fact but of administrative discretion. The available administrative procedures must be pursued until a definite
and final determination is held. 18

Litis Pendentia also Fatal to Petitioner's Cause

In its Memorandum filed before this Court on December 14, 1999, ACWS claims that the NTC has already decided NTC
Administrative Case No. 98-009. ACWS further claims that it filed an appeal under the  1997 Rules of Civil Procedure  before the
Court of Appeals from the NTC's decision in the administrative case. There are in effect two cases pending between the same
parties for the same causes of action and reliefs, one in the Court of Appeals and the other in this Court.

If we resolve this case on the merits while ACWS's appeal is pending before the Court of Appeals, the duplicity of suits
would result in confusion and the possibility of conflicting decisions could arise. For an orderly administration of justice, ACWS's
appeal now pending before the Court of Appeals should be resolved first considering that the appeal is from a decision of the NTC
on the merits of the case.

No Denial of Due Process

Neither could ACWS plead denial of due process as justification for its immediate resort to the court. Section 1 of the Bill
of Rights lays down what is known as the "due process clause" of the Constitution, thus:

Section 1. No person shall be deprived of life, liberty, or property without due process of law, . . . ."

In order to fall within the protection of this provision, two conditions must concur, namely, that there is a deprivation and
that such deprivation is done without proper observance of due process. When one speaks of due process of law, a distinction must
be made between matters of procedure and matters of substance. In essence, procedural due process "refers to the method or
manner by which the law is enforced," while substantive due process "requires that the law itself, not merely the procedures by
which the law would be enforced, is fair, reasonable, and just." 19

ACWS argues that NTC failed to observe due process in the issuance of the Order dated February 26, 1998 because
ACWS did not receive the letter dated November 17, 1998 20 mentioned in the Order. The letter required petitioner to submit its
new congressional franchise within 30 days from expiration of the temporary permit to be renewed. The letter did not refer to
Channel 25 but to the radio stations maintained and operated by ACWS. ACWS likewise assails the directive to cease and desist
from operating Channel 25. Obviously, ACWS is referring to the procedural aspect of the due process clause.

Notice and hearing are fundamental requirements of procedural due process when an administrative body exercises its
quasi-judicial functions. Both were complied with in this case.

It is of no moment that ACWS did not receive the letter dated November 17, 1998. What is important is that ACWS
received the Order dated February 26, 1998 requiring it to show cause why its permit to operate Channel 25 should not be
cancelled. In any case, the Court has maintained a clear position with regard to the due process requirements in administrative
cases, that is —

"(a)s long as a party was given the opportunity to defend his interests in due course, he cannot be
said to have been denied due process of law, for this opportunity to be heard is the very essence of due
process. Moreover, this constitutional mandate is deemed satisfied if a person is granted an opportunity to
seek reconsideration of the action or ruling complained of " 21 (Emphasis supplied).

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 The NTC afforded ACWS an opportunity to be heard by requiring it to submit an answer and by conducting hearings on
the matter. All told, ACWS had an opportunity to seek a reconsideration of the Order dated February 26, 1998 before the NTC.

WHEREFORE, the Decision of the Court of Appeals dated September 30, 1998, as well as its Resolution dated
December 10, 1998 in CA-G.R. SP No. 47675, is AFFIRMED. aIHCSA

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 [G.R. No. 252119. August 25, 2020.]

ABS-CBN CORPORATION, petitioner, vs. NATIONAL TELECOMMUNICATIONS

COMMISSION, * respondent.

DECISION

PERLAS-BERNABE, J p:
Before the Court is a Petition for Certiorari and Prohibition (With Urgent Applications for the Issuance of a Temporary
Restraining Order [TRO] and/or a Writ of Preliminary Injunction [WPI]) 1 assailing the Order 2 dated May 5, 2020 issued by
respondent National Telecommunications Commission (NTC) which directed petitioner ABS-CBN Corporation (ABS-CBN) to
immediately cease and desist from operating its radio and television stations (CDO) due to the expiration of its legislative
franchise granted under Republic Act No. (RA) 7966, entitled "An Act Granting the ABS-CBN Broadcasting Corporation a
Franchise to Construct, Install, Operate, and Maintain Television and Radio Broadcasting Stations in the Philippines, and for
Other Purposes." 3
The Facts
On March 30, 1995, petitioner ABS-CBN was granted a legislative franchise to "construct, operate, and maintain, for
commercial purposes and in the public interest, television and radio broadcasting stations in and throughout the
Philippines" 4 under RA 7966. The franchise was valid for a term of twenty-five (25) years from the law's effectivity on May 4,
1995, or until May 4, 2020. 5
In 2014 and 2018, bills 6 for the renewal of ABS-CBN's franchise were filed in the 16th and 17th Congress. 7 In the
current (or 18th) Congress, eleven (11) bills 8 for the renewal of ABS-CBN's franchise were submitted before the House
Committee on Legislative Franchises, while two (2) bills 9 were filed before the Senate Committee on Rules. 10 On February
26, 2020, another bill 11 was filed seeking the amendment of Section 1 of RA 7966 to extend the term of ABS-CBN's franchise
while Congress is still deliberating on the issue of franchise renewal. 12
In addition to these bills, several Resolutions were filed in relation to the renewal or extension of ABS-CBN's
franchise, particularly: (a) House Resolution No. 639, 13 urging the House Committee on Legislative Franchises to report,
without delay, the pending franchise bills of ABS-CBN for plenary action; (b) House Joint Resolution No. 28, 14 seeking the
extension of the franchise of ABS-CBN until the end of the 18th Congress, or until June 30, 2022, to give Congress additional
time to review and assess the franchise bills; and (c) House Joint Resolution No. 29, 15 seeking to extend the franchise of
ABS-CBN until May 4, 2021, to give Congress enough time to thoroughly study and debate on the pending franchise bills. 16
On February 24, 2020, the Senate Committee on Public Services called a hearing to "look into, in aid of legislation,
the operations of [ABS-CBN] to determine compliance with the terms and conditions of its franchise under [ RA] 7966." During
the hearing, respondent NTC's Commissioner, Gamaliel A. Cordoba (Commissioner Cordoba), stated that the NTC has not
withdrawn any Provisional Authority to operate under similar circumstances and has not closed any broadcast company in the
past due to an expired franchise, pending its renewal. Commissioner Cordoba also declared that in the case of ABS-CBN, it
will issue a Provisional Authority if so advised by the Department of Justice (DOJ). 17
On February 26, 2020, the DOJ — through Secretary Menardo I. Guevarra — replied 18 to the letter dated February
12, 2020 written by Commissioner Cordoba requesting a legal opinion on the matter of the congressional franchise of ABS-
CBN. Citing a number of circumstances, 19 the DOJ Secretary refrained from rendering a formal legal opinion on the matter.
Nonetheless, he made the following observations for the NTC's "guidance": (a) there is an "established practice" or "equitable
practice" to allow a broadcast company to continue its operations despite an expired franchise, pending its renewal;  (b) the
plenary power of Congress includes the auxiliary power to define and preserve the rights of the franchise applicant pending
final determination of the renewal of the franchise; and (c) the NTC may provisionally authorize an entity to operate. 20
On even date (February 26, 2020), the House Committee on Legislative Franchises sent a letter 21 to the NTC
enjoining it to grant ABS-CBN a provisional authority to operate "effective May 4, 2020 until such time that the House of
Representatives/Congress has made a decision on its application." 22 The letter was signed by the Committee's Chairperson,
Franz E. Alvarez (Chairperson Alvarez) with the concurrence of Speaker Alan Peter S. Cayetano. 23
On March 4, 2020, the Senate adopted Resolution No. 40, 24 "expressing the sense of the Senate that [ABS-CBN],
its subsidiaries and/or affiliates, ABS-CBN Convergence, Inc., Sky Cable Corporation and Amcara Broadcasting Network, Inc.,
should continue to operate pending final determination of the renewal of its franchise by the 18th Congress."  25 This was an
adoption of Senate Concurrent Resolution No. 6, 26 which was earlier filed, taking into consideration Senate Concurrent
Resolution Nos. 7 27 and 8, 28 and Proposed Senate Resolution No. 344. 29
On March 10, 2020, during the preliminary hearing of the House Bills for the renewal or grant of ABS-CBN's
franchise conducted by the House Committee on Legislative Franchises, Commissioner Cordoba declared that the NTC "will
follow the advice of the DOJ and let ABS-CBN continue [its] operations based on equity." 30

8|Page
 On March 16, 2020, the NTC, due to the mandated suspension of regular work in light of the Enhanced Community
Quarantine, issued a Memorandum Order 31 declaring that "[a]ll subsisting permits [sic] necessary to operate, and maintain
broadcast and pay TV facilities nationwide expiring within the quarantine period shall automatically be renewed and shall
continue to be valid sixty (60) days after the end of the government-imposed quarantine period." 32
On May 3, 2020, Solicitor General Jose C. Calida, through a press release, "warned the [NTC] against granting ABS-
CBN provisional authority to operate while the approval of its franchise is pending in Congress." He further declared that "the
NTC [C]ommissioners could risk subjecting themselves to prosecution under the country's anti-graft and corruption laws should
they issue the 'unlawful' [provisional authorities] to ABS-CBN in the absence of a franchise." 33
For his part, the DOJ Secretary "[stood] by [his] position that there is sufficient equitable basis to allow broadcast
entities to continue operating while the bills for the renewal of their franchise[s] remain pending with Congress."  34 Also,
several lawmakers disagreed with the Solicitor General's statements, including Chairperson Alvarez who said that "[w]ith the
legal opinion of the [DOJ] and the authority given by the House of Representatives, there is no reason for ABS-CBN to
discontinue or stop [its] operations." 35
On May 4, 2020, ABS-CBN's franchise expired. Hence, on May 5, 2020, the NTC issued the CDO directing ABS-
CBN to "immediately CEASE and DESIST from operating [the enumerated] 36 radio and television stations." The CDO was
based solely on the "expiration of RA 7966." 37 Consequently, on even date, ABS-CBN complied with the CDO and went off-
air. 38
On May 7, 2020, ABS-CBN filed the instant Petition for Certiorari and Prohibition (With Urgent Applications for the
Issuance of a [TRO] and/or a [WPI]) before the Court, claiming that the NTC committed grave abuse of discretion in issuing the
CDO. 39
In its petition, ABS-CBN mainly argues that instead of issuing the CDO, the NTC should have allowed ABS-
CBN to continue its operations pending Congress' determination of whether or not to renew its legislative franchise
based on the bills already filed therefor. In this regard, ABS-CBN posits that "the plenary power of Congress to grant
or renew a franchise necessarily includes the corollary power to define and preserve rights and obligations pending
its final determination of the matter." 40 Therefore, by disregarding the pending bills for the renewal of ABS-CBN's
franchise, the NTC gravely abused its discretion in issuing the assailed CDO. 41
Also, ABS-CBN asserts that the CDO violated its right to equal protection of the laws, pointing out that the NTC
deviated from its past practice to allow broadcasting entities to continue operating pending Congress' action on the renewal or
extension of their franchises. 42
Furthermore, ABS-CBN decries a transgression of its right to due process since the NTC issued the CDO without
any prior notice or hearing and by ignoring the serious and irreparable damage that the CDO will inflict on it and its
employees. 43
Finally, ABS-CBN maintains that the CDO compromised the right to public information, especially in this time of
public health emergency where it plays a significant role, and that it necessarily amounts to a limitation, if not, curtailment, of
the freedom of speech and of the press with prior restraint. 44
Incidents After the Filing of the Petition
On May 11, 2020, the NTC received a Show Cause Order 45 from the House of Representatives, requiring it to
explain why it should not be cited in contempt for issuing the CDO against ABS-CBN. 46 In a letter-response 47 dated May 12,
2020, the NTC explained that in view of the wording of the Constitution and related laws, as well as prevailing jurisprudence on
the matter, it could not issue a provisional authority in favor of ABS-CBN pending the deliberations of the Congress on
its franchise, as to do so would amount to an encroachment into the exclusive power of Congress to grant legislative
franchises to broadcasting companies. Expressing regret over its failure to notify the House of Representatives of its
decision to issue the assailed CDO, the NTC assured that it will abide by any law passed by Congress regarding the
matter. 48
On May 18, 2020, ABS-CBN filed an Urgent Reiterative Motion for the Issuance of a [TRO] and/or a
[WPI], 49 pointing out that on May 13, 2020, House Bill No. (HB) 6732, entitled "An Act Granting ABS-CBN Broadcasting
Corporation a Franchise to Construct, Install, Operate, and Maintain Television and Radio Broadcasting Stations in the
Philippines, and for Other Purposes," was filed before the House of Representatives, seeking to grant ABS-CBN a provisional
franchise until October 31, 2020 to "give both the House of Representatives and the Senate [ample time] to hear the issues
being raised for and against the renewal, and assess, with complete impartiality and fairness, whether or not the network shall
be granted a franchise for another twenty-five (25) years." 50 While highlighting that HB 6732 had already been approved on
second reading by the House of Representatives convened as a "Committee of the Whole" and that the members of the
Senate had also expressed their willingness to act swiftly on the matter, ABS-CBN nevertheless lamented that it will still take
some time before HB 6732 is passed into law. In this light, and in order to avert any grave and irreparable injury to it, its
employees, various stakeholders, and the public in general, ABS-CBN reiterated its prayer for the Court to immediately issue a
TRO or WPI to, in the meantime, restrain the implementation of the CDO. 51
In a Resolution dated May 19, 2020, the Court resolved to: (a) require the NTC to comment on the petition and
urgent applications for the issuance of a TRO and/or WPI; (b) separately implead the House of Representatives and the
Senate as parties to this case and require them to likewise comment on the petition and urgent applications for a TRO and/or
WPI; and (c) require NTC to file a reply to the aforesaid comments of the House of Representatives and Senate. The Court
further resolved to deny the motion to consolidate this case with G.R. No. 251932. 52

9|Page
 Complying with the Court's directive, the NTC, through the Office of the Solicitor General (OSG), filed its Comment
(with Omnibus Motion) 53 dated May 25, 2020, raising both procedural and substantive arguments in support of the dismissal
of the instant petition. In its Omnibus Motion, the NTC further prayed that the Senate and the House of Representatives
should be discharged as parties to the instant case, since they are not real parties-in-interest or indispensable parties
herein as no relief has been claimed by ABS-CBN as against them but only as against the NTC. 54
In response, ABS-CBN filed a Motion for Leave to File Opposition to Omnibus Motion and Opposition to Omnibus
Motion, 55 positing that the Senate and the House of Representatives were rightly impleaded in this case, since the issue
herein concerns their constitutional power to grant a legislative franchise, and the CDO is an incursion into the auxiliary power
of Congress to preserve the rights of a franchise applicant. 56
For its part, the Senate filed its Manifestation (In Lieu of Comment Re: Resolution dated May 19, 2020) 57 dated
May 28, 2020. Praying that it be discharged as a party to the case, the Senate echoed the NTC's Omnibus Motion that it is
neither an indispensable party nor a necessary party to the case, invoked the principle of separation of powers, and pointed out
that there is no claim, counterclaim, or cross-claim against it. 58
On June 1, 2020, the House of Representatives filed its Comment Ad Cautelam, 59 similarly seeking to be
discharged as a party to the case since there is no cause of action or any relief sought by ABS-CBN as against it in the
petition. Moreover, the House of Representatives asserted that any inquiry into its actions at this stage in the deliberations on
ABS-CBN's franchise will be premature and offensive to the doctrine of separation of powers. 60
The Issue Before the Court
The primordial issue for the Court's resolution is whether or not the NTC gravely abused its discretion in issuing the
assailed CDO against ABS-CBN.
The Court's Ruling
In light of the supervening denial of the pending House bills for the renewal of ABS-CBN's legislative franchise, the
Court finds it appropriate to dismiss this case on the ground of mootness. The Court explains.
At the onset, it is imperative to point out that based on our Constitution and laws, a legislative franchise is both a
pre-requisite and a continuing requirement for broadcasting entities to broadcast their programs through television and
radio stations in the country.
Broadly speaking, "a franchise is defined to be a special privilege to do certain things conferred by government on
an individual or corporation, and which does not belong to citizens generally of common right." 61 Insofar as the great
powers of government are concerned, "[a] franchise is basically a legislative grant of a special privilege to a
person." 62 In Associated Communications & Wireless Services v. NTC (Associated Communications), 63 the Court defined a
"franchise [as] the privilege granted by the State through its legislative body x x x subject to regulation by the State itself by
virtue of its police power through its administrative agencies " 64 On this score, Section 11, Article XII of the 1987
Constitution further states that "for the operation of a public utility," no "such franchise or right [shall] be granted except under
the condition that it shall be subject to amendment, alteration, or repeal by the Congress when the common good so
requires." 65
With respect to the broadcast industry, Section 1 of Act No. 3846, 66 as amended, clearly provides that "[n]o person,
firm, company, association or corporation shall construct, install, establish, or operate a radio station within the Philippine
Islands without having first obtained a franchise therefor from the Philippine Legislature x x x." 67 It has also been
clarified in Associated Communications that a congressional franchise is required to operate radio, as well as television
stations, in light of the subsequent issuance of Presidential Decree No. (PD) 576-A. 68
In this relation, Section 6 of PD 576-A further imposes, as an additional requirement to operate a radio or television
station, an "authority" coming from "the Board of Communications and the Secretary of Public Works and Communications or
their successors [(i.e., the NTC)] 69 who have the right and authority to assign to qualified parties frequencies, channels or
other means of identifying broadcasting systems." In Divinagracia v. Consolidated Broadcasting System, Inc.
(Divinagracia), 70 citing Associated Communications, this Court ruled that the legislative franchise requirement under Act No.
3846, as amended, was not repealed by the additional requirement imposed in PD 576-A. 71 Instead, they co-exist. Thus,
in Divinagracia, it was explained that:
Broadcast and television stations are required to obtain a legislative franchise, a requirement
imposed by the Radio Control Act and affirmed by our ruling in Associated Broadcasting. After
securing their legislative franchises, stations are required to obtain CPCs from the NTC before they can
operate their radio or television broadcasting systems. Such requirement while traceable also to the  Radio
Control Act, currently finds its basis in E.O. No. 546, the law establishing the NTC. 72 (Emphasis supplied)
In this case, ABS-CBN seeks that the Court annul and set aside the CDO issued by the NTC ordering it to cease and
desist from operating its radio and television stations enumerated therein. The core of ABS-CBN's petition rests on its
argument that the NTC should not have pre-empted the will of Congress by directing it (ABS-CBN) to halt its broadcasting
operations through said stations pending the determination of Congress on the renewal of its legislative franchise based
on the bills specifically filed therefor. In other words, ABS-CBN banks on the fact that since Congress has yet to act on
these pending bills, there is still a possibility that its legislative franchise would be renewed; hence, the NTC should not have
overtaken Congress' action on these pending bills by issuing the assailed CDO. In this regard, ABS-CBN claims that Congress
has the "corollary power" to define and preserve rights and obligations pending its final determination on the
matter. 73 Notably, ABS-CBN's position is echoed in the "guidance" issued by the DOJ Secretary, which submits that the

10 | P a g e
 plenary power of Congress includes the auxiliary power to define and preserve the rights of the franchise applicant pending
final determination of the renewal of the franchise. 74
However, the Court takes judicial notice of the fact that on July 10, 2020, the House Committee on Legislative
Franchises had adopted the recommendation of the Technical Working Group (TWG) to "deny the application of ABS-CBN
Corporation for a franchise to construct, install, establish, operate, and maintain radio and broadcasting stations in
the Philippines" 75 by an overwhelming 70 affirmative votes 76 from the 85 voting members present. 77 While ABS-CBN
states that there are two (2) pending bills for the renewal of its legislative franchise authored by members of the
Senate, 78 the Constitution provides that private bills, 79 such as those pertaining to the grant or renewal of a franchise,  must
exclusively originate from the lower house of Congress. 80 Accordingly, these pending Senate bills were referred to the Senate
Committee on Rules, 81 and now, the Senate Committee on Public Services. 82 Pursuant to existing jurisprudence, these
"substitute" bills are nonetheless only prepared in anticipation of the corresponding bill from the lower House, and that the
action of the Senate as a body is withheld pending receipt of the said House bill.  83 The anticipated House bills raised in the
petition, however, had already been passed upon by the House Committee on Legislative Franchises, and as mentioned, had
already been denied. As explicitly stated in the TWG's recommended resolution which was adopted by the House Committee
on Legislative Franchises, the denial pertained to "all of the House Bills and House Resolutions relative to the grant or
renewal of the franchise application of ABS-CBN Corporation [which were] hereby laid on the table," clearly showing
that the "committee action on a bill or resolution is unfavorable," 84 viz.:
RESOLUTION
DENYING THE FRANCHISE APPLICATION OF ABS-CBN CORPORATION TO CONSTRUCT,
INSTALL, ESTABLISH, OPERATE, AND MAINTAIN RADIO AND BROADCASTING STATIONS IN THE
PHILIPPINES
WHEREAS, Republic Act (RA) No. 7966 granted ABS-CBN Corporation (formerly ABS-CBN
Broadcasting Corporation) a franchise to construct, operate, and maintain television and radio
broadcasting stations throughout the Philippines;
WHEREAS, prior to expiration of RA No. 7966 on 05 May 2020, several House Bills and House
Resolutions were filed including House Bill Nos. 676, 3521, 3713, 3947, 4305, 5608, 5705, 5753, 6052,
6138, 6293 and 6694, and House Resolution Nos. 639 and 853 relative to the grant or renewal of ABS-
CBN Corporation's franchise;
WHEREAS, the Committee on Legislative Franchises sought the position of the stakeholders,
relevant government agencies and constituencies on the franchise application of ABS-CBN Corporation;
WHEREAS, the Committee on Legislative Franchises conducted its initial hearing on March 10,
2020 and the Joint Committees on Legislative Franchises and Good Government and Public
Accountability conducted extensive hearings from May 26 to July 9, 2020 to discuss the various issues
raised against ABS-CBN Corporation;
WHEREAS, the Committee on Legislative Franchises created a Technical Working Group
(TWG) to discuss the findings and recommend a decision of the Committee on Legislative Franchises on
the franchise application of ABS-CBN Corporation;
WHEREAS, the TWG, after due consideration of the testimonies, documents, submissions and
arguments has come up with its findings and recommendations contained in the TWG Report;
WHEREAS, the TWG recommended to deny the franchise application of ABS-CBN Corporation
and the Committee on Legislative Franchises to adopt its recommendation;
NOW THEREFORE BE IT RESOLVED AS IT IS HEREBY RESOLVED, that the members of
the Committee on Legislative Franchises deny the application of ABS-CBN Corporation for a
franchise to construct, install, establish, operate, and maintain radio and broadcasting stations in
the Philippines;
RESOLVED FURTHER that, pursuant to Section 49 of the 18th Congress Rules of the House of
Representatives, all of the House Bills and House Resolutions relative to the grant or renewal of the
franchise application of ABS-CBN Corporation are hereby laid on the table; and the authors thereof
shall be notified in writing and, as far as practicable, through electronic mail of the action within five (5)
days stating the reason(s) thereof.
xxx xxx xxx (Emphases and underscoring supplied)
Indeed, the adoption of the TWG's recommendation by the House Committee on Legislative Franchises is
considered as the official expression of the legislative will that has dispelled any previous uncertainty regarding ABS-
CBN's franchise status insofar as the pending franchise renewal bills are concerned. Hence, the supervening denial of
these bills means that ABS-CBN cannot any more invoke the same as basis for continuing the operation of the radio and
television networks covered by the CDO issued by the NTC. Accordingly, the issue on the "corollary/auxiliary" powers of
Congress pending the renewal of these bills had already been rendered moot.
To expound, "[a] case or issue is considered moot and academic when it ceases to present a justiciable
controversy by virtue of supervening events, so that an adjudication of the case or a declaration on the issue would be of no
practical value or use. In such instance, there is no actual substantial relief which a petitioner would be entitled to,

11 | P a g e
 and which would be negated by the dismissal of the petition. Courts generally decline jurisdiction over such case or
dismiss it on the ground of mootness. This is because the judgment will not serve any useful purpose or have any practical
legal effect because, in the nature of things, it cannot be enforced." 85
Because of the aforementioned supervening event, there is no actual substantial relief which petitioner ABS-
CBN would be entitled to regardless of this Court's disposition on the merits of the present petition. To demonstrate, should
the Court dismiss the petition on the merits, the dismissal would only validate and sustain respondent NTC's CDO and hence,
accord ABS-CBN no relief at all. On the other hand, should the Court grant the petition on the merits, the nullification of the
CDO will be of no practical consequence since based on our Constitution and laws, a legislative franchise is necessary for a
broadcasting entity to legally operate its radio and television stations. Thus, even if the CDO is annulled as prayed for, ABS-
CBN cannot altogether resume its broadcast operations through its radio and television stations because its
legislative franchise therefor had already expired and that, considering the denial of the House Committee on
Legislative Franchises, has not been renewed.
While indeed Congress has the plenary power to grant or renew legislative franchises and that this power has no
time limitation, it must be borne in mind that ABS-CBN's petition against the NTC is specifically anchored on the uncertainty
that the then-pending franchise renewal bills may be granted by Congress and hence, in the meantime, should have precluded
the NTC from issuing any interim CDO pending Congress' determination on the matter. However, since these bills had already
been denied, ABS-CBN's position lost its foundation and more so, legitimizes the current state of affairs that ABS-CBN cannot
legally operate its radio and television operations absent a legislative franchise therefor. Suffice it to say that any future
favorable action upon a newly-filed franchise renewal bill goes beyond the scope of this case, which is anchored only on the
franchise renewal bills pending in Congress at the time the NTC issued the assailed CDO. Besides, a broadcasting entity with
an expired legislative franchise cannot simply bank on the speculation of any future favorable congressional action on its
expired franchise since to do so would permit it to indefinitely circumvent the constitutional and statutory requirement of a valid
and subsisting legislative franchise altogether.
At any rate, the Court finds that ABS-CBN failed to provide sufficient legal basis to support its theory on Congress'
so-called "corollary/auxiliary" powers pending determination of the renewal of its expired franchise. On the contrary, what is
sufficiently clear to the Court is that, under our present legal framework, a legislative franchise granting broadcasting entities
the privilege to broadcast their programs through television and radio stations in the country must be in the form of a duly
enacted law. The congressional deliberations on pending bills are not equivalent and cannot take the place of a duly enacted
law, which requires the entire constitutional process for legislation to take its full course. Neither can it be inferred from
our Constitution and our present statutes that temporary statutory privileges may be accorded to a franchise applicant pending
deliberation of a franchise grant or renewal. Indeed, it is only upon the completion of the full law-making procedure in
accordance with the parameters prescribed by the Constitution can it be said that Congress has granted a broadcasting entity
the statutory privilege to so broadcast its programs through its television and radio stations. Absent a valid and subsisting
legislative franchise embodied in a duly passed law, no such statutory privilege, even if temporary, can be enjoyed.
On this note, it is apt to explain that it was actually because of ABS-CBN's argument on Congress' so-called
"corollary/auxiliary" powers that the Court deemed it necessary to implead 86 the two (2) Houses of Congress as parties to this
case if only to accord them the opportunity to be heard. Notably, the Court's directive to implead was made prior to the denial
of the franchise renewal bills as above-mentioned. Nonetheless, both the Senate and the House of Representatives requested
not to participate in the proceedings, considering that petitioner ABS-CBN has not, in fact, asked for any relief against them but
only against the NTC which issued the assailed CDO. As the Court's only intention was to accord its co-equal branch of
government due process because of the prospect of tackling a delicate constitutional issue, and considering now that the
pertinent issue affecting them had already been rendered moot, the Court therefore grants the requests of both Houses to be
discharged as parties to this case as prayed for in their submissions. "Parties may be dropped or added by order of the court
on motion of any party or on its own initiative at any stage of the action and on such terms as are just." 87
Finally, the Court recognizes that ABS-CBN also raises grounds other than its theory on "corollary/auxiliary" powers.
These are: (a) violation of the equal protection clause given that the NTC has in the past allowed broadcast entities to operate
pending renewal of their franchises; (b) violation of due process as it was not given the opportunity to be heard before the CDO
was issued; and (c) violation of freedom of the press and the right to public information because of its "significant role" in
disseminating news during this public health emergency. 88 All the same, however, the resolution of these issues cannot yield
any actual practical relief in favor of ABS-CBN because, by force of our Constitution and laws, it cannot be allowed to legally
operate the television and radio stations covered by the said CDO absent a legislative franchise for this purpose, and
considering the fact that the pending bills for its renewal had already been denied through official congressional action.
In closing, while the Court understands the plight and concerns of ABS-CBN, its employees, and its supporters in
general, it wishes to emphasize that the act of granting or renewing legislative franchises is beyond the Court's power.
Congress has the sole authority to grant and renew legislative franchises for broadcasting entities, such as ABS-CBN, to
legally broadcast their programs through allocated frequencies for the purpose. As it presently stands, the legislative branch of
our government has yet to grant or renew ABS-CBN's legislative franchise, which decision — whether fortunate or unfortunate
— this Court must impartially respect, else it violates the fundamental principle of separation of powers.
WHEREFORE, the Court resolves to: (1) DROP the House of Representatives and the Senate of the Philippines as
parties to this case; and (2) DISMISS the petition on the ground of mootness.
SO ORDERED.
Peralta, C.J., Caguioa, Gesmundo, J.C. Reyes, Jr., Hernando, Carandang, Lazaro-Javier, Inting, Zalameda, Lopez,
Delos Santos and Gaerlan, JJ., concur.

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 Leonen, J., see separate concurring opinion, I concur in the result.
Baltazar-Padilla, ** J., is on official leave.

13 | P a g e
 [G.R. No. 23551. November 25, 1925.]

THE CITY OF MANILA, petitioner,vs.JUAN POSADAS, Jr.,Collector of Internal Revenue, BEN F.

WRIGHT, Insular Auditor, and THE METROPOLITAN WATER DISTRICT, respondents.

SYLLABUS

1. THE CITY OF MANILA IS A MUNICIPAL CORPORATION WITH POWER TO SUE AND BE SUED. — Under its
charter, the City of Manila is a political body corporate, with the attributes of perpetual succession, and endowed with all of the
powers which pertain to a municipal corporation, with the right to a common seal, and it may take, purchase, hold, lease,
convey or dispose of real or personal property, condemn private property for public use, contract and be contracted with, sue
and be sued, and prosecute and defend its interests in the courts.
2. ITS MAYOR IS APPOINTED BY THE GOVERNOR-GENERAL. — Its Mayor is appointed by the Governor-
General with the consent of the Senate, and has "immediate control over the executive functions of the different departments,
subject to the authority and supervision of the Secretary of the Interior."
3. ITS MUNICIPAL BOARD IS THE LEGISLATIVE BODY OF THE CITY, AND ITS MEMBERS ARE ELECTED BY A
DIRECT VOTE OF THE PEOPLE. — The Municipal Board is the legislative body of the city, and its members are elected at
large from the entire city, and "the Board shall make all appropriations for the expenses of the government of the city."
4. PROVISIONS OF SECTION 3 OF THE ORGANIC ACT ARE CONSTITUTIONAL LIMITATIONS OF POWER
WHICH SHOULD BE RECOGNIZED AND ENFORCED. — Section 3 of the Organic Act, or what is known as the Jones Law,
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 laws. ...
"That no money shall be paid out of the treasury except in pursuance of an appropriation by law.
xxx xxx xxx
"That all money collected on any tax levied or assessed for a special purpose shall be treated as a
special fund in the treasury and paid out for such purpose only."
5. PROVISIONS FOR THE ALLOTMENT OF PUBLIC FUNDS AND THE DRAWING OF QUARTERLY WARRANTS
IN FAVOR OF MUNICIPALITIES. — Under the provisions of section 491 of the Administrative Code, from and out of the
internal revenue accruing to the Insular Treasury under section 490, there shall be set apart ten per centum as a road and
bridge allotment, and twenty per centum as a municipal allotment, and section 494 provides that the municipal allotment shall
be for the benefit of the inhabitants of the Islands in the purview of their community or requirements, and section 495 provides
that the City of Manila shall receive the shares which it would otherwise receive if it were both a municipality or a regularly
organized province, and section 497 provides that the payment of the internal revenue allotment shall be made from the Insular
Treasury quarterly, upon Warrants drawn by the Collector of Internal Revenue.
6. MAYOR IS EXECUTIVE OFFICER, AND MUNICIPAL BOARD IS LEGISLATIVE BODY OF THE CITY. — The
Mayor is the executive officer of the city, and the Municipal Board is the legislative body of the city, and the power to allow or
disallow claims against the city is vested in the Municipal Board, and that is a legislative power.
7. METROPOLITAN WATER DISTRICT IS A PUBLIC CORPORATION. — Under the provisions of Act No. 2832, the
Metropolitan Water District is a public corporation with powers among others "to sue and be sued in any court."
8. THE CITY DERIVES ITS REVENUES FROM PUBLIC SOURCES, AND THE METROPOLITAN WATER
DISTRICT DERIVES ITS REVENUES FROM PRIVATE SOURCES. — The City of Manila is a municipal Corporation which
derives all of its revenues From public funds in the nature of fines, licenses, and taxes that are assessed, levied, and collected
for its maintenance, and the Metropolitan Water District is a public corporation which derives all of its revenues from private
sources and monies which it collects from Consumers of its waters.
9. UNDER ITS CHARTER, CITY OF MANILA HAS BOTH EXECUTIVE, LEGISLATIVE AND JUDICIAL POWERS.
— Under its charter, the City of Manila has executive, legislative and judicial powers. Its executive power is vested in its Mayor.
Its judicial power is vested in its courts, and its legislative power is vested in its Municipal Board, which among other things has
the power to allow or disallow claims against the city, which is a legislative power.
10. THE CITY HAS A VESTED RIGHT IN ITS "PRO RATA" SHARE OF PUBLIC FUNDS IN THE TREASURY OF
THE GOVERNMENT. — Under the provisions of section 497, when the internal revenue has been collected and paid over to
the government treasury, the City of Manila has a legal and a vested right to have warrants drawn and signed for its pro rata
share to and in its favor, and to have that money taken from the government treasury and paid into its treasury.
11. DECISION OF INSULAR AUDITOR IS NOT BINDING AS TO THE VALIDITY OF A DISPUTED CLAIM
BETWEEN THE METROPOLITAN WATER DISTRICT AND THE CITY OF MANILA UPON WHICH THE CITY DENIES ANY
LIABILITY. — Although, in the absence of an appeal, the decisions of the Insular Auditor are binding upon the executive

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 branches of the government, they are not binding as to a claim of the Metropolitan Water District against the City of Manila, the
validity of which is disputed by the city, and upon which it denies any liability.
12. NO MONEY CAN BE TAKEN FROM THE GOVERNMENT TREASURY WITHOUT AN APPROPRIATION. —
Under the provisions of section 3 of the Jones Law, neither the Insular Auditor nor any one else has authority to take money
from and out of the government treasury without an appropriation having first been made for that purpose.
13. WHEN MONEY IN THE GOVERNMENT TREASURY IS A SPECIAL FUND AND HOW IT SHOULD BE PAID
OUT. — Where money has been assessed, levied and collected for a special purpose, it should be deemed and treated as a
special fund in the government treasury, and should only be paid out on warrants drawn on that particular fund.
14. WHEN THE ACTS OF THE INSULAR AUDITOR ARE NULL AND VOID. — In the instant case, the decision of
the Insular Auditor to take money out of the government treasury, which legally belonged to the city, and pay it over to the
Metropolitan Water District upon a claim which it had against the city and upon which the city denied any liability, and for which
no appropriation had ever been made, was depriving the city of its property "without due process of law," and hence was
unconstitutional and void.
15. WHEN INSULAR AUDITOR DOES NOT HAVE JUDICIAL POWER. — Where a public corporation has a claim
against the City of Manila, a municipal corporation, upon which the city denies any liability, and for the payment of which no
appropriation has ever been made by the city, the Insular Auditor does not have judicial power to compel the payment of the
claim by the city, and to take funds out of the government treasury, which legally belonged to the city, and pay them over to the
public corporation in satisfaction of the disputed claim.
16. WHEN THE ENFORCEMENT OF THE PAYMENT OF A DISPUTED CLAIM BETWEEN A MUNICIPAL AND A
PUBLIC CORPORATION IS SUBJECT ONLY TO THE JURISDICTION OF THE COURTS. — The payment or non-payment of
a claim against the City of Manila, which is a municipal corporation, to a public corporation is a legislative act which is subject
only to the control and jurisdiction of the courts.
17. WHEN CITY IS NOT AN EXECUTIVE BRANCH OF THE GOVERNMENT. — Under the provisions of the charter
of the City of Manila, in the allowance or disallowance by the Municipal Board of a claim like the one here in question, the city
is exercising its legislative powers, and in that particular, it is not an executive branch of the government.
18. TITLE TO PROPERTY CANNOT BE LITIGATED IN MANDAMUS PROCEEDING. — The question as to whether
or not the title which the Metropolitan Water District has in its water system is held by it in trust for the use and benefit of the
city cannot be litigated in a mandamus proceeding.
19. THE ONLY QUESTION BEFORE THE COURT. — The only question before the court is whether the city has the
legal right to have the warrants in question issued to and in its favor, and as to whether the acts of the Collector of Internal
Revenue and the Insular Auditor, in seeking to pay over the money in question to the Metropolitan Water District, are null and
void
20. HOW THE CLAIM IN QUESTION SHOULD BE SETTLED. — Both the City of Manila and the Metropolitan Water
District have the power to sue and be sued, and all other questions should be determined upon the merits in other
proceedings, and upon proper pleadings and about which this court upon the record now before it does not have or express
any opinion.
STATEMENT
This is an original petition for mandamus, in which it is alleged:
"I. That the petitioner is a municipal corporation organized under the provisions of Chapter 60, Title X, of Act No.
2711 of the Philippine Legislature, known as the Administrative Code, and is empowered to sue and be sued.
"II. That the respondent Juan Posadas, jr.,is, and during the period of time mentioned in this petition was, the
Collector of Internal Revenue of the Government of the Philippine Islands; the respondents Ben F. Wright and Vicente
Carmona are, and during the same period were, the Insular Auditor and Insular Treasurer, respectively, of the Philippine
Islands, and the respondent Metropolitan Water District is a public corporation created by Act No. 2832, with powers to sue and
be sued.
"III. That the petitioner is entitled to a part and portion, determined by law, of the internal revenue collected by the
respondent, the Collector of Internal Revenue (see sec. 488, Adm. Code), as well as to a certain per cent of the one and one-
half per cent tax imposed on merchants, manufacturers and commission merchants (see sec. 3, Act No. 3065), and that
petitioner's share of said internal revenue and one and one-half per cent tax does not constitute a credit or debt owing by, and
due from, the Insular Government to the petitioner, but is a property of the petitioner, belonging and appertaining to it both as a
province and as a municipality of the Philippine Islands (see sec. 495, par. 2, Adm. Code), used and to be used by the
petitioner for the purpose of defraying the expenses necessary for its existence and operation.
 
"IV. That the respondent, the Collector of Internal Revenue, in compliance with his ministerial duty imposed upon him
by section 497 of the Administrative Code to pay quarterly to the petitioner, the allotments of said internal revenue and
percentage tax belonging to it, has been in the past drawing warrants for said allotments payable to the petitioner; but that from
and after the month of January, 1922, the said respondent has ceased to make such payments to the petitioner, and has
drawn warrants for such internal revenue and percentage tax allotments belonging to the petitioner, payable to the Metropolitan
Water District, a water corporation created by Act No. 2832 of the Philippine Legislature.
"V. That the petitioner is informed, and, therefore, alleges, that the transfer and payment of said allotments of the
internal revenue and percentage tax, belonging to the petitioner, to the said Metropolitan Water District has been made by the

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 respondent Collector of Internal Revenue by and under certain instruction of the respondent Insular Auditor, dated January 5,
1922, a certified copy of which is attached hereto and made a part hereof, marked as Exhibit A.
"VI. That the petitioner is also informed, and, therefore, alleges, that the respondent Insular Auditor has instructed his
co-respondent Collector of Internal Revenue to pay the said allotments of internal revenue and percentage tax aforementioned,
belonging to the petitioner, to the said Metropolitan Water District, instead of the petitioner, for the purpose of setting-off certain
alleged debts of the petitioner for alleged water services rendered it by the said Metropolitan Water District."
It is then alleged that upon receipt of such information, the city notified the Collector of Internal Revenue that such
proceedings were illegal and void, and that in the future payments should be made to the City of Manila, in accord with the
provisions of section 497 of the Administrative Code.
"VIII. That in spite of the letter or communication sent by the petitioner, through its attorney, to the respondent
Collector of Internal Revenue, the latter, following instructions of the other respondent, Insular Auditor, informed the petitioner
by a communication bearing date of January 5, 1925, which is hereto attached and made a part hereof as Exhibit C, that he
would continue making payments of the share belonging to the petitioner of the internal revenue and of the especial tax
imposed by Act No. 3065, including that corresponding to the last quarter of the year 1924, in favor of the respondent
Metropolitan Water District, and the petitioner believes, and, therefore, alleges that said respondent Collector of Internal
Revenue will carry out such threats unless timely prevented from so doing by this Honorable Court.
"IX. That there does not exist between the Metropolitan Water District, which is neither a governmental entity, nor
office, nor branch of the Insular Government (see sec. 1, Act No. 2832),and the petitioner City of Manila, any account the
settlement of which the respondent Insular Auditor could legally authorize and enforce.
"X. That the petitioner does not owe anything to the Metropolitan Water District by way of alleged water service
rendered by said District to said petitioner; and that the latter has up to the present time been questioning the power of said
District to render and collect any bill for water supplied to the petitioner.
"XI. That Act No. 2832 does not empower the Metropolitan Water District, either expressly or impliedly or in general
terms, to charge for water consumed by the petitioner, from the water system of the City of Manila.
xxx xxx xxx
"XIX. That the said Act No. 2832 did not have more object, and in fact, did not do more than to transfer, from the
petitioner to the Metropolitan Water District, the possession, administration, control and management of the sewer and water
supply systems of the City of Manila, and, to this effect, has provided, in its section 8 that the said District receive and assume
all assets and liabilities together with the bonds sinking funds of said systems, the same as if it were a mere receiver or judicial
depositary.
xxx xxx xxx
"XXI. That as one of the liabilities of the water supply system of the City Manila, and among the charges, obligations
and responsibilities going with said system which constitutes a part of said liabilities, is that of furnishing water free of charge to
the petitioner, in its aforesaid capacities as owner and fiduciary, for all its uses and needs.
xxx xxx xxx
"XXV. That even supposing that the respondent Insular Auditor is empowered to settle accounts outstanding
between the petitioner and the Metropolitan Water District, the said petitioner has up to the present time contested the bills of
the latter for alleged water services rendered the petitioner for the reason that the same are not authorized by law, and that
said Insular Auditor is not authorized to settle or adjust accounts which, not being based upon any provision of law, are only
made so by an erroneous interpretation of the law by said Auditor, by disposing in favor of said District of funds clearly
belonging to the petitioner, such as its share in the collections obtained by the enforcement of the internal revenue laws and of
Act No. 3065.
"XXVI. That it is a ministerial duty on the part of the respondent Collector of Internal Revenue to make in favor of the
petitioner quarterly allotments of the share of internal revenue collected by him, corresponding to said petitioner, and of its
portion of the tax imposed by Act No. 3065. (Sec. 497, Adm. Code.)
"XXVII. That there is no law authorizing the respondent Insular Auditor to prevent his co-respondent Collector of
Internal Revenue from complying with his ministerial duty referred to in the next preceding paragraph hereof, or to give the
latter instructions to the effect that the abovementioned allotments which, by clear and express provision of law, ought to be
made in favor of the petitioner should be made and paid in the name and in favor of the Metropolitan Water District; nor is said
respondent Insular Auditor also authorized by any law to constitute himself a judge and arbiter of disputes regarding the
interpretation of laws arising between a municipal corporation and a public corporation which does not belong to the Insular
Government or any executive branch of the Government of the Philippine Islands.
xxx xxx xxx
"XXX. That the respondent Ben F. Wright, Insular Auditor, is without authority of law to issue a warrant by himself,
much less a warrant covering amounts payable and chargeable against the apportionment of the City of Manila in the internal
revenue collections and special assessment imposed by Act No. 3065.
"XXXI. That the respondent Vicente Carmona, Insular Treasurer, is likewise without any authority of law to honor,
cash or otherwise pay out of the funds belonging to the petitioner as aforesaid, any check, warrant or order of payment issued
by the respondent Ben F. Wright, Insular Auditor, or by any other officer, except only after judicial determination of the present
controversy.

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 "XXXII. That to permit such an open violator of the law by the herein respondents, the aforesaid warrants
corresponding to the allotments of funds of internal revenue pertaining to the petitioner, collected during the last quarter of
1924, as well as those which may thereafter be collected and may be payable to said petitioner, would be issued and made
payable to the Metropolitan Water District, in violation of the law, and to the serious detriment of the petitioner's interests in
particular and of the public interests in general.
"XXXIII. That as a result of the acts of the respondents above related, the petitioner has suffered and will suffer
irreparable damages and has encountered and will encounter serious and considerable embarrassments and obstacles in the
discharge of its corporate and government functions, unless said respondents are immediately restrained and enjoined such
acts by this Honorable Tribunal."
The Metropolitan Water District is made a party defendant, for the reason that it claims to have interests which are
adverse to those of the petitioner.
It is then alleged that the city does not have any plain, speedy or adequate remedy in the ordinary course of law.
Under our view of the case, the foregoing allegations are the only ones which are material to this opinion. The
complaint, which is quite voluminous, also purports to give a history of the water system of the City of Manila, and alleges in
substance that any title to such water system which the Metropolitan Water District may have is held by it in trust and for the
use and benefit of the city.
To this petition, a demurrer was filed by the defendants upon the ground that it did not state facts sufficient to
constitute a cause of action.
After arguments were heard, and the respective briefs of opposing counsel were submitted, the demurrer of the
defendants was overruled, and an answer was filed, in which they deny all of the material allegations of the petition, and as a
special defense allege:
"1. That when the water and sewerage system referred to in the petition was under the administration of the sewer
and waterworks division of the engineering and public works department of the City of Manila, the other departments of the city
paid for water and other services furnished to them by said division;
"2. That the Metropolitan Water District since its organization in the year 1919 up to the present has been furnishing
water and rendering water services to the government of the City of Manila;
"3. That the government of the City of Manila has been voluntarily paying to the Metropolitan Water District for some
of the water and water services above mentioned in the amounts, for the purposes, and for the period specified in the
statement marked Exhibit A attached to this answer and made a part thereof;
"4. That on January 28, 1924, a supposed majority of the Board of Directors of the Metropolitan Water District
passed a resolution exempting the government of the City of Manila from fees for the water consumed by the fire and public
hydrants installed in said City; but upon appeal duly taken by the minority of said Board to the Governor-General, through the
Secretary of the Interior, under the provisions of section 4 of Act No. 2832, as amended by section 2 of Act No. 3109, the
Governor-General in an indorsement dated September 18, 1924, reversed the above resolution of the alleged majority of the
Board and decided 'that the City of Manila shall pay for all services rendered by the Metropolitan Water District.' A copy of the
correspondence in regard to the above resolution, appeal, and decision, marked Exhibit B is hereto attached and made a part
hereof;
"5. That on August 11, 1924, a majority of the Board of Directors of the Metropolitan Water District approved a
resolution to the effect that the Secretary of the Interior be 'requested to recommend to the Legislature the amendment of the
Organic Act of the Metropolitan Water District in such a way as to relieve the City of Manila from payment for fire hydrant
rentals, and for water and service maintenance charges of public hydrants;' but the minority members of the Board duly
appealed from this resolution to the Governor-General, through the Secretary of the Interior, under the provisions of section 4
of Act No. 2832, as amended by section 2 of Act No. 3109, and the Governor-General rendered the same decision mentioned
in the next preceding paragraph. A copy of the correspondence referring to this matter, marked Exhibit C, is hereto attached
and made a part hereof ;"
It is then alleged that on November 17, 1924, the Board of Directors of the Metropolitan Water District unanimously
approved Resolution No. 21, entitled "A resolution to fix charges, and the rates thereof, for all services rendered by the
Metropolitan Water District," in and by which all consumers of water were to be charged uniform rates.
"7. That the Metropolitan Water District has been sending bills to the government of the City of Manila for the
collection of the value of the water and water services which it had been furnishing to said city; but while said government has
been paying some of those bills it has refused to pay others;
"8. That the Metropolitan Water District advised the Insular Auditor of the refusal of the government of the City of
Manila to pay the above-mentioned bills, requesting the latter to enforce the adjustment and settlement of said outstanding
accounts under the provisions of section 588 of the Administrative Code, as amended by Act No. 3066;
"9. That the Insular Auditor, after due study of the above claim of the Metropolitan Water District against the City of
Manila, taking into consideration the conflicting contentions of both parties, reached the conclusion that said claim was just,
legal, and proper;
"10. That the Insular Auditor then made demand on the City of Manila for the payment and settlement of said claim,
advising said city that, upon failure of payment, he would exercise the power vested in him by section 588 of the Administrative
Code, as amended by section 1 of Act No. 3066, but the city refused to comply with said demand;

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 "11. That thereupon the Insular Auditor instructed the Collector of Internal Revenue that thereafter and until further
notice, all warrants covering the internal revenue collections allotted to the City of Manila be drawn by said Collector in favor of
the Metropolitan Water District instead of said city as theretofore;
"12. That by virtue of an arrangement between the Insular Auditor and the Collector of Internal Revenue for the
purpose of putting the present question to a test, the latter officer issued warrant No. 636, dated December 9, 1924, for the
sum of P21,880.57 and warrant No. 638, dated December 23, 1924, for the sum of P3,856.04, both covering the internal
revenue allotment of the City of Manila, in favor of said city instead of the Metropolitan Water District, and the Insular Auditor,
pursuant to the same arrangement, refused to countersign said warrants and returned them, unsigned by him, to the Collector
of Internal Revenue;
"13. That on January 5, 1925, the Collector of Internal Revenue, in answer to a communication from the City Fiscal,
advised the latter that pursuant to subsequent instructions from the Insular Auditor, he would, within ten days from said date,
proceed to issue the warrants for the abovementioned sums, in favor of the Metropolitan Water District, but due to the
preliminary injunction issued in the present case the Collector of Internal Revenue was prevented from doing so."
To this answer, the petitioner filed a demurrer upon the ground, first, that the answer does not state facts sufficient to
constitute a defense, and, second, that the answer is ambiguous, unintelligible and uncertain.
Hence, the only question now before this court is whether or not the facts alleged in the special defense constitute a
defense to plaintiff's cause of action.

DECISION

JOHNS, J p:

Section 2427 of the Administrative Code says:

"This chapter shall be known as the Charter of the City of Manila."
Section 2428 provides:
"The City of Manila constitutes a political body corporate and as such is endowed with the attribute
of perpetual succession and possessed of the powers which pertain to a municipal corporation, to be
exercised in conformity with the provisions of this charter."
Section 2429 provides:
"The city may have a common seal, and alter the same at pleasure may take, purchase, receive,
hold, lease, convey, and dispose of real and personal property for the general interests of the city, condemn
private property for public use, contract and be contracted with, sue and be sued, and prosecute and defend
to final judgment and execution, and exercise all the powers hereinafter conferred."
Section 2434, as amended by Act No. 2774, provides:
"The Mayor shall be the chief executive of the city, and as such, shall have immediate control over
the executive functions of the different departments, subject to the authority and supervision of the Secretary
of the Interior.
"The Mayor shall be appointed by the Governor-General with the consent of the Senate, shall hold
office for three years unless sooner removed, ..."
Section 2439 provides:
"The Municipal Board shall be the legislative body of the city, and shall consist of ten elective
members who shall hold office for four years or until their successors are elected and qualified. The members
of the Board shall elect each year from among their number a president, who for one year shall preside at all
meetings of the Board at which he is present. In his absence, the Board shall elect one of its members as
temporary presiding officer. The president shall sign all ordinances, and all resolutions and motions directing
the payment of money or creating liability, enacted or adopted by the board."
This was amended so as to make the terms of office of the members of the Board for a period of three years.
Section 2440 provides:
"The members of the Municipal Board shall be elected at large from the entire city, and each of
them at the time of his election shall be a resident for at least one year, and a qualified elector, of his
assembly district, and not less than twenty-three years of age. .."
Section 2442 provides:
"The Board shall make all appropriations for the expenses of the government of the city. .."

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 Section 2444, as amended by Act No. 2774, specifies and defines the "General powers and duties of the Board,"
which are very broad and comprehensive, and covers all matters which are necessary and material to the administration of a
government by the city.
Subsection (u) of that section provides:
"For the laying out, construction, and improvement, and to regulate the use, of streets, avenues,
alleys, sidewalks, wharves, piers, parks, cemeteries, and other public places; ..." and subsection (x) provides:
"For the maintenance of waterworks for the purpose of supplying water to the inhabitants of the
city, and for the purification of the source of supply and the places through which the same passes, and to
regulate the consumption and use of the water; to fix and provide for the collection of rents therefore; and to
regulate the construction, repair, and use of hydrants, pumps, cisterns, and reservoirs."
Section 2465, as amended by Acts Nos. 3043 and 3169, provides:
"The law department shall consist of the fiscal of the city and of seven assistants, who shall
discharge their duties under the general supervision of the Attorney-General. The fiscal of the city shall be
the chief legal adviser of the city and all offices and departments thereof; shall represent the city in all civil
cases wherein the city or any officer thereof in his official capacity is a party; ..."
Section 2468 provides:
"The municipal court shall have territorial jurisdiction embracing the entire police jurisdiction of the
city, ..."
It will thus be seen that under the terms and provisions of its charter, the City of Manila has both executive,
legislative and judicial powers, and that all of such powers are vested and conferred by an Act of the Legislature of the
Philippine Islands.
Section 3 of the Organic Act or what is known as the Jones Law says:
"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 laws ...
"That no money shall be paid out of the treasury except in pursuance of an appropriation by law.
xxx xxx xxx
"That all money collected on any tax levied or assessed for a special purpose shall be treated as a
special fund in the treasury and paid out for such purpose only."
Section 8 provides:
"That general legislative power, except as otherwise herein provided, is hereby granted to the
Philippine Legislature, authorized by this Act."
 
Section 490 of the Administrative Code says:
"Disposition of internal revenue in general.— Internal revenue collected under the laws of the
Philippine Islands and not applied as hereinabove provided or otherwise specially disposed of by law shall
accrue to the Insular Treasury and shall be available for the general purposes of the Government, with the
exception of the amounts set apart by way of allotment under the next succeeding section."
Section 491 provides:
"Allotments of internal revenue for special purposes.— Of the internal revenue accruing to the
Insular Treasury under the preceding section there shall be set apart ten per centum as a provincial
allotment, ten per centum a road and bridge allotment, and twenty per centum as a municipal allotment; but
the amounts allotted to said several purposes during any year shall not be greater than the amount allotted
for the same purposes during the fiscal year nineteen hundred and nine."
Section 492 provides:
"Apportionment and use of provincials allotment.— The provincial allotment shall be apportioned to
the treasuries of the several respective provinces and shall there accrue to their general funds, respectively."
Section 494 provides:
"Apportionment and we of municipal allotment.— The municipal allotment shall be for the benefit of
the inhabit ants of the Islands in the purview of their community requirements, being available for municipal or
other use as hereinbelow provided."
Section 495 provides:
xxx xxx xxx
"The City of Manila shall receive the shares which it would receive if it were both a municipality and
a regularly organized province, and for the purposes hereof shall be deemed to be both the one and the
other."

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 Section 497 provides:
"Warrants for quarterly payment of allotments.— The payment of the internal-revenue allotments
shall be made from the Insular Treasury quarterly, upon warrants drawn by the Collector of Internal
Revenue."
It appears from the answer of the defendants that under the terms and provisions of said section 497, the Collector
of Internal Revenue: "Issued warrant No. 636, dated December 9, 1924, for the sum of P21,880.57 and warrant No. 638, dated
December 23, 1924, for the sum of P3,856.04, both covering the internal revenue allotment of the City of Manila, in favor of
said City instead of the Metropolitan Water District, and the Insular Auditor, pursuant to the same arrangement, refused to
countersign said warrants and returned them, unsigned by him, to the Collector of Internal Revenue."
That is to say, such warrants represent the amount which the city should receive as its allotment from and out of the
"internal revenues collected under the laws of the Philippine Islands," and that fact is admitted by defendants' answer. This
money is to be paid to the city from and out of the public revenues of the Government, and it is public money, which has been
assessed, levied and collected by the Government for governmental purposes, and the law says that the City of Manila shall
have and receive twenty per centum of such money as a municipal allotment, and it also says that it shall receive that money
quarterly, "upon warrants drawn by the Collector of Internal Revenue." When the money was assessed, levied and collected, in
so far as the City of Manila is concerned, it was assessed, levied and collected for a specific purpose, and for such reason, it
should "be treated as a special fund in the treasury and paid out for such purpose only." The money was public money in the
Treasury of the Government, and it was there held in trust for the sole use and benefit of the city.
The Jones Law further provides:
"That no money shall be paid out of the treasury except in pursuance of an appropriation by law."
(Sec. 3) And in this instance, an appropriation could only be made by the Legislature of the Philippine Islands
of the legislative body of the City of Manila.
There is no claim or pretense that any appropriation has ever been made out of the public funds to pay the claim of
the Metropolitan Water District against the City of manila, and yet in legal effect the defendants seek to take money out of the
Treasury of the Philippine Islands which belongs to the Treasury of the city of manila, and to pay the private debt which the
metropolitan Water District claims to have the city of manila. The city of Manila has no authority to pay any debt against it,
"except in pursuance of an appropriation by law." Neither has any person any authority to take money out of the Treasury of
the Government for any purpose, "except in pursuance of an appropriation by law," and there is no claim or pretense that any
appropriation was ever made by the government or the City of Manila to pay the claim of the Metropolitan Water District
against the City of Manila.
In the case of Reeside vs. Walker, Secretary of the Treasury of the United States (52 U. S.,271),the supreme Court
of the United States says:
"Where the United States were the plaintiffs, and a verdict was rendered that they were indebted to
the defendant, and an application was amended for a mandamus to compel the secretary of the Treasury to
credit the defendant upon the books of the Treasury with the amount of the verdict, and to pay the same, the
mandamus was properly refused by the Circuit Court. For a mandamus will only lie against a ministerial
officer to do some ministerial act where the laws require him to do it and he improperly refuses to do so.
"Besides, there was no appropriation made by law, and no officer of the government can pay a
debt due by the United States without an appropriation by Congress." And on page 290, the opinion says:
"No officer, however high, not even the President, much less a Secretary of the Treasury, or
Treasurer, is empowered to pay debts of the United States generally, when presented to them. If, therefore,
the petition in this case was allowed so far as to order the verdict against the United States to be entered on
the books of the Treasury Department, the plaintiff would be as far from having a claim on the Secretary or
Treasurer to pay it as now. The difficulty in the way is the want of any appropriation by Congress to pay this
claim. It is a well-known constitutional provision, that no money can be taken or drawn from the Treasury
except under an appropriation by Congress. (See Constitution, art. 1, sec. 9 [1 Stat. at L.,15].)
"However much money may be in the Treasury at any one time, not a dollar of it can be used in the
payment of anything not thus previously sanctioned. Any other course would give to the fiscal officers a most
dangerous discretion."
As stated, the City of Manila is a municipal corporation with broad and general legislative powers given to it by the
Legislature.
The Metropolitan Water District was also created by Act No. 2832 of the Legislature, and is entitled:
"An Act creating a public corporation denominated the Metropolitan Water District, prescribing its
functions and activities, and for other purposes."
Section 2 provides:
"Powers and general functions of the District. — The powers, functions, and activities of the
Metropolitan Water District of Manila shall be the following:
"(a) To have continuous succession under its corporate name until otherwise provided by law;
"(b) To prescribe its by-laws;
"(c) To adopt and use a seal and alter it at its pleasure;

20 | P a g e
 "(d) To sue and be sued in any court;
"(e) To construct, maintain, and operate mains, pipes,
water reservoirs, machinery, and other waterworks for the purpose of supplying water to the inhabitants of
the District, both for domestic and other purposes; to purify the source of supply, regulate the control and
use, and prevent the waste of water; and to fix and provide for the collections of rents therefor; etc."
Section 3 provides (as amended by Act No. 3109):
"District Board; its members, reports to the Department of the Interior.— Unless otherwise provided
by law, all corporative powers of the Metropolitan Water District shall be exercised, its business managed,
and its property kept and preserved, by a Board to be composed of the Mayor of the City of Manila, the
President of the Municipal Board of the City of Manila, the governor of the Province of Rizal, the Director of
Public Works or his representative, the engineer of the City of Manila, the city treasurer, and a taxpayer of the
district, being a resident of the City of Manila, appointed by the Governor-General, with the consent of the
Senate."
Section 8 provides:
"Assets and liabilities of the Manila water and sewer system; their transfer to the District; sinking
fund and Government guaranty. — The District Board is hereby authorized and directed to receive and
assume on behalf of the Metropolitan Water District all assets and liabilities pertaining to the sewerage and
waterworks-system of the City of Manila, together with the sewerage and waterworks bonds sinking funds.
and of all the indebtedness in general of the present sewer and water system of the City of Manila, and in
turn to pledge such assets as security for the payment of the sewerage and waterworks bonded debt thus
acquired."
Section 10 provides:
"Powers reserved to the Legislature.— This Act or any part thereof may be amended or repealed
at any date by legislative authority, and the Metropolitan Water District may be reorganized or dissolved by
legislative provision."
That is to say, the City of Manila is a municipal corporation, deriving all of its powers from the legislature, and the
Metropolitan Water District is a public corporation, as distinguished from a municipal corporation, and derives all of its powers
from the Legislature. The City of Manila derives all of its revenues from public funds in the nature of fines, licenses and taxes
assessed, levied and collected for its maintenance. The Metropolitan Water District derives all of its revenues from private
sources and monies which it collects from consumers of its waters.
Under the facts alleged in the answer, the defendants undertook to take the money out of the Government Treasury
which belongs to the city and use it to pay a disputed claim of a public corporation against the city over the vigorous protest of
the city.
Assuming all of such facts to be true, the answer alleges as a defense:
"8. That the Metropolitan Water District advised the Insular Auditor of the refusal of the government
of the City of Manila to pay the above-mentioned bills, requesting the latter to enforce the adjustment and
settlement of said outstanding accounts under the provisions of section 588 of the Administrative Code, as
amended by Act No. 3066."
Section 588 of the Administrative Code, as amended by Act No. 3066, provides:
"Authority of auditor in adjustment of accounts between offices.— The Insular Auditor shall have
the power, subject to such regulations as may be prescribed therefor, to authorize and enforce the settlement
of accounts subsisting between the different bureaus or offices of the Insular service; between any such
bureau or office and any provincial, municipal or city government; between provincial governments; between
municipal or city governments; and between any such provincial and municipal or city governments."
Act No. 3066 is entitled "An Act to amend certain sections of the Administrative Code, and for other purposes."
Section 584 of the Administrative Code, as amended by Act No. 3066, provides:
"General jurisdiction of Bureau of Audits.— The authority and powers of the Bureau of Audits
extend to and comprehend all matters relating to accounting procedure, including the keeping of the
accounts of the Government, the preservation of vouchers, the methods of accounting, the examination and
inspection of the books, records, and papers relating to such accounts, and to the audit and settlement of the
accounts of all persons respecting funds or property received or held by them in an accountable capacity, as
well as to the examination and audit of all debts and claims of any sort due from or owing to the Government
of the Philippine Islands in any of its branches. The said jurisdiction shall also extend to all corporations
established and organized in accordance with the laws of the Philippine Islands wherein the Government of
the said Islands or any of its branches owns the majority of the stock. .."
Section 593, as amended by the same Act, provides:
"Auditing districts; assignment and compensation of district auditors.— The provinces of the
Philippine Islands, the chartered cities and the Metropolitan Water District, which shall be regarded as
provinces, are hereby divided into twenty-two regular and one special auditing districts, ..." These twenty-
three districts are grouped into four divisions.

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 There is nothing in any of these provisions which would authorize or justify the Insular Auditor to compel a municipal
corporation to pay a claim to a public corporation where the city disputes the claim.
The question involved between the city and the Metropolitan Water District is not one of an accounting. There is no
pretense that the City of Manila has any claim of any kind against the Metropolitan Water District, and the only claim which the
Metropolitan Water District has against the city is for the use of water, and the city disputes the validity of the claim.
Hence, the question involved between the city and the Metropolitan Water District is one of legal liability, and of legal
liability only.
The answer further alleges as a defense:
"9. That the Insular Auditor, after due study of the above claim of the Metropolitan Water District
against the City of Manila, taking into consideration the conflicting contentions of both parties, reached the
conclusion that said claim was just, legal, and proper."
That defense is based on the assumption that the Auditor has judicial powers, and yet there is no claim or pretense
that any hearing was ever had or that any process was ever served on the city, or that it ever had any previous notice of the
proceeding, or that it was given an opportunity to defend, and yet the record shows that the Auditor knew that the city denied
any liability.
In defining what is "due process of law," Words and Phrases, vol. 3, says:
Page 2227:
"The principle that no man shall be deprived of his liberty or property except by the 'law of the land,'
or its synonym, 'due process of law,' is older than written constitutions — older even than Runnymede — and
breathes so palpably of exact justice that it needs no formulation in the organic law. .."
Page 2230:
" 'Due process of law' is not confined to judicial proceedings, but extends to every case which may
deprive a citizen of life, liberty, or property, whether the process be judicial or administrative or executive in
its nature.
" 'Due process of law,' in its constitutional meaning, includes administrative process of the
customary sort, as well as judicial process."
Page 2238:
" 'To give the clause of the Constitution which guaranties that "no person shall be deprived of life,
liberty, or property without due process of law," therefore, any value, it must be understood to mean that no
person shall be deprived by any form of legislation or governmental action of either life, liberty, or property,
except as the consequence of some judicial proceeding, appropriately and legally con- ducted. It shows that
a law which by its own inherent force extinguishes rights of property, or compels their extinction, without any
legal process whatever, comes directly in conflict with the Constitution.' "
Page 2243:
" 'Due process of law' implies that whenever, in a judicial proceeding, a judgment is rendered by a
court of justice affecting the liberty or condemning the property of another person, he is entitled to have
reasonable notice of such procedure, trial, or contest."
In other words, "due process of law" is a fundamental, constitutional right given to every person, which it is the sworn
duty of the courts to honor and protect.
Giving to Act No. 3066 its broadest possible construction, we are clearly of the opinion that, as between the City of
Manila and the Metropolitan Water District, the Insular Auditor is not vested with judicial powers. By their respective charters,
one is a public corporation, and the other is a municipal corporation.
The United States is under a Republican form of government in which all powers are vested in the executive,
legislative and judiciary, and their respective limits are clearly specified and defined, and as to the question here involved,
those principles are embodied in and made a part of the Jones Law, known as the Organic Act of the Philippine Islands, and of
section 17 of the Administrative Code.
The answer further alleges that on January 28, 1924, an alleged majority of the Board of Directors of the
Metropolitan Water District passed a resolution, exempting the City of Manila from the payment of water consumed by fire and
the public hydrants of the city. That an appeal was taken by the minority of the Board to the Governor-General, who reversed
the action of the Board, and decided "that the City of Manila shall pay for all services rendered by the Metropolitan Water
District."
It will be noted that the City of Manila was not a party to that proceeding, and that the only thing which the Board of
Directors undertook to do was to exempt the city from the payment of water, and that the action of the Board was reversed by
the Governor-General. That was the only question presented on the appeal.
It is further alleged that on August 11, 1924, a majority of the Board of Directors of the Water District passed a
resolution that the Secretary of the Interior be requested to recommend to the Legislature to amend the Organic Act of the
Water District, so as to relieve the City of Manila from such payment, and that upon appeal by the minority of the Board, this
action of the Board also was reversed by the Governor-General. That is to say, the Board of Directors of the Metropolitan
Water District passed a resolution to have the law amended so as to relieve the city from the payment of water, and the action

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 of the Board was reversed by the Governor-General. No other question was presented to or considered by the Governor-
General, and it is not claimed that the city was a party to that proceeding. The Governor-General did nothing more than to say
that the Metropolitan Water District had a claim against the city for water which the city ought to pay, and that it ought not to be
exempted from liability
No one questions the power or authority of the Governor-General to make either one of those decisions. They were
both executive acts. But the question as to whether money may be unlawfully taken out of the government treasury, which
belongs to the city, and given to and applied by a public corporation upon the payment of an alleged claim which it has against
the city, and upon which the city denies all liability, or as to whether the city is legally liable, or has a valid defense or
counterclaim, is another and a very different question, and one upon which the city has a legal right to be heard and to defend
itself
In the final analysis, we have this situation. An attempt was made to take money out of the government treasury,
which belongs to the City of Manila, a municipal corporation, and apply it to the payment of a debt which a public corporation
claims to have against the city. That proceeding was in direct conflict with three of the express provisions of section 3 of the
Jones Law.
First, it violates that portion of the section which says that no law shall be enacted "which shall deprive any person of
life, liberty, or property without due process of law."
The answer does not claim or allege that the city was ever served with any process or that it had notice or was given
an opportunity to defend itself before the Insular Auditor rendered his decision.
Second, it violates that portion of the section which says:
"That no money shall be paid out of the treasury exception pursuance of an appropriation by law."
It is not claimed that any appropriation was made by the Government of the city to pay the claim of the Metropolitan
Water District against the city, and yet over the vigorous protest and objection of the city, defendants propose to take money
out of the government treasury, which belongs to the city, and pay an-alleged debt of the Metropolitan Water District against
the city. No money can be taken out of the Government treasury for any purpose without an appropriation having first been
made for that specific purpose. In legal effect that was the decision of this court in Gotamco vs. Wright, decided November 5,
1924, and published in 46 Phil.,467, where in an opinion written by Justice Ostrand, it is said:
"...Section 3 of the Organic Act expressly provides that 'no money shall be paid out of the Treasury
except in pursuance of an appropriation by law.' Neither the Insular Collector of Customs nor any other
official of the Government is authorized to order the expenditure of unappropriated funds,..."
And third, the other provision which says:
"That all money collected on any tax levied or assessed for a special purpose shall be treated as a
special fund in the treasury and paid out for such purpose only."
Here, the defendants purpose to take public money from and out of the government treasury, which is in a special
fund, and which was assessed, levied and collected for a special purpose, and pay it over to a public corporation. In other
words, to take money out of the government treasury, which was assessed, levied and collected for the exclusive use and
benefit of the City of Manila, a municipal corporation, and pay it to the Metropolitan Water District, which is a public corporation.
No authority has been cited, and none will ever be found to legalize such a proceeding.
In the recent decision of this court in the case of Ynchausti & Co. vs. Wright (47 Phil.,866),it was held that the
decisions of the Insular Auditor are final and conclusive only upon the "executive branches of the government."
Accepting that as the law of this court, the defendants vigorously contend that the City of Manila is an executive
branch of the government. That position is not tenable. It is true that by the terms of the charter, the Mayor of the City of Manila
is the executive officer of the City, and that the Mayor is appointed by the Governor-General. It is also true that by the terms of
the charter, the Municipal Board is the legislative body of the city, which consists of ten members, who are elected by a direct
vote of the people, and that it is the duty of the Board to elect a president from one of its own members, and that "the president
shall sign all ordinances, and all resolutions and motions directing the payment of money or creating liability, enacted or
adopted by the Board." That is to say, in the first instance, the power to allow or disallow a claim against the city, like the one in
question, is vested in the Municipal Boards and it is elected by a direct vote of the people, and the charter of the City of Manila
was granted by the Legislature of the Philippine Islands, and approved by the then Governor-General.
If, in the first instance, the power to allow or disallow a claim, like the one in question, was vested in the ,Mayor,
there might be some merit in the contention, that it would then be an executive act. But that authority is vested in the council,
and in such cases, the only power which the Mayor has is that of veto, and the council has the power to overrule his veto.
Under the terms and provisions of the charter, the allowance or disallowance of a claim against the city, subject only to a veto,
is vested exclusively in the legislative body of the city, which is elected by a direct vote of the people, and, outside of his power
of veto, is a matter over which the Mayor has no control.
It must follow that under the provisions of the charter of the City of Manila, the allowance or disallowance by the
Municipal Board of a claim like the one in question is a legislative act, and that in the doing of such an act, the city would be
exercising its legislative powers, and for such reason, and, if it is in any case, in that particular at least, the city is not an
executive branch of the government.
The city claims and alleges that any title which the Metropolitan Water District may have in or to the water system is
held by the Water District in trust and for the use and benefit city. That would be an equitable defense and one upon which the
city has the right to be heard and to have judicially determined.

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 This is a mandamus proceeding, and it is fundamental that title to property cannot be litigated in this kind of an
action. It also appears that any claim which the Water District may have against the city is founded upon a contract express or
implied for which mandamus will not lie.
Ruling Case Law, vol. 18, p. 129, says:
"43. Contract Rights.— Obligations which rest solely upon contract will not be enforced by
mandamus where there is no question of trust or of official duty; it is not the appropriate remedy for the
enforcement of private contract rights, ..."
On legal principle, the decision of this court in the case of Quiogue vs. Romualdez (46 Phil.,337),is in point. Although
the question there presented was "to enforce the performance of a private contract," the opinion written by Justice Street says
that mandamus:
" '...never lies where the party aggrieved has adequate remedy at law, and its aid is only to be
invoked to prevent an absolute failure of justice in cases where ordinary legal processes furnish no relief. ..' "
And quotes with approval from the decision in State ex rel.Bohannon vs. Howard County (39 Mo.,375),where
the court says that it would not:
" 'Undertake by writ of mandamus to enforce simple common law rights between individuals, such
as payment of money, or where there is another adequate legal remedy. ..' " And the opinion of Justice Street
says:
"The authorities, almost without exception, support the doctrine stated in the foregoing cases,"
citing a number of authorities.
It follows that the question as to whether or not the Metropolitan Water District has a valid claim against the City of
Manila cannot be litigated in this kind of a proceeding, but assuming that its claim was valid, it would not be a defense to
plaintiff's petition. The same thing is true as to the allegation in the petition, that the Metropolitan Water District holds the title to
the water system in trust and for the use and benefit of the city. That question cannot be litigated in this action.
Hence, the only question now before this court is as to whether the city has a legal right to have the warrants in
question issued to and in its favor, and as to whether the acts of the Collector of Internal Revenue and the Insular Auditor, in
seeking to pay over the money in question to the Metropolitan Water District are null and void.
Based upon the statutory provisions and the admitted facts, we are clearly of the opinion that the warrants in
question should be drawn to and in favor of the city, and that it is legally entitled to the possession of the funds, and that the
decision of the Insular Auditor to divert the funds to the Metropolitan Water District is null and void and of no legal force and
effect.
Under their respective charters, both the Metropolitan Water District and the city can sue and be sued. If the
Metropolitan Water District has a valid claim against the city, that fact can legally be ascertained and determined in a judicial
proceeding for that purpose, and in the same manner as any other disputed claim. If the Water District holds the title to the
water system in trust and for the use and benefit of the city, that fact can also be determined in the same way, and the whole
question settled. But neither of such questions can be judicially determined in a mandamus proceeding. Both of those
questions will have to be determined in another and a different proceeding, upon proper pleadings, and decided upon the
merits, and about which at this time and upon this record, we do not have or express any opinion.
Suffice it to say that the City of Manila is solvent and can be made to pay any debt that it legally owes, and that as to
the title of the property, the city has ample redress against the Metropolitan Water District.
It will be noted that in the answer of the defendants:
"They deny, all and singular, the allegations contained in the other paragraphs of the petition,
except those that in the following special defense are specifically admitted."
That is to say, the answer is in the nature of a general denial, except as to those questions which are alleged and
admitted in the "special defense," which is in the nature of a plea of "confession and avoidance." In legal effect, the special
defense admits the doing of the things of which the petitioner complains, and in justification alleges how and by whom they
were done and the reasons why they were done.
The demurrer of the petitioner is upon the ground that the answer does not state facts sufficient to constitute a
defense.
In its argument on the demurrer, the city says nothing whatever about the general denial in the answer, and confines
itself to the matters set forth and alleged in the special defense, from which it is very apparent that it was the purpose and
intent of the city to limit its demurrer to the special defense alleged in the answer, and that it should be so construed.
Based upon the allegations made in the petition and those made in the special answer, it is the judgment of the court
that the demurrer, in so far as it alleges that the answer does not allege facts sufficient to constitute a defense, be sustained as
to the special defense plead in the answer, and unless the defendants shall within ten days amend their answer, so as to cure
the defects pointed out in this decision, the petition prayed for shall issue as follows:
First, that a writ of mandamus shall issue "ordering the respondent Collector of Internal Revenue to issue in favor of
the petitioner, and not to the Metropolitan Water District, all the warrants which he ought to issue for the share of the petitioner
in the internal revenue collections and in whatever other fiscal collections to which said petitioner is, by law, entitled."
Second, that a writ of mandamus shall issue "ordering the respondent Ben F. Wright, Insular Auditor, his deputies,
agents, employees or other persons acting in his stead, to countersign and approve any check, warrant or order of payment

24 | P a g e
 which the respondent Collector of Internal Revenue may issue in favor of the petitioner for such sum of money as represent its
share or allotment in the internal revenue collections and in the special tax imposed by Act. No. 3065."
That the temporary injunction heretofore issued by the vacation Justice shall be, and is hereby, made permanent,
and in all other respects, the prayer of the petitioner is denied. Neither party to recover costs. So ordered.
Avanceña, C.J.,Malcolm, Villamor and Romualdez, JJ., concur.
Johnson and Villa-Real, JJ.,took no part in the consideration of this case.
[G.R. No. L-26511. October 29, 1966.]

PIO FELWA, GASPAR PONCHINLAN, ALFREDO PACYAYA, LEONARDO CADIOGAN, WILLIAM

CLAVER, MANUEL SUMEDCA, WILLIAM PACRAY, ALBERTO OYA-OY, ROMULO ZARATE, CENON
BAUTISTA, ALEXANDER SUMEDCA, CLARO BAUTISTA, ANTONIO JADSAC, and ALFREDO G.
LAMEN, petitioners, vs. RAFAEL SALAS, FLORES BAYOT, and ISMAEL MATHAY, SR., in their
capacities as Executive Secretary and Chairman of Committee to Implement RA 4695; and as Auditor
General of the Philippines; EDUARDO Z. ROMUALDEZ, ABELARDO SUBIDO and DENNIS MOLINTAS,
in their capacities as Secretary of Finance, Commissioner of Civil Service and Governor of Benguet,
respectively, respondents.

SYLLABUS

1. CONSTITUTIONAL LAW; CREATION OF PROVINCES BY LEGISLATIVE ACT; SUCCESSION OF OFFICERS.

— Section 8 of Republic Act No. 4695 provides, among others, that where the position of provincial governor, in a newly
created province, becomes vacant as a consequence of the division therein effected and the incumbent vice governor is
assigned to said province, the latter shall automatically succeed to the position of governor and shall hold office as such until
his successor shall have been elected and qualified. This provision is manifestly germane to the subject of said Republic Act,
as set forth in its title, to wit, An Act Creating the Provinces of Benguet, Mountain Province, Ifugao, and Kalinga-Apayao. For,
an Act creating said provinces must be expected to provide for the officers who shall run the affairs thereof.
2. ID.; ID.; EQUAL PROTECTION CLAUSE; NOT VIOLATED. — Petitioners maintain that Republic Act No. 4695 is
unconstitutional because it denies equal protection. It is contended that the old Mountain Province, which used to be a first
class province, was reduced to the category of a sixth-class province, in view of the divisions effected by said Act. And
pursuant to the rules of succession prescribed therein petitioner Provincial Governor retains the position of Governor in the
new Mountain Province which has become a sixth-class province. Upon the other hand, respondent Vice-Governor of the old
Mountain Province has become, in consequence of the contested legislation, the Governor of Benguet, a second class
province and, hence, higher, in this respect, in rank to his former superior officer, the Provincial Governor. Held: The reduction
in class of Mountain Province is not material to the issue of equal protection. Such reduction is not made by Republic Act No.
4695, but is a mere effect of the limited revenues of the territory comprised in the new Mountain Province, as compared to that
of Benguet. The territory of each of the four (4) provinces established by the Act in question merely follows the traditional
political division of the region commonly known as Mountain Province, based upon the tribes or ethnic groups inhabiting the
same. Being a resident of a municipality which is part of the new Mountain Province, petitioner cannot be made Provincial
Governor of any of the other (3) provinces into which the old Mountain Province has been divided, without violating the policies
of the laws on public corporations. By the same token, respondent Vice-Governor, who resides in the provincial capital of the
new province of Benguet, cannot, without impinging upon said policies, be made provincial governor either of the new
Mountain Province, or of Ifugao, or Kalinga-Apayao.
3. ID.; ID.; ID.; EQUAL PROTECTION CLAUSE NOT A BAR TO A REASONABLE CLASSIFICATION OF THE
SUBJECTS OF LEGISLATION; CLASSIFICATION WHEN REASONABLE. — Similarly, the elective members of the provincial
board maintain that they have been denied equal protection because they were retained as members of the provincial board
instead of filling up the vacant positions of Vice-Governor of Mountain Province and the newly created province of Ifugao and
Kalinga-Apayao, pursuant to the order of succession prescribed in Section 4 of Republic Act No. 180. It is well settled that the
equal protection clause applies only to persons or things identically situated and does not bar a reasonable classification of the
subjects of legislation. A classification is reasonable where: (1) it is based upon substantial distinctions which make real
differences: (2) these are germane to the purpose of the law; (3) the classification applies, not only to present conditions, but,
also, to future conditions which are substantially identical to those of the present; and (4) the classification applies, equally to
all those who belong to the same class.
4. ID.; ID.; ID.; ID.; POSITIONS AND FUNCTIONS OF PROVINCIAL GOVERNOR AND VICE-GOVERNOR
DISTINGUISHED FROM MEMBERS OF PROVINCIAL BOARD. — The requirements of reasonable classification are
sufficiently met in Republic Act No. 4695. The offices of provincial governor and vice- governor on the one hand, are
substantially different from those of plain members of the provincial board, and those of appointive officers of the provincial
government, on the other. The former are essentially executive in nature, whereas plain members of the said board perform
functions partaking of a legislative character, since the authority vested by law upon provincial boards involves primarily a
delegation of some legislative powers of Congress. The equal protection clause does not require the identical treatment of
appointive and elective officers, insofar as the order of succession is concerned, because they obviously belong to different
classes, both constitutionally and administratively.

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 5. ID.; ID.; METHOD OF CREATING REPRESENTATIVE DISTRICTS; APPORTIONMENT OF REPRESENTATIVE
DISTRICT. — Under the Constitution, a representative district may come into existence: (a) indirectly, through the creation of a
province — for "each province shall have at least one member" in the House of Representatives; or (b) by direct creation of
several representative districts within a province. The requirements concerning the apportionment of representative districts
and the territory thereof refer only to the second method of creation of representative districts, and do not apply to those
incidental to the creation of provinces, under the first method. This is deducible from the fact that the apportionment therein
alluded to refers to that which is made by an Act of Congress. Indeed, when a province is created by statute, the corresponding
representative district, comes into existence neither by authority of that statute — which cannot provide otherwise — nor by
apportionment, but by operation of the Constitution, without a reapportionment.
6. ID.; ID.; ID.; REQUIREMENT THAT EACH REPRESENTATIVE DISTRICT SHALL COMPRISE CONTIGUOUS
AND COMPACT TERRITORY. — The constitutional command to the effect that each representative district shall comprise
contiguous and compact territory is not absolute, but, qualified by the phrase "as far as practicable". In the case at bar, the
delimitation of the provinces involved is based upon the tribes or ethnic groups inhabiting the same.

DECISION

CONCEPCION, C.J p:

This is an original action for prohibition with preliminary injunction.

Petitioners herein are the provincial governor, the elective members of the Provincial Board and some of the
important appointive officials of Mountain Province prior to June 18, 1966, the date of approval and effectivity of Republic Act
No. 4695, which divides Mountain Province into four (4) provinces to be known as Benguet, Mountain Province, Ifugao, and
Kalinga-Apayao. They seek the declaration of unconstitutionality of said Act and to prevent its enforcement by respondents
herein, namely, the Executive Secretary, the Auditor General, the Secretary of Finance, the Commissioner of Civil Service, the
Provincial Governor of Benguet, and the Assistant Executive Secretary and Chairman of the Committee designated to
implement the aforementioned legislation. In their complaint, petitioners, likewise, prayed for a writ of preliminary injunction,
which this Court has not issued.
Said Republic Act No. 4695 reads:
"An Act Creating The Province of Benguet, Mountain Province, Ifugao and Kalinga-Apayao.

"Be it enacted by the Senate and House of Representatives of the Philippines in Congress
assembled:

"SECTION 1. Mountain Province is hereby divided into four provinces, to be known as Benguet,
Mountain Province, Ifugao and Kalinga-Apayao.

"SEC. 2. The Province of Benguet shall comprise the Subprovince of Benguet and the
municipalities of Tuba, Sablan, Itogon, La Trinidad, Tublay, Atok, Boko, Kabayan, Kapangan, Bakun,
Kibungan, Mankayan, and Buguias.

"SEC. 3. Mountain Province shall comprise the subprovince of Bontoc and the municipalities of
Barlig, Bauko, Besao, Bontoc, Natonin, Sabangan, Sadanga, Sagada, Tadian and Paraceles.

"SEC. 4. The Province of Ifugao shall comprise the Subprovince of Ifugao and the municipalities of
Banaue, Lagawe, Hungduan, Kiangan, Lamut, Mayaoyao and Potia.

"SEC. 5. The Province of Kalinga-Apayao shall comprise the Subprovince of Kalinga and Apayao.

"The municipalities of Balbalan, Lubuagan, Pinukpuk, Tabuk, Tanudan, Tinglayan, Quirino and
Liwan in the Subprovince of Kalinga shall retain its status as the Subprovince of Kalinga. The Municipalities
of Luna, Flora, Kabugao, Pudtol, Conner and Bayag in the Subprovince of Apayao shall retain its status as
the Subprovince of Apayao.

"SEC. 6. The Provincial Capital of the Province of Benguet shall be La Trinidad; that of Mountain
Province shall be Bontoc; that of the Province of Ifugao shall be Lagawe; that of the Province of Kalinga-
Apayao shall be Tabuk.

"SEC. 7. Except as hereinafter provided, all provisions of law now or hereafter applicable to regular
provinces shall apply to the Provinces of Benguet, Mountain Province, Ifugao and Kalinga-Apayao.

"SEC. 8. The present elective provincial officers of Mountain Province shall, until their successors
shall have been elected and shall have qualified, be assigned to and perform their duties as such officers in
the corresponding province herein created, to which said elective provincial officers belong as a member of
the particular tribe or ethnic group inhabiting said province: Provided, That they shall continue to receive the

26 | P a g e
 salaries they are receiving at the time of approval of this Act until the new readjustment of salaries, in
accordance with existing law. Where the position of provincial governor, in a newly created province,
becomes vacant as a consequence of the division herein effected and the incumbent vice governor is
assigned to said province in accordance with the provisions of this Act, the law of succession shall apply and
the vice governor shall automatically succeed and shall hold office as such until his successor shall have
been elected in the election following approval of this Act and shall have qualified. All other elective officers
as may be necessary to fill in any of the said provinces shall, for the time being, be appointed by the
President of the Philippines, with the consent of the Commission on Appointments, and shall hold office until
their successors shall have been elected in the election for provincial and municipal officials following the
approval of this Act, and shall have qualified.

"SEC. 9. The present appointive provincial officers and employees of Mountain Province shall
likewise perform their respective duties as such in any of the four provinces herein created which they shall
individually choose within thirty days from the date of approval hereof: Provided, That they shall continue to
receive the salaries they are receiving at the time of approval of this Act until the new readjustment of
salaries in accordance with existing law. Such appointive officers and employees as may be necessary to
organize, or to complete, the government personnel of either province shall be appointed as provided by law.

"SEC. 10. The incumbent Members of the House of Representatives shall continue to serve the
districts in which they are elected until their term of office shall expire, after which each province shall be
represented by one Member: Provided, That the City of Baguio shall form part of the representative district of
the Province of Benguet.

"SEC. 11. Upon effectivity of this Act, the obligations, funds, assets and other properties of
Mountain Province shall be divided equitably among the provinces of Benguet, Mountain Province, Ifugao
and Kalinga-Apayao by the President of the Philippines upon the recommendation of the Auditor General.

"SEC. 12. This Act shall take effect upon its approval.

"Approved, June 18, 1966."

Petitioners herein maintain that this Act is unconstitutional and hence null and void, because: (1) it denies equal
protection; (2) one of the provisions thereof is not covered by its title; (3) it creates congressional districts without the
reapportionment provided in the Constitution; and (4) the congressional districts thus created do not consist of contiguous and
compact territory.
I. The alleged denial of equal protection is based upon the following premises, viz.:
(a) That the old Mountain Province became a first class province under the administration of its Governor, petitioner
Lamen, who, pursuant to Republic Act No. 4695, retains said position in the new Mountain Province, which, however, in view of
the divisions effected by said Act, is reduced to the category of a sixth-class province. Upon the other hand, respondent Dennis
Molintas, as Vice-Governor of the old Mountain Province and, hence, subordinate of petitioner Lamen, as Governor thereof,
has become, in consequence of the contested legislation, the Governor of Benguet, a second class province and, hence,
higher, in this respect, in rank to his former superior officer, petitioner Lamen, who, because of the same statute has been
reduced to the category of Governor of a sixth-class province.
(b) That, although by becoming Provincial Governor of the new province of Benguet, respondent Molintas vacates
his former position as Vice-Governor of the old Mountain Province, petitioner Pio Felwa, the senior member of the provincial
board of the old Mountain Province is retained, by Republic Act No. 4695, in such position in the new Mountain Province
instead of filling said vacant position of Vice-Governor of Mountain-Province, pursuant to the order of succession prescribed in
Section 4 of Republic Act No. 2264, and Section 21, paragraph 6, of Republic Act No. 180.
(c) That similarly, petitioners Gaspar Ponchinlan and Castro Lammawin, as elective members of the Provincial Board
of the old Mountain Province, are retained as members of the provincial board of the new provinces of Ifugao and Kalinga-
Apayao, respectively, instead of becoming Vice Governors thereof, pursuant to the rule of succession prescribed in said
Republic Act Nos. 180 and 2264, which are applied to respondent Molintas, as Vice-Governor of the old Mountain Province,
who, pursuant to Republic Act No. 4695, becomes the Governor of the new Province of Benguet.
The foregoing arguments do not prove that equal protection has been denied to petitioners herein. It is well settled
that the equal protection clause applies only to persons or things identically situated and does not bar a reasonable
classification of the subjects of legislation, and that a classification is reasonable where: (1) it is based upon substantial
distinctions which make real differences; (2) these are germane to the purpose of the law; (3) the classification applies, not only
to present conditions, but, also, to future conditions which are substantially identical to those of the present; and (4) the
classification applies equally to all those who belong to the same class. 1
We believe that these requirements are sufficiently met in Republic Act No. 4695. It cannot be denied that the offices
of provincial governor and vice-governor on the one hand, 2 are substantially different from those of plain members of the
provincial board, 3 and those of appointive officers of the provincial government, 4 on the other. The former are essentially
executive in nature, whereas plain members of the said board perform functions partaking of a legislative character, since the
authority vested by law upon provincial boards involves primarily a delegation of some legislative powers of Congress. Indeed,
a good legislator is not necessarily an effective executive, and vice-versa. And, this is specially true in provinces, like those
created by Republic Act No. 4695, for its inhabitants belong to the non-Christian and less enlightened minorities of our
population, and the administration of their public affairs requires a special kind of tact, understanding and vision, which are not

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 needed in the Christianized regions of the Philippines. It goes without saying that the equal protection clause does not require
the identical treatment of appointive and elective officers, insofar as the order of succession is concerned, because they
obviously belong to different classes, both constitutionally and administratively.
The reduction in class of Mountain Province is not material to the issue of equal protection. 5 It may not be amiss to
add, also, that such reduction is not made by Republic Act No. 4695, but is a mere effect of the limited revenues of the territory
comprised in the new Mountain Province, as compared to that of Benguet; 6 that the territory of each of the four (4) provinces
established by the Act in question merely follows the traditional political division of the region commonly known as Mountain
Province, based upon the tribes or ethnic groups inhabiting the same; and that, being a resident of the Municipality of Sagada,
which is part of the new Mountain Province, petitioner Lamen cannot be made Provincial Governor of any of the other three (3)
provinces into which the old Mountain Province has been divided, without violating the very policies of our laws on public
corporations which petitioners cite in their favor. By the same token, respondent Molintas, who resides in La Trinidad, which is
the provincial capital of the new province of Benguet, cannot without impinging upon said policies, be made provincial governor
either of the new Mountain Province, or of Ifugao, or Kalinga-Apayao.
II. Petitioners assail Republic Act No. 4695 upon the ground that the provision thereof reading:
". . . Where the position of provincial governor, in a newly created province, becomes vacant as a
consequence of the division herein effected and the incumbent vice governor is assigned to said province in
accordance with the provisions of this Act, the law of succession shall apply and the vice governor shall
automatically succeed to the position of governor in said province and shall hold office as such until his
successor shall have been elected in the election following approval of this Act and shall have qualified."
(Section 8.)

pursuant to which former Vice-Governor Molintas becomes provincial governor of Benguet, upon the ground that it is not
included in the title of said legislation, reading: "An Act Creating the Provinces of Benguet, Mountain Province, Ifugao and
Kalinga-Apayao."
This pretense is absolutely devoid of merit, for, surely, an Act creating said provinces must be expected to provide
for the officers who shall run the affairs thereof. In other words, the above quoted provision of Section 8 of  Republic Act No.
4695 is manifestly germane to the subject of this legislation, as set forth in its title.
III. & IV. The Constitution ordains:
"The house of Representatives shall be composed of not more than one hundred and twenty
Members who shall be apportioned among the several provinces as nearly as may be according to the
number of their respective inhabitants, but each province shall have at least one Member. The Congress
shall by law make an apportionment within three years after the return of every enumeration, and not
otherwise. Until such apportionment shall have been made, the house of Representatives shall have the
same number of Members as that fixed by law for the National Assembly, who shall be elected by the
qualified electors from the present Assembly districts. Each representative district shall comprise as far as
practicable, contiguous and compact territory."

Pursuant to this Section, a representative district may come into existence: (a) indirectly, through the creation of a
province — for "each province shall have at least one member" in the House of Representatives; or (b) by direct creation
of several representative districts within a province. The requirements concerning the apportionment of representative districts
and the territory thereof refer only to the second method of creation of representative districts, and do not apply to those
incidental to the creation of provinces, under the first method. This is deducible, not only from the general tenor of the provision
above quoted, but, also, from the fact that the apportionment therein alluded to refers to that which is made by an Act of
Congress. Indeed, when a province is created by statute, the corresponding representative district, comes into
existence neither by authority of that statute — which cannot provide otherwise — nor by apportionment, but by operation of
the Constitution, without a reapportionment.
There is no constitutional limitation as to the time when, territory of, or other conditions under which a province may
be created, except, perhaps, if the consequence thereof were to exceed the maximum of 120 representative districts
prescribed in the Constitution, which is not the effect of the legislation under consideration. As a matter of fact, provinces have
been created or subdivided into other provinces, with the consequent creation of additional representative districts, without
complying with the aforementioned requirements. 7
Then, again, petitioners' allegation to the effect that the new representative district resulting from the creation of the
new provinces of Benguet, Mountain Province, Ifugao and Kalinga-Apayao, do not comprise contiguous and compact territory,
has been controverted by respondents and has not been sufficiently proven.
Last, but not least, the constitutional command to the effect that "each representative district shall comprise . . .
contiguous and compact territory" is, not absolute, but, qualified by the phrase "as far as practicable." In the case at bar, the
delimitation of the provinces involved therein is based upon the tribes or ethnic groups inhabiting the same.
WHEREFORE, the petition herein is hereby dismissed, with costs against the petitioners. It is so ordered.
||| (Felwa v. Salas, G.R. No. L-26511, [October 29, 1966], 124 PHIL 1226-1236)

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 [G.R. No. L-7995. May 31, 1957.]

LAO H. ICHONG, in his own behalf and in behalf of other alien residents, corporations and
partnerships adversely affected by Republic Act No. 1180, petitioner, vs. JAIME HERNANDEZ,
Secretary of Finance, and MARCELINO SARMIENTO, City Treasuer of Manila, respondent.

SYLLABUS

1. CONSTITUTIONAL LAW; POLICE POWER; NATURE AND SCOPE. — Police power is 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 co-extensive 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. Especially is it so under
a modern democratic framework where the demands of society and of nations have multiplied to almost unimaginable
proportions; the field and scope of police power has become almost boundless, just as the fields of public interest and public
welfare have become almost all-embracing and have transcended human foresight.
2. ID.; GUARANTEES IN SECTION I, ARTICLE III OF THE CONSTITUTION; UNIVERSALITY OF APPLICATION.
— The constitutional guarantees in Section I, Article III, of the Constitution, which embody the essence of individual liberty and
freedom in democracies, are not limited to citizens alone but are admittedly universal in their application, without regard to any
differences of race, of color, or of nationality (Yiek Wo vs. Hopkins, 30 L. ed., 220, 226).
3. ID.; LAW DEPRIVATION OF LIFE, LIBERTY OR PROPERTY; TEST OR STANDARD. — The conflict between
police power and the guarantees of due process and equal protection of the laws is more apparent than real. Properly related,
the power and the guarantees are supposed to coexist. The balancing is the essence, or the indispensable means for the
attainment of legitimate aspirations of any democratic society. There can be no absolute power, whoever exercises it, for that
would be tyranny. Yet there can neither be absolute liberty, for that would mean license and anarchy. So the State can deprive
persons of life, liberty or property, provided there is due process of law; and persons may be classified into classes and groups,
provided everyone is given the equal protection of the law. The test or standard, as always, is reason. The police power
legislation must be firmly grounded on public interest and welfare, and a reasonable relation must exist between purposes and
means. And if distinction or classification has been made, there must be a reasonable basis for said distinction.
4. ID.; EQUAL PROTECTION OF THE LAW CLAUSE; WHEN NOT DEEMED INFRINGED BY LEGISLATION. —
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 a specified class, if
it applies alike to all persons within such class, and reasonable grounds exist for making a distinction between those who fall
within such class and those who do not (2 Cooley, Constitutional Limitations, 824-825).
5. ID.; ID.; LEGISLATIVE POWER TO MAKE DISTINCTION AND CLASSIFICATION AMONG PERSONS;
CITIZENSHIP AS GROUND FOR CLASSIFICATION. — The Power of the legislature to make distinctions and classifications
among persons is not curtailed or denied by the equal protection of the laws clause. The legislative power admits of a wide
scope of discretion, and a law can be violative of the constitutional limitation only when the classification is without reasonable
basis. Citizenship is a legal and valid ground for classification.
6. ID.; ID.; NATIONALIZATION OF RETAIL TRADE; CLASSIFICATION IN REPUBLIC ACT NO. 1180 ACTUAL,
REAL AND REASONABLE. — The classification in the law of retail traders into nationals and aliens is actual, real and
reasonable. All persons of one class are treated alike, and it cannot be said that the classification is patently unreasonable and
unfounded. Hence, it is the duty of this Court to declare that the legislature acted within its legitimate prerogative and it cannot
declare that the act transcends the limits of equal protection established by the Constitution.
7. ID.; ID.; ID.; ID.; TEST OF REASONABLENESS. — The law in question is deemed absolutely necessary to bring
about the desired legislative objective, i.e., to free the national economy from alien control and dominance. It is not necessarily
unreasonable because it affects private rights and privileges (II Am. Jur., pp. 1080-1081). The test of reasonableness of a law
is the appropriateness or adequacy under all circumstances of the means adopted to carry out its purpose into effect. Judged
by this test, the disputed legislation, which is not merely reasonable but actually necessary, must be considered not to have
infringed the constitutional limitation of reasonableness.
8. ID.; ID.; ID.; ID.; ID.; REPUBLIC ACT NO. 1180 TOLERANT AND REASONABLE. — A cursory study of the
provisions of the law immediately reveals how tolerant and reasonable the Legislature has been. The law is made prospective
and recognizes the right and privilege of those already engaged in the occupation to continue therein during the rest of their
lives; and similar recognition of the right to continue is accorded associations of aliens. The right or privilege is denied only to
persons upon conviction of certain offenses.
9. ID.; ID.; ID.; ATTAINMENT OF LEGISLATIVE ASPIRATIONS OF A PEOPLE NOT BEYOND THE LIMITS OF
LEGISLATIVE AUTHORITY. — If political independence is a legitimate aspiration of a people, then economic independence is
none of less legitimate. Freedom and liberty are not real and positive if the people are subject to the economic control and
domination of others, especially if not of their own race or country. The removal and eradication of the shackles of foreign
economic control and domination is one of the noblest motives that a national legislature may pursue. It is impossible to

29 | P a g e
 conceive that legislation that seeks to bring it about can infringe the constitutional limitation of due process. The attainment of a
legitimate aspiration of a people can never be beyond the limits of legislative authority.
10. ID.; ID.; ID.; NATIONALISTIC TENDENCY MANIFESTED IN THE CONSTITUTION. — Nationalistic tendency is
manifested in various provisions of the Constitution. The nationalization of the retail trade is only a continuance of the
nationalistic protective policy laid down as a primary objective of the Constitution. It cannot therefore be said that a law imbued
with the same purpose and spirit underlying many of the provisions of the Constitution is unreasonable, invalid or
unconstitutional.
11. ID.; LEGISLATIVE DEPARTMENT; EXERCISE OF LEGISLATIVE DISCRETION NOT SUBJECT TO JUDICIAL
REVIEW. — The exercise of legislative discretion is not subject to judicial review. The Court will not inquire into the motives of
the Legislature, nor pass upon general matters of legislative judgment. The Legislature is primarily the judge of the necessity of
an enactment or of any of its provisions, and every presumption is in favor of its validity, and though the Court may hold views
inconsistent with the wisdom of the law, it may not annul the legislation if not palpably in excess of the legislative power.
12. ID.; TITLES OF BILLS; PROHIBITION AGAINST DUPLICITY; PRESENCE OF DUPLICITY NOT SHOWN IN
TITLE OR PROVISIONS OF REPUBLIC ACT NO. 1180. — What Section 21(1) of Article VI of the Constitution prohibits is
duplicity, that is, if its title completely fails to apprise the legislators or the public of the nature, scope and consequences of the
law or its operation (I Sutherland, Statutory Construction, Sec. 1707, p. 297). A cursory consideration of the title and the
provisions of the bill fails to show the presence of duplicity. It is true that the term "regulate" does not and may not readily and
at first glance convey the idea of "nationalization" and "prohibition", which terms express the two main purposes and objectives
of the law. But "regulate" is a broader term than either prohibition or nationalization. Both of these have always been included
within the term "regulation".
13. ID.; ID.; ID.; ID.; USE OF GENERAL TERMS IN TITLE OF BILL. — The general rule is for the use of general
terms in the title of a bill; the title need not be an index to the entire contents of the law (I Sutherland, Statutory Construction,
Sec. 4803, p. 345). The above rule was followed when the title of the Act in question adopted the more general term "regulate"
instead of "nationalize" or "prohibit".
14. ID.; ID.; ID.; ID.; PURPOSE OF CONSTITUTIONAL DIRECTIVE REGARDING SUBJECT OF A BILL. — One
purpose of the constitutional directive that the subject of a bill should be embraced in its title is to apprise the legislators of the
purposes, the nature and scope of its provisions, and prevent the enactment into law of matters which have not received the
notice, action and study of the legislators or of the public. In case at bar it cannot be claimed that the legislators have not been
apprised of the nature of the law, especially the nationalization and prohibition provisions. The legislators took active interest in
the discussion of the law, and a great many of the persons affected by the prohibition in the law conducted a campaign against
its approval. It cannot be claimed, therefore, that the reasons for declaring the law invalid ever existed.
15. ID.; INTERNATIONAL TREATIES AND OBLIGATIONS NOT VIOLATED BY REPUBLIC ACT No. 1180;
TREATIES SUBJECT TO QUALIFICATION OR AMENDMENT BY SUBSEQUENT LAW. — The law does not violate
international treaties and obligations. The United Nations Charter imposes no strict or legal obligations regarding the rights and
freedom of their subjects (Jans Kelsen, The Law of the United Nations, 1951 ed., pp. 29-32), 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. The Treaty of Amity between the Republic of the Philippines and the Republic of China of April 18, 1947 guarantees
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 discriminated 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. But even supposing that the law
infringes upon the said treaty, the treaty is always subject to qualification or amendment by a subsequent law (U.S. vs.
Thompson, 258, Fed. 257, 260), and the same may never curtail or restrict the scope of the police power of the State (Palston
vs. Pennsylvania 58 L. ed., 539).

DECISION

LABRADOR, J p:

I. The case and the issue, in general

This Court has before it the delicate task of passing upon the validity and constitutionality of a legislative enactment,
fundamental and far-reaching in significance The enactment poses questions of due process, police power and equal
protection of the laws. It also poses an important issue of fact, that is whether the conditions which the disputed law purports to
remedy really or actually exist. Admittedly springing from a deep, militant, and positive nationalistic impulse, the law purports to
protect citizen and country from the alien retailer. Through it, and within the field of economy it regulates, Congress attempts to
translate national aspirations for economic independence and national security, rooted in the drive and urge for national
survival and welfare, into a concrete and tangible measures designed to free the national retailer from the competing
dominance of the alien, so that the country and the nation may be free from a supposed economic dependence and bondage.
Do the facts and circumstances justify the enactment?
II. Pertinent provisions of Republic Act No. 1180

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 Republic Act No. 1180 is entitled "An Act to Regulate the Retail Business." In effect it nationalizes the retail trade
business. The main provisions of the Act are: (1) a prohibition against persons, not citizens of the Philippines, and against
associations, partnerships, or corporations the capital of which are not wholly owned by citizens of the Philippines, from
engaging directly or indirectly in the retail trade; (2) an exception from the above prohibition in favor of aliens actually engaged
in said business on May 15, 1954, who are allowed to continue to engage therein, unless their licenses are forfeited in
accordance with the law, until their death or voluntary retirement in case of natural persons, and for ten years after the approval
of the Act or until the expiration of term in case of juridical persons; (3) an exception therefrom in favor of citizens and juridical
entities of the United States; (4) 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; (5) a prohibition against the establishment or opening by aliens actually engaged in the retail business of additional
stores or branches of retail business, (6) a provision requiring aliens actually engaged in the retail business to present for
registration with the proper authorities a verified statement concerning their businesses, giving, among other matters, the
nature of the business, their assets and liabilities and their offices and principal offices of juridical entities; and (7) a provision
allowing the heirs of aliens now engaged in the retail business who die, to continue such business for a period of six months for
purposes of liquidation.
III. Grounds upon which petition is based — Answer thereto
Petitioner, for and in his own behalf and on behalf of other alien residents, corporations and partnerships adversely
affected by the provisions of Republic Act No. 1180, brought this action to obtain a judicial declaration that said Act is
unconstitutional, and to enjoin the Secretary of Finance and all other persons acting under him, particularly city and municipal
treasurers, from enforcing its provisions. Petitioner attacks the constitutionality of the Act, contending that: (1) it denies to alien
residents the equal protection of the laws and deprives them of their liberty and property without due process of law; (2) the
subject of the Act is not expressed or comprehended in the title thereof; (3) the Act violates international and treaty obligations
of the Republic of the Philippines; (4) 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.
In answer, the Solicitor-General and the Fiscal of the City of Manila contend that: (1) 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; (2) the Act has only one subject embraced in the title; (3) no treaty or international obligations are infringed; (4) 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.
IV. Preliminary consideration of legal principles involved
a. The police power. —
There is no question that the Act was approved in the exercise of the police power, but petitioner claims that its
exercise in this instance is attended by a violation of the constitutional requirements of due process and equal protection of the
laws. But before proceeding to the consideration and resolution of the ultimate issue involved, it would be well to bear in mind
certain basic and fundamental, albeit preliminary, considerations in the determination of the ever recurrent conflict between
police power and the guarantees of due process and equal protection of the laws. What is the scope of police power and how
are the due process and equal protection clauses related to it? What is the province and power of the legislature, and what is
the function and duty of the courts? These consideration must be clearly and correctly understood that their application to the
facts of the case may be brought forth with clarity and the issue accordingly resolved.
It has been said that police power is so far-reaching in scope, that it has become almost impossible to limit its sweep.
As it derives its existence from the very existence of the State itself, it does not need to be expressed or defined in its scope; it
is said to be co- extensive 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. Especially is it so under a modern democratic framework where the
demands of society and of nations have multiplied to almost unimaginable proportions; the field and scope of police power has
become almost boundless, just as the fields of public interest and public welfare have become almost all- embracing and have
transcended human foresight. Otherwise stated, as 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 public interest or welfare. So it is that Constitutions do not define the
scope or extent of the police power of the State; what they do is to set forth the limitations thereof. The most important of these
are the due process clause and the equal protection clause.
b. Limitations on police power. —
The basic limitations of due process and equal protection are found in the following provisions of our Constitution:
"SECTION 1.(1) No person shall be deprived of life, liberty or property without due process of law,
nor shall any person be denied the equal protection of the laws." (Article III, Phil. Constitution)
These constitutional guarantees which embody the essence of individual liberty and freedom in democracies, are not limited to
citizens alone but are admittedly universal in their application, without regard to any differences of race, of color, or of
nationality. (Yick Wo vs. Hopkins, 30, L. ed. 220, 226.)
c. The equal protection clause. —
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

31 | P a g e
 liabilities enforced. The equal protection clause is not infringed by legislation which applies only to those persons falling within
a specified class, if it applies alike to all persons 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.)
 
d. The due process clause. —
The due process clause has to do with the reasonableness of legislation enacted in pursuance of the police power,
Is there public interest, a public purpose; is public welfare involved? Is the Act reasonably necessary for the accomplishment of
the legislature's purpose; is it not unreasonable, arbitrary or oppressive? Is there sufficient foundation or reason in connection
with the matter involved; or has there not been a capricious use of the legislative power? Can the aims conceived be achieved
by the means used, or is it not merely an unjustified interference with private interest? These are the questions that we ask
when the due process test is applied.
The conflict, therefore, between police power and the guarantees of due process and equal protection of the laws is
more apparent than real. Properly related, the power and the guarantees are supposed to coexist. The balancing is the
essence or, shall it be said, the indispensable means for the attainment of legitimate aspirations of any democratic society.
There can be no absolute power, whoever exercise it, for that would be tyranny. Yet there can neither be absolute liberty, for
that would mean license and anarchy. So the State can deprive persons of life, liberty and property, provided there is due
process of law; and persons may be classified into classes and groups, provided everyone is given the equal protection of the
law. The test or standard, as always, is reason. The police power legislation must be firmly grounded on public interest and
welfare, and a reasonable relation must exist between purposes and means. And if distinction and classification has been
made, there must be a reasonable basis for said distinction.
e. Legislative discretion not subject to judicial review. —
Now, in this matter of equitable balancing, what is the proper place and role of the courts? It must not be overlooked,
in the first place, that the legislature, which is the constitutional repository of police power and exercises the prerogative of
determining the policy of the State, is by force of circumstances primarily the judge of necessity, adequacy or reasonableness
and wisdom, of any law promulgated in the exercise of the police power, or of the measures adopted to implement the public
policy or to achieve public interest. On the other hand, courts, although zealous guardians of individual liberty and right, have
nevertheless evinced a reluctance to interfere with the exercise of the legislative prerogative. They have done so early where
there has been a clear, patent or palpable arbitrary and unreasonable abuse of the legislative prerogative. Moreover, courts
are not supposed to override legitimate policy, and courts never inquire into the wisdom of the law.
V. Economic problems sought to be remedied
With the above considerations in mind, we will now proceed to delve directly into the issue involved. If the disputed
legislation were merely a regulation, as its title indicates, there would be no question that it falls within the legitimate scope of
legislative power. But it goes further and prohibits a group of residents, the aliens, from engaging therein. The problem
becomes more complex because its subject is a common, trade or occupation, as old as society itself, which from time
immemorial has always been open to residents, irrespective of race, color or citizenship.
a. Importance of retail trade in the economy of the nation. —
In a primitive economy where families produce all that they consume and consume all that they produce, the dealer,
of course, is unknown. But as group life develops and families begin to live in communities producing more than what they
consume and needing an infinite number of things they do not produce, the dealer comes into existence. As villages develop
into big communities and specialization in production begins, the dealer's importance is enhanced. Under modern conditions
and standards of living, in which man's needs have multiplied and diversified to unlimited extents and proportions, the retailer
comes as essential as the producer, because thru him the infinite variety of articles, goods and commodities needed for daily
life are placed within the easy reach of consumers. Retail dealers perform the functions of capillaries in the human body, thru
which all the needed food and supplies are ministered to members of the communities comprising the nation.
There cannot be any question about the importance of the retailer in the life of the community. He ministers to the
resident's daily needs, food in all its increasing forms, and the various little gadgets and things needed for home and daily life.
He provides his customers around his store with the rice or corn, the fish, the salt, the vinegar, the spices needed for the daily
cooking. He has cloths to sell, even the needle and the thread to sew them or darn the clothes that wear out. The retailer,
therefore, from the lowly peddler, the owner of a small sari-sari store, to the operator of a department store or a supermarket is
so much a part of day-to-day existence.
b. The alien retailer's traits. —
The alien retailer must have started plying his trade in this country in the bigger centers of population (Time there
was when he was unknown in provincial towns and villages). Slowly but gradually he invaded towns and villages; now he
predominates in the cities and big centers of population. He even pioneers in far away nooks where the beginnings of
community life appear, ministering to the daily needs of the residents and purchasing their agricultural produce for sale in the
towns. It is an undeniable fact that in many communities the alien has replaced the native retailer. He has shown in this trade,
industry without limit, and the patience and forbearance of a slave. Derogatory epithets are hurled at him, but he laughs these
off without murmur; insults of ill-bred and insolent neighbors and customers are made in his face, but he heeds them not, and
he forgets and forgives. The community takes no note of him, as he appears to be harmless and extremely useful.
c. Alleged alien control and dominance. —
There is a general feeling on the part of the public, which appears to be true to fact, about the controlling and
dominant position that the alien retailer holds in the nation's economy. Food and other essentials, clothing, almost all articles of

32 | P a g e
 daily life reach the residents mostly through him. In big cities and centers of population he has acquired not only
predominance, but apparent control over distribution of almost all kinds of goods, such as lumber, hardware, textiles, groceries,
drugs, sugar, flour, garlic, and scores of other goods and articles. And were it not for some national corporations like the Naric,
the Namarco, the Facomas and the Accfa, his control over principal foods and products would easily become full and
complete.
Petitioner denies that there is alien predominance and control in the retail trade. In one breath it is said that the fear
is unfounded and the threat is imagined; in another, it is charged that the law is merely the result of racialism and pure and
unabashed nationalism. Alienage, it is said, is not an element of control; also so many unmanageable factors in the retail
business make control virtually impossible. The first argument which brings up an issue of fact merits serious consideration.
The others are matters of opinion within the exclusive competence of the legislature and beyond our prerogative to pass upon
and decide.
The best evidence are the statistics on the retail trade, which put down the figures in black and white. Between the
constitutional convention year (1935), when the fear of alien domination and control of the retail trade already filled the minds
of our leaders with fears and misgivings, and the year of the enactment of the nationalization of the retail trade act (1954),
official statistics unmistakably point out to the ever-increasing dominance and control by the alien of the retail trade, as witness
the following tables:
 
The above figures reveal that in percentage distribution of assets and of gross sales, alien participation has steadily
increased during the years. It is true, of course, that Filipinos have the edge in the number of retailers, but aliens more than
make up for the numerical gap through their assets and gross sales which average between six and seven times those of the
very many Filipino retailers Numbers in retailers, here, do not imply superiority; the alien invests more capital, buys and sells
six to seven times more, and gains much more. The same of official report, pointing out to the known predominance of foreign
elements in the retail trade, remarks that the Filipino retailers were largely engaged in minor retailer enterprises. As observed
by respondents, the native investment is thinly spread, and the Filipino retailer is practically helpless in matters of capital,
credit, price and supply.
d. Alien control and threat, subject of apprehension in Constitutional Convention. —
It is this domination and control, which we believe has been sufficiently shown to exist, that is the legislature's target
in the enactment of the disputed nationalization law. If they did not exist as a fact the sweeping remedy of nationalization would
never have been adopted. The framers of our Constitution also believed in the existence of this alien dominance and control
when they approved a resolution categorically declaring among other things, that "it is the sense of the Convention that the
public interest requires the nationalization of the retail trade; . . ." (II Aruego, The Framing of the Philippine Constitution, 662-
663, quoted on page 67 of Petitioner.) That was twenty-two years ago; and the events since then have not been either
pleasant or comforting. Dean Since of the University of the Philippines College of Law, commenting on the patrimony clause of
the Preamble opines that the fathers of our Constitution were merely translating the general preoccupation of Filipinos "of the
dangers from alien interests that had already brought under their control the commercial and other economic activities of the
country" (Sinco, Phil. Political Law, 10th ed., p. 114); and analyzing the concern of the members of the constitutional
convention for the economic life of the citizens, in connection with the nationalistic provisions of the Constitution, he says:
"But there has been a general feeling that alien dominance over the economic life of the country is
not desirable and that if such a situation should remain, political independence alone is no guarantee to
national stability and strength. Filipino private capital is not big enough to wrest from alien hands the control
of the national economy. Moreover, it is but of recent formation and hence, largely inexperienced, timid and
hesitant. Under such conditions, the government as the instrumentality of the national will, has to step in and
assume the initiative, if not the leadership, in the struggle for the economic freedom of the nation in
somewhat the same way that it did in the crusade for political freedom. Thus . . . It (the Constitution)
envisages an organized movement for the protection of the nation not only against the possibilities of armed
invasion but also against its economic subjugation by alien interests in the economic field." (Phil. Political
Law by Sinco, 10th ed., p. 476.)
Belief in the existence of alien control and predominance is felt in other quarters. Filipino business men,
manufacturers and producers believe so; they fear the business coming from alien control, and they express sentiments of
economic independence. Witness thereto is Resolution No. 1, approved on July 18, 1953, of the Fifth National Convention of
Filipino Businessmen, and a similar resolution, approved on March 20, 1954, of the Second National Convention of
Manufacturers and Producers. The man in the street also believes, and fears, alien predominance and control; so our
newspapers, which have editorially pointed out not only to control but to alien stranglehold. We, therefore, find alien domination
and control to be a fact, a reality proved by official statistics, and felt by all the sections and groups that compose the Filipino
community.
e. Dangers of alien control and dominance in retail. —
But the dangers arising from alien participation in the retail trade does not seem to lie in the predominance alone;
there is a prevailing feeling that such predominance may truly endanger the national interest. With ample capital, unity of
purpose and action and thorough organization, alien retailers and merchants can act in such complete unison and concert on
such vital matters as the fixing of prices, the determination of the amount of goods or articles to be made available in the
market, and even the choice of the goods or articles they would or would not patronize or distribute, that fears of dislocation of
the national economy and of the complete subservience of national retailers and of the consuming public are not entirely
unfounded. Nationals, producers and consumers alike, can be placed completely at their mercy. This is easily illustrated.
Suppose an article of daily use is desired to be prescribed by the aliens, because the producer or importer does not offer them
sufficient profits, or because a new competing article offers bigger profits for its introduction. All that aliens would do is to agree

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 to refuse to sell the first article, eliminating it from their stocks, offering the new one as a substitute. Hence, the producers or
importers of the prescribed article, or its consumers, find the article suddenly out of circulation. Freedom of trade is thus
curtailed and free enterprise correspondingly suppressed.
We can even go farther than theoretical illustrations to show the pernicious influences of alien domination. Grave
abuses have characterized the exercise of the retail trade by aliens. It is a fact within judicial notice, which courts of justice may
not properly overlook or ignore in the interests of truth and justice, that there exists a general feeling on the part of the public
that alien participation in the retail trade has been attended by a pernicious and intolerable practices, the mention of a few of
which would suffice for our purposes; that at some time or other they have cornered the market of essential commodities, like
corn and rice, creating artificial scarcities to justify and enhance profits to unreasonable proportions; that they have hoarded
essential foods to the inconvenience and prejudice of the consuming public, so much so that the Government has had to
establish the National Rice and Corn Corporation to save the public from their continuous hoarding practices and tendencies;
that they have violated price control laws, especially on foods and essential commodities, such that the legislature had to enact
a law (Sec. 9, Republic Act No. 1168), authorizing their immediate and automatic deportation for price control convictions; that
they have secret combinations among themselves to control prices, cheating the operation of the law of supply and demand;
that they have connived to boycott honest merchants and traders who would not cater or yield to their demands, in unlawful
restraint of freedom of trade and enterprise. They are believed by the public to have evaded tax laws, smuggled goods and
money into and out of the land, violated import and export prohibitions, control laws and the like, in derision and contempt of
lawful authority. It is also believed that they have engaged in corrupting public officials with fabulous bribes, indirectly causing
the prevalence of graft and corruption in the Government. As a matter of fact appeals to unscrupulous aliens have been made
both by the Government and by their own lawful diplomatic representatives, action which impliedly admits a prevailing feeling
about the existence of many of the above practices.
The circumstances above set forth create well founded fears that worse things may come in the future. The present
dominance of the alien retailer, especially in the big centers of population, therefore, becomes a potential source of danger on
occasions of war or other calamity. We do not have here in this country isolated groups of harmless aliens retailing goods
among nationals; what we have are well organized and powerful groups that dominate the distribution of goods and
commodities in the communities and big centers of population. They owe no allegiance or loyalty to the State, and the State
cannot rely upon them in times of crisis or emergency. While the national holds his life, his person and his property subject to
the needs of his country, the alien may even become the potential enemy of the State.
f. Law enacted in interest of national economic survival and security. —
We are fully satisfied upon a consideration of all the facts and circumstances that the disputed law is not the product
of racial hostility, prejudice or discrimination, but the expression of the legitimate desire and determination of the people, thru
their authorized representatives, to free the nation from the economic situation that has unfortunately been saddled upon it
rightly or wrongly, to its disadvantage. The law is clearly in the interest of the public, any of the national security itself, and
indisputably falls within the scope of police power, thru which and by which the State insures its existence and security and the
supreme welfare of its citizens.
VI. The Equal Protection Limitation
a. Objections to alien participation in retail trade. —
The next question that now poses solution is, Does the law deny the equal protection of the laws? As pointed out
above, the mere fact of alienage is the root and cause of the distinction between the alien and the national as a trader. The
alien resident owes allegiance to the country of his birth or his adopted country; his stay here is for personal convenience; he is
attracted by the lure of gain and profit. His aim or purpose of stay, we admit, is neither illegitimate nor immoral, but he is
naturally lacking in that spirit of loyalty and enthusiasm for this country where he temporarily stays and makes his living, or of
that spirit of regard, sympathy and consideration for his Filipino customers as would prevent him from taking advantage of their
weakness and exploiting them. The faster he makes his pile, the earlier can the alien go back to his beloved country and his
beloved kin and country men. The experience of the country is that the alien retailer has shown such utter disregard for his
customers and the people on whom he makes his profit, that it has been found necessary to adopt the legislation, radical as it
may seem.
Another objection to the alien retailer in this country is that he never really makes a genuine contribution to national
income and wealth. He undoubtedly contributes to general distribution, but the gains and profits he makes are not invested in
industries that would help the country's economy and increase national wealth. The alien's interest in this country being merely
transient and temporary, it would indeed be ill-advised to continue entrusting the very important function of retail distribution to
his hands.
The practices resorted to by aliens in the control of distribution, as already pointed out above, their secret
manipulations of stocks of commodities and prices, their utter disregard of the welfare of their customers and of the ultimate
happiness of the people of the nation of which they are mere guests, which practices, manipulations and disregard do not
attend the exercise of the trade by the nationals, show the existence of real and actual, positive and fundamental differences
between an alien and a national which fully justify the legislative classification adopted in the retail trade measure. These
differences are certainly a valid reason for the State to prefer the national over the alien in the retail trade. We would be doing
violence to fact and reality were we to hold that no reason or ground for a legitimate distinction can be found between one and
the other.
b. Difference in alien aims and purposes sufficient basis for distinction. —
The above objectionable characteristics of the exercise of the retail trade by the aliens, which are actual and real,
furnish sufficient grounds for legislative classification of retail traders into nationals and aliens. Some may disagree with the
wisdom of the legislature's classification. To this we answer, that this is the prerogative of the law-making power. Since the

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 Court finds that the classification is actual, real and reasonable, and all persons of one class are treated alike, and as it cannot
be said that the classification is patently unreasonable and unfounded, it is in duty bound to declare that the legislature acted
within its legitimate prerogative and it cannot declare that the act transcends the limit of equal protection established by the
Constitution.
Broadly speaking, the power of the legislature to make distinctions and classifications among persons is not curtailed
or denied by the equal protection of the laws clause. The legislative power admits of a wide scope of discretion, and a law can
be violative of the constitutional limitation only when the classification is without reasonable basis. In addition to the authorities
we have earlier cited, we can also refer to the case of Lindsley vs. Natural Carbonic Gas Co. (1911), 55 L. ed., 369, which
clearly and succinctly defined the application of equal protection clause to a law sought to be voided as contrary thereto:
". . . '1. The equal protection clause of the Fourteenth Amendment does not take from the state the
power to classify in the adoption of police laws, but admits of the exercise of the wide scope of discretion in
that regard, and avoids what is done only when it is without any reasonable basis, and therefore is purely
arbitrary. 2. A classification having some reasonable basis does not offend against that clause merely
because it is not made with mathematical nicety, or because in practice it results in some inequality. 3. When
the classification in such a law is called in question, if any state of facts reasonably can be conceived that
would sustain it, the existence of that state of facts at the time the law was enacted must be assumed. 4. One
who assails the classification in such a law must carry the burden of showing that it does not rest upon any
reasonable basis, but is essentially arbitrary.'"
c. Authorities recognizing citizenship as basis for classification. —
The question as to whether or not citizenship is a legal and valid ground for classification has already been
affirmatively decided in this jurisdiction as well as in various courts in the United States. In the case of Smith Bell & Co. vs.
Natividad, 40 Phil. 136, where the validity of Act No. 2761 of the Philippine Legislature was in issue, because of a condition
therein limiting the ownership of vessels engaged in coastwise trade to corporations formed by citizens of the Philippine Islands
or the United States, thus denying the right to aliens, it was held that the Philippine Legislature did not violate the equal
protection clause of the Philippine Bill of Rights. The Legislature in enacting the law had as ultimate purpose the
encouragement of Philippine shipbuilding and the safety for these Islands from foreign interlopers. We held that this was a valid
exercise of the police power, and all presumptions are in favor of its constitutionality. In substance, we held that the limitation of
domestic ownership of vessels engaged in coastwise trade to citizens of the Philippines does not violate the equal protection of
the law and due process of law clauses of the Philippine Bill of Rights. In rendering said decision we quoted with approval the
concurring opinion of Justice Johnson in the case of Gibbons vs. Ogden, 9 Wheat., I, as follows:
"'Licensing acts, in fact, in legislation, are universally restraining acts; as, for example, acts
licensing gaming houses, retailers of spirituous liquors, etc. The act, in this instance, is distinctly of that
character, and forms part of an extensive system, the object of which is to encourage American shipping, and
place them on an equal footing with the shipping of other nations. Almost every commercial nation reserves
to its own subjects a monopoly of its coasting trade; and a countervailing privilege in favor of American
shipping is contemplated, in the whole legislation of the United States on this subject. It is not to give the
vessel an American character, that the license is granted; that effect has been correctly attributed to the act
of her enrollment. But it is to confer on her American privileges, as contra distinguished from foreign; and to
preserve the Government from fraud by foreigners; in surreptitiously intruding themselves into the American
commercial marine, as well as frauds upon the revenue in the trade coastwise, that this whole system is
projected.'"
The rule in general is as follows:
"Aliens are under no special constitutional protection which forbids a classification otherwise
justified simply because the limitation of the class falls along the lines of nationality. That would be requiring a
higher degree of protection for aliens as a class than for similar classes of American citizens. Broadly
speaking, the difference in status between citizens and aliens constitutes a basis for reasonable classification
in the exercise of police power." (2 Am. Jur. 468-469.)
In Commonwealth vs. Hana, 81 N. E. 149 (Massachusetts, 1907), a statute on the licensing of hawkers and
peddlers, which provided that no one can obtain a license unless he is, or has declared his intention, to become a citizen of the
United States, was held valid, for the following reason: It may seem wise to the legislature to limit the business of those who
are supposed to have regard for the welfare, good order and happiness of the community, and the court cannot question this
judgment and conclusion. In Bloomfield vs. State, 99 N.E. 309 (Ohio, 1912), a statute which prevented certain persons, among
them aliens, from engaging in the traffic of liquors, was found not to be the result of race hatred, or in hospitality, or a deliberate
purpose to discriminate, but was based on the belief that an alien cannot be sufficiently acquainted with 'our institutions and our
life as to enable him to appreciate the relation of this particular business to our entire social fabric", and was not, therefore,
invalid. In Ohio ex rel. Clarke vs. Deckebach, 274 U.S. 392, 71 L. ed. 1115 (1926), the U. S. Supreme Court had under
consideration an ordinance of the city of Cincinnati prohibiting the issuance of licenses (pools and billiard rooms) to aliens. It
held that plainly irrational discrimination against aliens is prohibited, but it does not follow that alien race and allegiance may
not bear in some instances such a relation to a legitimate object of legislation as to be made the basis of permitted
classification, and that it could not state that the legislation is clearly wrong; and that latitude must be allowed for the legislative
appraisement of local conditions and for the legislative choice of methods for controlling an apprehended evil. The case of
State vs. Carrol, 124 N. E. 129 (Ohio, 1919) is a parallel case to the one at bar. In Asakura vs. City of Seattle, 210 P. 30
(Washington, 1922), the business of pawnbroking was considered as having tendencies injuring public interest, and limiting it
to citizens is within the scope of police power. A similar statute denying aliens the right to engage in auctioneering was also
sustained in Wright vs. May, L. R. A., 1915 P. 151 (Minnesota, 1914). So also in Anton vs. Van Winkle, 297 F. 340 (Oregon,
1924), the court said that aliens are judicially known to have different interests, knowledge, attitude, psychology and loyalty,

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 hence the prohibition of issuance of licenses to them for the business of pawnbroker, pool, billiard, card room, dance hall, is not
an infringement of constitutional rights. In Templar vs. Michigan State Board of Examiners, 90 N.W. 1058 (Michigan, 1902), a
law prohibiting the licensing of aliens as barbers was held void, but the reason for the decision was the court's finding that the
exercise of the business by the aliens does not in any way affect the morals, the health, or even the convenience of the
community. In Takahashi vs. Fish and Game Commission, 92 L. ed. 1479 (1947), a California statute banning the issuance of
commercial fishing licenses to persons ineligible to citizenship was held void, because the law conflicts with Federal power
over immigration, and because there is no public interest in the mere claim of ownership of the waters and the fish in them, so
there was no adequate justification for the discrimination. It further added that the law was the outgrowth of antagonism toward
persons of Japanese ancestry. However, two Justices dissented on the theory that fishing rights have been treated traditionally
as natural resources. In Fraser vs. McConway & Tarley Co., 82 Fed. 257 (Pennsylvania, 1897), a state law which imposed a
tax on every employer of foreign-born unnaturalized male persons over 21 years of age, was declared void because the court
found that there was no reason for the classification and the tax was an arbitrary deduction from the daily wage of an
employee.
d. Authorities contra explained. —
It is true that some decisions of the Federal court and of the State courts in the United States hold that the distinction
between aliens and citizens is not a valid ground for classification. But in these decisions the laws declared invalid were found
to be either arbitrary, unreasonable or capricious, or were the result or product of racial antagonism and hostility, and there was
no question of public interest involved or pursued. In Yu Cong Eng vs. Trinidad, 70 L. ed. 1059 (1925), the United States
Supreme Court declared invalid a Philippine law making unlawful the keeping of books of account in any language other than
English, Spanish or any other local dialect, but the main reasons for the decisions are: (1) that if Chinese were driven out of
business there would be no other system of distribution, and (2) that the Chinese would fall prey to all kinds of fraud, because
they would be deprived of their right to be advised of their business and to direct its conduct. The real reason for the decision,
therefore, is the court's belief that no public benefit would be derived from the operation of the law and on the other hand it
would deprive Chinese of something indispensable for carrying on their business. In Yick Wo vs. Hopkins, 30 L. ed. 220 (1885)
an ordinance conferring power on officials to withhold consent in the operation of laundries both as to persons and place, was
declared invalid, but the court said that the power granted was arbitrary, that there was no reason for the discrimination which
attended the administration and implementation of the law, and that the motive thereof was mere racial hostility. In State vs.
Montgomery, 47 A. 165 (Maine, 1900), a law prohibiting aliens to engage as hawkers and peddlers was declared void,
because the discrimination bore no reasonable and just relation to the act in respect to which the classification was proposed.
The case at bar is radically different, and the facts make them so. As we already have said, aliens do not naturally
possess the sympathetic consideration and regard for customers with whom they come in daily contact, nor the patriotic desire
to help bolster the nation's economy, except in so far as it enhances their profit, nor the loyalty and allegiance which the
national owes to the land. These limitations on the qualifications of aliens have been shown on many occasions and instances,
especially in times of crisis and emergency. We can do no better than borrow the language of Anton vs. Van Winkle, 297 F.
340, 342, to drive home the reality and significance of the distinction between the alien and the national, thus:
". . . It may be judicially known, however, that aliens coming into this country are without the
intimate knowledge of our laws, customs, and usages that our own people have. So it is likewise known that
certain classes of aliens are of different psychology from our fellow countrymen. Furthermore, it is natural and
reasonable to suppose that the foreign born, whose allegiance is first to their own country, and whose ideals
of governmental environment and control have been engendered and formed under entirely different regimes
and political systems, have not the same inspiration for the public weal, nor are they as well disposed toward
the United States, as those who by citizenship, are a part of the government itself. Further enlargement, is
unnecessary. I have said enough so that obviously it cannot be affirmed with absolute confidence that the
Legislature was without plausible reason for making the classification, and therefore appropriate
discrimination against aliens as it relates to the subject of legislation. . . ."

VII. The Due Process of Law Limitation

a. Reasonability, the test of the limitation; determination by legislature decisive. —
We now come to due process as a limitation on the exercise of the police power. It has been stated by the highest
authority in the United States that:
". . . And the guaranty of due process, as has often been held, demands only that the law shall not
be unreasonable, arbitrary or capricious, and that the means selected shall have a real and substantial
relation to the subject sought to be attained. . . ."
xxx xxx xxx
"So far as the requirement of due process is concerned and in the absence of other constitutional
restriction a state is free to adopt whatever economic policy may reasonably be deemed to promote public
welfare, and to enforce that policy by legislation adapted to its purpose. The courts are without authority
either to declare such policy, or, when it is declared by the legislature, to override it. If the laws passed are
seen to have a reasonable relation to a proper legislative purpose, and are neither arbitrary nor
discriminatory, the requirements of due process are satisfied, and judicial determination to that effect renders
a court functus officio. . . ." (Nebbia vs. New York, 78 L. ed. 940, 950, 957.)
Another authority states the principle thus:

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 ". . . Too much significance cannot be given to the word 'reasonable' in considering the scope of
the police power in a constitutional sense, for the test used to determine the constitutionality of the means
employed by the legislature is to inquire whether the restrictions it imposes on rights secured to individuals by
the Bill of Rights are unreasonable, and not whether it imposes any restrictions on such rights. . . ."
xxx xxx xxx
". . . A statute to be within this power must also be reasonable in its operation upon the persons
whom it affects, must not be for the annoyance of a particular class, and must not be unduly oppressive." (11
Am. Jur. Sec. 302, pp. 1074-1075.)
In the case of Lawton vs. Steele, 38 L. ed. 385, 388, it was also held:
". . . To justify the state in thus interposing its authority in behalf of the public, it must appear, first,
that the interests of the public generally, as distinguished from those of a particular class, require such
interference; and second, that the means are reasonably necessary for the accomplishment of the purpose,
and not unduly oppressive upon individuals. . . ."
Prata Undertaking Co. vs. State Board of Embalming, 104 ALR, 389, 395, fixes this test of constitutionality:
"In determining whether a given act of the Legislature, passed in the exercise of the police power
to regulate the operation of a business, is or is not constitutional, one of the first questions to be considered
by the court is whether the power as exercised has a sufficient foundation in reason in connection with the
matter involved, or is an arbitrary, oppressive, and capricious use of that power, without substantial relation to
the health, safety, morals, comfort, and general welfare of the public."
b. Petitioner's argument considered. —
Petitioner's main argument is that retail is a common, ordinary occupation, one of those privileges long ago
recognized as essential to the orderly pursuit of happiness by free men; that it is a gainful and honest occupation and therefore
beyond the power of the legislature to prohibit and penalize. This argument overlooks fact and reality and rests on an incorrect
assumption and premise, i.e., that in this country where the occupation is engaged in by petitioner, it has been so engaged by
him, by the alien, in an honest creditable and unimpeachable manner, without harm or injury to the citizens and without
ultimate danger to their economic peace, tranquility and welfare. But the Legislature has found, as we have also found and
indicated, that the privilege has been so grossly abused by the alien, thru the illegitimate use of pernicious designs and
practices, that he now enjoys a monopolistic control of the occupation and threatens a deadly stranglehold on the nation's
economy endangering the national security in times of crisis and emergency.
The real question at issue, therefore, is not that posed by petitioner, which overlooks and ignores the facts and
circumstances, but this, Is the exclusion in the future of aliens from the retail trade unreasonable, arbitrary and capricious,
taking into account the illegitimate and pernicious form and manner in which the aliens have heretofore engaged therein? As
thus correctly stated the answer is clear. The law in question is deemed absolutely necessary to bring about the desired
legislative objective, i.e., to free national economy from alien control and dominance. It is not necessarily unreasonable
because it affects private rights and privileges (11 Am. Jur. pp. 1080-1081.) The test of reasonableness of a law is the
appropriateness or adequacy under all circumstances of the means adopted to carry out its purpose into effect (Id.) Judged by
this test, disputed legislation, which is not merely reasonable but actually necessary, must be considered not to have infringed
the constitutional limitation of reasonableness.
The necessity of the law in question is explained in the explanatory note that accompanied the bill, which later was
enacted into law:
"This bill proposes to regulate the retail business. Its purpose is to prevent persons who are not
citizens of the Philippines from having a strangle hold upon our economic life. If the persons who control this
vital artery of our economic life are the ones who owe no allegiance to this Republic, who have no profound
devotion to our free institutions, and who have no permanent stake in our people's welfare, we are not really
the masters of our own destiny. All aspects of our life, even our national security, will be at the mercy of other
people.
"In seeking to accomplish the foregoing purpose, we do not propose to deprive persons who are
not citizens of the Philippines of their means of livelihood. While this bill seeks to take away from the hands of
persons who are not citizens of the Philippines a power that can be wielded to paralyze all aspects of our
national life and endanger our national security it respects existing rights.
"The approval of this bill is necessary for our national survival."
If political independence is a legitimate aspiration of a people, then economic independence is none the less
legitimate. Freedom and liberty are not real and positive if the people are subject to the economic control and domination of
others, especially if not of their own race or country. The removal and eradication of the shackles of foreign economic control
and domination, is one of the noblest motives that a national legislature may pursue. It is impossible to conceive that legislation
that seeks to bring it about can infringe the constitutional limitation of due process. The attainment of a legitimate aspiration of
a people can never be beyond the limits of legislative authority.
c. Law expressly held by Constitutional Convention to be within the sphere of legislative action. —
The framers of the Constitution could not have intended to impose the constitutional restrictions of due process on
the attainment of such a noble motive as freedom from economic control and domination, thru the exercise of the police power.
The fathers of the Constitution must have given to the legislature full authority and power to enact legislation that would

37 | P a g e
 promote the supreme happiness of the people, their freedom and liberty. On the precise issue now before us, they expressly
made their voice clear; they adopted a resolution expressing their belief that the legislation in question is within the scope of
the legislative power. Thus they declared in their Resolution:
"'That it is the sense of the Convention that the public interest requires the nationalization of retail
trade; but it abstains from approving the amendment introduced by the Delegate for Manila, Mr. Araneta, and
others on this matter because it is convinced that the National Assembly is authorized to promulgate a law
which limits to Filipino and American citizens the privilege to engage in the retail trade.'" (II Aruego, The
Framing of the Philippine Constitution, 662- 663, quoted on pages 66 and 67 of the Memorandum for the
Petitioner.)
It would do well to refer to the nationalistic tendency manifested in various provisions of the Constitution. Thus in the
preamble, a principal objective is the conservation of the patrimony of the nation and as corollary thereto the provision limiting
to citizens of the Philippines the exploitation, development and utilization of its natural resources. And in Section 8 of Article
XIV, it is provided that "no franchise, certificate, or any other form of authorization for the operation of a public utility shall be
granted except to citizens of the Philippines." The nationalization of the retail trade is only a continuance of the nationalistic
protective policy laid down as a primary objective of the Constitution. Can it be said that a law imbued with the same purpose
and spirit underlying many of the provisions of the Constitution is unreasonable, invalid and unconstitutional?
The seriousness of the Legislature's concern for the plight of the nationals as manifested in the approval of the
radical measure is, therefore, fully justified. It would have been recreant to its duties towards the country and its people would it
view the sorry plight of the nationals with complacency and refuse or neglect to adopt a remedy commensurate with the
demands of public interest and national survival. As the repository of the sovereign power of legislation, the Legislature was in
duty bound to face the problem and meet, through adequate measures, the danger and threat that alien domination of retail
trade poses to national economy.
d. Provisions of law not unreasonable. —
A cursory study of the provisions of the law immediately reveals how tolerant, how reasonable the Legislature has
been. The law is made prospective and recognizes the right and privilege of those already engaged in the occupation to
continue therein during the rest of their lives; and similar recognition of the right to continue is accorded associations of aliens.
The right or privilege is denied to those only upon conviction of certain offenses. In the deliberations of the Court on this case,
attention was called to the fact that the privilege should not have been denied to children and heirs of aliens now engaged in
the retail trade. Such provision would defeat the law itself, its aims and purposes. Besides, the exercise of legislative discretion
is not subject to judicial review It is well settled that the Court will not inquire into the motives of the Legislature, nor pass upon
general matters of legislative judgment. The Legislature is primarily the judge of the necessity of an enactment or of any of its
provisions, and every presumption is in favor of its validity, and though the Court may hold views inconsistent with the wisdom
of the law, it may not annul the legislation if not palpably in excess of the legislative power. Furthermore, the test of the validity
of a law attacked as a violation of due process, is not its reasonableness, but its unreasonableness, and we find the provisions
are not unreasonable. These principles also answer various other arguments raised against the law, some of which are: that
the law does not promote general welfare; that thousands of aliens would be thrown out of employment; that prices will
increase because of the elimination of competition; that there is no need for the legislation; that adequate replacement is
problematical; that there may be general breakdown; that there would be repercussions from foreigners; etc. Many of these
arguments are directed against the supposed wisdom of the law which lies solely within the legislative prerogative; they do not
import invalidity.
X. Conclusion
Resuming what we have set forth above we hold 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
such dominance and control; that 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; that 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; that the wisdom and efficacy of
the law to carry out its objectives appear to us to be plainly evident — as a matter of fact it seems not only appropriate but
actually necessary — and that in any case such matter falls within the prerogative of the Legislature, with whose power and
discretion the Judicial department of the Government may not interfere; that the provisions of the law are clearly embraced in
the title, and this suffers from no duplicity and has not misled the legislators or the segment of the population affected; and that
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.
Some members of the Court are of the opinion that the radical effects of the law could have been made less harsh in
its impact on the aliens. Thus it is stated that more time should have been given in the law for the liquidation of existing
businesses when the time comes for them to close. Our legal duty, however, is merely to determine if the law falls within the
scope of legislative authority and does not transcend the limitations of due process and equal protection guaranteed in the
Constitution. Remedies against the harshness of the law should be addressed to the Legislature; they are beyond our power
and jurisdiction.
The petition is hereby denied, with costs against petitioner.
||| (Ichong v. Hernandez, G.R. No. L-7995, [May 31, 1957], 101 PHIL 1155-1195)

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 [G.R. No. L-49112. February 2, 1979.]

LEOVILLO C. AGUSTIN, petitioner, vs. HON. ROMEO F. EDU, in his capacity as Land Transportation

Commissioner; HON. JUAN PONCE ENRILE, in his capacity as Minister of National Defense; HON. ALFREDO
L. JUINIO, in his capacity as Minister of Public Works, Transportation and Communications; and HON:
BALTAZAR AQUINO, in his capacity as Minister of Public Highways, respondents.

SYNOPSIS

Letter of Instruction No. 229 (1974) as amended by Letter of Instruction No. 479 (1976) required every motor vehicle
owner to procure and use one pair of a reflectorized triangular early warning device whenever any vehicle is stalled or disabled
or is parked for thirty (30) minutes or more on any street, or highway, including expressways or limited access roads. The
implementing rules and regulations prepared by the respondent Land Transportation Commissioner on December 10, 1976
were not enforced as President Marcos, on January 25, 1977, ordered a six-month period of suspension insofar as the
installation of early warning device (EWD) as a pre-registration requirement for motor vehicles was concerned.  Letter of
Instruction No. 716, issued on June 30, 1978 lifted such suspension and in pursuance thereof, the rules and regulations
prepared by respondent Commission were approved for immediate implementation by respondent Minister of Public Works
and Communication.
Petitioner came to court alleging that Letter of Instruction 229, as amended, clearly violates the provisions of the New
Constitution on due process, equal protection and delegation of police power. That it is oppressive, unreasonable, arbitrary,
confiscatory and contrary to the precepts of our compassionate New Society. The respondents' Answer demonstrated that the
assailed Letter of Instruction was a valid exercise of the police power; that the implementing rules and regulations of
respondent Land Transportation Commissioner do not constitute unlawful delegation of legislative power and that the hazards
posed by such obstructions to traffic have been recognized by international bodies concerned with traffic safety, the 1968
Vienna Convention on Road Signs and Signals of which Philippines was a signatory and which was duly ratified and the United
Nations Organization.
The Court dismissed the petition for prohibition ruling that the Letter of Instruction in question was issued in the
exercise of the State's police power intended to promote public safety; that there has been no undue delegation of legislative
power as a standard has been set; and that the country cannot repudiate its commitment to international bodies and the
accepted principles of international law.

SYLLABUS

1. CONSTITUTIONAL LAW; POLICE POWER OF THE STATE; ENACTMENT OF LEGISLATION TO PROMOTE

GENERAL WELFARE; JURISPRUDENCE. — The broad and expansive scope of the police power, which was originally
identified by Chief Justice Taney of the American Supreme Court in an 1847 decision, as "nothing more or less than the
powers of government inherent in every sovereignty" was stressed in the case of  Edu v. Ericta, (L-32096, Oct. 24, 1970), thus:
"Justice Laurel, in the first leading decision after the Constitution came into force, Calalang v. Williams, (70 Phil. 720) [1940]
identified police power with the state authority to enact legislation that may interfere with personal liberty or property in order to
promote the general welfare. Persons and property could thus 'be subjected to all kinds of restraints and burdens in order to
secure the general comfort, health and prosperity of the state.' Shortly after independence in 1948, Primicias v. Fugoso (80
Phil. 71) reiterated the doctrine, such a competence being referred to as 'the power to prescribe regulations to promote the
health, morals, peace, education, good order or safety, and general welfare of the people.' The concept was set forth in
negative terms by Justice Malcolm in a pre-Commonwealth decision as 'that inherent and plenary power in the State which
enables it to prohibit all things hurtful to the comfort, safety and welfare of society.' In the sense it could be hardly
distinguishable as noted in Morfe v. Mutuc (L-20387 Jan. 31, 1969) with the totality of legislative power. It is in the above sense
the greatest and most powerful attribute of government. It is, to quote Justice Malcolm, 'the most essential, insistent, and at
least illimitable powers,' extending as Justice Holmes, aptly pointed out 'to all the great public needs.' Its scope, over-
expanding to meet the exigencies of the times, even to anticipate the future where it could be done, provides enough room for
an efficient and flexible response to conditions and circumstances thus assuring the greatest benefits. In the language of
Justice Cardozo: 'Needs that were narrow or parochial in the past may be interwoven in the present with the well-being of the
nation. What is critical or urgent changes with the time.' The police power is thus a dynamic agency, suitably vague and far
from precisely defined, rooted in the conception that men in organizing the state and imposing upon its government limitations
to safeguard constitutional rights did not intend thereby to enable an individual citizen or a group of citizens to obstruct
unreasonably the enactments of such salutary measures calculated to insure communal peace, safety, good order, and
welfare.'"
2. ID.; ID.; ID.; LETTER OF INSTRUCTION NO. 229; INTENDED TO PROMOTE PUBLIC SAFETY. — Letter of
Instruction 229 is a police measure clearly intended to promote public safety. It would be rare occurrence for the Court to
invalidate a legislative or executive act of that character. The latest decision in point,  Edu v. Ericta, sustained the validity of the
Reflector Law, R.A. No. 5715 (1969), an enactment conceived with the same end in view. Calalang v. Williams found nothing
objectionable in a statute, the purpose of which was: "To promote safe transit upon, and avoid obstruction on roads and streets
designated as national roads . . . ."

39 | P a g e
 3. ID.; ID.; ID.; ID.; ISSUED AFTER CAREFUL STUDY BY THE EXECUTIVE DEPARTMENT. — The issuance
of Letter of Instruction No. 229 is encased in the armor of prior, careful study by the Executive Department. The President had
in his possession the necessary statistical information and data at the time he issued said letter of instruction and such factual
foundation cannot be defeated by petitioner's naked assertion, not backed up by demonstrable data on record, that early
warning devices are not too vital to the prevention of nighttime vehicular accidents. To set it aside for alleged repugnancy to
the due process clause is to give sanction to conjectural claims that exceeded even the broadest permissible limits of a
pleader's well-known penchant for exaggeration.
4. ID.; ID.; ID.; ID.; EARLY WARNING DEVICE REQUIREMENT NOT OPPRESSIVE AND CONFISCATORY. —
There is nothing in the questioned Letter of Instruction No. 229, as amended, or in the implementing rules and regulations in
Administrative Order No. 1 issued by the Land Transportation Commission, which requires or compels motor vehicle owners to
purchase the early warning device prescribed thereby. All that is required is for motor vehicle owners concerned to equip their
motor vehicles with a pair of this early warning device in question, procuring or obtaining the same from whatever source. With
a little of industry and practical ingenuity, motor vehicle owners can even personally make or produce this early warning device
so long as the same substantially conforms with the specifications laid down in said letter of instruction and administrative
order. Accordingly, the early warning device requirement can neither be oppressive, onerous, immoral, nor confiscatory, much
less does it make manufacturers and dealers of said devices instant millionaries at the expense of car owners as petitioner so
sweepingly concludes.
5. ID.; ID.; ID.; ID.; ATTACK ON THE WISDOM THEREOF CANNOT BE SUSTAINED. — The attack on the validity
of the challenged provision insofar as there may be objections, even if valid and cogent, on its wisdom cannot be sustained.
That approach is distinguished by its unorthodoxy. It bears repeating "that this Court, in the language of Justice Laurel, 'does
not pass upon questions of wisdom, justice or expediency of legislation.' As expressed by Justice Tuason:' It is not the province
of the courts to supervise legislation and keep it within the bounds of propriety and common sense. That is primarily and
exclusively a legislative concern.' There can be no possible objection then to the observation of Justice Montemayor:' As long
as laws do not violate any constitutional provision, the Courts merely interpret and apply them regardless of whether or not
they are wise or salutary.' For they, according to Justice Labrador, 'are not supposed to override legitimate policy and . . . never
inquire into the wisdom of the law.' It is thus settled, to paraphrase Chief Justice Concepcion in Gonzales v. Commission on
Elections, that only congressional power or competence, not the wisdom of the action taken, may be the basis for declaring a
statute invalid. This is as it ought to be. The principle of separation of powers has in the main wisely allocated the respective
authority of each department and confined its jurisdiction to such a sphere. There would then be intrusion not allowable under
the Constitution if on a matter left to the discretion of a coordinate branch, the judiciary would substitute its own. If there be
adherence to the rule of law, as there ought to be, the last offender should be courts of justice, to which rightly litigants submit
their controversy precisely to maintain unimpaired the supremacy of legal norms and prescriptions. . . ."
6. ID.; ID.; ID.; NO INFRINGEMENT OF THE PRINCIPLE OF NON-DELEGATION OF LEGISLATIVE POWER. —
The alleged infringement of the principle of non-delegation of legislative power is without any support in well-settled legal
doctrines. An excerpt from the aforecited decision of Edu v. Ericta sheds light on the matter: "To avoid the taint of unlawful
delegation, there must be a standard, which implies at the very least that the legislature itself determines matters of principle
and lays down fundamental policy. Otherwise, the charge of complete abdication may be hard to repel. A standard thus defines
legislative policy, marks its limits, maps out its boundaries and specifies the public agency to apply it. It indicates the
circumstances under which the legislative command is to be effected. It is the criterion by which legislative purpose may be
carried out. Thereafter, the executive or administrative office designated may in pursuance of the above guidelines promulgate
supplemental rules and regulations. The standard may be either express or implied. If the former, the non-delegation is easily
met. The standard though does not have to be spelled out specifically. It could be implied from the policy and purpose of the
act considered as a whole. . . ."
7. ID.; ID.; ID.; ID.; STATE RECOGNITION OF INTERNATIONAL AGREEMENTS. — Where the two whereas
clauses of the assailed Letter of Instruction read: "(Whereas), the hazards posed by such obstructions to traffic have been
recognized by international bodies concerned with traffic safety, the 1968 Vienna Convention on Road Signs and Signals and
the United Nations Organization (U.N.); (Whereas), the said Vienna Convention, which was ratified by the Philippine
Government under P.D. No. 207, recommended the enactment of local legislation for the installation of road safety signs and
devices; . . .", it cannot be disputed then that this Declaration of Principle found in the  Constitution possesses relevance: "The
Philippines . . . adopts the generally accepted principles of international law as part of the law of the land, . . ." The 1968
Vienna Convention on Road Signs and Signals is impressed with such a character. It is not for this country to repudiate a
commitment to which it had pledged its word. The concept of Pacta sunt servanda stands in the way of such an attitude, which
is, moreover, at war with the principle of international morality.
TEEHANKEE, J., dissenting:
1. STATUTES; LETTER OF INSTRUCTION NO. 229; EARLY WARNING DEVICE REQUIREMENT; OPPRESSIVE,
ARBITRARY AND DISCRIMINATORY. — It is oppressive, arbitrary and discriminatory to require owners of motor vehicles with
built-in and more effective and efficient early warning devices (E.W.D.'s) such as "(a) blinking lights in the fore and aft of said
motor vehicles, (b) battery-powered blinking lights inside motor vehicles, (c) built-in reflectorized tapes on front and rear
bumpers of motor vehicles . . . ." to purchase the E.W.D. specified in the challenged order, whose effectivity and utility have yet
to be demonstrated.
2. ID.; ID.; ID.; NO PUBLIC NECESSITY THEREFOR. — The public necessity for the challenged order has yet to be
shown. No valid refutation has been made of petitioner's assertion that the "E.W.D.'s" are not too vital to the prevention of
nighttime vehicular accidents. Statistics show that the 26,000 motor vehicle accidents that occurred in 1976, only 390 or 1.5
percent involved rear-end collisions, "as to require the purchase and installation of the questioned E.W.D. for almost 900,000
vehicles throughout the country. There is no imperative need for imposing such a blanket requirement on all vehicles. The

40 | P a g e
 respondents have not shown that they have availed of the powers and prerogatives vested in their offices such as ridding the
country of dilapitated trucks and vehicles which are the main cause of the deplorable highway accidents due to stalled vehicles,
establishing an honest and fool-proof system of examination and licensing of motor vehicle drivers so as to ban the reckless
and irresponsible and a sustained education campaign to install safe driving habits and attitudes that can be carried out for
much less than the P50 million burden that would be imposed by the challenged order.

DECISION

FERNANDO, J p:

The validity of a Letter of Instruction 1 providing for an early warning device for motor vehicles is assailed in this
prohibition proceeding as being violative of the constitutional guarantee of due process and, insofar as the rules and
regulations for its implementation are concerned, for transgressing the fundamental principle of non-delegation of legislative
power. The Letter of Instruction is stigmatized by petitioner, who is possessed of the requisite standing, as being arbitrary and
oppressive. A temporary restraining order as issued and respondents Romeo F. Edu, Land Transportation Commissioner;
Juan Ponce Enrile, Minister of National Defense; Alfredo L. Juinio, Minister of Public Works, Transportation and
Communications; and Baltazar Aquino, Minister of Public Highways; were required to answer. That they did in a pleading
submitted by Solicitor General Estelito P. Mendoza. 2 Impressed with a highly persuasive quality, it makes quite clear that the
imputation of a constitutional infirmity is devoid of justification. The challenged Letter of Instruction is a valid police power
measure. Nor could the implementing rules and regulations issued by respondent Edu be considered as amounting to an
exercise of legislative power. Accordingly, the petition must be dismissed. llcd
The facts are undisputed. The assailed Letter of Instruction No. 229 of President Marcos, issued on December 2,
1974, reads in full: "[Whereas], statistics show that one of the major causes of fatal or serious accidents in land transportation
is the presence of disabled, stalled, or parked motor vehicles along streets or highways without any appropriate early warning
device to signal approaching motorists of their presence; [Whereas], the hazards posed by such obstructions to traffic have
been recognized by international bodies concerned with traffic safety, the 1968 Vienna Convention on Road Signs and Signals
and the United Nations Organization (U.N.); [Whereas], the said Vienna Convention which was ratified by the Philippine
Government under P.D. No. 207, recommended the enactment of local legislation for the installation of road safety signs and
devices; [Now, therefore, I, Ferdinand E. Marcos], President of the Philippines, in the interest of safety on all streets and
highways, including expressways or limited access roads, do hereby direct: 1. That all owners, users or drivers of motor
vehicles shall have at all times in their motor vehicles at least one (1) pair of early warning device consisting of triangular,
collapsible reflectorized plates in red and yellow colors at least 15 cms. at the base and 40 cms. at the sides. 2. Whenever any
motor vehicle is stalled or disabled or is parked for thirty (30) minutes or more on any street or highway, including expressways
or limited access roads, the owner, user or driver thereof shall cause the warning device mentioned herein to be installed at
least four meters away to the front and rear of the motor vehicle stalled, disabled or parked. 3. The Land Transportation
Commissioner shall cause Reflectorized Triangular Early Warning Devices, as herein described, to be prepared and issued to
registered owners of motor vehicles, except motorcycles and trailers, charging for each piece not more than 15% of the
acquisition cost. He shall also promulgate such rules and regulations as are appropriate to effectively implement this order. 4.
All hereby concerned shall closely coordinate and take such measures as are necessary or appropriate to carry into effect
these instructions." 3 Thereafter, on November 15, 1976, it was amended by Letter of Instruction No. 479 in this wise:
"Paragraph 3 of Letter of Instructions No. 229 is hereby amended to read as follows: '3. The Land Transportation
Commissioner shall require every motor vehicle owner to procure from any source and present at the registration of his vehicle,
one pair of a reflectorized triangular early warning device, as described herein, of any brand or make chosen by said motor
vehicle owner. The Land Transportation Commissioner shall also promulgate such rules and regulations as are appropriate to
effectively implement this order.'" 4 There was issued accordingly, by respondent Edu, the implementing rules and regulations
on December 10, 1976. 5 They were not enforced as President Marcos, on January 25, 1977, ordered a six-month period of
suspension insofar as the installation of early warning device as a pre-registration requirement for motor vehicles was
concerned. 6 Then on June 30, 1978, another Letter of Instruction 7 ordered the lifting of such suspension and directed the
immediate implementation of Letter of Instruction No. 229 as amended. 8 It was not until August 29, 1978 that respondent Edu
issued Memorandum Circular No. 32, worded thus: "In pursuance of Letter of Instructions No. 716, dated June 30, 1978,
directing the implementation of Letter of Instructions No. 229, as amended by Letter of Instructions No. 479, requiring the use
of Early Warning Devices (EWD) on motor vehicles, the following rules and regulations are hereby issued: 1. LTC
Administrative Order No. 1, dated December 10, 1976; shall now be implemented provided that the device may come from
whatever source and that it shall have substantially complied with the EWD specifications contained in Section 2 of said
administrative order; 2. In order to insure that every motor vehicle, except motorcycles, is equipped with the device, a pair of
serially numbered stickers, to be issued free of charge by this Commission, shall be attached to each EWD. The EWD serial
number shall be indicated on the registration certificate and official receipt of payment of current registration fees of the motor
vehicle concerned. All Orders, Circulars, and Memoranda in conflict herewith are hereby superseded, This Order shall take
effect immediately." 9 It was for immediate implementation by respondent Alfredo L. Juinio, as Minister of Public Works,
Transportation, and Communications. 10
Petitioner, after setting forth that he "is the owner of a Volkswagen Beetle Car, Model 13035, already properly
equipped when it came out from the assembly lines with blinking lights fore and aft, which could very well serve as an early
warning device in case of the emergencies mentioned in Letter of Instructions No. 229, as amended, as well as the

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 implementing rules and regulations in Administrative Order No. 1 issued by the Land Transportation Commission," 11 alleged
that said Letter of Instruction No. 229, as amended, "clearly violates the provisions and delegation of police power, [sic] . . .:"
For him, they are "oppressive, unreasonable, arbitrary, confiscatory, nay unconstitutional and contrary to the precepts of our
compassionate New Society." 12 He contended that they are "infected with arbitrariness because it is harsh, cruel and
unconscionable to the motoring public;" 13 are "one-sided, onerous and patently illegal and immoral because [they] will make
manufacturers and dealers instant millionaires at the expense of car owners who are compelled to buy a set of the so-called
early warning device at the rate of P56.00 to P72.00 per set." 14 are unlawful and unconstitutional and contrary to the precepts
of a compassionate New Society [as being] compulsory and confiscatory on the part of the motorists who could very well
provide a practical alternative road safety device, or a better substitute to the specified set of EWDs." 15 He therefore prayed
for a judgment declaring both the assailed Letters of Instructions and Memorandum Circular void and unconstitutional and for a
restraining order in the meanwhile.
A resolution to this effect was handed down by this Court on October 19, 1978: "L-49112 (Leovillo C. Agustin v. Hon.
Romeo F. Edu, etc., et al.) — Considering the allegations contained, the issues raised and the arguments adduced in the
petition for prohibition with writ of preliminary prohibitory and/or mandatory injunction, the Court Resolved to [require] the
respondents to file an answer thereto within ten (10) days from notice and not to move to dismiss the petition. The Court further
Resolved to [issue] a [temporary restraining order] effective as of this date and continuing until otherwise ordered by this
Court." 16
Two motions for extension were filed by the Office of the Solicitor General and granted. Then on November 15,
1978, he Answer for respondents was submitted. After admitting the factual allegations and stating that they lacked knowledge
or information sufficient to form a belief as to petitioner owning a Volkswagen Beetle car,  17 they "specifically deny the
allegations in paragraphs X and XI (including its subparagraphs 1, 2, 3, 4) of Petition to the effect that Letter of Instruction No.
229 as amended by Letters of Instructions Nos. 479 and 716 as well as Land Transportation Commission Administrative Order
No. 1 and its Memorandum Circular No. 32 violates the constitutional provisions on due process of law, equal protection of law
and undue delegation of police power, and that the same are likewise oppressive, arbitrary, confiscatory, one-sided, onerous,
immoral, unreasonable and illegal, the truth being that said allegations are without legal and factual basis and for the reasons
alleged in the Special and Affirmative Defenses of this Answer." 18 Unlike petitioner who contented himself with a rhetorical
recital of his litany of grievances and merely invoked the sacramental phrases of constitutional litigation, the Answer, in
demonstrating that the assailed Letter of Instruction was a valid exercise of the police power and implementing rules and
regulations of respondent Edu not susceptible to the charge that there was unlawful delegation of legislative power, there was
in the portion captioned Special and Affirmative Defenses, a citation of what respondents believed to be the authoritative
decisions of this Tribunal calling for application. They are Calalang v. Williams, 19 Morfe v. Mutuc, 20 and Edu v.
Ericta. 21 Reference was likewise made to the 1968 Vienna Conventions of the United Nations on road traffic, road signs, and
signals, of which the Philippines was a signatory and which was duly ratified. 22 Solicitor General Mendoza took pains to refute
in detail, in language calm and dispassionate, the vigorous, at times intemperate, accusation of petitioner that the assailed
Letter of Instruction and the implementing rules and regulations cannot survive the test of rigorous scrutiny. To repeat, its
highly-persuasive quality cannot be denied. LexLib
This Court thus considered the petition submitted for decision, the issues being clearly joined. As noted at the outset,
it is far from meritorious and must be dismissed.
1. The Letter of Instruction in question was issued in the exercise of the police power. That is conceded by petitioner
and is the main reliance of respondents. It is the submission of the former, however, that while embraced in such a category, it
has offended against the due process and equal protection safeguards of the Constitution, although the latter point was
mentioned only in passing. The broad and expansive scope of the police power which was originally identified by Chief Justice
Taney of the American Supreme Court in an 1847 decision, as "nothing more or less than the powers of government inherent
in every sovereignty" 23 was stressed in the aforementioned case of Edu v. Ericta thus: "Justice Laurel, in the first leading
decision after the Constitution came into force, Calalang v. Williams, identified police power with state authority to enact
legislation that may interfere with personal liberty or property in order to promote the general welfare. Persons and property
could thus 'be subjected to all kinds of restraints and burdens in order to secure the general comfort, health and prosperity of
the state.' Shortly after independence in 1948, Primicias v. Fugoso reiterated the doctrine, such a competence being referred to
as 'the power to prescribe regulations to promote the health, morals, peace, education, good order or safety, and general
welfare of the people.' The concept was set forth in negative terms by Justice Malcolm in a pre-Commonwealth decision as
'that inherent and plenary power in the State which enables it to prohibit all things hurtful to the comfort, safety and welfare of
society.' In that sense it could be hardly distinguishable as noted by this Court in Morfe v. Mutuc with the totality of legislative
power. It is in the above sense the greatest and most powerful attribute of government. It is, to quote Justice Malcolm anew,
'the most essential, insistent, and at least illimitable powers,' extending as Justice Holmes aptly pointed out 'to all the great
public needs.' Its scope, ever expanding to meet the exigencies of the times, even to anticipate the future where it could be
done, provides enough room for an efficient and flexible response to conditions and circumstances thus assuring the greatest
benefits. In the language of Justice Cardozo: 'Needs that were narrow or parochial in the past may be interwoven in the
present with the well-being of the nation. What is critical or urgent changes with the time.' The police power is thus a dynamic
agency, suitably vague and far from precisely defined, rooted in the conception that men in organizing the state and imposing
upon its government limitations to safeguard constitutional rights did not intend thereby to enable an individual citizen or a
group of citizens to obstruct unreasonably the enactment of such salutary measures calculated to insure communal peace,
safety, good order, and welfare." 24
2. It was thus a heavy burden to be shouldered by petitioner, compounded by the fact that the particular police power
measure challenged was clearly intended to promote public safety. It would be a rare occurrence indeed for this Court to
invalidate a legislative or executive act of that character. None has been called to our attention, an indication of its being non-
existent. The latest decision in point, Edu v. Ericta, sustained the validity of the Reflector Law, 25 an enactment conceived with
the same end in view. Calalang v. Williams found nothing objectionable in a statute, the purpose of which was: "To promote

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 safe transit upon, and avoid obstruction on roads and streets designated as national roads . . ."  26 As a matter of fact, the first
law sought to be nullified after the effectivity of the 1935 Constitution, the National Defense Act, 27 with petitioner failing in his
quest, was likewise prompted by the imperative demands of public safety. LLphil
3. The futility of petitioner's effort to nullify both the Letter of Instruction and the implementing rules and regulations
becomes even more apparent considering his failure to lay the necessary factual foundation to rebut the presumption of
validity. So it was held in Ermita-Malate Hotel and Motel Operators Association, Inc. v. City Mayor of Manila. 28 The rationale
was clearly set forth in an excerpt from a decision of Justice Brandeis of the American Supreme Court, quoted in the opinion:
"The statute here questioned deals with a subject clearly within the scope of the police power. We are asked to declare it void
on the ground that the specific method of regulation prescribed is unreasonable and hence deprives the plaintiff of due process
of law. As underlying questions of fact may condition the constitutionality of legislation of this character, the presumption of
constitutionality must prevail in the absence of some factual foundation of record in overthrowing the statute." 29
4. Nor did the Solicitor General, as he very well could, rely solely on such rebutted presumption of validity. As was
pointed out in his Answer: "The President certainly bad in his possession the necessary statistical information and data at the
time he issued said letter of instructions, and such factual foundation cannot be defeated by petitioner's naked assertion that
early warning devices 'are not too vital to the prevention of nighttime vehicular accidents' because allegedly only 390 or 1.5 per
cent of the supposed 26,000 motor vehicle accidents that occurred in 1976 involved rear-end collisions (p. 12 of petition).
Petitioner's statistics is not backed up by demonstrable data on record. As aptly stated by this Honorable Court: 'Further: "It
admits of no doubt therefore that there being a presumption of validity, the necessity for evidence to rebut it is unavoidable,
unless the statute or ordinance is void on its face, which is not the case here"' . . . But even assuming the verity of petitioner's
statistics, is that not reason enough to require the installation of early warning devices to prevent another 390 rear-end
collisions that could mean the death of 390 or more Filipinos and the deaths that could likewise result from head-on or frontal
collisions with stalled vehicles?" 30 It is quite manifest then that the issuance of such Letter of Instruction is encased in the
armor of prior, careful study by the Executive Department. To set it aside for alleged repugnancy to the due process clause is
to give sanction to conjectural claims that exceeded even the broadest permissible limits of a pleader's well-known penchant
for exaggeration.
5. The rather wild and fantastic nature of the charge of oppressiveness of this Letter of Instruction was exposed in
the Answer of the Solicitor General thus: "Such early warning device requirement is not an expensive redundancy, nor
oppressive, for car owners whose cars are already equipped with 1) 'blinking-lights in the fore and aft of said motor vehicles,' 2)
'battery-powered blinking lights inside motor vehicles,' 3) 'built-in reflectorized tapes on front and rear bumpers of motor
vehicles,' or 4) 'well-lighted two (2) petroleum lamps (the Kinke) . . . because: Being universal among the signatory countries to
the said 1968 Vienna Conventions, and visible even under adverse conditions at a distance of at least 400 meters, any
motorist from this country or from any part of the world, who sees a reflectorized rectangular early warning device installed on
the roads, highways or expressways, will conclude, without thinking, that somewhere along the travelled portion of that road,
highway, or expressway, there is a motor vehicle which is stationary, stalled or disabled which obstructs or endangers passing
traffic. On the other hand, a motorist who sees any of the aforementioned other built-in warning devices or the petroleum lamps
will not immediately get adequate advance warning because he will still think what that blinking light is all about. Is it an
emergency vehicle? Is it a law enforcement car? Is it an ambulance? Such confusion or uncertainty in the mind of the motorist
will thus increase, rather than decrease, the danger of collision." 31
6. Nor did the other extravagant assertions of constitutional deficiency go unrefuted in the Answer of the Solicitor
General: "There is nothing in the questioned Letter of Instruction No. 229, as amended, or in Administrative Order No. 1, which
requires or compels motor vehicle owners to purchase the early warning device prescribed thereby. All that is required is for
motor vehicle owners concerned like petitioner, to equip their motor vehicles with a pair of this early warning device in question,
procuring or obtaining the same from whatever source. In fact, with a little of industry and practical ingenuity, motor vehicle
owners can even personally make or produce this early warning device so long as the same substantially conforms with the
specifications laid down in said letter of instruction and administrative order. Accordingly, the early warning device requirement
can neither be oppressive, onerous, immoral, nor confiscatory, much less does it make manufacturers and dealers of said
devices 'instant millionaires at the expense of car owner's as petitioner so sweepingly concludes . . . Petitioner's fear that with
the early warning device requirement 'a more subtle racket' may be committed by those called upon to enforce it . . . is an
unfounded speculation. Besides, that unscrupulous officials may try to enforce said requirement in an unreasonable manner or
to an unreasonable degree, does not render the same illegal or immoral where, as in the instant case, the challenged Letter of
Instruction No. 229 and implementing order disclose none of the constitutional defects alleged against it." 32
7. It does appear clearly that petitioner's objection to this Letter of Instruction is not premised on lack of power, the
justification for a finding of unconstitutionality, but on the pessimistic, not to say negative, view he entertains as to its wisdom.
That approach, it put it at its mildest, is distinguished, if that is the appropriate word, by its unorthodoxy. It bears repeating "that
this Court, in the language of Justice Laurel, 'does not pass upon questions of wisdom, justice or expediency of legislation.' As
expressed by Justice Tuason: 'It is not the province of the courts to supervise legislation and keep it within the bounds of
propriety and common sense. That is primarily and exclusively a legislative concern.' There can be no possible objection then
to the observation of Justice Montemayor: 'As long as laws do not violate any Constitutional provision, the Courts merely
interpret and apply them regardless of whether or not they are wise or salutary.' For they, according to Justice Labrador, 'are
not supposed to override legitimate policy and . . . never inquire into the wisdom of the law.' It is thus settled, to paraphrase
Chief Justice Concepcion in Gonzales v. Commission on Elections, that only congressional power or competence, not the
wisdom of the action taken, may be the basis for declaring a statute invalid. This is as it ought to be. The principle of separation
of powers has in the main wisely allocated the respective authority of each department and confined its jurisdiction to such a
sphere. There would then be intrusion not allowable under the Constitution if on a matter left to the discretion of a coordinate
branch, the judiciary would substitute its own. If there be adherence to the rule of law, as there ought to be, the last offender
should be courts of justice, to which rightly litigants submit their controversy precisely to maintain unimpaired the supremacy of

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 legal norms and prescriptions. The attack on the validity of the challenged provision likewise insofar as there may be
objections, even if valid and cogent, on is wisdom cannot be sustained." 33
8. The alleged infringement of the fundamental principle of non-himself with authoritative pronouncements from this
Tribunal, he would not have the temerity to make such an assertion. An excerpt from the aforecited decision of  Edu v.
Ericta sheds light on the matter: "To avoid the taint of unlawful delegation, there must be a standard, which implies at the very
least that the legislature itself determines matters of principle and lays down fundamental policy. Otherwise, the charge of
complete abdication may be hard to repel. A standard thus defines legislative policy, marks its limits, maps out its boundaries
and specifies the public agency to apply it. It indicates the circumstances under which the legislative command is to be
effected. It is the criterion by which legislative purpose may be carried out. Thereafter, the executive or administrative office
designated may in pursuance of the above guidelines promulgate supplemental rules and regulations. The standard may be
either express or implied. If the former, the non-delegation objection is easily met. The standard though does not have to be
spelled out specifically. It could be implied from the policy and purpose of the act considered as a whole. In the Reflector Law,
clearly, the legislative objective is public safety. What is sought to be attained as in Calalang v. Williams is "safe transit upon
the roads." This is to adhere to the recognition given expression by Justice Laurel in a decision announced not too long after
the Constitution came into force and effect that the principle of non-delegation "has been made to adapt itself to the
complexities of modern governments, giving rise to the adoption, within certain limits, of the principle of "subordinate
legislation" not only in the United States and England but in practically all modern governments.' He continued: 'Accordingly,
with the growing complexity of modern life, the multiplication of the subjects of governmental regulation, and the increased
difficulty of administering the laws, there is a constantly growing tendency toward the delegation of greater powers by the
legislature and toward the approval of the practice by the courts.' Consistency with the conceptual approach requires the
reminder that what is delegated is authority non-legislative in character, the completeness of the statute when it leaves the
hands of Congress being assumed." 34
9. The conclusion reached by this Court that this petition must be dismissed is reinforced by this consideration. The
petition itself quoted these two whereas clauses of the assailed Letter of Instruction: "[Whereas], the hazards posed by such
obstructions to traffic have been recognized by international bodies concerned with traffic safety, the 1968 Vienna Convention
on Road Signs and Signals and the United Nations Organization (U.N.); [Whereas], the said Vienna Convention, which was
ratified by the Philippine Government under P.D. No. 207, recommended the enactment of local legislation for the installation of
road safety signs and devices; . . ." 35 It cannot be disputed then that this Declaration of Principle found in
the Constitution possesses relevance: "The Philippines . . . adopts the generally accepted principles of international law as part
of the law of the land, . . ." 36 The 1968 Vienna Convention on Road Signs and Signals is impressed with such a character. It is
not for this country to repudiate a commitment to which it had pledged its word. The concept of  Pacta sunt servanda stands in
the way of such an attitude, which is, moreover, at war with the principle of international morality. LLpr
10. That is about all that needs be said. The rather court reference to equal protection did not even elicit any attempt
on the part of petitioner to substantiate in a manner clear, positive, and categorical, why such a casual observation should be
taken seriously. In no case is there a more appropriate occasion for insistence on what was referred to as "the general rule"
in Santiago v. Far Eastern Broadcasting Co., 37 namely, "that the constitutionality of a law will not be considered unless the
point is specially pleaded, insisted upon, and adequately argued." 38 "Equal protection" is not a talismanic formula at the mere
invocation of which a party to a lawsuit can rightfully expect that success will crown his efforts. The law is anything but that.
WHEREFORE, this petition is dismissed. The restraining order is lifted. This decision is immediately executory. No
costs.
||| (Agustin v. Edu, G.R. No. L-49112, [February 2, 1979], 177 PHIL 160-181)

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