Lupangco vs. CA (G.R. No. 77372)

Facts:

On or about October 6, 1986, herein respondent Professional Regulation Commission (PRC) issued Resolution No. 105 as parts of its "Additional Instructions to Examinees," to all those applying for admission to take the licensure examinations in accountancy:

No examinee shall attend any review class, briefing, conference or the like conducted by, or shall receive any hand-out, review material, or any tip from any school, college or university, or any review center or the like or any reviewer, lecturer, instructor official or employee of any of the aforementioned or similar institutions  during the three days immediately proceeding every examination day including examination day.

Any examinee violating this instruction shall be subject to the sanctions prescribed by Sec. 8, Art. III of the Rules and Regulations of the Commission.

On October 16, 1986, herein petitioners, all reviewees preparing to take the licensure examinations in accountancy schedule on October 25 and November 2 of the same year, filed on their own behalf of all others similarly situated like them, with the Regional Trial Court of Manila a complaint for injunction with a prayer with the issuance of a writ of a preliminary injunction against respondent PRC to restrain the latter from enforcing the above-mentioned resolution and to declare the same unconstitutional.

Respondent PRC filed a motion to dismiss on October 21, 1987 on the ground that the lower court had no jurisdiction to review and to enjoin the enforcement of its resolution. In an Order of October 21, 1987, the lower court declared that it had jurisdiction to try the case and enjoined the respondent commission from enforcing and giving effect to Resolution No. 105 which it found to be unconstitutional. Not satisfied therewith, respondent PRC, on November 10, 1986, an appeal with the Court of Appeals. The petition was granted.

Issue: 

Whether or not Resolution No. 105 is constitutional.

Held:

CA stated as basis its conclusion that PCS and RTC are co-equal branches. They relied heavily on the case of National Electrification Administration vs. Mendoza where the Court held that a Court of First Instance cannot interfere with the orders of SEC, the two being a co-equal branch.

SC said the cases cited by CA are not in point. It is glaringly apparent that the reason why the Court ruled that the Court of First Instance could not interfere with the orders of SEC was that this was provided for by the law. Nowhere in the said cases was it held that a Court of First Instance has no jurisdiction over all other government agencies. On the contrary, the ruling was specifically limited to the SEC. The respondent court erred when it place he SEC and PRC in the same category. There is no law providing for the next course of action for a party who wants to question a ruling or order of the PRC. What is clear from PD No. 223 is that PRC is attached to the Office of the President for general direction and coordination. Well settled in our jurisprudence the view that even acts of the Office of the President may be reviewed by the RTC. In view of the foregoing, SC rules that RTC has jurisdiction to entertain the case and enjoin PRC from enforcing its resolution.

As to the validity of Resolution No. 105, although the resolution has a commendable purpose which is to preserve the integrity and purity of the licensure examinations, the resolution is unreasonable in that an examinee cannot even attend and review class, briefing, conference or the like or receive hand-out, review material, or any tip from any school, college or university, or any review center. The unreasonableness is more obvious in that one who is caught committing the prohibited acts even without ill motives will be barred from taking future examinations.

Resolution No. 105 is not only unreasonable and arbitrary, it also infringes on the examinees’ right to liberty guaranteed by the Constitution. PRC has no authority to dictate on the reviewees as to how they should prepare themselves for the licensure examinations specially if the steps they take are lawful. 

Another evident objection to Resolution No. 105 is that it violates the academic freedom of the schools concerned. PRC cannot interfere with the conduct of review that review schools and centers believe would best enable their enrollees to pass the examination. Unless the means and methods of instruction are clearly found to be inefficient, impractical, or riddled with corruption, review schools and centers may not be stopped from helping out their students.

The enforcement of Resolution No. 105 is not a guarantee that the alleged leakages in the licensure examinations will be eradicated or at least minimized. What is needed to be done by the respondent is to find out the source of such leakages and stop it right there. 

The decision of the CA was REVERSE and SET ASIDE. 

 

Philippine Blooming Mills Employeest Organization vs. Philippine Blooming Mills Co., Inc. (G.R. No. L-31195)

Facts:

Philippine Blooming Mills Employees Organization (PBMEO) decided to stage a mass demonstration at Malacañang in protest against alleged abuses of the Pasig police and that they informed the Philippine Blooming Mills Inc. (Company) of their proposed demonstration.

The company called a meeting with the officers of PBMEO after learning about the planned mass. During the meeting, the planned demonstration was confirmed by the union,explaining further that the demonstration has nothing to do with the Company because the union has no quarrel or dispute with Management. It was stressed out that the demonstration was not a strike against the company but in protest against alleged abuses of the Pasig police.

Company informed PBMEO that the demonstration is an inalienable right of the union but emphasized, however, that any demonstration for that matter should not unduly prejudice the normal operation of the Company. For which reason, the Company warned the PBMEO representatives that workers who without previous leave of absence approved by the Company, particularly the officers present who are the organizers of the demonstration, who shall fail to report for work shall be dismissed.

Another meeting was convoked by the Company. It reiterated and appealed to the PBMEO representatives that while  workers may join the Malacañang demonstration, those from the 1st and regular shifts should not absent themselves to participate, otherwise, they would be dismissed. Since it was too late to cancel the plan, the rally took place and the officers of the PBMEO were eventually dismissed for a violation of the ‘No Strike and No Lockout’ clause of their Collective Bargaining.

The lower court decided in favor of the company and the officers of the PBMEO were found guilty of bargaining in bad faith. Their motion for reconsideration was subsequently denied by the Court of Industrial Relations for being filed two days late. They then filed with the respondent court a petition for relief from the order dated Oct. 9,1969 on the ground that their failure to file their motion for reconsideration on time was due to excusable negligence and honest mistake committed by the president of the petitioner Union and of the office clerk of their counsel. However, without waiting for any resolution on their petition for relief, they filed with the Supreme Court a notice of appeal.

Issue:

1. Whether the workers who joined the strike violated the CBA.

2. Whether the company is guilty of unfair labor practice for dismissing its employees.

Held:

The Supreme Court did not sustain the conclusion of the CIR. The demonstration held by petitioners was against the alleged abuses of some Pasig policemen, not against their employer. The demonstration was purely an exercise of their freedom of expression in general and of their right to assembly. As a matter of fact, it was the duty of the private respondent firm to protect the petitioner Union from harassment of local police officers. The pretension of the employer that it would suffer loss or damage by reason of the absence of its employees from 6 o’clock to 2 o’clock in the afternoon is a plea for the preservation merely of their property rights. The primacy of human rights such as freedom of expression, of peaceful assembly and of petition for redress of grievances should be sustained over property rights.

SC said that the respondent company is the one guilty of unfair labor practice. Because of the refusal on the part of the respondent firm to permit all its employees and workers to join the mass demonstration against alleged police abuses and the subsequent separation of the eight petitioners from the service constituted an unconstitutional restraint on the freedom of expression, freedom of assembly and freedom of petition for redress of grievances, the respondent firm committed an unfair labor practice defined in Section 4 in relation to Section 3 of Republic Act 875, otherwise known as the Industrial Peace Act. 

Apart from violating the constitutional guarantees of free speech and assembly as well as the right to petition for redress of grievances of the employees, the dismissal of the eight leaders for proceeding with the demonstration and consequently being absent from work constitutes a denial of social justice likewise assured by the fundamental law to these lowly employees. Section 5 of Article 2 of the Constitution imposes upon the State “the promotion of social justice to insure the well-being and economic security of all of the people,” which guarantee is emphasized by the other directive in Section 6 of Article 14 of the Constitution that “the State shall afford protection to labor...”.

Also, the denial by the CIR of the motion for reconsideration of the petitioner for the reason that it was filed 2 days late cannot be sustained. According to SC, such rule is unreasonable as procedural rule should not prevail over constitutional rights. Even the Supreme Court suspend its own rules whenever the purpose of justice require.

Furthermore, the dismissal of the eight leaders of the Union is a harsh punishment for a one-day absence from work. The appropriate penalty, if it deserves a penalty, should have been simply to charge said one-day absence against their vacation or sick leave. But to dismiss the eight leaders is a most cruel penalty.

Wherefore, the orders of the respondent court is null and void. Directing the reinstatement of the eight leaders with full back pay minus one day’s pay.

American Inter-Fashion Corporation vs. Office of the President, Garments and Textile Export Board and Glorious Sun Fashion Garments Manufacturing Co. (G.R. No. 92422)

Facts:

Glorious Sun Fashion was found guilty by GTEB of dollar salting and mis-declaration of importations. As a result, its export quotas were cancelled. After GTEB rendered its decision, Glorious filed with the Court a petition for certiorari and prohibition contending that its right to due process of law was violated and that GTEB decision was not supported by substantial evidence. The Court then issued a resolution ordering GTEB to conduct further proceedings. However, on July 25, 1984, Glorious filed a manifestation of its intention to withdraw the petition. The Court granted the motion for withdrawal. Glorious filed another motion to dismiss with prejudice which the Court duly noted.

After two years, Glorious filed with GTEB a petition for restitution of its export quota allocation and requested for a reconsideration of the GTEB decision dated April 27, 1984. Glorious once again alleged that the charges against them were not supported by evidence. Moreover, it alleged that the GTEB decision cancelling its export quota was rendered as a result of duress, threats, intimidation and undue influence exercised by former Minister Roberto V. Ongpin in order to transfer Glorious export quotas to “Marcos crony-owned” corporations. Glorious further alleged that it was coerced by Mr. Roberto Ongpin to withdraw its petition in G.R. No. 67180 and to enter into joint venture agreements paving the way for the creation of De Soleil Apparel and AIFC. 

On Sept. 4, 1987, GTEB denied the petition of Glorious. An appeal was then taken on Oct. 5, 1987 to the Office of the President. AIFC filed its opposition to Glorious’ appeal claiming that the GTEB decision dated April 27, 1984 has long been final. The Office of the President ruled in favor of Glorious and remanded the case to GTEB for further proceedings. The motion for reconsideration of AIFC was subsequently denied. Hence, this petition.

Issue:

1. W/N the previous GTEB decision constituted res judicata to the instant case on the ground that the former decision was a final judgment on the merits. – NO

2. W/N Glorious was accorded due process in relation to the 1984 GTEB decision. – NO

Held:

The petitioner contends that in entertaining the appeal of private respondent Glorious, the Office of the President “had unwittingly made itself a tool in a cunning move to resurrect a decision which had become final and executory more than three years earlier. The petitioner asseverates  resolution dismissing G.R. No. 67180 was res judicata on the matter.

The Supreme Court said that one of the requirements for a judgment to be a bar to a subsequent case is that the it must be a judgment on the merits. A judgment is upon the merits when it amounts to a declaration of the law as to the respective rights and duties of the parties, based upon the ultimate fact or state of facts disclosed by the pleadings and evidence, and upon which the right of recovery depends, irrespective of formal, technical or dilatory objection or contentions. Certainly, the dismissal of G.R. No. 67180 cannot be categorized as a judgment on the merits. The action in 1984 did not resolve anything. In fact, when the court heard the parties during the oral arguments, GTEB was not able to present any showing of mis-declaration if imports. The motion to withdraw te petition arose from the fears of Mr. Nemesio Co that not only Glorious Sun but his other businesses would be destroyed by the martial law regime. The resolution dismissing G.R. No. 67180 was based solely on the notice of withdrawal by the private respondent. The dismissal of the petition was clearly based on a technical matter rather than on the merits of the petition. Hence, it cannot constitute res judicata.

With regards to the second issue, the Petitioner contend that Glorious Sun was not denied due process. Although AIFC admits that the 1984 GTEB decision failed to disclose to Glorious vital evidence used by GTEB in arriving at its conclusion that Glorious was guilty of dollar-salting, it contends that the subsequent disclosure in 1987, where relevant documents were given to Glorious and that the latter was given an opportunity to comment thereon, cured the defect. This contention by AIFC, the court holds, is MISLEADING. The SC recognized that the instant petition involves the 1984 resolution of the GTEB. AIFC cannot use as an excuse the subsequent disclosure of the evidence used by the GTEB to Glorious in 1987 to justify the 1984 GTEB resolution. The glaring fact is that Glorious was denied due process when GTEB failed to disclose evidence used by it in rendering a resolution against Glorious. Moreover, the documents disclosed to Glorious by GTEB in 1987 enhanced the charge that the former was denied due process.

Attention was also brought to the Puno affidavit, wherein Puno, the Chairman of the Investigating Panel created by the Ministry of Trade and Industry admitted that he was pressured by Minister Ongpin to look for ways and means to remove the quotas from Glorious. AIFC claims that it is an inconsequential matter in that the GTEB Board did not give credence to it and also, none of the members of the committee would agree that there was any pressure or instruction from Minister Ongpin.

The Supreme Court said that the fact that the other members would not agree that there was pressure from Ongpin does not mean that Puno was not telling the truth. Mr. Puno stated that he was pressured. He did not state that the members of the investigating panel were pressured. Mr. Puno was the Chairman of the Investigating Panel. Hence, it is plausible that in view of his position he was the one pressured by Minister Ongpin. There is every reason to suspect that even before Glorious Sun was investigated, a decision to strip it of its quotas and to award them to friends of their administration had already been made.

The Supreme Court also held that although factual findings of administrative agencies are generally accorded respect, such factual findings may be disregarded if they are not supported by evidence; where the findings are initiated by fraud, imposition or collusion; where the procedures which lead to the factual findings are irregular; when palpable errors are committed; or when grave abuse of discretion arbitrariness or capriciousness is manifest.

Contrary to the petitioners posture, the record clearly manifests that in cancelling the export quotas of the private respondent GTEB violated the private respondent’s constitutional right to due process. Before the cancellation in 1984, Glorious had been enjoying export quotas granted to it since 1977. In effect the private respondent’s export quota allocation which initially was a privilege evolved into some form of property right which should not be removed from it arbitrarily and without due process only to hurriedly confer it on another.

The motion for reconsideration was GRANTED. The instant petition is DISMISSED.

Philippine Press Institute vs. COMELEC (G.R. No. L-11994)

Facts:

COMELEC issued resolution 2772 directing newspapers to provide provide free print space of not less than one half (1/2) page for use as “Comelec Space” which shall be allocated by the Commission, free of charge, among all candidates within the area in which the newspaper, magazine or periodical is circulated to enable the candidates to make known their qualifications, their stand on public issues and their platforms and programs of government. Philippine Press Institute, a non-stock, non-profit organization of newspaper and magazine publishers asks the Court to declare said resolution unconstitutional and void on the ground that it violates the prohibition imposed by the Constitution upon the government, and any of its agencies, against the taking of private property for public use without just compensation.

The Office of the Solicitor General, on behalf of Comelec alleged that the resolution does not impose upon the publishers any obligation to provide free print space in the newspapers. It merely established guidelines to be followed in connection with the procurement of “Comelec space”. And if it is viewed as mandatory, the same would nevertheless be valid as an exercise of the police power of the State- a permissible exercise of the power of supervision or regulation of the Comelec over the communication and information operations of print media enterprises during the election period to safeguard and ensure a fair, impartial and credible election.

Issue:

Whether the resolution was a valid exercise of the power of eminent domain?

Held:

The Supreme Court declared the Resolution as unconstitutional. It held that to compel print media companies to donate “Comelec space” amounts to “taking” of private personal property without payment of the just compensation required in expropriation cases. The threshold requisites for a lawful taking of private property for public use are the necessity for the taking and the legal authority to effect the taking. The element of necessity for the taking has not been established by respondent Comelec considering that the newspapers were not unwilling to sell advertising space. The taking of private property for public use is authorized by the constitution, but not without payment of just compensation. Also Resolution No. 2772 does not constitute a valid exercise of the police power of the state. In the case at bench, there is no showing of existence of a national emergency to take private property of newspaper or magazine publishers.

However, Sec 8 still stands as it is within the power of COMELEC to control the media influences of candidates to prevent unequal campaigns.

NAPOCOR vs. Gutierrez (G.R. No. L-60077)

Facts:

National Power Corporation a GOCC vested with Eminent Domain power initiated negotiations for right of easement to construct transmission lines to several lots. The commissioners appointed recommended P1.00/sqm easement fee for Gutierrez lot. This was countered by Gutierrez with P10.00/sqm as disturbance compensation. Court countered with P5.00/sqm. The lower court granted P10.00/sqm but this was appealed and was reduced to P5.00/sqm. Still not satisfied NPC appealed to CA. CA sustained the decision of the lower court.

NPC contend that full ownership is retained by the private respondents and they are not totally deprived of the use of the land. They can continue planting the same agricultural crops, except those that would result in contact with the wires. On this premise, petitioner submits that if full market value is required, then full transfer of ownership is only the logical equivalent.

Issue:

Whether or not petitioner should be made to pay simple easement fee or full compensation for the land traversed by its transmission lines.

Held:

While it is true that plaintiff are only after a right-of-way easement, it nevertheless perpetually deprives defendants of their proprietary rights as manifested by the imposition by the plaintiff upon defendants that below said transmission lines no plant higher than three (3) meters is allowed. Furthermore, because of the high-tension current conveyed through said transmission lines, danger to life and limbs that may be caused beneath said wires cannot altogether be discounted, and to cap it all plaintiff only pays the fee to defendants once, while the latter shall continually pay the taxes due on said affected portion of their property.

In the case at bar, the easement of right-of-way is definitely a taking under the power of eminent domain. Considering the nature and effect of the installation of the 230 KV Mexico-Limay transmission lines, the limitation imposed by NPC against the use of the land for an indefinite period deprives private respondents of its ordinary use.

For these reasons, the owner of the property expropriated is entitled to a just compensation.

Wherefore, the assailed decision of CA is AFFIRMED.

Lozano vs. Martinez (G.R. No. L-63419)

Facts: 

Petitioners, charged with Batas Pambansa Bilang 22 (BP 22 for short), popularly known as the Bouncing Check Law, assail the law's constitutionality.

BP 22 punishes a person "who makes or draws and issues any check on account or for value, knowing at the time of issue that he does not have sufficient funds in or credit with the drawee bank for the payment of said check in full upon presentment, which check is subsequently dishonored by the drawee bank for insufficiency of funds or credit or would have been dishonored for the same reason had not the drawer, without any valid reason, ordered the bank to stop payment." The penalty prescribed for the offense is imprisonment of not less than 30 days nor more than one year or a fine or not less than the amount of the check nor more than double said amount, but in no case to exceed P200,000.00, or both such fine and imprisonment at the discretion of the court.

The statute likewise imposes the same penalty on "any person who, having sufficient funds in or credit with the drawee bank when he makes or draws and issues a check, shall fail to keep sufficient funds or to maintain a credit to cover the full amount of the check if presented within a period of ninety (90) days from the date appearing thereon, for which reason it is dishonored by the drawee bank.

Among the constitutional objections raised against BP 22, the most serious is the alleged conflict between the statute and the constitutional provision forbidding imprisonment for debt. It is contended that the statute runs counter to the inhibition in the Bill of Rights which states, "No person shall be imprisoned for debt or non-payment of a poll tax." Petitioners insist that, since the offense under BP 22 is consummated only upon the dishonor or non-payment of the check when it is presented to the drawee bank, the statute is really a "bad debt law" rather than a "bad check law." What it punishes is the non-payment of the check, not the act of issuing it. The statute, it is claimed, is nothing more than a veiled device to coerce payment of a debt under the threat of penal sanction.

Issue:

Whether or not BP 22 transgressed the constitutional inhibition against imprisonment for debt.

Held:

No. The gravamen of the offense punished by BP 22 is the act of making and issuing a worthless check or a check that is dishonored upon its presentation for payment. It is not the non-payment of an obligation which the law punishes. The law is not intended or designed to coerce a debtor to pay his debt. The thrust of the law is to prohibit, under pain of penal sanctions, the making of worthless checks and putting them in circulation. Because of its deleterious effects on the public interest, the practice is proscribed by the law. The law punishes the act not as an offense against property, but an offense against public order.

The effects of the issuance of a worthless check transcends the private interests of the parties directly involved in the transaction and touches the interests of the community at large. The mischief it creates is not only a wrong to the payee or holder, but also an injury to the public. The harmful practice of putting valueless commercial papers in circulation, multiplied a thousand fold, can very wen pollute the channels of trade and commerce, injure the banking system and eventually hurt the welfare of society and the public interest.

The enactment of BP 22 is a declaration by the legislature that, as a matter of public policy, the making and issuance of a worthless check is deemed public nuisance to be abated by the imposition of penal sanctions. The State can do this in its exercise of Police Power.

ISSUE 2: 

W/N BP 22 impairs the freedom to contract.

HELD: No. The freedom of contract which is constitutionally protected is freedom to enter into "lawful" contracts. Contracts which contravene public policy are not lawful. Besides, we must bear in mind that checks can not be categorized as mere contracts. It is a commercial instrument which, in this modem day and age, has become a convenient substitute for money; it forms part of the banking system and therefore not entirely free from the regulatory power of the state.

ISSUE 3:  

W/N it violates the equal protection clause.

HELD: No. Petitioners contend that the payee is just as responsible for the crime as the drawer of the check, since without the indispensable participation of the payee by his acceptance of the check there would be no crime. This argument is tantamount to saying that, to give equal protection, the law should punish both the swindler and the swindled. Moreover, the clause does not preclude classification of individuals, who may be accorded different treatment under the law as long as the classification is no unreasonable or arbitrary.

Wherefore, petitions are hereby DISMISSED.

People of the Philippines vs. Pomar (G.R. No. L-22008)

Facts:

Julio Pomar, the manager and person - in charge of La Flor de la Isabela, a tobacco factory pertaining to La Campania General de Tabacos de Filipinas, a corporation duly authorized to transact business in Manila, employed Macaria Fajardo as cigar-maker. She was granted a vacation leave beginning July 16, 1923 by reason of pregnancy. 

On October 26, 1923 a case was filed against defendant Pomar for failing to pay Fajardo her regular wages corresponding to 30 days before and 30 days after her delivery and confinement, in accordance with the provision of Act. 3071 which states that; 

“Section 13-Every person, firm or corporation owning or managing a factory, shop or place of labor of any description shall be obliged to grant to any woman employed by it as laborer who may be pregnant, thirty days vacation with pay before and another thirty days after confinement: Provided, That the employer shall not discharge such laborer without just cause, under the penalty of being required to pay to her wages equivalent to the total of two months counted from the day of her discharge.”

The judge found the defendant guilty of the alleged offense. From that sentence, the defendant appealed contending that his act did not constitute any offense because such provision of the Act No. 3071 is unconstitutional.

Issue:

Whether or not the provisions of sections 13 and 15 of Act No. 3071 are a reasonable and lawful exercise of the police power of the state

Held:

Said section 13 was enacted by the Legislature of the Philippine Islands in the exercise of its supposed police power, with the praiseworthy purpose of safeguarding the health of pregnant women laborers in "factory, shop or place of labor of any description," and of insuring to them, to a certain extent, reasonable support for one month before and one month after their delivery. 

The statute now under consideration is attacked upon the ground that it authorizes an unconstitutional interference with the freedom of contract including within the guarantees of the due process clause of the 5th Amendment. That the right to contract about one's affairs is a part of the liberty of the individual protected by this clause is settled by the decision of this court, and is no longer open to question. The law takes account of the necessities of only one party to the contract. It ignores the necessities of the employer by compelling him to pay not less than a certain sum, not only whether the employee is capable of earning it, but irrespective of the ability of his business to sustain the burden, generously leaving him, of course, the privilege of abandoning his business as an alternative for going on at a loss. Liberty includes not only the right to labor, but to refuse to labor, and, consequently, the right to contract to labor or for labor, and to terminate such contracts, and to refuse to make such contracts.. Hence, we are of the opinion that this Act contravenes those provisions of the state and Federal constitutions, which guarantee that no person shall be deprived of life, liberty or property without due process of law.

Clearly, therefore, the law has deprived, every person, firm, or corporation owning or managing a factory, shop or place of labor of any description within the Philippine Islands, of his right to enter into contracts of employment upon such terms as he and the employee may agree upon. The law creates a term in every such contract, without the consent of the parties. Such persons are, therefore, deprived of their liberty to contract. The constitution of the Philippine Islands guarantees to every citizen his liberty and one of his liberties is the liberty to contract. It has been decided in a long line of decisions of the Supreme Court of the United States, that the right to contract about one's affairs is a part of the liberty of the individual, protected by the "due process of law" clause of the constitution. The rule in this jurisdiction is, that the contracting parties may establish any agreements, terms, and conditions they may deem advisable, provided they are not contrary to law, morals or public policy. (Art. 1255, Civil Code.) 

For all of the foregoing reasons, we are fully persuaded, under the facts and the law, that the provisions of section 13, of Act No. 3071 of the Philippine Legislature, are unconstitutional and void, in that they violate and are contrary to the provisions of the first paragraph of section 3 of the Act of Congress of the United States of August 29, 1916. (Vol. 12, Public Laws, p. 238.)

Acebedo Optical Company, Inc. vs. The Honorable Court of Appeals (G.R. No. 100152)

Facts: 

Petitioner applied with the Office of the City Mayor of Iligan for a business permit. After consideration of petitioner's application and the opposition interposed thereto by local optometrists, respondent City Mayor issued Business Permit No. 5342 subject to the following conditions: (1) Since it is a corporation, Acebedo cannot put up an optical clinic but only a commercial store; (2) It  cannot examine and/or prescribe reading and similar optical glasses for patients, because these are functions of optical clinics; (3) It cannot sell reading and similar eyeglasses without a prescription having first been made by an independent optometrist or independent optical clinic. Acebedo can only sell directly to the public, without need of a prescription, Ray-Ban and similar eyeglasses; (4) It cannot advertise optical lenses and eyeglasses, but can advertise Ray-Ban and similar glasses and frames; (5) It is allowed to grind lenses but only upon the prescription of an independent optometrist.

On December 5, 1988, private respondent Samahan ng Optometrist Sa Pilipinas (SOPI lodged a complaint against the petitioner alleging that Acebedo had violated the conditions set forth in its business permit and requesting the cancellation and/or revocation of such permit. On July 19, 1989, the City Mayor sent petitioner a Notice of Resolution and Cancellation of Business Permit effective as of said date and giving petitioner three (3) months to wind up its affairs.

Issue:  

Whether the City Mayor has the authority to impose special conditions, as a valid exercise of police power, in the grant of business permits.

Held:

Police power as an inherent attribute of sovereignty is the power to prescribe regulations to promote the health, morals,peace, education, good order or safety and general welfare of the people. The State,through the legislature, has delegated the exercise of police power to local government units, as agencies of the State, in order to effectively accomplish and carry out the declared objects of their creation. This delegation of police power is embodied in the general welfare clause of the Local Government Code.

Power of city mayor to grant business permits The authority of city mayors to issue or grant licenses and business permits is beyond cavil.It is provided for by law.

However, the power to grant or issue licenses or business permits must always be exercised in accordance with law, with utmost observance of the rights of all concerned to due process and equal protection of the law.

But can city mayor cancel business permits or impose special conditions? As aptly discussed by the Solicitor General in his Comment, the power to issue licenses and permits necessarily includes the corollary power to revoke, withdraw or cancel the same. And the power to revoke or cancel, likewise includes the power to restrict through the imposition of certain conditions.

Did the conditions or restrictions imposed amount to a confiscation of the business? Yes.

Distinction must be made between the grant of a license or permit to do business and the issuance of a license to engage in the practice of a particular profession. The first is usually granted by the local authorities and the second is issued by the Board or Commission tasked to regulate the particular profession. A business permit authorizes the person, natural or otherwise, to engage in business or some form of commercial activity. A professional license, on the other hand, is the grant of authority to a natural person to engage in the practice or exercise of his or her profession.

In the case at bar, what is sought by petitioner from respondent City Mayor is a permit to engage in the business of running an optical shop. It does not purport to seek a license to engage in the practice of optometry as a corporate body or entity, although it does have in its employ, persons who are duly licensed to practice optometry by the Board of Examiners in Optometry.

According to the Samahan ng Optometrist sa Pilipinas-Ilocos Sur Chapter, Acebedo is a juridical entity not qualified to practice optometry.

In the present case, the objective of the imposition of subject conditions on petitioner’s business permit could be attained by requiring the optometrist in petitioner’s employ to produce a valid certificate of registration as optometrist, from the Board of Examiners in Optometry. A business permit is issued primarily to regulate the conduct of business and the City Mayor cannot, through the issuance of such permit, regulate the practice of a profession, like that of optometry. Such a function is within the exclusive domain of the administrative agency specifically empowered by the law to supervise the profession, in this case the Professional Regulations Commission and the Board of Examiners in Optometry.

Thus, the imposition of special conditions on petitioner’s business permit is ultra vires.

Wherefore, the petition is GRANTED.

Tablarin vs. Gutierrez (G.R. No. 78164)

Facts:

Teresita Tablarin, Ma. Luz Ciriaco, Ma. Nimfa B. Rovira, and Evangelina S. Labao sought admission into colleges or schools of medicine for the school year 1987-1988. However, they either did not take or did not successfully take the National Medical Admission Test (NMAT) required by the Board of Medical Education and administered by the Center for Educational Measurement (CEM). On 5 March 1987, Tablarin, et. al., in behalf of applicants for admission into the Medical Colleges who have not taken up or successfully hurdled the NMAT, filed with the Regional Trial Court (RTC), National Capital Judicial Region, a Petition for Declaratory Judgment and Prohibition with a prayer for Temporary Restraining Order (TRO) and Preliminary Injunction, to enjoin the Secretary of Education, Culture and Sports, the Board of Medical Education and the Center for Educational Measurement from enforcing Section 5 (a) and (f) of Republic Act 2382, as amended, and MECS Order 52 (series of 1985), dated 23 August 1985 [which established a uniform admission test (NMAT) as an additional requirement for issuance of a certificate of eligibility for admission into medical schools of the Philippines, beginning with the school year 1986-1987] and from requiring the taking and passing of the NMAT as a condition for securing certificates of eligibility for admission, from proceeding with accepting applications for taking the NMAT and from administering the NMAT as scheduled on 26 April 1987 and in the future. After hearing on the petition for issuance of preliminary injunction, the trial court denied said petition on 20 April 1987. The NMAT was conducted and administered as previously scheduled. Tablarin, et. al. accordingly filed a Special Civil Action for Certiorari with the Supreme Court to set aside the Order of the RTC judge denying the petition for issuance of a writ of preliminary injunction.

Issue:

Whether NMAT requirement for admission to medical colleges contravenes the Constitutional guarantee for the accessibility of education to all, and whether such regulation is invalid and/or unconstitutional.

Held:

No. Republic Act 2382, as amended by Republic Acts 4224 and 5946, known as the “Medical Act of 1959″ defines its basic objectives to govern (a) the standardization and regulation of medical education; (b) the examination for registration of physicians; and (c) the supervision, control and regulation of the practice of medicine in the Philippines. The Statute created a Board of Medical Education and prescribed certain minimum requirements for applicants to medical schools. 

The petitioners invoke a number of provisions of the 1987 Constitution which are, in their assertion, violated by the continued implementation of Section 5(a) and (f) of RA 238, as amended, and MECS Order No. 52 series 1985. One of the provision is Article 14, Section 1 which states “The State shall protect and promote the right of all citizens to quality education at all levels and take appropriate steps to make such education accessible to all.

The State is not really enjoined to take appropriate steps to make quality education “accessible to all who might for any number of reasons wish to enroll in a professional school but rather merely to make such education accessible to all who qualify under “fair, reasonable and equitable admission and academic requirements.” 

Also, the legislative and administrative provisions impugned by the petitioners, to the mind of the Court, is a valid exercise of the Police Power of the State. The police power is the pervasive and non-waivable power and authority of the sovereign to secure and promote important interest and needs -- in other words, the public order -- of the general community. An important component of that public order is health and physical safety and well being of the population, the securing of which no one can deny is a legitimate objective of governmental effort and regulation.

The regulation of the practice of medicine in all its branches has long been recognized as a reasonable method of protecting the health and safety of the public. The power to regulate and control the practice of medicine includes the power to regulate admission to the ranks of those authorized to practice medicine. Legislation and administrative regulations requiring those who wish to practice medicine first to take and pass medical board examinations have long ago been recognized as valid exercises of governmental powers. Similarly, the establishment of minimum medical educational requirements for admission to the medical profession, has also been sustained as a legitimate exercise of the regulatory authority of the state.

Thus, prescribing the NMAT and requiring certain scores as a condition for admission to medical schools do not constitute unconstitutional imposition.

Wherefore, the petition is DISMISSED.

Tatel vs. Municipality of Virac (G.R. No L-29159)

Facts: 

Petitioner Celestino Tatel owns a warehouse in barrio Sta. Elena,Municipality of Virac. Complaints were received by the municipality concerning the disturbance caused by the operation of the abaca bailing machine inside petitioner’s warehouse. A committee was then appointed by the municipal council, and it noted from its investigation on the matter that an accidental fire within the warehouse of the petitioner created a danger to the lives and properties of the people in the neighborhood. Resolution No. 29 was then passed by the Municipal council declaring said warehouse as a public nuisance within a purview of Article 694 of the New Civil Code. According to respondent municipal officials, petitioner’s warehouse was constructed in violation of Ordinance No. 13, series of 1952, prohibiting the construction of warehouses near a block of houses either in the poblacion or barrios without maintaining the necessary distance of 200 meters from said block of houses to avoid loss of lives and properties by accidental fire. On the other hand, petitioner contends that Ordinance No. 13 is unconstitutional, contrary to the due process and equal protection clause of the Constitution and null and void for not having been passed in accordance with law. 

The Court of First Instance ruled in favor of the respondent. Hence, this petition.

Issues:

(1) Whether or not petitioner’s warehouse is a nuisance within the meaning Article 694 of the Civil Code

(2) Whether or not Ordinance No. 13, series of 1952 of the Municipality of Virac is unconstitutional and void.

Held: 

The storage of abaca and copra in petitioner’s warehouse is anuisance under the provisions of Article 694 of the Civil Code. At the same time, Ordinance No. 13 was passed by the Municipal Council of Virac in the exercise of its police power. Municipal Corporations are agencies of the State for the promotion and maintenance of local self-government an as such are endowed with the police powers in order to accomplish and carry out the declared objects of their creation. 

It is valid because it meets the criteria for a valid municipal ordinance: 1) must not contravene the Constitution or any statute, 2) must not be unfair or oppressive, 3) must not be partial or discriminatory, 4) must not prohibit but may regulate trade, 5) must be general and consistent with public policy, and 6) must not be unreasonable. 

Basically, what is regulated by the ordinance is the construction of warehouses wherein inflammable materials are stored. The purpose of the said ordinance is to avoid the loss of property and life in case of fire which is one of the primordial obligation of government. The lower court did not err in its decision.

Petition is DISMISSED for lack of merit.

US vs. Toribio (G.R. No. L-5060)

Facts: 

Respondent Toribio is an owner of carabao, residing in the town of Carmen in the province of Bohol. The trial court of Bohol found that the respondent slaughtered or caused to be slaughtered a carabao without a permit from the municipal treasurer of the municipality wherein it was slaughtered, in violation of Sections 30 and 33 of Act No. 1147, an Act regulating the registration, branding, and slaughter of Large Cattle. The act prohibits the slaughter of large cattle fit for agricultural work or other draft purposes for human consumption.

The respondent counters by stating that what the Act is prohibiting is the slaughter of large cattle in the municipal slaughter house without a permit given by the municipal treasurer. Furthermore, he contends that the municipality of Carmen has no slaughter house and that he slaughtered his carabao in his dwelling. Respondent said that the statute is unconstitutional and in violation of the Philippine Bill which provides that “no law shall be enacted which shall deprive any person of life, liberty, or property without due process of law.”

Issue: 

Whether or not Act. No. 1147, regulating the registration, branding and slaughter of large cattle, is an undue and unauthorized exercise of police power and unconstitutional.

Held:

It is a valid exercise of police power of the state. 

Police power is the inherent power of the state to legislate laws which may interfere with personal liberties. To justify the state in the exercise of its sovereign police power it must appear (1) that the interest of the general public requires it and (2) that the means are reasonably necessary for the accomplishment of the purpose, and not unduly oppressive upon individuals. 

The act primarily seeks to protect large cattle against theft to make it easy for the recovery and return to owners, which encouraged them to regulate the registration and slaughter of large cattle.

Also, several years prior to the enactment of the said law, an epidemic struck the Philippine islands which threatened the survival of carabaos in the country. In some provinces seventy, eighty and even one hundred percent of their local carabaos perished due to the said epidemic. This drove the prices of carabaos up to four or five-fold, as a consequence carabao theft became rampant due to the luxurious prices of these work animals. Moreover, this greatly affected the food production of the country which prompted the government to import rice from its neighboring countries. 

As these work animals are vested with public interest for they are of fundamental use for the production of crops, the government was prompted to pass a law that would protect these work animals. The purpose of the law is to stabilize the number of carabaos in the country as well as to redistribute them throughout the entire archipelago. It was also the same reason why large cattles fit for farm work was prohibited to be slaughtered for human consumption. 

Further, the court is of the opinion that the act applies generally to the slaughter of large cattle for human consumption, ANYWHERE, without a permit duly secured from the municipal treasurer, For to do otherwise is to defeat the purpose of the law and the intent of the law makers. 

Obviously, the provisions of the statute under consideration were imposed strictly for the promotion of general welfare and public interest. These reasons satisfy the requisites for the valid exercise of police power. 

The SC affirmed the decision of the trial court.

Ynot vs. IAC (G.R. No. 74457)

Facts:

In 1980 President Marcos amended Executive Order No. 626-A which orders that no carabao and carabeef shall be transported from one province to another; such violation shall be subject to confiscation and forfeiture by the government, to be distributed to charitable institutions and other similar institutions as the Chairman of the National Meat Inspection Commission may see fit for the carabeef and to deserving farmers through dispersal as the Director of Animal Industry may see fit in the case of the carabaos.

On January 13, 1984, Petitioner’s 6 carabaos were confiscated by the police station commander of Barotac Nuevo, Iloilo for having been transported from Masbate to Iloilo in violation of EO 626-A. He issued a writ for replevin, challenging the constitutionality of said EO. The trial court sustained the confiscation of the animals and declined to rule on the validity of the law on the ground that it lacked authority to do so. Its decision was affirmed by the IAC.Hence, this petition for review filed by Petitioner.

Issue:

Whether or not the said Executive Order is unconstitutional.

Held:

SC ruled that while there is a lawful subject, there was no lawful method. The EO imposes on the absolute ban not on the slaughter of carabaos but on their movement, providing that no carabao and carabeef should be transported from one province to another the purpose of which is to protect the community from the loss of the services of such animals by their slaughter. SC said that the reasonable connection between the means employed and the purpose sought to be achieved by the questioned measure is missing. They cannot see how the prohibition of the inter-provincial transport of carabaos can prevent their indiscriminate slaughter considering that they can be killed anywhere.

The EO is also unconstitutional as there was outright confiscation of carabaos without according the owner the right to be heard before a competent and impartial court. There certainly was no reason why the offense prohibited by the EO should not have been proved first in a court of justice, with the accused being accorded all the rights safeguarded to him under the Constitution. The EO is penal in nature, the violation should have been pronounced not by the police only but by a court of justice, which alone would have had the authority to impose the prescribed penalty, and only after trial and conviction of the accused. 

Wherefore, the EO is unconstitutional. 

Republic of the Philippines vs. Vda. De Castellvi (G.R. No. L-20620)

Facts:

In 1947, the republic, through the Armed Forces of the Philippines (AFP), entered into a lease agreement over a land in Pampanga with Castellvi on a year-to-year basis. When Castellvi gave notice to terminate the lease in 1956, the AFP refused because of the permanent installations and other facilities worth almost P500,000,00 that were erected and already established on the property. She then instituted an ejectment proceeding against the AFP. In 1959, however, the republic commenced the expropriation proceedings for the land in question.

Issue: 

Whether or not the compensation should be determined as of 1947 or 1959.

Ruling:

The Supreme Court ruled that the taking should not be reckoned as of 1947, and that just compensation should not be determined on the basis of the value of the property that year .

The requisites for taking are:

1. The expropriator must enter a private property;

2. The entry must be for more than a momentary period;

3. It must be under warrant or color of authorities;

4. The property must be devoted for public use or otherwise informally appropriated or injuriously affected; and

5. The utilization of the property for public use must be such a way as to oust the owner and deprive him of beneficial enjoyment of the property.

Only requisites 1, 3 and 4 are present. It is clear, therefore, that the “taking” of Castellvi’s property for purposes of eminent domain cannot be considered to have taken place in 1947 when the republic commenced to occupy the property as lessee thereof.

Requisite number 2 is not present according to the Supreme Court, “momentary” when applied to possession or occupancy of real property should be construed to mean “a limited period” -- not indefinite or permanent. The aforecited lease contract was for a period of one year, renewable from year to year. The entry on the property, under the lease, is temporary, and considered transitory. The fact that the Republic, through AFP, constructed some installations of a permanent nature does not alter the fact that the entry into the lant was transitory, or intended to last a year, although renewable from year to year by consent of the owner of the land. By express provision of the lease agreement the republic, as lessee, undertook to return the premises in substantially the same condition as at the time the property was first occupied by the AFP. It is claimed that the intention of the lessee was to occupy the land permanently, as may be inferred from the construction of permanent improvements. But this “intention” cannot prevail over the clear and express terms of the lease contract.

The 5th requirement is also lacking. In the instant case the entry of the Republic into the property and its utilization of the same for public use did not oust Castellvi and deprive her of all beneficial enjoyment of the property. Cstellvi remained as owner, and was continuously recognized as owner by the Republic, as shown by the renewal of the lease contract from year to year, and by the provision in the lease contract whereby the Republic undertook to return the property to Castellvi when the lease was terminated. Neither was Castellvi deprived of all the beneficial enjoyment of the property, because the Republic was bound to pay, and had been paying Castellvi the agreed monthly rentals until the time when it filed the complaint for eminent domain on June 26, 1959.

It is clear, therefore, that the “taking” of Castellvi’s property for purposes of eminent domain cannot be considered to have taken place in 1947 when the Republic commenced to occupy the property as lessee thereof, and that the just compensation to be paid for the Castellvi’s property should not be determined on the basis of the value of the property as of that year. The lower court did not commit an error when it held that the “taking” of the property under expropriation commenced with the filing of the complaint in this case.

Under Sec. 4, Rule 67 of the Rules of Court, “just compensation” is to be determined as of the date of the filing of the complaint. The Supreme Court has ruled that when the taking of the property sought to be expropriated coincides with the commencement of the expropriation proceedings, or takes place subsequent to the filing of the complaint for eminent domain, the just compensation should be determined as of the date of the filing of the complaint.

MMDA vs. Bel-Air Village Association (G.R. No. 135962)

Facts:

On December 30, 1995, respondent received from petitioner a notice requesting the former to open its private road, Neptune Street, to public vehicular traffic starting January 2, 1996. On the same day, respondent was apprised that the perimeter separating the subdivision from Kalayaan Avenue would be demolished.

Respondent instituted a petition for injunction against petitioner, praying for the issuance of a TRO and preliminary injunction enjoining the opening of Neptune Street and prohibiting the demolition of the perimeter wall. The trial court denied issuance of a preliminary injunction.  On appeal, the appellate court ruled that the MMDA has no authority to order the opening of Neptune Street, and cause the demolition of its perimeter walls. It held that the authority is lodged in the City Council of Makati by ordinance. 

MMDA said it has the authority to open Neptune St. because it is an agent of the Government endowed with police power in the delivery of basic services in Metro Manila. From the premise of police powers, it follow then that it need not for an ordinance to be enacted first. 

Hence this petition.

Issue:

Does MMDA has the mandate to open Neptune Street to public traffic pursuant to its regulatory and police powers?

Ruling:

According to SC, Police power is an inherent attribute of sovereignty. Police power is lodged primarily in the National Legislature, which the latter can delegate to the President and administrative boards, LGU or other lawmaking bodies.

LGU is a political subdivision for local affairs. Which has a legislative body empowered to enact ordinances, approved resolutions and appropriate funds for the general welfare of the province/city/municipality.

The MMDA is, as termed in the charter itself, "development authority." All its functions are administrative in nature.The powers of the MMDA are limited to the following acts: formulation, coordination, regulation,implementation, preparation, management, monitoring, setting of policies, installation of a system and administration. There is no syllable in R.A. No. 7924 that grants the MMDA police power, let alone legislative power

In sum, the MMDA has no power to enact ordinances for the welfare of the community. It is the LGUs, acting through their respective legislative councils, that possess legislative power and police power.

The Sangguniang Panlungsod of Makati City did not pass any ordinance or resolution ordering the opening of Neptune Street, hence, its proposed opening by the MMDA is illegal.

Wherefore, the petition is denied.

Magtajas v. Pryce Properties Corp. (G.R. No. 111097)

Facts:

PAGCOR decided to expand its operations to Cagayan de Oro City. It leased a portion of a building belonging to Pryce Properties Corporations, Inc., renovated & equipped the same, and prepared to inaugurate its casino during the Christmas season.

Civil organizations angrily denounced the project. Petitioners opposed the casino’s opening and enacted Ordinance No. 3353, prohibiting the issuance of business permit and canceling existing business permit to the establishment for the operation of the casino, and Ordinance No. 3375-93, prohibiting the operation of the casino and providing a penalty for its violation.

Respondents assailed the validity of the ordinances on the ground that they both violated Presidential Decree No. 1869. Petitioners contend that, pursuant to the Local Government Code, they have the police power authority to prohibit the operation of casino for the general welfare.

Issue:

Whether the Ordinances are valid.

Ruling:

No. Cagayan de Oro City, like other local political subdivisions, is empowered to enact ordinances for the purposes indicated in the Local Government Code. It is expressly vested with the police power under what is known as the General Welfare Clause now embodied in Section 16 as follows:Sec. 16.

General Welfare. — Every local government unit shall exercise the powers expressly granted, those necessarily implied therefrom, as well as powers necessary, appropriate, or incidental for its efficient and effective governance, and those which are essential to the promotion of the general welfare. Within their respective territorial jurisdictions, local government units shall ensure and support, among other things, the preservation and enrichment of culture, promote health and safety, enhance the right of the people to a balanced ecology, encourage and support the development of appropriate and self-reliant scientific and technological capabilities, improve public morals, enhance economic prosperity and social justice, promote full employment among their residents, maintain peace and order, and preserve the comfort and convenience of their inhabitants.

Local Government Code, local government units are authorized to prevent or suppress, among others, "gambling and other prohibited games of chance." Obviously, this provision excludes games of chance which are not prohibited but are in fact permitted by law.

The tests of a valid ordinance are well established. A long line of decisions has held that to be valid, an ordinance must conform to the following substantive requirements:

1) It must not contravene the constitution or any statute.

2) It must not be unfair or oppressive.

3) It must not be partial or discriminatory.

4) It must not prohibit but may regulate trade.

5) It must be general and consistent with public policy.

6) It must not be unreasonable.

The rationale of the requirement that the ordinances should not contravene a statute is obvious.Casino gambling is authorized by P.D. 1869. This decree has the status of a statute that cannot be amended or nullified by a mere ordinance. Local councils exercise only delegated legislative powers conferred on them by Congress as the national lawmaking body. The delegate cannot be superior to the principal or exercise powers higher than those of the latter. It is a heresy to suggest that the local government units can undo the acts of Congress, from which they have derived their power in the first place, and negate by mere ordinance the mandate of the statute.Hence, it was not competent for the Sangguniang Panlungsod of Cagayan de Oro City to enact Ordinance No. 3353 prohibiting the use of buildings for the operation of a casino and Ordinance No. 3375-93 prohibiting the operation of casinos. For all their praiseworthy motives, these ordinances are contrary to P.D. 1869 and the public policy announced therein and are therefore ultra vires and void.

Wherefore, the petition is denied.

Lina v. Paño (G.R. No. 129093)

Facts:

Private respondent Tony Calvento, was appointed agent by PCSO to install a terminal for the operation of lotto, applied for a mayor’s permit to operate a lotto outlet in San Pedro,Laguna. It was denied on the ground that an ordinance entitled Kapasiyahan Blg. 508, Taon1995 of the Sangguniang Panlalawigan of Laguna prohibited gambling in the province,including the operation of lotto. With the denial of his application, private respondent filed an action for declaratory relief with prayer for preliminary injunction and temporary restraining order. The trial court rendered judgment in favor of private respondent enjoining petitioners from implementing or enforcing the subject resolution.

Issue:

whether Kapasiyahan Blg. 508, T. 1995 of the Sangguniang Panlalawigan of Laguna and the denial of a mayor’s permit based thereon are valid

Held:

No. The questioned ordinance merely states the “objection” of the council to the said game. It is but a mere policy statement on the part of the local council, which is not self-executing. Nor could it serve as a valid ground to prohibit the operation of the lotto system in the province of Laguna. As a policy statement expressing the local government’s objection to the lotto, such resolution is valid. This is part of the local government’s autonomy to air its views which may be contrary to that of the national government’s.However, this freedom to exercise contrary views does not mean that local governments may actually enact ordinances that go against laws duly enacted by Congress. Given this premise, the assailed resolution in this case could not and should not be interpreted as a measure or ordinance prohibiting the operation of lotto.

Moreover, ordinances should not contravene statutes as municipal governments are merely agents of the national government. The local councils exercise only delegated legislative powers which have been conferred on them by Congress. The delegate cannot be superior to the principal or exercise powers higher than those of the latter. This being the case, these councils, as delegates, cannot be superior to the principal or exercise powers higher than those of the latter. The question of whether gambling should be permitted is for Congress to determine, taking into account national and local interests. Since Congress has allowed the PCSO to operate lotteries which PCSO seeks to conduct in Laguna, pursuant toits legislative grant of authority, the province's Sangguniang Panlalawigan cannot nullify the exercise of said authority by preventing something already allowed by Congress.

SUBIC BAY METROPOLITAN AUTHORITY vs. COMELEC (G.R. No. 125416)

SUBIC BAY METROPOLITAN AUTHORITY vs. COMELEC

G.R. No. 125416 September 26, 1996

FACTS:

On March 13, 1992, Congress enacted RA. 7227 (The Bases Conversion and Development Act of 1992), which created the Subic Economic Zone. RA 7227 likewise created SBMA to implement the declared national policy of converting the Subic military reservation into alternative productive uses.

On November 24, 1992, the American navy turned over the Subic military reservation to the Philippines government. Immediately,petitioner commenced the implementation of its task, particularly the preservation of the sea-ports, airport, buildings, houses and other installations left by the American navy.

On April 1993, the Sangguniang Bayan of Morong, Bataan passed Pambayang Kapasyahan Bilang 10, Serye 1993, expressing therein its absolute concurrence, as required by said Sec. 12 of RA 7227, to join the Subic Special Economic Zone and submitted such to the Office of the President.

On May 24, 1993, respondents Garcia filed a petition with the Sangguniang Bayan of Morong to annul Pambayang Kapasyahan Blg.10, Serye 1993.

The petition prayed for the following: a) to nullify PambayangKapasyang Blg. 10 for Morong to join the Subic Special Economi Zone,b) to allow Morong to join provided conditions are met.

The Sangguniang Bayan ng Morong acted upon the petition by promulgating Pambayang Kapasyahan Blg. 18, Serye 1993, requesting Congress of the Philippines so amend certain provisions of RA 7227.

Not satisfied, respondents resorted to their power initiative under the LGC of 1991.

On July 6, 1993, COMELEC denied the petition for local initiative on the ground that the subject thereof was merely a resolution and not an ordinance.

On February 1, 1995, the President issued Proclamation No. 532 defining the metes and bounds of the SSEZ including therein the portion of the former naval base within the territorial jurisdiction of the Municipality of Morong.

On June 18, 19956, respondent Comelec issued Resolution No. 2845and 2848, adopting a "Calendar of Activities for local referendum and providing for "the rules and guidelines to govern the conduct of the referendum.

On July 10, 1996, SBMA instituted a petition for certiorari contesting the validity of Resolution No. 2848 alleging that public respondent is intent on proceeding with a local initiative that proposes an amendment of a national law.

Issue:

1. WON Comelec committed grave abuse of discretion in promulgating Resolution No. 2848 which governs the conduct of the referendum proposing to annul or repeal Pambayang Kapasyahan Blg. 10

2. WON the questioned local initiative covers a subject within the powersof the people of Morong to enact; i.e., whether such initiative "seeks the amendment of a national law."

Ruling:

1. YES. COMELEC committed grave abuse of discretion.

FIRST. The process started by private respondents was an INITIATIVE but respondent Comelec made preparations for a REFERENDUM only.

In fact, in the body of the Resolution as reproduced in the footnote below,the word "referendum" is repeated at least 27 times, but "initiative" is not mentioned at all. The Comelec labeled the exercise as a "Referendum"; the counting of votes was entrusted to a "Referendum Committee"; the documents were called "referendum returns"; the canvassers, "Referendum Board of Canvassers" and the ballots themselves bore the description"referendum". To repeat, not once was the word "initiative" used in said body of Resolution No. 2848. And yet, this exercise is unquestionably an INITIATIVE.

As defined, Initiative is the power of the people to propose bills and laws,and to enact or reject them at the polls independent of the legislative assembly. On the other hand, referendum is the right reserved to the people to adopt or reject any act or measure which has been passed by a legislative body and which in most cases would without action on the part of electors become a law.

In initiative and referendum, the Comelec exercises administration and supervision of the process itself, akin to its powers over the conduct of elections. These law-making powers belong to the people, hence the respondent Commission cannot control or change the substance or the content of legislation.

2. The local initiative is NOT ultra vires because the municipal resolution is still in the proposal stage and not yet an approved law.

The municipal resolution is still in the proposal stage. It is not yet an approved law. Should the people reject it, then there would be nothing to contest and to adjudicate. It is only when the people have voted for it and it has become an approved ordinance or resolution that rights and obligations can be enforced or implemented thereunder. At this point, it is merely a proposal and the writ or prohibition cannot issue upon a mere conjecture or possibility. Constitutionally speaking, courts may decide only actual controversies, not hypothetical questions or cases.

In the present case, it is quite clear that the Court has authority to review Comelec Resolution No. 2848 to determine the commission of grave abuse of discretion. However, it does not have the same authority in regard to the proposed initiative since it has not been promulgated or approved, or passed upon by any "branch or instrumentality" or lower court, for that matter. The Commission on Elections itself has made no reviewable pronouncements about the issues brought by the pleadings. The Comelec simply included verbatim the proposal in its questioned Resolution No. 2848. Hence, there is really no decision or action made by a branch, instrumentality or court which this Court could take cognizance of and acquire jurisdiction over, in the exercise of its review powers.