City of Manila vs. Judge Laguio (G.R. No. 118127)

Facts:

The private respondent, Malate Tourist Development Corporation (MTOC) is a corporation engaged in the business of operating hotels, motels, hostels, and lodging houses. It built and opened Victoria Court in Malate which was licensed as a motel although duly accredited with the Department of Tourism as a hotel.

March 30, 1993 - City Mayor Alfredo S. Lim approved an ordinance enacted which prohibited certain forms of amusement, entertainment, services and facilities where women are used as tools in entertainment and which tend to disturb the community, annoy the inhabitants, and adversely affect the social and moral welfare of the community. The Ordinance prohibited the establishment of sauna parlors, massage parlors, karaoke bars, beerhouses, night clubs, day clubs, cabarets, motels, inns. Owners and operators of the enumerated establishments are given three months to wind up business operations or transfer to any place outside Ermita-Malate or convert said businesses to other kinds allowable within the area. The Ordinance also provided that in case of violation and conviction, the premises of the erring establishment shall be closed and padlocked permanently.

June 28, 1993 - MTOC filed a Petition with the lower court, praying that the Ordinance, insofar as it included motels and inns as among its prohibited establishments, be declared invalid and unconstitutional for several reasons but mainly because it is not a valid exercise of police power and it constitutes a denial of equal protection under the law.

Judge Laguio ruled for the petitioners. The case was elevated to the Supreme Court.

Issue:

WON the Ordinance is constitutional.

Held:

SC held that the ordinance is unconstitutional for several reasons.

First, it did not meet the valid exercise of police power. To successfully invoke the exercise of police power, not only must it appear that (1)the interest of the public generally, as distinguished from those of a particular class, require an interference with private rights, but (2)the means employed must be reasonably necessary for the accomplishment of the purpose and not unduly oppressive. The object of the ordinance was the promotion and protection of the social and moral values of the community. The closing down and transfer of businesses or their conversion into businesses allowed under the ordinance have no reasonable relation to its purpose. Otherwise stated, the prohibition of the enumerated establishments will not per se protect and promote social and moral welfare of the community. It will not itself eradicate prostitution, adultery, fornication nor will it arrest the spread of sexual disease in Manila.

Second. The modality employed constitutes unlawful taking. The ordinance is unreasonable and oppressive as it substantially divests the respondent of the beneficial use of its property. The ordinance forbids running of the enumerated businesses in Ermita-Malate area and instructs owners/operators to wind up their business operations or to transfer outside the area or convert said business into allowed business. An ordinance which permanently restricts the use of property that it cannot be used for any reasonable purpose goes beyond regulation and must be recognized as a taking of the property without just compensation. It is intrusive and violative of the private property rights of individuals. There are two types of taking: A “possessory” taking and a “regulatory” taking. The latter occurs when the government’s regulation leaves no reasonable economically viable use of the property, as in this case.

Third. The ordinance violates the equal protection clause. Equal protection requires that all persons or things similarly situated should be treated alike, both as to the rights conferred and responsibilities imposed. Similar subjects, in other words, should not be treated differently, so as to give undue favor to some. Legislative bodies are allowed to classify the subjects of legislation provided the classification is reasonable. To be valid, it must conform to the following requirements: (1)It must be based on substantial distinction; (2)It must be germane to the purpose of the law; (3)It must not be limited to existing conditions only; and (4)It must apply equally to all members of the class. In the Court’s view, there are no substantial distinction between motels, inns, pension houses, hotels, lodging houses or other similar establishments. By definition, all are commercial establishments providing lodging and usually meals and other services for the public. No reason exists for prohibiting motels and inns but not pension houses, hotels, lodging houses or other similar establishments. The Court likewise cannot see the logic for prohibiting the business and operation of motels in the Ermita-Malate area but not outside this area. A noxious establishment does not become any less noxious if located outside the area.

Fourth. The ordinance is repugnant to general laws, thus it is ultra vires. The ordinance is in contravention of the Revised Administrative Code as the Code merely empowers the local government units to regulate, and not prohibit, the establishments enumerated. Not only that, it likewise runs counter to the provisions of P.D. 499. The P.D. Had already converted the residential Ermita-Malate area into a commercial area. The decree allowed the establishment and operation of all kinds of commercial establishments.

Wherefore, the petition was DENIED and the decision of the RTC was AFFIRMED.