Pubcor Cases Full Text 06-20-13

8/11/2019 Pubcor Cases Full Text 06-20-13

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"esultantly, "esolution #o. $% was passed by the unicipal Council of !irac on (pril $$,-%)) declaring the warehouse owned and operated by petitioner a public nuisancewithin the purview of (rticle )%* of the #ew Civil Code. 2

1is motion for reconsideration having been denied by the unicipal Council of !irac,

petitioner instituted the present petition for prohibition with preliminary injunction.

"espondent municipal officials contend that petitioner2s warehouse was constructed inviolation of 3rdinance #o. -4, series of -%5$, prohibiting the construction ofwarehouses near a bloc0 of houses either in the poblacion or barrios withoutmaintaining the necessary distance of $66 meters from said bloc0 of houses to avoidloss of lives and properties by accidental fire.

3n the other hand, petitioner contends that said ordinance is unconstitutional, contraryto the due process and e/ual protection clause of the Constitution and null and void fornot having been passed in accordance with law.

The issue then boils down on whether petitioner2s warehouse is a nuisance within themeaning of (rticle )%* of the Civil Code and whether 3rdinance #o. -4, &. -%5$ of theunicipality of !irac is unconstitutional and void.

In a decision dated &eptember -, -%)%, the court a quo ruled as follows7

-. The warehouse in /uestion was legally constructed under a valid permit issued by themunicipality of !irac in accordance with existing regulations and may not be destroyed orremoved from its present location8

$. 3rdinance #o. -4, series of -%5$, is a legitimate and valid exercise of police power by

the unicipal Council of !irac is not +sic unconstitutional and void as claimed by thepetitioner8

4. The storage by the petitioner of abaca and copra in the warehouse is not only inviolation of the provisions of the ordinance but poses a grave danger to the safety of thelives and properties of the residents of the neighborhood due to accidental fire andconstitutes a public nuisance under the provisions of (rticle )%* of the #ew Civil code ofthe Philippines and may be abated8

*. (ccordingly, the petitioner is hereby directed to remove from the said warehouse allabaca and copra and other inflammable articles stored therein which are prohibited underthe provisions of 3rdinance #o. -4, within a period of two +$ months from the time thisdecision becomes final and that henceforth, the petitioner is enjoined from storing such

prohibited articles in the warehouse. 9ith costs against petitioner.

&ee0ing appellate review, petitioner raised as errors of the court a quo:

-. In holding that 3rdinance #o. -4, series of -%5$, of the unicipality of !irac,Catanduanes, is a legitimate and valid exercise of police power of the unicipal Council,and therefore, constitutional8


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$. In giving the ordinance a meaning other than and different from what itprovided bydeclaring that petitioner violated the same by using the warehouse for storage of abacaand copra when what is prohibited and penali:ed by the ordinance is the construction ofwarehouses.

4. In refusing to ta0e judicial notice of the fact that in the municipality, there are numerous

establishments similarly situated as appellants2 warehouses but which are notprosecuted.

9e find no merit in the Petition.

3rdinance #o. -4, series of -%5$, was passed by the unicipal Council of !irac in theexercise of its police power. It is a settled principle of law that municipal corporations areagencies of the &tate for the promotion and maintenance of local self;government andas such are endowed with the police powers in order to effectively accomplish and carryout the declared objects of their creation. 3Its authority emanates from the generalwelfare clause under the (dministrative Code, which reads7

The municipal council shall enact such ordinances and ma0e such regulations, notrepugnant to law, as may be necessary to carry into effect and discharge the powers andduties conferred upon it by law and such as shall seem necessary and proper to providefor the health and safety, promote the prosperity, improve the morals, peace, good order,comfort and convenience of the municipality and the inhabitants thereof, and for theprotection of property therein. 4

For an ordinance to be valid, it must not only be within the corporate powers of themunicipality to enact but must also be passed according to the procedure prescribed bylaw, and must be in consonance with certain well established and basic principles of asubstantive nature. These principles re/uire that a municipal ordinance +- must notcontravene the Constitution or any statute +$ must not be unfair or oppressive +4 mustnot be partial or discriminatory +* must not prohibit but may regulate trade +5 must begeneral and consistent with public policy, and +) must not be unreasonable. 3rdinance #o. -4, &eries of -%5$, meets these criteria.

(s to the petitioner2s second assignment of error, the trial court did not give theordinance in /uestion a meaning other than what it says. 3rdinance #o. -4 passed bythe unicipal Council of !irac on P"31I?ITI#@ T1' C3#&T"ACTI3# 3F 9("'13A&'I# (#> F3" #'(" ( ?=3CB 3F 13A&'& 'IT1'" I# P3?=(CI3# 3" ?(""I39IT1 #'C'&&(">


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&ection $ provides7

3wners of warehouses in any form, are hereby given advice to remove their saidwarehouses this ordinance by the unicipal Council,provided however, that if thosewarehouses now in existence should no longer be utili:ed as such warehouse for theabove;described products in &ection - of this ordinance after a lapse of the time given for

the removal of the said warehouses now in existence, same warehouses shall beexempted from the spirit of the provision of section - of this ordinance,provided further,that these warehouses now in existence, shall in the future be converted into non;inflammable products and materials warehouses.

In spite of its fractured syntax, basically, what is regulated by the ordinance is theconstruction of warehouses wherein inflammable materials are stored where suchwarehouses are located at a distance of $66 meters from a bloc0 of houses and not theconstructionper seof a warehouse. The purpose is to avoid the loss of life and propertyin case of fire which is one of the primordial obligation of the government.

This was also the observation of the trial court7

( casual glance of the ordinance at once reveals a manifest disregard of the elementalrules of syntax. 'xperience, however, will show that this is not uncommon in law ma0ingbodies in small towns where local authorities and in particular the persons charged withthe drafting and preparation of municipal resolutions and ordinances lac0 sufficienteducation and training and are not well grounded even on the basic and fundamentalelements of the 'nglish language commonly used throughout the country in suchmatters. #evertheless, if one scrutini:es the terms of the ordinance, it is clear that what isprohibited is the construction of warehouses by any person, entity or corporation whereincopra, hemp, gasoline and other inflammable products mentioned in &ection - may bestored unless at a distance of not less than $66 meters from a bloc0 of houses either inthe poblacion or barrios in order to avoid loss of property and life due to fire. Ander&ection $, existing warehouses for the storage of the prohibited articles were given one

year after the approval of the ordinance within which to remove them but were allowed toremain in operation if they had ceased to store such prohibited articles.

The ambiguity therefore is more apparent than real and springs from simple error ingrammatical construction but otherwise, the meaning and intent is clear that what isprohibited is the construction or maintenance of warehouses for the storage ofinflammable articles at a distance within $66 meters from a bloc0 of houses either in thepoblacion or in the barrios. (nd the purpose of the ordinance is to avoid loss of life andproperty in case of accidental fire which is one of the primordial and basic obligation ofany government.

Clearly, the lower court did #3T add meaning other than or differrent from what was

providedin the ordinance in /uestion. It merely stated the purpose of the ordinance andwhat it intends to prohibit to accomplish its purpose.

(s to the third assignment of error, that warehouses similarly situated as that of thepetitioner were not prosecuted, suffice it to say that the mere fact that the municipalauthorities of !irac have not proceeded against other warehouses in the municipalityallegedly violating 3rdinance #o. -4 is no reason to claim that the ordinance isdiscriminatory. ( distinction must be made between the law itself and the manner in


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which said law is implemented by the agencies in charge with its administration andenforcement. There is no valid reason for the petitioner to complain, in the absence ofproof that the other bodegas mentioned by him are operating in violation of theordinance and that the complaints have been lodged against the bodegas concernedwithout the municipal authorities doing anything about it.

The objections interposed by the petitioner to the validity of the ordinance have notbeen substantiated. Its purpose is well within the objectives of sound government. #oundue restraint is placed upon the petitioner or for anybody to engage in trade butmerely a prohibition from storing inflammable products in the warehouse because of thedanger of fire to the lives and properties of the people residing in the vicinity. (s far aspublic policy is concerned, there can be no better policy than what has been conceivedby the municipal government.

(s to petitioner2s contention of want of jurisdiction by the lower court we find no merit inthe same. The case is a simple civil suit for abatement of a nuisance, the original

jurisdiction of which falls under the then Court of First Instance.

91'"'F3"', for lac0 of merit, the petition is hereby


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Republic of the Philippines

SUPREME COURT

Manila

EN BANC

G.R. No. 11044 -a")ar& 2, 199

5ON. ALFREO S. LIM, !" h!# ca$ac!%& a# Ma&or o' Ma"!/a, a"( %h* C!%& o' Ma"!/a,petitioners,vs.5ON. FELIPE G. PAC6UING, a# -)(7*, 8ra"ch 40, R*7!o"a/ Tr!a/ Co)r% o' Ma"!/aa"( ASSOCIATE CORPORATION, respondents.

G.R. No. 1123 -a")ar& 2, 199

TEOFISTO GUINGONA, -R. a"( OMINAOR R. CEPEA, petitioners,vs.5ON. VETINO REYES a"( ASSOCIATE EVELOPMENT CORPORATION,respondents.

PAILLA, J.:

These two +$ cases which are inter;related actually involve simple issues. if theseissues have apparently become complicated, it is not by reason of their nature becauseof the events and dramatis personae involved.

The petition in @.". #o. --56** was dismissed by the First


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c. order dated $6 (pril -%%* reiterating the previous order directing ayor =im toimmediately issue thepermit/license to (ssociated


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eanwhile, Gudge "eyes on -% 3ctober -%%* issued another order, this time, granting(


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commit an act of injustice to the movants, to their successor;in;interest and to allpurchasers for value and in good faith and thereby open the door to fraud, falsehoodand misrepresentation, should intervenors2 claim be proven to be true.

In the present case, the resulting injustice and injury, should the national government2s

allegations be proven correct, are manifest, since the latter has s/uarely /uestioned thevery existence of a valid franchise to maintain and operate the jai;alai +which is agambling operation in favor of (


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final, cannot have the effect of nullifying P< #o. DD- as unconstitutional, since only theCourt En anchas that power under (rticle !III, &ection *+$ of the Constitution. 4

(nd on the /uestion of whether or not the government is estopped from contesting(


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or gamble on any bas/ue pelota game or event outside t(e place, enclosure, or $ronton"(ere t(e basque pelota game is (eld. +emphasis supplied.

*. 3n 6D &eptember -%D-, however, the unicipal ?oard of anila nonetheless passed3rdinance #o. D6)5 entitled (n 3rdinance (uthori:ing the ayor To (llow (nd PermitThe (ssociated


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It is worthy of note that neither of the authorities relied upon by (


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In era, this Court declared that a law which gives the Provincial ?oard the discretion todetermine whether or not a law of general application +such as, the Probation law;(ct#o. *$$- would or would not be operative within the province, is unconstitutional forbeing an undue delegation of legislative power.

From the ruling in era, it would be logical to conclude that, if (


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91'"'(&, it has been reported that in spite of the current drive of our law enforcementagencies against vices and illegal gambling, these social ills are still prevalent in manyareas of the country8

91'"'(&, there is need to consolidate all the efforts of the government to eradicate andminimi:e vices and other forms of social ills in pursuance of the social and economic

development program under the new society8

91'"'(&, in order to effectively control and regulate wagers or betting by the public onhorse and dog races, jai;alai and other forms of gambling there is a necessity to transferthe issuance of permit andHor franchise from local government to the #ational@overnment.

It cannot be argued that the control and regulation of gambling do not promote publicmorals and welfare. @ambling is essentially antagonistic and self;reliance. It breedsindolence and erodes the value of good, honest and hard wor0. It is, as very aptly statedby P< #o. DD-, a vice and a social ill which government must minimi:e +if not eradicatein pursuit of social and economic development.

In Magtaas v. Pr!ce Properties &orporation+$6 Guly -%%*, @.". #o. ---6%D, this Courtstated thru r. Gustice Isagani (. Cru:7

In the exercise of its own discretion, the legislative power may prohibit gamblingaltogether or allow it without limitation or it may prohibit some forms of gambling andallow others for whatever reasons it may consider sufficient. Thus, it has prohibited

uetengand montebut permits lotteries, coc0fighting and horse;racing. In ma0ing suchchoices, Congress has consulted its own wisdom, which this Court has no aut(orit! torevie", much less reverse. 9ell has it been said that courts do not sit to resolve themerits of conflicting theories. That is the prerogative of the political departments. It issettled that /uestions regarding wisdom, morality and practicability of statutes are notaddressed to the judiciary but may be resolved only by the executive and legislativedepartments, to which the function belongs in our scheme of government. +'mphasissupplied

Tal0s regarding the supposed vanishing line between rig(tandprivilegein (mericanconstitutional law has no relevance in the context of these cases since the referencethere is to economic regulations. 3n the other hand, jai;alai is not a mere economicactivity which the law see0s to regulate. It is essentially gambling and whether it shouldbe permitted and, if so, under what conditions are /uestions primarily for the lawma0ingauthority to determine, tal0ing into account national and local interests. 1ere, it is thepolice power of the &tate that is paramount.

(


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epressed and proclaimed purposes o$ P# )o. 223, "(ic( are reasonable and evenlaudable.

It should also be remembered that P< #o. DD- provides that the national governmentcan subse/uently grant franchises upon proper application and verification of the

/ualifications of the applicant. (


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There was no violation by P< #o. DD- of the e/ual protection clause since the decreerevo0ed all franchises issued by local governments without /ualification or exception.

(


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&3 3"


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(


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municipal franchise for the operation of the ?as/ue pelota game jai alai. In response tothe government2s vehement objections against (


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Clearly the, if 3rdinance D6)5 merely grants a permit or a license to operate the jai;alaifronton, I see no conflict with a national law, duly enacted pursuant to legitime franchiseto operate certain gambling and gaming operations, generally viewed as deleterious tothe public welfare and morals, for the purpose of regulating the same and raisingrevenue. In other words, the national government may well validly re/uire operators of

such establishments to first secure a legislative franchise before starting theiroperations. (fter securing the proper legislative franchise, they may ta0e then exercisewhatever authority granted to them by local legislative bodies pursuant to the permits orlicenses granted by these bodies. This is essentially the spirit ordained by at least twolegislative issuances relating to jai;alai and other gambling operations passed beforeand after the anila City Council issued the (


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law, is generally proscribed as offensive to the public morals and the public good. Inmaintaining a state policy on various forms of gambling, the political branches ofgovernment are best e/uipped to regulate and control such activities and thereforeassume full responsibility to the people for such policy. Parenthetically, gambling in allits forms, is generally immoral.

The disturbing implications of a grant of a franchise, in perpetuity, to the (


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4.


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The grant of an intervention is left to the discretion of the court. Paragraph +b, &ection$, "ule -$ of the "ules of Court provides7

+b #iscretion o$ court. J In allowing or disallowing a motion for intervention, the court, inthe exercise of discretion, shall consider whether or not the intervention will unduly delayor prejudice the adjudication of the rights of the original parties and whether or not the

intervenor2s rights may be fully protected in a separate proceeding.

It is thus clear that, by its very nature, intervention presupposes an eisting litigationorapending case,and by the opening paragraph of &ection $, "ule -$ of the "ules the"ules of Court, it may be properly filed only before or during the trial of the said case.'ven if it is filed before or during the trial, it should be denied if it will unduly delay orprejudice the adjudication of the rights of the original parties and if the intervenor2s rightsmay be fully protected in a separate proceeding.9

It is not disputed that the motion to intervene was filed only on -) &eptember -%%*, oron the fifteenth +-5th day after the First


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fraud, falsehood and misrepresentation, should intervenors2 claims be proven to be true.For it cannot be gainsaid that if the petition for reconstitution is finally granted, the chaosand confusion arising from a situation where the certificates of title of the movantscovering large areas of land overlap or encroach on properties the title to which is beingsought to be reconstituted by private respondent, who herself indicates in her 3ppositionthat, according to the


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(ccordingly, I vote to deny the motion for intervention in @.". #o. --56**.

II

1owever, I vote to partially grant the petition in @.". #o. --D$)4 insofar as wagering or

betting on the results order and the preliminary mandatory injunction issued byrespondent Gudge cannot legally and validly allow such wagering and betting. It wasprecisely for this reason that I earlier voted to grant a temporary restraining order in@.". #o. --56** and @.". #o. --D$)4 to restrain wagering or betting. I wish to reiteratehere what I stated in my supplemental concurring opinion in @.". #o. --56**7

&econdly, to ma0e my position clear that the dismissal of the petition should not beconstrued as compelling the City of anila to authori:e gambling by allowing betting onthe results of jai;alai. The decision merely dismissed the petition because the Court found no abuse of discretion, much less lac0 of excess of jurisdiction, on the part of therespondent judge in issuing the challenged order directing the petitioner to issue apermit or license in favor of the private respondent pursuant to 3rdinance #o. D6)5. Thatorder was to enforce the final and executory decision of the "egional Trial Court of %&eptember -% in Civil Case #o. ;*5))6, the appeal therefrom to the Court of

(ppeals by the City of anila having been withdrawn by it on % February -%%. Thatdecision ordered the City of anila to immediately issue to the private respondent thepermitHlicense re/uired under 3rdinance #o. D6)5. The City of anila did in fact issuethe re/uired permit or license to the private respondent for the operation of the jai;alai inanila for the years -% to -%%$. #evertheless, when the jai;alai complex was almostcompleted, the City ayor refused to renew the ayor2s Permit.

There is a clear distinction between the initial duty of the City ayor under 3rdinance #o.D6)5 to issue the necessary license or permit to establish the jai;alai fronton and tomaintain and operate the jai;alai, and his subse/uent discretion to impose other termsand conditions for the$inal contractrelative to such operation. The trial court specificallysaid so in its decision of % &eptember -%%. Thus7

( suggestion has been made in the (nswer that a writ of mandamuswillnot lie against respondents, particularly the ayor, because theavailment of the franchise . . . is subject to the terms and conditionswhich the respondent ayor may impose.

( careful reading however, of 3rdinances D6)5 will readily show that thediscretion, if any, allowed respondent ayor, under the ordinance, will beexercisable only after the permit, which he is mandated to issue, hadbeen issued and the jai;alai fronton is already operational. The ordinancestipulates that the ayor is authori:ed to allow and permit petitioner toestablish, maintain and operate a jai;alai in the City of anila, under the

five conditions enumerated in subparagraphs a to e of &ection - ofthe 3rdinance. ?y a simple reading of these terms and conditionspatently shows that subparagraphs b to e are clearly conditions thatwill only come into play after the jai;alai has been put up or established8while the condition under subparagraph a appears to have beencomplied with satisfactorily by the petitioner, since no objection at all hasbeen made by respondents to the proposed site for jai;alai fronton, thatis, the $5,666 s/. m. land area behind the present 1arrison Pla:aComplex located at 'rmita, anila.


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Conse/uently, the ayor2s Permit sough to be renewed or the motion before the lowercourt to compel the ayor to renew it, has reference only to subparagraph +a, &ection -of 3rdinance #o. D6)5. The renewal of the permit can by no stretch of the imagination beta0en as a final contract between the private respondent and the City of anila forotherwise it would remove the power and authority of the ayor under the ordinance toimpose other terms and conditions as he may prescribe for good reasons of generalinterest.

It follows then that the ayor2s Permit ordered by the trial court to be issued to the privaterespondent is not a license or authority to allow betting or wagering on the results of the

ai-alaigames. Jai-alaiis a sport based on s0ill. Ander (rticle -%D of the "evised PenalCode, before it was amended by P.


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authori:ed agents shall ta0e or arrange bets on any pelotari or on thegame, or maintain or use a totali:ator or other device, method or systemto bet on any pelotari or on the game within or without the place,enclosure or court where the games are held by the grantee. (nyviolation of this section shall be punished by a fine of not more than twothousand pesos or by imprisonment of not more than six months, or bothin the discretion of the Court. If the offender is a partnership, corporationor association, the criminal liability shall devolve upon its president,directors or any officials responsible for the violation.

1owever, as stated in theponencia, P.


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&pecifically, the establishment, maintenance and operation of a Gai;(lai fronton in etro;anila shall be by virtue o$ t(e original and still legall! eisting $ranc(ise granted to t(e

'ssociated #evelopment &orporation+(son permit to hold or conduct a Esic

jai;alai contestsHexhibition on &eptember -$ to -*, -%%*, at the harrison Pla:a Complex,located in 1arrison Pla:a, alate, anila.

This permit is issued subject to the condition that the promoter shall comply with theprovisions of 'xecutive order #o. $*, &. -%$, the rules and regulations, orders andHorpolicies adopted or which may hereafter be adopted by the ?oard, and with theconditions set forth in the application for which this permit has been granted8 and failureon the part of the promoter to comply with any of which shall be deemed sufficient causefor the revocation thereof +@.". #o. --D$)4, Rollo, pp. 56, $4, $%.

In compliance with @(? "ules and "egulations, (


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operation. In reply, chairman &umulong furnished Gai;(lai de anila with copies of '.3.#os. 4%$ and $* and the "evised rules and "egulations for bas/ue pelota @ames+'xhs. B and =, Civil Case #o. %*;D-)5), "TC, ?r. *, anila8 @.". #o. --D$)4, Rollo,pp. 46-;46$.

3n &eptember -4, -%%*, 'xecutive &ecretary Teofisto @uingona, jr. issued the following


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3n &eptember -), -%%*, 'xecutive &ecretary @uingona and Chairman &umulong filedan urgent motion to recall the temporary restraining order, with opposition to the motionfor issuance of a writ of preliminary injunction. The said motion was reiterated in thesupplemental motion filed on &eptember $6, -%%* +@.". #o. --D$)4, Rollo, pp. ));D5,D);).

eanwhile, on &eptember -), -%%*, the "epublic of the Philippines, represented by@(?, filed in @.". #o. --56** a motion for intervention8 for leave to file a motion forreconsideration;in;intervention8 to admit the attached motion for reconsideration;in;intervention8 and to refer the case to the Court en banc +Rollo, pp. $-%;$*%.

&ubse/uently, and on the different dates, the "epublic filed in @.". #o. --56** thefollowing pleadings7 otion for =eave to File &upplemental otion for "econsideration;In;Intervention +Rollo, pp. $)$;$)58 &upplemental otion for "econsideration;In;Intervention +Rollo, pp. $));$68 otion for =eave to File &econd &upplementalotion for "econsideration;In;Intervention and to (dmit attached &econd &upplemental

otion For "econsideration;In;intervention ;Rollo, pp. 46;4$8 and &econd&upplemental otion for "econsideration;In;Intervention +Rollo, pp. 44;*66.

(cting on the motion of the "epublic dated &eptember -), -%%*, the First


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+*. order dated 3ctober -%, -%%* granting (


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The purpose of its intervention is to nullify the decision of Gudge (ugusto '. !illarin ofthe "egional Trial Court, ?ranch *6, anila, dated &eptember %, -%% in Civil Case #o.;*5))6, which upheld the validity of 3rdinance #o. D6)5 of the City of anila granting

(


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In 0an v.Intermediate 'ppellate &ourt, -)4 &C"( D5$ +-%, the Court held7

It is settled jurisprudence that except in the case of judgments which are void ab initio ornull and voidper se for lac0 of jurisdiction which can be /uestioned at any time J andthe decision here is not of this character J once a decision becomes final, even the courtwhich has rendered it can no longer alter or modify it, except to correct clerical errors or

mista0es. otherwise, there would be no end to litigation, thus setting to naught the mainrole of courts of justice, which is, to assist in the enforcement of the rule of law and themaintenance of peace and order, by settling justifiable controversies with finality. +&eealso Fabular v. Court of (ppeals, --% &C"( 4$% E-%$8 Fariscal !da. de 'mnas v.'mnas, %5 &C"( *D6 E-%68 3campo v. Caluag, -% &C"( %-D E-%)D.

(s to the second issue, the First


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&upreme Court, the intervention of the "epublic was in a case that had become finaland executory more than five years prior to the filing of the motion to intervene.

(s of &eptember -), -%%*, therefore, when the republic moved to intervene, there wasno longer any pending litigation between the parties in @.". no. --56**. Intervention is

an auxiliary and supplemental remedy to an existing, not a settled litigation +cf. Clare:av. "osales, $ &C"( *55 E-%)-. (n intervention was disallowed in a case which hasbecomes final and executory +Tra:o v. anila Pencil Co., DD &C"( -- E-%DD

The case of *uson v. &ourt o$ 'ppeals, -D$ &C"( D6 +-%% invo0ed by the "epublic+@.". #o. --D$)4, Rollo, pp. 5-D;5- is inappropriate because the intervention thereinwas before the trial court, not in this Court.

In its "eply, the "epublic admitted that the First


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or exercise of an office and to oust the holder from its enjoyment if his claim is not well;founded +Castro v.


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&ec. $. The ayor and the City Treasurer of their duly authori:edrepresentatives are hereby empowered to inspect at all times duringregular business hours the boo0s, records and accounts of theestablishment, as well as to prescribe the manner in which the boo0s andfinancial statement of the entrepreneur shall be 0ept.

&ec. 4. This ordinance shall ta0e effect upon its approval.

'nacted originally by the unicipal ?oard on &eptember D, -%D-8 vetoed by the ayor on&eptember $D, -%D-8 modified and amended by the unicipal ?oard at its regularsession today, 3ctober -$, -%D-.

(pproved by 1is 1onor, the ayor on -4 #ovember -%D-.

The said 3rdinance was enacted pursuant to &ection - +jj, the Charter of the City ofanila +".(. #o. *6%, which too0 effect in -%*%. The charters of two other cities JNue:on City and Cebu City J contained a similar delegation of authority to grant jai;alaifranchises.

&aid &ection -+jj provides7

=egislative powers. J The unicipal ?oard shall have the following legislative powers7

xxx xxx xxx

+jj To tax, license, permit and regulate wagers or betting by the public on boxing, billiards,pools, horse or dog races, coc0pits, jai;alai, roller of ice;s0ating or any sporting or athleticcontests, as well as grant exclusive rights to establishments for this purpose,notwithstanding any existing law to the contrary.

(. It is the posture of the "epublic that the power of local governments to issuefranchisers for the operation of jai;alai was consolidated and transferred to the @(?under '.3. #o. 4%$. In its &upplemental otion for reconsideration;In;Intervention filedon &eptember $D, -%%*, the "epublic averred7

-$. (s early as -%5-, the power of the local governments to issue licenses and permitsfor the operation of jai;alai was consolidated and transferred to the @ames and

(musements ?oard under '.3. #o. 4%$ issued by then President 'lpidio Nuirino +sictoo0 effect on Ganuary -, -%5-. Thus, in -%D-, the City of anila was without authority toenact an ordinance authori:ing the City ayor to issue a licenseHpermit to privaterespondent for the operation of jai;alai in anila +Rollo, pp. $D-;$D$.

Furthermore, the republic alleged7

-4. &uch consolidation and transfer of power manifest the policy of the @overnment tocentrali:e the regulation, through appropriate institutions, of all games of chanceauthori:ed by existing franchises of permitted by law. . . . +Rollo, p. $D$.

There is no need to dwell upon this argument for suprisingly it was the "epublic itselfthat repudiated it albeit after wrongfully attributing the argument to (


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In its "eply filed on #ovember %, -%%*, the "epublic stated that7 Contrary torespondent (


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It ma! eercise t(is aut(orit! b! direct legislation, or t(roug( agencies dul! establis(ed(aving po"er $or t(at purpose. 0(is grant "(en made binds t(e public, and is, directl! orindirectl!, t(e 'ct o$ t(e *tate. 0(e easement is a legislative grant, "(et(er made directl!b! t(e legislature itsel$, or b! an! one o$ its properl! constituted instrumentalities +Gusticeof Pi0e Co. v. Plan0 road, -- @a. $*)8 'mphasis supplied.

If the intention of Congress in enacting ".(. #o. %5* was to repeal &ection - +jj, itcould have used explicit language to that effect in order not to leave room forinterpretation.

If ".(. #o. %5* repealed &ection - +jj, why did President arcos still issue P.


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&ection 4 violated the due process clause of the Constitution, both in its procedural andsubstantive aspects. The right to due process is guaranteed by the same &ection - of

(rticle I! of the -%D4 Constitution.

3rdinance #o. D6)5, li0e any franchise, is a valuable property by itself. The concept of

property protected by the due process clause has been expanded to include economicinterests and investments. The rudiments of fair play under the procedural dueprocess doctrine re/uire that (


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=astly, &ection 4 impaired the obligation of contracts prohibited by &ection -- of (rticleI! of the -%D4 Constitution.

(s authori:ed by &ection -+jj, 3rdinance #o. D6)5 grants (


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this issue, obviously because there were no significant financial investments involved inthe operation of the permits or licenses.

?ut assuming that 3rdinance #o. D6)5 is a mere privilege, still over the years, theconcept of a privilege has changed. Ander the traditional form a property ownership,

recipients of privileges, benefits or largesse from the government may be said to haveno property rights because they have no traditionally recogni:ed proprietary interesttherein. The case of inco v. Municipalit! o$ Hinigaran, *- Phil. D%6 +-%-D and Pedro v.Provincial oard o$ Ri5al, 5) Phil -$4 +-%4-, holding that a license to operate coc0pitsis a mere privilege, belong to this vintage. 1owever, the right;privilege dichotomy hascome to an end when the courts have reali:ed that individuals should not be subjectedto the unfettered whims of government officials to withhold privileges previously giventhem +!an (lstyne, 0(e #emise o$ t(e Rig(t > Privilege #istinctionin &onstitutional%a", - 1arvard =. ". -*4% E-%). To perpetuate such distinction would leave manyindividuals at the mercy of government officials and threaten the liberties protected bythe ?ill of "ights +#owa0, "otunda and >oung, Constitutional =aw 5*) E$nd ed.

That a franchise is subject to regulation by the state by virtue of its police power isconceded. 9hat is not acceptable is the "epublic2s proposition that the power toregulate and supervise includes the power to cancel the franchise altogether.

The stance of the "epublic that the gambling franchises it issues are not covered by theconstitutional mantle protecting property rights is ill;advised considering that it isplanning to operate gambling establishments involving substantial foreign investmentsin putting up the facilities thereof.

The belabored arguments of the "epublic on the evils of gambling fall to the ground

upon a showing that (


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variance in measurement came about is a matter that should have been submittedbefore the trial court for determination.

1owever, the operative law on the siting of jai;alai establishments is no longer '.3. #o.-45 of President Nuirino but ".(. #o. %4 as amended by ".(. #o. -$$*.

Ander said law only night clubs, cabarets, pavillions, or other similar places are coveredby the $66;lineal meter radius. In the case of all other places of amusements exceptcoc0pits, the proscribed radial distance has been reduced to 56 meters. 9ith respect tococ0pits, the determination of the radial distance is left to the discretion of the municipalcouncil or city board +&ec. -.

F. The "epublic also /uestions the lac0 of the period of the grant under 3rdinance #o.D6)5, thus ma0ing it indeterminate +@.". #o. --D$)4, Rollo, pp. 566;565. Theordinance leaves it to the ayor of the City of anila to lay down other terms andconditions of the grant in addition to those specified therein. It is up to the parties to

agree on the life or term of the grant. In case the parties fail to reach an agreement onthe term, the same can be fixed by the courts under (rticle --%D of the Civil Code of thePhilippines, which provides as follows7

If the obligation does not fix a period, but from its nature and the circumstances it can beinferred that a period was intended, the courts may fix the duration thereof.

The courts shall also fix the duration of the period when it depends upon the will of thedebtor.

In every case, the courts shall determine such period as may under the circumstanceshave been probably contemplated by the parties. 3nce fixed by the courts, the periodcannot be changed by them.

III

@.". #o. --D$)4

The petition in @.". #o. --D$)4 see0s to nullify the following orders of respondentGudge "eyes7

+- the Temporary "estraining 3rder dated &eptember -5, -%%*8

+$ the 3rder dated &eptember $5, -%%*8 and

+4 the 9rit of Preliminary Injunction dated &eptember 46, -%%* +Rollo, pp. -;$.

The supplemental petition in said case see0s to nullify the 3rder dated 3ctober -%,-%%* +Rollo, pp. -));$$5.

(ccording to 'xecutive &ecretary @uingona and @(? Chairman Cepeda, respondentGudge "eyes acted without jurisdiction and with grave abuse of discretion in issuing


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said orders and writ of preliminary injunction because7 +- Civil Case #o.%*;D-)5) was not properly assigned to him in accordance with &ection D, "ule $$ of the"evised "ules of Court8 +$ the enforcement of the


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-%%* their otion to "ecall Temporary "estraining 3rder, Argent &upplemental otionto "ecall Temporary "estraining 3rder and 3pposition to Issuance of a 9rit ofPreliminary Issuance of a 9rit of Preliminary Injunction +@.". #o. --D$)4, Rollop. *4*.

Petitioners in @.". #o. --D$)4 failed to shown any irregularity attendant to the raffle or

any prejudice which befell them as a result of the lac0 of notice of the raffle of Civil Case#o. %*;D-)5).

3n the other hand, petitioners never as0ed for a re;raffle of the case or for anyaffirmative relief from the trial court and proceeded with the presentation of evidence of

(


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The orders of Gudge "eyes are provisional in nature and do not touch on the merits ofthe case. The issues raised in Civil Case #o. %*;D-)5) are the validity of the


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'stablish, aintain and 3perate a Gai;(lai in the city of anila, Ander Certain Termsand Conditions (nd For 3ther Purposes.

3n &eptember $-, -%D$, martial law was declared by then president Ferdinand '.arcos. The -%D- Constitution, as amended, authori:ed the former President to

exercise legislative powers. (mong the laws he decreed is P.


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Case #o. ;*5))6 as the same is null and void for want of jurisdiction of the court thatrendered it. 1e li0ewise contended that 3rdinance #o. D6)5 had been revo0ed by P.


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(


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(s said 'xplanatory #ote is expressive of the purpose of the bill, it gives a reliable0eyhole on the scope and coverage of ".(. #o. %5*. #othing from the 'xplanatory#ote remotely suggests any intent of the law to revo0e the power of the City of anila toissue permits to operate jai;alai games within its territorial jurisdiction.

The


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The subse/uent enactment of P.


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extortion, and oppression8 +j roads and streets, and their preservation and repair8 and+0 the preservation of game and fish. 14

?ut while the &tate is bestowed near boundless authority to promote public welfare, stillt(e eercise o$ police po"er cannot be allo"ed to run riot in a republic ruled b! reason .

Thus, our courts have laid down the test to determine the validity of a police measure asfollows7 +- the interest of the public generally, as distinguished from those of particularclass, re/uires its exercise8 and +$ the means employed are reasonably necessary forthe accomplishment of the purpose and not unduly oppresive upon individuals. 1


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The purported revocation of all franchises and permits when there was only one existingpermit at that time is an unmista0eable attempt to mas0 the law with impartiality. #oother permit was affected by said sec. 4 except (


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in anila. The subse/uent use of said section should not obfuscate the fact that the lawwas enacted in the wrongful exercise of the police power of the &tate. There is nosidestepping the truth that its enactment inflicted undue injury on the right s of (


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view that section -, (rticle !III of the Constitution expanding the jurisdiction of this Courtto determine whether or not there has been a grave abuse of discretion amounting tolac0 or excess of jurisdiction on the part of any branch or agency of government is not apointless postulate. 9ithout the grant of this new power, it would be difficult, if notimpossible, to pierce through the pretentious purposes of P.


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(fter the City of anila subse/uently granted (


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to admit supplemental petition and re/uired respondents therein to file their comment on3ctober $5, -%%*.

The (


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one involving constitutional adjudication, the court should exercise becoming modestyand avoid the constitutional /uestion.

The &tate has every legitimate right, under the police power, to regulate gamblingoperationsby re/uiring legislative franchises for such operations. @ambling, in all its

forms, unless specifically authori:ed by law and carefully regulated pursuant to suchlaw, is generally proscribed as offensive to the public morals and the public good. Inmaintaining a state policy on various forms of gambling, the political branches ofgovernment are best e/uipped to regulate and control such activities and thereforeassume full responsibility to the people for such policy. Parenthetically, gambling in allits forms, is generally immoral.

The disturbing implications of a grant of a franchise, in perpetuity, to the (


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raised by the parties in the case at bench paves the way for us to consider the petitionfiled in @.". #o. --D$)4 as one for quo "arranto.

91'"'F3"', on the basis of the foregoing premises, judgment is hereby rendered7

-. (llowing the republic to intervene in @.". #o. --56**.

$.


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intervention could not be allowed after the trial had been concluded or after the trialand decision of the original case.

Fundamentally then, intervention is never an independent action but is ancillary andsupplemental to an existing litigation. Its purpose is not to obstruct nor unnecessarily

delay the placid operation of the machinery of trial, but merely to afford one not anoriginal party, yet having a certain right or interest in the pending case, the opportunityto appear and be joined so he could assert or protect such right or interest.

The grant of an intervention is left to the discretion of the court. Paragraph +b, &ection$, "ule -$ of the "ules of Court provides7

+b #iscretion o$ court. J In allowing or disallowing a motion for intervention, the court, inthe exercise of discretion, shall consider whether or not the intervention will unduly delayor prejudice the adjudication of the rights of the original parties and whether or not theintervenor2s rights may be fully protected in a separate proceeding.

It is thus clear that, by its very nature, intervention presupposes an eisting litigationorapending case,and by the opening paragraph of &ection $, "ule -$ of the "ules the"ules of Court, it may be properly filed only before or during the trial of the said case.'ven if it is filed before or during the trial, it should be denied if it will unduly delay orprejudice the adjudication of the rights of the original parties and if the intervenor2s rightsmay be fully protected in a separate proceeding.9

It is not disputed that the motion to intervene was filed only on -) &eptember -%%*, oron the fifteenth +-5th day after the First


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&uper 1ighway is affected, are indispensable parties to these proceedings as it has beenshown affirmatively that they have such an interest in the controversy or subject matterthat a final adjudication cannot be made, in their absence, without injuring or affectingsuch interest. The joinder must be ordered in order to prevent multiplicity of suits, so thatthe whole matter in dispute may be determined once and for all in one litigation.

(nd, s/uarely on the aspect of intervention, it found that the denial thereof

will lead the Court to commit an act of injustice to the movants, to their successors;in;interest and to all purchasers for value and in good faith and thereby open the door tofraud, falsehood and misrepresentation, should intervenors2 claims be proven to be true.For it cannot be gainsaid that if the petition for reconstitution is finally granted, the chaosand confusion arising from a situation where the certificates of title of the movantscovering large areas of land overlap or encroach on properties the title to which is beingsought to be reconstituted by private respondent, who herself indicates in her 3ppositionthat, according to the


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@overnment and petitioner @uingona may challenge the validity of (


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establish, maintain and operate a jai;alai in the City of anila, under thefive conditions enumerated in subparagraphs a to e of &ection - ofthe 3rdinance. ?y a simple reading of these terms and conditionspatently shows that subparagraphs b to e are clearly conditions thatwill only come into play after the jai;alai has been put up or established8while the condition under subparagraph a appears to have beencomplied with satisfactorily by the petitioner, since no objection at all hasbeen made by respondents to the proposed site for jai;alai fronton, thatis, the $5,666 s/. m. land area behind the present 1arrison Pla:aComplex located at 'rmita, anila.

Conse/uently, the ayor2s Permit sough to be renewed or the motion before the lowercourt to compel the ayor to renew it, has reference only to subparagraph +a, &ection -of 3rdinance #o. D6)5. The renewal of the permit can by no stretch of the imagination beta0en as a final contract between the private respondent and the City of anila forotherwise it would remove the power and authority of the ayor under the ordinance toimpose other terms and conditions as he may prescribe for good reasons of generalinterest.

It follows then that the ayor2s Permit ordered by the trial court to be issued to the privaterespondent is not a license or authority to allow betting or wagering on the results of theai-alaigames. Jai-alaiis a sport based on s0ill. Ander (rticle -%D of the "evised PenalCode, before it was amended by P.


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Pursuant to &ection $ of P.


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President and until after (son permit to hold or conduct a Esic

jai;alai contestsHexhibition on &eptember -$ to -*, -%%*, at the harrison Pla:a Complex,located in 1arrison Pla:a, alate, anila.


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issued pending $urt(er scrutin! and evaluation to '#& on 7 *eptember 377 is (ereb!"it(dra"n+@.". #o. --D$)4, Rollo, pp. 5-, -%*8 'mphasis supplied.

3n &eptember -5, -%%*, (


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@.". #o. --56**otion for Intervention

The "epublic of the Philippines +"epublic represented by @(? justifies its belatedintervention in @.". #o. --56** on the grounds that it has an interest involved in this

case and will be affected by the


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+- The decision of Gudge !illarin dated &eptember %, -% in Civil Case #o. ;*5))6 isnull and void for failure to rule that P.


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The case of #irector o$ %ands v. &ourt o$ 'ppeals, %4 &C"( $4 +-%D%, can not, serveas authority in support of the "epublic2s intervention at this late stage. while said caseinvolved an intervention for the first time in the &upreme court, the motion to be allowedto intervene was filed before the appeal could be decided on the merits. Theintervention allowed in Republic v. *andiganba!an, @.". #o. %)6D4, "esolution, arch

4, -%%$, was also made before the decision on the merits by this Court. In contrast, theintervention of the "epublic was sought after this Court had decided the petition in @.".#o. --56** and petitioners had complied with and satisfied the judgment. 9hile theintervention in


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?e that as it may, the Court may consider the motion to intervene, motion forreconsideration;in;intervention, supplemental motion for reconsideration;in;interventionand second supplemental motion;in;intervention as a petition for quo "arranto under"ule )) of the revised "ules of Court. In the liberal construction of the "ules in order toattain substantial justice, the Court has treated petitions filed under one "ule as

petitions filed under the more appropriate "ule +


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c. That the City of anila will received a share of $ LK on the annualgross receipts on all wagers or bets, LK of which will accrue to the@ames and (musements ?oard as now provided by law8

d. That the corporation will, in addition, pay to the city an annual licensefee of P4,666.66 and a daily permit fee of P$66.668

e. That the corporation will, to insure its faithful compliance of all theterms and conditions under this ordinance, put up a performance bondfrom a surety acceptable to the city, in the amount of at least P46,666.66.

&ec. $. The ayor and the City Treasurer of their duly authori:ed representatives arehereby empowered to inspect at all times during regular business hours the boo0s,records and accounts of the establishment, as well as to prescribe the manner in whichthe boo0s and financial statement of the entrepreneur shall be 0ept.

&ec. 4. This ordinance shall ta0e effect upon its approval.

'nacted originally by the unicipal ?oard on &eptember D, -%D-8 vetoed by the ayor on

&eptember $D, -%D-8 modified and amended by the unicipal ?oard at its regularsession today, 3ctober -$, -%D-.

(pproved by 1is 1onor, the ayor on -4 #ovember -%D-.

The said 3rdinance was enacted pursuant to &ection - +jj, the Charter of the City ofanila +".(. #o. *6%, which too0 effect in -%*%. The charters of two other cities JNue:on City and Cebu City J contained a similar delegation of authority to grant jai;alaifranchises.

&aid &ection -+jj provides7

=egislative powers. J The unicipal ?oard shall have the following legislative powers7

xxx xxx xxx

+jj To tax, license, permit and regulate wagers or betting by the public on boxing, billiards,pools, horse or dog races, coc0pits, jai;alai, roller of ice;s0ating or any sporting or athleticcontests, as well as grant exclusive rights to establishments for this purpose,notwithstanding any existing law to the contrary.

(. It is the posture of the "epublic that the power of local governments to issuefranchisers for the operation of jai;alai was consolidated and transferred to the @(?

under '.3. #o. 4%$. In its &upplemental otion for reconsideration;In;Intervention filedon &eptember $D, -%%*, the "epublic averred7

-$. (s early as -%5-, the power of the local governments to issue licenses and permitsfor the operation of jai;alai was consolidated and transferred to the @ames and

(musements ?oard under '.3. #o. 4%$ issued by then President 'lpidio Nuirino +sictoo0 effect on Ganuary -, -%5-. Thus, in -%D-, the City of anila was without authority toenact an ordinance authori:ing the City ayor to issue a licenseHpermit to privaterespondent for the operation of jai;alai in anila +Rollo, pp. $D-;$D$.


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anila pursuant to the powers delegated to it by the legislature. ( grant, under adelegated authority, binds the public and is considered the act of the state. Thefranchise Egranted by the delegate is a legislative grant, whether made directly by thelegislature itself or by any one of its properly constituted instrumentalities +4) (m Gur$d. D4*.

(s held in =rig(t v. )agle, -6- A.&. %$-, the grant of a franchise by the legislature maybe done in two ways7

It ma! eercise t(is aut(orit! b! direct legislation, or t(roug( agencies dul! establis(ed(aving po"er $or t(at purpose. 0(is grant "(en made binds t(e public, and is, directl! orindirectl!, t(e 'ct o$ t(e *tate. 0(e easement is a legislative grant, "(et(er made directl!b! t(e legislature itsel$, or b! an! one o$ its properl! constituted instrumentalities +Gusticeof Pi0e Co. v. Plan0 road, -- @a. $*)8 'mphasis supplied.

If the intention of Congress in enacting ".(. #o. %5* was to repeal &ection - +jj, itcould have used explicit language to that effect in order not to leave room for

interpretation.

If ".(. #o. %5* repealed &ection - +jj, why did President arcos still issue P.


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( facially neutral statute +P.oung,Constitutional =aw *4), **4 E$d ed.

9hen President arcos issued P.


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assumes the character of a vested right +?ra:osport &avings and =oan (ssociation v.(merican &avings and =oan (ssociation, -)- Tex. 5*4, 4*$ &.9. $d. D*D.

The cases cited by the "epublic to the effect that gambling permits or license issued bymunicipalities can be revo0ed when public interest so re/uires, have never addressed

this issue, obviously because there were no significant financial investments involved inthe operation of the permits or licenses.

?ut assuming that 3rdinance #o. D6)5 is a mere privilege, still over the years, theconcept of a privilege has changed. Ander the traditional form a property ownership,recipients of privileges, benefits or largesse from the government may be said to haveno property rights because they have no traditionally recogni:ed proprietary interesttherein. The case of inco v. Municipalit! o$ Hinigaran, *- Phil. D%6 +-%-D and Pedro v.Provincial oard o$ Ri5al, 5) Phil -$4 +-%4-, holding that a license to operate coc0pitsis a mere privilege, belong to this vintage. 1owever, the right;privilege dichotomy hascome to an end when the courts have reali:ed that individuals should not be subjected

to the unfettered whims of government officials to withhold privileges previously giventhem +!an (lstyne, 0(e #emise o$ t(e Rig(t > Privilege #istinctionin &onstitutional%a", - 1arvard =. ". -*4% E-%). To perpetuate such distinction would leave manyindividuals at the mercy of government officials and threaten the liberties protected bythe ?ill of "ights +#owa0, "otunda and >oung, Constitutional =aw 5*) E$nd ed.

That a franchise is subject to regulation by the state by virtue of its police power isconceded. 9hat is not acceptable is the "epublic2s proposition that the power toregulate and supervise includes the power to cancel the franchise altogether.

The stance of the "epublic that the gambling franchises it issues are not covered by the

constitutional mantle protecting property rights is ill;advised considering that it isplanning to operate gambling establishments involving substantial foreign investmentsin putting up the facilities thereof.

The belabored arguments of the "epublic on the evils of gambling fall to the groundupon a showing that (


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3n the other hand, a certificate issued by the 3fficer;in;charge of the 3ffice of the City'ngineer of the City of anila attests to the fact that not one of the buildings or placesmentioned in the certificate submitted by the "epublic is within the $66;meter radialdistance, center to center from the (


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@oing bac0 to &ection D of "ule $$, this Court has rules in &ommissioner o$Immigration v. Re!es, -$ &C"( D$ +-$%)* that the purpose of the notice is to affordthe parties a chance to be heard in the assignment of their cases and this purpose isdeemed accomplished if the parties were subse/uently heard. In the instant case,'xecutive &ecretary @uingona and @(? Chairman Cepeda were given a hearing on the

matter of the lac0 of notice to them of the raffle when the court heard on &eptember $4,-%%* their otion to "ecall Temporary "estraining 3rder, Argent &upplemental otionto "ecall Temporary "estraining 3rder and 3pposition to Issuance of a 9rit ofPreliminary Issuance of a 9rit of Preliminary Injunction +@.". #o. --D$)4, Rollop. *4*.

Petitioners in @.". #o. --D$)4 failed to shown any irregularity attendant to the raffle orany prejudice which befell them as a result of the lac0 of notice of the raffle of Civil Case#o. %*;D-)5).

3n the other hand, petitioners never as0ed for a re;raffle of the case or for anyaffirmative relief from the trial court and proceeded with the presentation of evidence of

(


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the legality of his action because in the same


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&ec. 5. #o person, operator, or maintainer of a fronton with legislative franchise toconduct bas/ue pelota games shall offer, ta0e, or arrange bets on any bas/ue pelotagame or event, or maintain or use a totali:ator or to her device, method or system to betor gamble on any bas/ue pelota game or event outside the place, enclosure, or frontonwhere the bas/ue pelota game is held.

3n &eptember D, -%D-, the unicipal ?oard of anila approved 3rdinance #o. D6)5authori:ing the ayor to (llow and Permit the (ssociated


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that 3rdinance #o. D6)5 created a binding contract between the city of anila and(


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injunction and preliminary mandatory injunction upon posting by (


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been instituted under (ct #o. *$*6 which was enacted in -%45. 1owever, in a recentopinion released by the City Fiscal of anila he maintains that (ct #o. *$*6 has alreadybeen repealed, so that the present law regulating ordinary horse races permits boo0iesto ply their trade, but not on sweepsta0es races and other races held for charitablepurposes. 9ith the operation of boo0ing places in the City of anila, the @overnmenthas been losing no less than P)66,666.66 a year, which amount represents the tax thatshould have been collected from bets made in such places. for these reasons, theapproval of the bill is earnestly recommended.

(s said 'xplanatory #ote is expressive of the purpose of the bill, it gives a reliable0eyhole on the scope and coverage of ".(. #o. %5*. #othing from the 'xplanatory#ote remotely suggests any intent of the law to revo0e the power of the City of anila toissue permits to operate jai;alai games within its territorial jurisdiction.

The


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To top it all, the text of ".(. no. %5* itself does not intimate that it is repealing anyexisting law, especially section - +jj of ".(. no. *6%, otherwise 0nown as the Charter ofanila. Indeed, ".(. #o. %5* has no repealing provision. The reason is obvious J itsimply prohibited certain practices in jai;alai then still unregulated by the laws of theland. It did not regulate aspects of jai;alai alread! regulated by existing laws, li0e the

matter of whether it is the national government alone that should issue franchises tooperate jai;alai games.

The subse/uent enactment of P.


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police regulations on broad areas of state concern7 +a the preservation of the state itselfand the unhindered execution of its legitimate functions8 +b the prevention andpunishment of crime8 +c the preservation of the public peace and order8 +d thepreservation of the public safety8 +e the purity and preservation of the public morals8 +fthe protection and promotion of the public health +g the regulation of business, trades,

or professions the conduct of which may affect one or other of the objects justenumerated8 +h the regulation of property and rights of property so far as to prevent itsbeing used in a manner dangerous or detrimental to others8 +i the prevention of fraud,extortion, and oppression8 +j roads and streets, and their preservation and repair8 and+0 the preservation of game and fish. 14

?ut while the &tate is bestowed near boundless authority to promote public welfare, stillt(e eercise o$ police po"er cannot be allo"ed to run riot in a republic ruled b! reason .Thus, our courts have laid down the test to determine the validity of a police measure asfollows7 +- the interest of the public generally, as distinguished from those of particularclass, re/uires its exercise8 and +$ the means employed are reasonably necessary for

the accomplishment of the purpose and not unduly oppresive upon individuals.1


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'pplicantsto franchises have no right to insist that their applications be acted upon bylocal governments. Their right to a franchise is only in purpose.

The second method adopted by &ection 4 of P.


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Cogni:ant of the truism that in life the only constant is change, the Constitution did notdesign that the point that can stri0e the balance between order and liberty should bestatic for precisely, the process of adjusting the moving point of the balance givesgovernment greater elasticity to meet the needs of the time.

It is also my respectful submission that the unconstitutionality of section 4 of P.


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contractual liberty. The spirit of liberalism which provides the main driving force of socialjustice rebels against the resuscitation of the ruling %oc(nerfrom its sarcophagus. 9eshould not be seduced by any judicial activism unduly favoring private economic interest19at the expense of the public good.

I also support the stance of r. Gustice Nuiason which resisted the stance that the Courtshould close its eyes to allegations that section 4 of P.


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5 Tra:o vs. anila Pencil Co., supranote 4, citing =im Te0 @oan vs. (:ores, D) Phil. 4)4E-%*)8 'l 1ogar Filipino vs. #ational ?an0 , )* Phil. 5$ E-%4D.

) "i:al &urety and Insurance Co. vs. Tan, 4 Phil. D4$ E-%*%.

D @arcia vs.


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-5 Cru:, op citp. * citing A& v. Toribio, -5 Phil. 5 E-%-68 Fabie v. City of anila, $-Phil. *) E-%-$8 Case v. ?oard of 1ealth, $* Phil. $5) E-%-4.

-) 1earing on #ovember -6, -%%*, T, pp. ;%.

-D (rticle II, section -4 on &tate Policies.

- -% A& $5 &CT 54%, *% = ed %4D E-%65, where Gustice 1olmes vigorously dissented,stating among others that the Fourteenth (mendment does not enact r. 1erbert&pencer2s &ocial &tatistics . . . and general propositions do not decide concrete cases.

-% The %oc(nerruling was jun0ed in -%4D but recent writings on possible revival ofeconomic activism include7 'sptein, "ichard, Ta0ings. Private Property and the Power of'mminent


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Towards environmental protection and ecology, navigational safety, and sustainabledevelopment, "epublic (ct #o. *56 created the =aguna =a0e


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procedure provided in the following sub;paragraph, the present laws,rules and permits or authori:ations remain in force8

+0 For the purpose of effectively regulating and monitoring activities in=aguna de ?ay, t(e 'ut(orit! s(all (ave eclusive urisdiction to issuene" permit $or t(e use o$ t(e lae "aters $or an! proects or activities in

or a$$ecting t(e said lae including navigation, construction, andoperation o$ $is(pens, $is( enclosures, $is( corrals and t(e lie, and toimpose necessary safeguards for la0e /uality control and managementand to collect necessary fees for said activities and projects7 Provided,That the fees collected for fisheries may be shared between the (uthorityand other government agencies and political sub;divisions in suchproportion as may be determined by the President of the Philippinesupon recommendation of the (uthority2s ?oard7 Provided, $urt(er, Thatthe (uthority2s ?oard may determine new areas of fishery developmentor activities which it may place under the supervision of the ?ureau ofFisheries and (/uatic "esources ta0ing into account the overalldevelopment plans and programs for =aguna de ?ay and related bodiesof water7 Provided, $inall!, That the (uthority shall subject to the approvalof the President of the Philippines promulgate such rules and regulationswhich shall govern fisheries development activities in =aguna de ?aywhich shall ta0e into consideration among others the following7 socio;economic amelioration of bonafide resident fishermen whetherindividually or collectively in the form of cooperatives, la0eshore towndevelopment, a master plan for fishpen construction and operation,communal fishing ground for la0e shore town residents, and preferenceto la0e shore town residents in hiring laborer for fishery projects8

+l To re/uire the cities and municipalities embraced within the region topass appropriate :oning ordinances and other regulatory measuresnecessary to carry out the objectives of the (uthority and enforce thesame with the assistance of the (uthority8

+m The provisions of existing laws to the contrary notwithstanding, toexercise water rights over public waters within the =aguna de ?ay regionwhenever necessary to carry out the (uthority2s projects8

+n To act in coordination with existing governmental agencies inestablishing water /uality standards for industrial, agricultural andmunicipal waste discharges into the la0e and to cooperate with saidexisting agencies of the government of the Philippines in enforcing suchstandards, or to separately pursue enforcement and penalty actions asprovided for in &ection * +d and &ection 4%;( of this (ct7 Provided, Thatin case of conflict on the appropriate water /uality standard to beenforced such conflict shall be resolved thru the #'


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powers vested in it by its charter, 'xecutive 3rder #o. %$D further defined and enlargedthe functions and powers of the (uthority and named and enumerated the towns, citiesand provinces encompassed by the term =aguna de ?ay "egion.

(lso, pertinent to the issues in this case are the following provisions of 'xecutive 3rder

#o. %$D which include in particular the sharing of fees7

&ec $. 9ater "ights 3ver =aguna de ?ay and 3ther ?odies of 9ater within the =a0e"egion7 To effectively regulate and monitor activities in the =aguna de ?ay region, the

(uthority shall have exclusive jurisdiction to issue permit for the use of all surface waterfor any projects or activities in or affecting the said region including navigation,construction, and operation of fishpens, fish enclosures, fish corrals and the li0e.

For the purpose of this 'xecutive 3rder, the term =aguna de ?ay "egion shall refer tothe Provinces of "i:al and =aguna8 the Cities of &an Pablo, Pasay, Caloocan, Nue:on,anila and Tagaytay8 the towns of Tanauan, &to. Tomas and alvar in ?atangasProvince8 the towns of &ilang and Carmona in Cavite Province8 the town of =ucban inNue:on Province8 and the towns of ari0ina, Pasig, Taguig, untinlupa, and Pateros in

etro anila.

&ec 4. &ollection o$ 4ees. The (uthority is hereby empowered to collect fees for the useof the la0e water and its tributaries for all beneficial purposes including but not limited tofisheries, recreation, municipal, industrial, agricultural, navigation, irrigation, and wastedisposal purpose8 Provided, that the rates of the fees to be collected, and the s(aring"it( ot(er government agencies and political subdivisions, i$ necessar!, s(all be subectto t(e approval o$ t(e President o$ t(e P(ilippinesupon recommendation of the

(uthority2s ?oard, ecept $is(pen $ee, which will be shared in the following manner8 ABpercent o$ t(e $ee s(all go to t(e laes(ore local governments, 5 percent shall go to theProject


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&ec. -*%. Fishery "entals, Fees and Charges.

+a unicipalities shall have the exclusive authority to grant fishery privileges in themunicipal waters and impose rental fees or charges therefor in accordance with theprovisions of this &ection.

+b The &angguniang ?ayan may7

+- @rant fishing privileges to erect fish corrals, oyster, mussel or othera/uatic beds or bangus fry areas, within a definite :one of the municipalwaters, as determined by it8 . . . .

+$ @rant privilege to gather, ta0e or catch bangus fry, prawn fry ora"ag-a"agor fry of other species and fish from the municipal watersby nets, traps or other fishing gears to marginal fishermen free from anyrental fee, charges or any other imposition whatsoever.

xxx xxx xxx

&ec. **D. Po"er, #uties, 4unctions and &ompensation. . . . .

xxx xxx xxx

+I &ubject to the provisions of ?oo0 II of this Code, grant exclusiveprivileges of constructing fish corrals or fishpens, or the ta0ing orcatching of bangus fry, prawn fry or a"ag-a"agor fry of any species orfish within the municipal waters.

xxx xxx xxx

unicipal governments thereupon assumed the authority to issue fishing privileges andfishpen permits. ?ig fishpen operators too0 advantage of the occasion to establishfishpens and fishcages to the consternation of the (uthority. Anregulated fishpens andfishcages, as of Guly, -%%5, occupied almost one;third of the entire la0e water surfacearea, increasing the occupation drastically from D,666 hectares in -%%6 to almost$-,666 hectares in -%%5. The ayor2s permit to construct fishpens and fishcages wereall underta0en in violation of the policies adopted by the (uthority on fishpen :oning andthe =aguna =a0e carrying capacity.

To be sure, the implementation by the la0eshore municipalities of separate independentpolicies in the operation of fishpens and fishcages within their claimed territorialmunicipal waters in the la0e and their indiscriminate grant of fishpen permits have

already saturated the la0e area with fishpens, thereby aggravating the currentenvironmental problems and ecological stress of =aguna =a0e.

In view of the foregoing circumstances, the (uthority served notice to the general publicthat7

In compliance with the instructions of 1is 'xcellency P"'&I


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Presidential


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of preliminary mandatory injunction were issued in Civil Cases #os. )*-$*, D5% and 5))enjoining the (uthority from demolishing the fishpens and similar structures in /uestion.

1ence, the herein petition for certiorari, prohibition and injunction, @.". #os. -$6)5;D-,were filed by the (uthority with this court. Impleaded as parties;respondents are

concerned regional trial courts and respective private parties, and the municipalitiesandHor respective ayors of ?inangonan, Taguig and Gala;jala, who issued permits forthe construction and operation of fishpens in =aguna de ?ay. The (uthority sought thefollowing reliefs, vi5.7

+( #ullification of the temporary restraining orderHwrits of preliminary injunction issued inCivil Cases #os. )*-$5, D5% and 5))8

+? Permanent prohibition against the regional trial courts from exercising jurisdiction overcases involving the (uthority which is a co;e/ual body8

+C Gudicial pronouncement that ".(. D)-6 +=ocal @overnment Code of -%%- did not

repeal, alter or modify the provisions of ".(. *56, as amended, empowering the(uthority to issue permits for fishpens, fishcages and other a/ua;culture structures in=aguna de ?ay and that, the (uthority the government agency vested with exclusiveauthority to issue said permits.

?y this Court2s resolution of ay $, -%%*, the (uthority2s consolidated petitions werereferred to the Court of (ppeals.

In a "'PA?=IC (CT D-)6. T1' &(I< "A=I#@ I& C3#T"(">T3 '&T(?=I&1'< P"I#CIP='& (#< GA"I&P"A


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4. T1' 13#3"(?=' C3A"T 3F (PP'(=& C3ITT'< &'"I3A& '""3" 91'# IT"A='< T1(T T1' P39'" T3 I&&A' FI&1P'# P'"IT& I# =(@A#(


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Thus, it has to be concluded that the charter of the (uthority should prevail over the=ocal @overnment Code of -%%-.

Considering the reasons behind the establishment of the (uthority, which areenvironmental protection, navigational safety, and sustainable development, there is

every indication that the legislative intent is for the (uthority to proceed with its mission.

9e are on all fours with the manifestation of petitioner =aguna =a0e


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which embodies a valid exercise of police power should prevail over the =ocal@overnment Code of -%%- on matters affecting =aguna de ?ay.

There should be no /uarrel over permit fees for fishpens, fishcages and other a/ua;culture structures in the =aguna de ?ay area. &ection 4 of 'xecutive 3rder #o. %$D

provides for the proper sharing of fees collected.

In respect to the /uestion as to whether the (uthority is a /uasi;judicial agency or not, itis our holding that, considering the provisions of &ection * of "epublic (ct #o. *56 and&ection * of 'xecutive 3rder #o. %$D, series of -%4, and the ruling of this Court in%aguna %ae #evelopment 'ut(orit! vs. &ourt o$ 'ppeals, $4- &C"( 46*, 46), whichwe /uote7

xxx xxx xxx

(s a general rule, the adjudication of pollution cases generally pertains to the Pollution(djudication ?oard +P(?, except in cases where the special law provides for another

forum. It must be recogni:ed in this regard that the ==


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&3 3"


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Foo%"o%*#

- &ection -, P< #o. -4.

$ (t pages )*;)5.

4 anila "ailroad Company vs. "afferty, *6 Phils. $$58 #ational PowerCorporation vs. (rca, $5 &C"( %458 Province of isamis 3riental vs. Cagayan'lectric Power and =ight Company, Inc., -- &C"( *4.

* Fajardo vs. !illafuerte, @.". #o. %-45,


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?e it ordained by the unicipal ?oard of


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could be passed imposing additional re/uirements for the issuance of marriagelicenses, to prevent bigamy8 the registration of vehicles, to minimi:e carnaping8 theexecution of contracts, to forestall fraud8 the validation of passports, to deter imposture8the exercise of freedom of speech, to reduce disorder8 and so on. The list is endless,but the means, even if the end be valid, would be ultra vires.

&o many excesses are attempted in the name of the police power that it is time, we feel,for a brief admonition.

"egulation is a fact of life in any well;ordered community. (s society becomes more andmore complex, the police power becomes correspondingly ubi/uitous. This has to be sofor the individual must subordinate his interests to the common good, on the timehonored justification of *alus populi est suprema le.

In this prolix age, practically everything a person does and owns affects the publicinterest directly or at least vicariously, unavoidably drawing him within the embrace of

the police power. Increasingly, he is hemmed in by all manner of statutory,administrative and municipal re/uirements and restrictions that he may find officiousand even oppressive.

It is necessary to stress that unless the creeping interference of the government inessentially private matters is moderated, it is li0ely to destroy that pri:ed and peculiarvirtue of the free society7 individualism.

'very member of society, while paying proper deference to the general welfare, mustnot be deprived of the right to be left alone or, in the Idiom of the day, to do his thing.

(s long as he does not prejudice others, his freedom as an individual must not be

unduly curtailed.

9e therefore urge that proper care attend the exercise of the police power lest itdeteriorate into an unreasonable intrusion into the purely private affairs of the individual.The so;called general welfare is too amorphous and convenient an excuse for officialarbitrariness.

=et it always be remembered that in the truly democratic state, protecting the rights ofthe individual is as important as, if not more so than, protecting the rights of the public.

This advice is especially addressed to the local governments which exercise the police

power only by virtue of a valid delegation from the national legislature under the generalwelfare clause. In the instant case, 3rdinance #o. $$ suffers from the additional defectof violating this authority for legislation in contravention of the national law by adding toits re/uirements.

91'"'F3"', the decision of the lower court annulling the challenged ordinance is(FFI"'


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&3 3"


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The assailed ordinance 3is worded as follows7 &ection -.J 0itle o$ 8rdinance.J This3rdinance shall be 0nown and may be cited as the EProhibition and Closure 3rdinanceof ?ocaue, ?ulacan. &ection $. J #e$initions o$ 0erms >+a 2#ight Club2 shall includeany place or establishment selling to the public food or drin0s where customers areallowed to dance. +b 2Cabaret2 or 2


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the guise of a police regulation, there was in this instance a clear invasion of personal orproperty rights, personal in the case of those individuals desirous of patroni:ing thosenight clubs and property in terms of the investments made and salaries to be earned bythose therein employed.

$. The decision now under review refers to "epublic (ct #o. %4 as amended.1

It wasoriginally enacted on Gune $6, -%54. It is entitled7 (# (CT @"(#TI#@ A#ICIP(= 3"CIT> ?3("


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welfare of the municipality and the inhabitants thereof, and insure the protection ofproperty therein8 ... 2There are in addition provisions that may have a bearing on the/uestion now before this Court. Thus the sangguniang ba!anshall +rr "egulate cafes,restaurants, beer;houses, hotels, motels, inns, pension houses and lodging houses,except travel agencies, tourist guides, tourist transports, hotels, resorts, de luxe

restaurants, and tourist inns of international standards which shall remain under thelicensing and regulatory power of the inistry of Tourism which shall exercise suchauthority without infringing on the taxing or regulatory powers of the municipality8 +ss"egulate public dancing schools, public dance halls, and sauna baths or massageparlors8 +tt "egulate the establishment and operation of billiard pools, theatricalperformances, circuses and other forms of entertainment8 ... 2It is clear that municipalcorporations cannot prohibit the operation of night clubs. They may be regulated, butnot prevented from carrying on their business. It would be, therefore, an exercise infutility if the decision under review were sustained. (ll that petitioners would have to dois to apply once more for licenses to operate night clubs. ( refusal to grant licenses,because no such businesses could legally open, would be subject to judicial correction.

That is to comply with the legislative will to allow the operation and continued existenceof night clubs subject to appropriate regulations. In the meanwhile, to compel petitionersto close their establishments, the necessary result of an affirmance, would amount to nomore than a temporary termination of their business.


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such ordinance is at the most dubious and under the present =ocal @overnment Codenon;existent.

91'"'F3"', the writ of certiorari is granted and the decision of the lower court datedGanuary -5, -%D) reversed, set aside, and nullied. 3rdinance #o. *, &eries of -%D5 of

the unicipality of ?ocaue is declared void and unconstitutional. The temporaryrestraining order issued by this Court is hereby made permanent. #o costs.

0ee(anee, 'quino, &oncepcion Jr., 6uerrero, 'bad *antos, Plana, Escolin Relova and6utierre5, Jr., JJ., concur.

Maasiar, J, reserves (is rig(t to $ile a dissent.

#e &astro, Melencio-Herrera and asque5, JJ., are on leave.

Foo%"o%*#

- unicipal ayor atias "amire: and unicipal !ice;ayor ario endo:a.

$ Petition, D. The other /uestion raised was the jurisdiction of a municipal council to prohibit the operation of nightclubs,it being alleged that the power of regulating tourist;oriented businesses being granted to the then u, $* Phil. - +-%-$8 Case v. ?oard of 1ealth, $* Phil. $56 +-%-4.

-* 4% Phil. -6$ +-%-.


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-5 Ibid, -6%;--6.

-) Ibid, ---. In &alaveria though the ordinance penali:ing the playing ofpanguingueon days not &undays or legalholidays was declared as valid.

-D It was amended by "epublic (ct #o. %D% and "epublic (ct #o. -$$*.

- Title of "epublic (ct #o. %4 as amended.

-% "epublic (ct #o. %4, &ection -.

$6 "epublic (ct #o. %D%, &ection -.

$- (rticle !III, &ection -%, par. - of the Constitution.

$$ &ection $$4.

$4 3tis v. Par0er, -D A& )6) +-%6$.

$* Cf. #uRe: v. &andiganbayan, @.". #os. 565-;56)-D, Ganuary 46, -%$, --- &C"( *44. &eparate opinion ofGustice a0asiar.


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(n appeal interposed on Gune $4, -%)5 by plaintiff;appellant, 3rtigas Co., =imitedPartnership, from the decision of the Court of First Instance of "i:al, ?ranch !I, atPasig, 1on. (ndres "eyes presiding, which dismissed its complaint in Civil Case #o.DD6), entitled, 3rtigas Company, =imited Partnership, plaintiff, v. Feati ?an0 andTrust Company, defendant, for lac0 of merit.

The following facts J a reproduction of the lower court2s findings, which, in turn, arebased on a stipulation of facts entered into by the parties are not disputed. Plaintiff+formerly 0nown as 3rtigas, adrigal y Cia is a limited partnership and defendantFeati ?an0 and Trust Co., is a corporation duly organi:ed and existing in accordancewith the laws of the Philippines. Plaintiff is engaged in real estate business, developingand selling lots

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Pubcor Cases Full Text 06-20-13