LIST OF CASES:

CONSTITUTIONAL LAW 2 |

LIST OF CASES:

POLICE POWER

Amelia Cabrera vs Manuel Lapid, GR No. 129098, December 6, 2006

Carlos Superdrug Corp. vs DSWD, GR No. 166494, June 29, 2007

City of Manila vs Hon. Perfecto Laguio, GR. No. 118127, August 12, 2005

Pollution Adjudication Board vs Court of Appeals, G.R. No. 93981, March 11, 1991

Metropolitan Manila Development Authority vs Dante O. Garin, G.R. No. 130230, April 15 2009

Ortigas & Co., Ltd. vs Court of Appeals, G.R. No. 126102, December 4, 2000

Philippine Press Institute vs COMELEC, G.R. No. 119694, May 22, 1995

PRC vs Arlene de Guzman, G.R. No. 144681, June 21, 2004

JMM Promotion & Management, Inc. vs Court of Appeals, G.R. No. 120095, August 5, 1996

IMMINENT DOMAIN

PLDT vs NTC, 190 SCRA 717

NPC vs Pobre, G.R. No. 106804, August 12, 2004

Lagcao vs Labra, G.R. No. 155746, October 13, 2004

Republic vs Castellvi, 58 SCRA 336

Emiliano de los Santos vs Intermediate Appellate Court, G.R. No. 71998-99

Moday vs Court of Appeals, G.R. No. 107916.NPC vs De la Cruz, G.R. No. 156093Eslaban vs de Onorio, G.R. No. 146062, June 28, 2001NPC vs Henson, G.R. No. 129998, December 29, 1998City of Cebu vs Dedamo, G.R. No. 142971, May 2, 2002Republic vs Vicente Lim, G.R. No. 61656, June 29, 2005Mactan Cebu International Airport Authority vs Court of Appeals, G.R. No. 139495, Nov. 27, 2000City of Mandaluyong vs Francisco, G.R. No. 137152Mactan Cebu International Airport Authority vs Bernardo Lozada, G.R. No. 176625, Feb. 25, 2010Reyes vs NHA, G.R. No. 147511, January 20, 2003Republic vs Salem Investment, G.R. No. 137569, June 23, 2000Spouses Campos vs NPC, G.R. No. 143643, June 27, 2003[G.R. No.129098. December 6, 2006.]AMELIA CABRERA,petitioner,vs. MANUEL LAPID, FERNANDO BALTAZAR, REYNALDO F. CABRERA and DIONY VENTURA, respondents.D E C I S I O NTINGA,Jp:The instant petition for review oncertiorariseeks the reversal of the Resolution1dated 13 May 1996 and the Order2dated 21 March 1997, both issued by the Office of the Ombudsman. The Resolution dismissed the complaint-affidavit filed by petitioner against respondents and the Order denied her motion for reconsideration.The instant petition originated from a Complaint-Affidavit3filed in November 1995 by petitioner Amelia M. Cabrera with the Office of the Ombudsman ("Ombudsman"). Named respondents were Manuel Lapid, Fernando Baltazar, Reynaldo F. Cabrera and Superintendent Diony Ventura, respectively, in their capacities as Governor of Pampanga, Mayor of Sasmuan, Pampanga, Vice-Mayor of Sasmuan, Pampanga and Superintendent of the Philippine National Police (PNP)-Region 3, Pampanga. In her three(3)-page affidavit, petitioner accused respondents of violating Section 3(e) of theAnti-Graft and Corrupt Practices Actand Article 324 of the Revised Penal Code.In her Complaint-Affidavit, petitioner stated that she entered into a lease agreement with the Municipality of Sasmuan over a tract of land for the purpose of devoting it to fishpond operations. According to petitioner, she had spent approximately P5,000,000.00 for its construction before the fishpond operations commenced in August 1995. A month later, petitioner learned from newspaper reports of the impending demolition of her fishpond as it was purportedly illegal and blocked the flow of the Pasak River. Thus, petitioner sent the fishpond administrator to dissuade respondents from destroying her property.4Despite pleas from petitioner, respondents ordered the destruction of petitioner's fishpond. The property was demolished on 10 October 1995 by dynamite blasting. Petitioner alleged that the demolition was purposely carried out in the presence of media representatives and other government officials to gain media mileage. Petitioner imputed evident bad faith on respondents Mayor Baltazar and Vice-Mayor Cabrera in allowing the destruction of the fishpond despite their prior knowledge of the existence of the lease agreement. She also charged respondents Governor Lapid and Senior Superintendent Ventura with gross inexcusable negligence for ordering the destruction of the fishpond without first verifying its legality.5At the preliminary investigation, respondents, except Senior Superintendent Ventura, submitted counter-affidavits, denying the accusations against them. In the counter-affidavit jointly filed by Mayor Baltazar and Vice-Mayor Cabrera, they insisted that contrary to petitioner's claim, the fishpond was an illegal structure because it was erected on the seashore, at the mouth of the Pasak River, and sat on an inalienable land. They claimed that the demolition was done by the Task ForceBilis Daloyupon the directive of then President Fidel V. Ramos.6In his Counter-Affidavit,7Governor Lapid averred that the contract of lease between petitioner and the Municipality of Sasmuan, represented by then Mayor Abelardo Panlaqui, was executed two weeks before respondent Mayor Baltazar took his oath of office in 1995. Governor Lapid also argued that under the law, the Department of Agriculture (DA) is the government agency authorized to enter into licensing agreements for fishpond operations, and as per certification by the DA Regional Director, petitioner's fishpond operation was not covered by a fishpond lease agreement or application. Governor Lapid also referred to the certification by the Municipal Health Officer of Sasmuan issued before the actual demolition of the fishpond, describing it as a nuisanceper seand recommending its abatement.8On 13 May 1996, the Ombudsman issued the assailed Resolution, dismissing petitioner's complaint. The dismissal was based on the declaration that the fishpond was a nuisanceper seand, thus, may be abated by respondents in the exercise of the police power of the State.9Petitioner sought reconsideration of the Resolution, arguing that under Sec. 149 ofRepublic Act (R.A.) No. 7160, otherwise known as theLocal Government Codeof 1991, the exclusive authority to grant fishery privileges is vested in the municipalities. Petitioner also questioned the certification by the Municipal Health Officer, alleging that the same was issued before the ocular inspection of the property which took place only on the day of the demolition. Petitioner also contended that a judicial proceeding was necessary to determine whether the property indeed had caused the flooding.10Respondents filed separate oppositions to petitioner's motion for reconsideration.11Petitioner filed a reply to the opposition12and respondent Governor Lapid filed a rejoinder to the reply.13In the Order dated 21 March 1997, the Ombudsman affirmed its 13 May 1996 Resolution. It ruled that the repealing clause ofR.A. No. 7160expressly repealed only Sec. 2, 6 and 29 of Presidential Decree (P.D.) No. 704 so that in harmonizing the remaining provisions ofP.D. No. 704and the provisions ofR.A. No. 7160applicable to the grant of fishery privileges, the Bureau of Fisheries and Aquatic Resources (BFAR) is the government agency authorized to grant fishpond license or permit in areas not identified as municipal waters or not declared as alienable or disposable by the Department of Environment and Natural Resources (DENR). Since it appears from DENR records that the subject property has not been declared disposable or included in areas devoted for fishpond development, the Ombudsman concluded that the lease agreement entered into by petitioner was voidab initio. In view of the illegality of the lease agreement, the Ombudsman ruled that its demolition was justified. The Ombudsman described the demolition as a valid exercise of police power and in accordance with the provision of Sec. 28 ofP.D. No. 704directing the removal of any fishpen or fishpond that obstructed the free navigation of a stream or lake. It also upheld the authority of the district health officer to determine the abatement of a nuisance without need of judicial proceedings.14Petitioner elevated the matter to this Court via a petition for review oncertiorariunder Rule 45 of the Rules of Court to assail the 13 May 1996 Resolution and 21 March 1997 Order of the Ombudsman. Petitioner subsequently filed an amended petition for review oncertiorarito implead the Ombudsman as respondent, although in a petition for review oncertiorari, the tribunal whose issuance is assailed need not be impleaded as respondent.The petition imputes the following errors on the Ombudsman:I.THE OFFICE OF THE OMBUDSMAN ERRED AND EXCEEDED ITS AUTHORITY IN RULING THAT THE LEASE CONTRACT BETWEEN THE MUNICIPALITY OF SASMUAN AND PETITIONER IS NULL AND VOID.II.THE OFFICE OF THE OMBUDSMAN ERRED IN RULING THAT THE DEMOLITION OF THE FISHPOND WAS VALIDLY MADE BY VIRTUE OF THE DECLARATION BY THE HEALTH OFFICER THAT IT WAS A NUISANCE PER SE.III.THE OFFICE OF THE OMBUDSMAN ERRED IN RULING THAT THE DEMOLITION IS PART OF THE PROPER EXERCISE OF THE POLICE POWER OF THE STATE.IV.THE OFFICE OF THE OMBUDSMAN ERRED IN RULING THAT PETITIONER WAS GIVEN DUE NOTICE AND HEARING BEFORE THE FISHPOND WAS BLASTED.V.THE OFFICE OF THE OMBUDSMAN ERRED IN RULING THAT PROBABLE CAUSE DOES NOT EXIST TO INDICT RESPONDENTS FOR VIOLATION OF THE SUBJECT OFFENSES.15Clearly, this is an appeal from the questioned issuances of the Ombudsman. However, such direct resort to this Court from a resolution or order of the Ombudsman is not sanctioned by any rule of procedure.Neither can petitioner avail of Sec. 2716ofR.A. No. 6770, otherwise known as TheOmbudsman Actof 1989. The provision allowed direct appeals in administrative disciplinary cases from the Office of the Ombudsman to the Supreme Court. The right to appeal is granted only in respect to orders or decisions of the Ombudsman in administrative cases.17The provision does not cover resolutions of the Ombudsman in criminal cases. More importantly, Sec. 27 ofR.A. No. 6770insofar as it allowed a direct appeal to this Court was declared unconstitutional inFabian v. Hon. Desierto.18However, an aggrieved party in criminal actions is not without any recourse. Where grave abuse of discretion amounting to lack or excess of jurisdiction taints the findings of the Ombudsman on the existence of probable cause, the aggrieved party may file a petition forcertiorariunder Rule 65.19The remedy from resolutions of the Ombudsman in preliminary investigations of criminal cases is a petition forcertiorariunder Rule 65, not a petition for review oncertiorariunder Rule 45.20But in this case, petitioner has taken the position that the Ombudsman has decided questions of substance contrary to law and the applicable decisions of the Supreme Court. That is a ground under a Rule 45 petition. Indeed, from a reading of the assignment of errors, it is clear that petitioner does not impute grave abuse of discretion to the Ombudsman in issuing the assailed Resolution and Order. Rather, she merely questions his findings and conclusions. As stated earlier, direct appeal to the Supreme Courtviaa petition for review oncertiorariis not sanctioned by any rule of procedure. By availing of a wrong remedy, the petition should be dismissed outright.Even if the Court treats the instant appeal as a petition forcertiorariunder Rule 65, its dismissal is nevertheless warranted because petitioner failed to present, much more substantiate, any grave abuse of discretion on the part of the Ombudsman.A careful reading of the questioned Resolution reveals that the Ombudsman dismissed petitioner's criminal complaint because respondents had validly resorted to the police power of the State when they effected the demolition of the illegal fishpond in question following the declaration thereof as a nuisanceper se. Thus, the Ombudsman was of the opinion that no violation of Section 3(e)21of theAnti-Graft and Corrupt Practices Actor of Article 32422of the Revised Penal Code was committed by respondents. In the words of the Ombudsman, "those who participated in the blasting of the subject fishpond were only impelled by their desire to serve the best interest of the general public; for the good and the highest good."23By grave abuse of discretion is meant capricious and whimsical exercise of judgment as is equivalent to lack of jurisdiction. Mere abuse of discretion is not enough. It must be grave abuse of discretion as when the power is exercised in an arbitrary or despotic manner by reason of passion or personal hostility, and must be so patent and so gross as to amount to an evasion of a positive duty or to a virtual refusal to perform the duty enjoined or to act at all in contemplation of law.24Grave abuse of discretion should be differentiated from an error in judgment. An error of judgment is one which the court may commit in the exercise of its jurisdiction, and which error is reversible only by an appeal. As long as the court acts within its jurisdiction, any alleged errors committed in the exercise of its discretion will amount to nothing more than mere errors of judgment, correctible by an appeal or a petition for review under Rule 45 of the Rules of Court. An error of jurisdiction is one where the act complained of was issued by the court without or in excess of jurisdiction and which error is correctible only by the extraordinary writ ofcertiorari.25The other errors raised by petitioner pertain to the Ombudsman's opinion on the lack of probable cause to indict respondents. These are purported errors in judgment which can be corrected by an appeal, although not via a direct appeal to this Court. Direct resort to this Court may be had only through the extraordinary writ ofcertiorariand upon showing that the Ombudsman committed grave abuse of discretion, which petitioner failed to demonstrate.Absent any grave abuse of discretion tainting it, the courts will not interfere with the Ombudsman's supervision and control over the preliminary investigation conducted by him.26It is beyond the ambit of this Court to review the exercise of discretion of the Ombudsman in prosecuting or dismissing a complaint filed before it.27The rule is based not only upon respect for the investigatory and prosecutory powers granted by the Constitution to the Office of the Ombudsman but upon practicality as well. Otherwise, the functions of the courts will be grievously hampered by innumerable petitions assailing the dismissal of investigatory proceedings conducted by the Office of the Ombudsman with regard to complaints filed before it, in much the same way that the courts would be extremely swamped if they would be compelled to review the exercise of discretion on the part of the fiscals or prosecuting attorneys each time they decide to file an information in court or dismiss a complaint by a private complainant.28WHEREFORE, the instant petition for review oncertiorariis DENIED. No costs.SO ORDERED.|||(Cabrera v. Lapid, G.R. No. 129098, [December 6, 2006], 539 PHIL 114-125) [G.R. No.166494. June 29, 2007.]CARLOS SUPERDRUG CORP., doing business under the name and style "Carlos Superdrug", ELSIE M. CANO, doing business under the name and style "Advance Drug", Dr. SIMPLICIO L. YAP, JR., doing business under the name and style "City Pharmacy", MELVIN S. DELA SERNA, doing business under the name and style "Botica dela Serna", and LEYTE SERV-WELL CORP., doing business under the name and style "Leyte Serv-Well Drugstore",petitioners,vs. DEPARTMENT OF SOCIAL WELFARE and DEVELOPMENT (DSWD), DEPARTMENT OF HEALTH (DOH), DEPARTMENT OF FINANCE (DOF), DEPARTMENT OF JUSTICE (DOJ), and DEPARTMENT OF INTERIOR and LOCAL GOVERNMENT (DILG),respondents.D E C I S I O NAZCUNA,Jp:This is a petition1for Prohibition with Prayer for Preliminary Injunction assailing the constitutionality of Section 4 (a) of Republic Act (R.A.) No. 9257,2otherwise known as the "Expanded Senior Citizens Act of 2003".Petitioners are domestic corporations and proprietors operating drugstores in the Philippines.Public respondents, on the other hand, include the Department of Social Welfare and Development (DSWD), the Department of Health (DOH), the Department of Finance (DOF), the Department of Justice (DOJ), and the Department of Interior and Local Government (DILG) which have been specifically tasked to monitor the drugstores' compliance with the law; promulgate the implementing rules and regulations for the effective implementation of the law; and prosecute and revoke the licenses of erring drugstore establishments.The antecedents are as follows:On February 26, 2004, R.A. No. 9257, amendingR.A. No. 7432,3was signed into law by President Gloria Macapagal-Arroyo and it became effective on March 21, 2004. Section 4 (a) of the Act states:SEC. 4.Privileges for the Senior Citizens. The senior citizens shall be entitled to the following:(a)the grant of twenty percent (20%) discount from all establishments relative to the utilization of services in hotels and similar lodging establishments, restaurants and recreation centers, and purchase of medicines in all establishments for the exclusive use or enjoyment of senior citizens, including funeral and burial services for the death of senior citizens;xxx xxx xxxThe establishment may claim the discounts granted under(a), (f), (g) and (h) astax deductionbased on the net cost of the goods sold or services rendered:Provided, That the cost of the discount shall be allowed as deduction from gross income for the same taxable year that the discount is granted.Provided, further, That the total amount of the claimed tax deduction net of value added tax if applicable, shall be included in their gross sales receipts for tax purposes and shall be subject to proper documentation and to the provisions of the National Internal Revenue Code, as amended.4On May 28, 2004, the DSWD approved and adopted the Implementing Rules and Regulations of R.A. No. 9257, Rule VI, Article 8 of which states:Article 8.Tax Deduction of Establishments. The establishment may claim the discounts granted underRule V, Section 4 Discounts for Establishments;5Section 9, Medical and Dental Services in Private Facilities[,]6and Sections 107and 118 Air, Sea and Land Transportation as tax deduction based on the net cost of the goods sold or services rendered.Provided,That the cost of the discount shall be allowed as deduction from gross income for the same taxable year that the discount is granted;Provided, further, That the total amount of the claimed tax deduction net of value added tax if applicable, shall be included in their gross sales receipts for tax purposes and shall be subject to proper documentation and to the provisions of the National Internal Revenue Code, as amended; Provided, finally, that the implementation of the tax deduction shall be subject to the Revenue Regulations to be issued by the Bureau of Internal Revenue (BIR) and approved by the Department of Finance (DOF).9DSITEHOn July 10, 2004, in reference to the query of the Drug Stores Association of the Philippines (DSAP) concerning the meaning of atax deductionunder the Expanded Senior Citizens Act, the DOF, through Director IV Ma. Lourdes B. Recente, clarified as follows:1)The difference between the Tax Credit (under the Old Senior Citizens Act) and Tax Deduction (under the Expanded Senior Citizens Act).1.1.The provision of Section 4 ofR.A. No. 7432(the old Senior Citizens Act) grants twenty percent (20%) discount from all establishments relative to the utilization of transportation services, hotels and similar lodging establishment, restaurants and recreation centers and purchase of medicines anywhere in the country, the costs of which may be claimed by the private establishments concerned astax credit.Effectively, atax creditis a peso-for-peso deduction from a taxpayer's tax liability due to the government of the amount of discounts such establishment has granted to a senior citizen. The establishment recovers the full amount of discount given to a senior citizen and hence, the government shoulders 100% of the discounts granted.It must be noted, however, that conceptually, atax creditscheme under the Philippine tax system, necessitates that prior payments of taxes have been made and the taxpayer is attempting to recover this tax payment from his/her income tax due. The tax credit scheme underR.A. No. 7432is, therefore, inapplicable since no tax payments have previously occurred.1.2.The provision under R.A. No. 9257, on the other hand, provides that the establishment concerned may claim the discounts under Section 4 (a), (f), (g) and (h) astax deductionfrom gross income, based on the net cost of goods sold or services rendered.Under this scheme, the establishment concerned is allowed to deduct from gross income, in computing for its tax liability, the amount of discounts granted to senior citizens. Effectively, the government loses in terms of foregone revenues an amount equivalent to the marginal tax rate the said establishment is liable to pay the government. This will be an amount equivalent to 32% of the twenty percent (20%) discounts so granted. The establishment shoulders the remaining portion of the granted discounts.It may be necessary to note that while the burden on [the] government is slightly diminished in terms of its percentage share on the discounts granted to senior citizens, the number of potential establishments that may claim tax deductions, have however, been broadened. Aside from the establishments that may claimtax creditsunder the old law, more establishments were added under the new law such as: establishments providing medical and dental services, diagnostic and laboratory services, including professional fees of attending doctors in all private hospitals and medical facilities, operators of domestic air and sea transport services, public railways and skyways and bus transport services.A simple illustration might help amplify the points discussed above, as follows:Tax DeductionTax CreditGross Salesx x x x x xx x x x x xLess: Cost of goods soldx x x x xx x x x xNet Salesx x x x x xx x x x x xLess: Operating Expenses:Tax Deduction on Discountsx x x x--Other deductions:x x x xx x x xNet Taxable Incomex x x x xx x x x xTax Duex x xx x xLess:Tax Credit--x xNet Tax Due--x xAs shown above, under atax deductionscheme, thetax deduction on discountswas subtracted from Net Sales together with other deductions which are considered as operating expenses before the Tax Due was computed based on the Net Taxable Income. On the other hand, under atax creditscheme, the amount of discounts which is thetax credititem, was deducted directly from the tax due amount.10Meanwhile, on October 1, 2004, Administrative Order (A.O.) No. 171 or thePolicies and Guidelines to Implement the Relevant Provisions of Republic Act 9257, otherwise known as the "Expanded Senior Citizens Act of 2003"11was issued by the DOH, providing the grant of twenty percent (20%) discount in the purchase of unbranded generic medicines from all establishments dispensing medicines for the exclusive use of the senior citizens.On November 12, 2004, the DOH issuedAdministrative Order No. 17712amending A.O. No. 171. Under A.O. No. 177, the twenty percent discount shall not be limited to the purchase of unbranded generic medicines only, but shall extend to both prescription and non-prescription medicines whether branded or generic. Thus, it stated that "[t]he grant of twenty percent (20%) discount shall be provided in the purchase of medicines from all establishments dispensing medicines for the exclusive use of the senior citizens".Petitioners assail the constitutionality of Section 4 (a) of the Expanded Senior Citizens Act based on the following grounds:131)The law is confiscatory because it infringes Art. III, Sec. 9 of the Constitution which provides that private property shall not be taken for public use without just compensation;2)It violates the equal protection clause (Art. III, Sec. 1) enshrined in our Constitution which states that "no person shall be deprived of life, liberty or property without due process of law, nor shall any person be denied of the equal protection of the laws;" and3)The 20% discount on medicines violates the constitutional guarantee in Article XIII, Section 11 that makes "essential goods, health and other social services available to all people at affordable cost."14Petitioners assert that Section 4 (a) of the law is unconstitutional because it constitutes deprivation of private property. Compelling drugstore owners and establishments to grant the discount will result in a loss of profit and capital because 1) drugstores impose a mark-up of only 5% to 10% on branded medicines; and 2) the law failed to provide a scheme whereby drugstores will be justly compensated for the discount.Examining petitioners' arguments, it is apparent that what petitioners are ultimately questioning is the validity of the tax deduction scheme as a reimbursement mechanism for the twenty percent (20%) discount that they extend to senior citizens.Based on the afore-stated DOF Opinion, the tax deduction scheme does not fully reimburse petitioners for the discount privilege accorded to senior citizens. This is because the discount is treated as a deduction, a tax-deductible expense that is subtracted from the gross income and results in a lower taxable income. Stated otherwise, it is an amount that is allowed by law15to reduce the income prior to the application of the tax rate to compute the amount of tax which is due.16Being a tax deduction, the discount does not reduce taxes owed on a peso for peso basis but merely offers a fractional reduction in taxes owed.Theoretically, the treatment of the discount as a deduction reduces the net income of the private establishments concerned. The discounts given would have entered the coffers and formed part of the gross sales of the private establishments, were it not for R.A. No. 9257.The permanent reduction in their total revenues is a forced subsidy corresponding to the taking of private property for public use or benefit.17This constitutes compensable taking for which petitioners would ordinarily become entitled to a just compensation.Just compensation is defined as the full and fair equivalent of the property taken from its owner by the expropriator. The measure is not the taker's gain but the owner's loss. The wordjust is used to intensify the meaning of the wordcompensation, and to convey the idea that the equivalent to be rendered for the property to be taken shall be real, substantial, full and ample.18A tax deduction does not offer full reimbursement of the senior citizen discount. As such, it would not meet the definition of just compensation.19Having said that, this raises the question of whether the State, in promoting the health and welfare of a special group of citizens, can impose upon private establishments the burden of partly subsidizing a government program.The Court believes so.The Senior Citizens Act was enacted primarily to maximize the contribution of senior citizens to nation-building, and to grant benefits and privileges to them for their improvement and well-being as the State considers them an integral part of our society.20The priority given to senior citizens finds its basis in the Constitution as set forth in the law itself. Thus, the Act provides:SEC. 2.Republic Act No. 7432is hereby amended to read as follows:SECTION 1.Declaration of Policies and Objectives. Pursuant to Article XV, Section 4 of the Constitution, it is the duty of the family to take care of its elderly members while the State may design programs of social security for them. In addition to this, Section 10 in the Declaration of Principles and State Policies provides: "The State shall provide social justice in all phases of national development." Further, Article XIII, Section 11, provides: "The State shall adopt an integrated and comprehensive approach to health development which shall endeavor to make essential goods, health and other social services available to all the people at affordable cost. There shall be priority for the needs of the underprivileged sick, elderly, disabled, women and children." Consonant with these constitutional principles the following are the declared policies of this Act:xxx xxx xxx(f)To recognize the important role of the private sector in the improvement of the welfare of senior citizens and to actively seek their partnership.21DAEIHTTo implement the above policy, the law grants a twenty percent discount to senior citizens for medical and dental services, and diagnostic and laboratory fees; admission fees charged by theaters, concert halls, circuses, carnivals, and other similar places of culture, leisure and amusement; fares for domestic land, air and sea travel; utilization of services in hotels and similar lodging establishments, restaurants and recreation centers; and purchases of medicines for the exclusive use or enjoyment of senior citizens. As a form of reimbursement, the law provides that business establishments extending the twenty percent discount to senior citizens may claim the discount as a tax deduction.The law is a legitimate exercise of police power which, similar to the power of eminent domain, has general welfare for its object. Police power is not capable of an exact definition, but has been purposely veiled in general terms to underscore its comprehensiveness to meet all exigencies and provide enough room for an efficient and flexible response to conditions and circumstances, thus assuring the greatest benefits.22Accordingly, it has been described as "the most essential, insistent and the least limitable of powers, extending as it does to all the great public needs."23It is "[t]he power vested in the legislature by the constitution to make, ordain, and establish all manner of wholesome and reasonable laws, statutes, and ordinances, either with penalties or without, not repugnant to the constitution, as they shall judge to be for the good and welfare of the commonwealth, and of the subjects of the same."24For this reason, when the conditions so demand as determined by the legislature, property rights must bow to the primacy of police power because property rights, though sheltered by due process, must yield to general welfare.25Police power as an attribute to promote the common good would be diluted considerably if on the mere plea of petitioners that they will suffer loss of earnings and capital, the questioned provision is invalidated. Moreover, in the absence of evidence demonstrating the alleged confiscatory effect of the provision in question, there is no basis for its nullification in view of the presumption of validity which every law has in its favor.26Given these, it is incorrect for petitioners to insist that the grant of the senior citizen discount is unduly oppressive to their business, because petitioners have not taken time to calculate correctly and come up with a financial report, so that they have not been able to show properly whether or not the tax deduction scheme really works greatly to their disadvantage.27In treating the discount as a tax deduction, petitioners insist that they will incur losses because, referring to the DOF Opinion, for every P1.00 senior citizen discount that petitioners would give, P0.68 will be shouldered by them as only P0.32 will be refunded by the government by way of a tax deduction.To illustrate this point, petitioner Carlos Super Drug cited the anti-hypertensive maintenance drugNorvascas an example. According to the latter, it acquiresNorvascfrom the distributors at P37.57 per tablet, and retails it at P39.60 (or at a margin of 5%). If it grants a 20% discount to senior citizens or an amount equivalent to P7.92, then it would have to sellNorvascat P31.68 which translates to a loss from capital of P5.89 per tablet. Even if the government will allow a tax deduction, only P2.53 per tablet will be refunded and not the full amount of the discount which is P7.92. In short, only 32% of the 20% discount will be reimbursed to the drugstores.28Petitioners' computation is flawed. For purposes of reimbursement, the law states that the cost of the discount shall be deducted from gross income,29the amount of income derived from all sources before deducting allowable expenses, which will result in net income. Here, petitioners tried to show a loss on a per transaction basis, which should not be the case. An income statement, showing an accounting of petitioners' sales, expenses, and net profit (or loss) for a given period could have accurately reflected the effect of the discount on their income. Absent any financial statement, petitioners cannot substantiate their claim that they will be operating at a loss should they give the discount. In addition, the computation was erroneously based on the assumption that their customers consisted wholly of senior citizens. Lastly, the 32% tax rate is to be imposed on income, not on the amount of the discount.Furthermore, it is unfair for petitioners to criticize the law because they cannot raise the prices of their medicines given the cutthroat nature of the players in the industry. It is a business decision on the part of petitioners to peg the mark-up at 5%. Selling the medicines below acquisition cost, as alleged by petitioners, is merely a result of this decision. Inasmuch as pricing is a property right, petitioners cannot reproach the law for being oppressive, simply because they cannot afford to raise their prices for fear of losing their customers to competition.The Court is not oblivious of the retail side of the pharmaceutical industry and the competitive pricing component of the business. While the Constitution protects property rights, petitioners must accept the realities of business and the State, in the exercise of police power, can intervene in the operations of a business which may result in an impairment of property rights in the process.Moreover, the right to property has a social dimension. While Article XIII of the Constitution provides the precept for the protection of property, various laws and jurisprudence, particularly on agrarian reform and the regulation of contracts and public utilities, continuously serve as a reminder that the right to property can be relinquished upon the command of the State for the promotion of public good.30Undeniably, the success of the senior citizens program rests largely on the support imparted by petitioners and the other private establishments concerned. This being the case, the means employed in invoking the active participation of the private sector, in order to achieve the purpose or objective of the law, is reasonably and directly related. Without sufficient proof that Section 4 (a) of R.A. No. 9257 is arbitrary, and that the continued implementation of the same would be unconscionably detrimental to petitioners, the Court will refrain from quashing a legislative act.31WHEREFORE, the petition is DISMISSED for lack of merit.|||(Carlos Superdrug Corp. v. DSWD, G.R. No. 166494, [June 29, 2007], 553 PHIL 120-135) [G.R. No.118127. April 12, 2005.]CITY OF MANILA, HON. ALFREDO S. LIM as the Mayor of the City of Manila HON. JOSELITO L. ATIENZA, in his capacity as Vice-Mayor of the City of Manila and Presiding Officer of the City Council of Manila, HON. ERNESTO A. NIEVA, HON. GONZALO P. GONZALES, HON. AVELINO S. CAILIAN, HON. ROBERTO C. OCAMPO, HON. ALBERTO DOMINGO, HON. HONORIO U. LOPEZ, HON. FRANCISCO G. VARONA, JR., HON. ROMUALDO S. MARANAN, HON. NESTOR C. PONCE, JR., HON. HUMBERTO B. BASCO, HON. FLAVIANO F. CONCEPCION, JR., HON. ROMEO G. RIVERA, HON. MANUEL M. ZARCAL, HON. PEDRO S. DE JESUS, HON. BERNARDITO C. ANG, HON. MANUEL L. QUIN, HON. JHOSEP Y. LOPEZ, HON. CHIKA G. GO, HON. VICTORIANO A. MELENDEZ, HON. ERNESTO V.P. MACEDA, JR., HON. ROLANDO P. NIETO, HON. DANILO V. ROLEDA, HON. GERINO A. TOLENTINO, JR., HON. MA. PAZ E. HERRERA, HON. JOEY D. HIZON, HON. FELIXBERTO D. ESPIRITU, HON. KARLO Q. BUTIONG, HON. ROGELIO P. DELA PAZ, HON. BERNARDO D. RAGAZA, HON. MA. CORAZON R. CABALLES, HON. CASIMIRO C. SISON, HON. BIENVENIDO M. ABANTE, JR., HON. MA. LOURDES M. ISIP, HON. ALEXANDER S. RICAFORT, HON. ERNESTO F. RIVERA, HON. LEONARDO L. ANGAT, and HON. JOCELYN B. DAWIS, in their capacity as councilors of the City of Manila,petitioners,vs. HON. PERFECTO A.S. LAGUIO, JR., as Presiding Judge, RTC, Manila and MALATE TOURIST DEVELOPMENT CORPORATION,respondents.D E C I S I O NTINGA,Jp:I know only that what is moral is what you feel good after and what is immoral is what you feel bad after.Ernest Hemingway Death in the Afternoon, Ch. 1It is a moral and political axiom that any dishonorable act, if performed by oneself, is less immoral than if performed by someone else, who would be well-intentioned in his dishonesty.J. Christopher Gerald Bonaparte in Egypt, Ch. IThe Court's commitment to the protection of morals is secondary to its fealty to the fundamental law of the land. It is foremost a guardian of the Constitution but not the conscience of individuals. And if it need be, the Court will not hesitate to "make the hammer fall, and heavily" in the words of Justice Laurel, and uphold the constitutional guarantees when faced with laws that, though not lacking in zeal to promote morality, nevertheless fail to pass the test of constitutionality.The pivotal issue in thisPetition1under Rule 45 (then Rule 42) of the Revised Rules on Civil Procedure seeking the reversal of theDecision2in Civil Case No. 93-66511 of the Regional Trial Court (RTC) of Manila, Branch 18 (lower court),3is the validity of Ordinance No. 7783 (theOrdinance) of the City of Manila.4The antecedents are as follows:Private respondent Malate Tourist Development Corporation (MTDC) is a corporation engaged in the business of operating hotels, motels, hostels and lodging houses.5It built and opened Victoria Court in Malate which was licensed as a motel although duly accredited with the Department of Tourism as a hotel.6On 28 June 1993, MTDC filed aPetition for Declaratory Relief with Prayer for a Writ of Preliminary Injunction and/or Temporary Restraining Order7(RTC Petition)with the lower court impleading as defendants, herein petitioners City of Manila, Hon. Alfredo S. Lim (Lim), Hon. Joselito L. Atienza, and the members of the City Council of Manila (City Council). MTDC prayed that theOrdinance, insofar as it includes motels and inns as among its prohibited establishments, be declared invalid and unconstitutional.8Enacted by the City Council9on 9 March 1993 and approved by petitioner City Mayor on 30 March 1993, the saidOrdinanceis entitled AN ORDINANCE PROHIBITING THE ESTABLISHMENT OR OPERATION OF BUSINESSES PROVIDING CERTAIN FORMS OF AMUSEMENT, ENTERTAINMENT, SERVICES AND FACILITIES IN THE ERMITA-MALATE AREA, PRESCRIBING PENALTIES FOR VIOLATION THEREOF, AND FOR OTHER PURPOSES.10TheOrdinanceis reproduced in full, hereunder:SECTION 1.Any provision of existing laws and ordinances to the contrary notwithstanding,no person, partnership, corporation or entity shall, in the Ermita-Malate areabounded by Teodoro M. Kalaw Sr. Street in the North, Taft Avenue in the East, Vito Cruz Street in the South and Roxas Boulevard in the West, pursuant toP.D. 499be allowed or authorized to contract and engage in, any business providing certain forms of amusement, entertainment, services and facilities where women are used as tools in entertainment and which tend to disturb the community, annoy the inhabitants, and adversely affect the social and moral welfare of the community, such as but not limited to:1.Sauna Parlors2.Massage Parlors3.Karaoke Bars4.Beerhouses5.Night Clubs6.Day Clubs7.Super Clubs8.Discotheques9.Cabarets10.Dance Halls11.Motels12.InnsSEC. 2.The City Mayor, the City Treasureror any person acting in behalf of the said officialsare prohibited from issuing permits, temporary or otherwise, or from granting licenses and accepting payments for the operation of business enumerated in the preceding section.SEC. 3.Owners and/or operator of establishmentsengaged in, or devoted to, the businesses enumerated in Section 1 hereof are herebygiven three (3) months from the date of approval of this ordinance within which to wind up business operations or to transfer to any place outside of the Ermita-Malate area or convert said businesses to other kinds of business allowable within the area, such as but not limited to:1.Curio or antique shop2.Souvenir Shops3.Handicrafts display centers4.Art galleries5.Records and music shops6.Restaurants7.Coffee shops8.Flower shops9.Music lounge and sing-along restaurants, with well-defined activities for wholesome family entertainment that cater to both local and foreign clientele.10.Theaters engaged in the exhibition, not only of motion pictures but also of cultural shows, stage and theatrical plays, art exhibitions, concerts and the like.11.Businesses allowable within the law and medium intensity districts as provided for in the zoning ordinances for Metropolitan Manila, except new warehouse or open-storage depot, dock or yard, motor repair shop, gasoline service station, light industry with any machinery, or funeral establishments.SEC. 4.Any person violating any provisions of this ordinance, shall upon conviction, be punished by imprisonment of one (1) year or fine of FIVE THOUSAND (P5,000.00) PESOS, or both, at the discretion of the Court, PROVIDED, that in case of juridical person, the President, the General Manager, or person-in-charge of operation shall be liable thereof; PROVIDED FURTHER, thatin case of subsequent violation and conviction, the premises of the erring establishment shall be closed and padlocked permanently.SEC. 5.This ordinance shall take effect upon approval.Enacted by the City Council of Manila at its regular session today, March 9, 1993.Approved by His Honor, the Mayor on March 30, 1993. (Emphasis supplied)In theRTC Petition, MTDC argued that theOrdinanceerroneously and improperly included in its enumeration of prohibited establishments, motels and inns such as MTDC's Victoria Court considering that these were not establishments for "amusement" or "entertainment" and they were not "services or facilities for entertainment," nor did they use women as "tools for entertainment," and neither did they "disturb the community," "annoy the inhabitants" or "adversely affect the social and moral welfare of the community."11MTDC further advanced that theOrdinancewas invalid and unconstitutional for the following reasons: (1) The City Council has no power to prohibit the operation of motels as Section 458 (a) 4 (iv)12of the Local Government Code of 1991 (the Code) grants to the City Council only the power to regulate the establishment, operation and maintenance of hotels, motels, inns, pension houses, lodging houses and other similar establishments; (2)TheOrdinanceis void as it is violative of Presidential Decree (P.D.) No. 49913which specifically declared portions of the Ermita-Malate area as a commercial zone with certain restrictions; (3) TheOrdinancedoes not constitute a proper exercise of police power as the compulsory closure of the motel business has no reasonable relation to the legitimate municipal interests sought to be protected; (4) The Ordinance constitutes anex post factolaw by punishing the operation of Victoria Court which was a legitimate business prior to its enactment; (5) TheOrdinanceviolates MTDC's constitutional rights in that: (a) it is confiscatory and constitutes an invasion of plaintiff's property rights; (b) the City Council has no power to find as a fact that a particular thing is a nuisanceper senor does it have the power to extrajudicially destroy it; and (6) TheOrdinanceconstitutes a denial of equal protection under the law as no reasonable basis exists for prohibiting the operation of motels and inns, but not pension houses, hotels, lodging houses or other similar establishments, and for prohibiting said business in the Ermita-Malate area but not outside of this area.14In theirAnswer15dated 23 July 1993, petitioners City of Manila and Lim maintained that the City Council had the power to "prohibit certain forms of entertainment in order to protect the social and moral welfare of the community" as provided for in Section 458 (a) 4 (vii) of the Local Government Code,16which reads, thus:Section 458.Powers, Duties, Functions and Compensation. (a) The sangguniang panlungsod, as the legislative body of the city, shall enact ordinances, approve resolutions and appropriate funds for the general welfare of the city and its inhabitants pursuant to Section 16 of this Code and in the proper exercise of the corporate powers of the city as provided for under Section 22 of this Code, and shall:xxx xxx xxx(4)Regulate activities relative to the use of land, buildings and structures within the city in order to promote the general welfare and for said purpose shall:xxx xxx xxx(vii)Regulate the establishment, operation, and maintenance of any entertainment or amusement facilities, including theatrical performances, circuses, billiard pools, public dancing schools, public dance halls, sauna baths, massage parlors, and other places for entertainment or amusement; regulate such other events or activities for amusement or entertainment, particularly those which tend to disturb the community or annoy the inhabitants, or require the suspension or suppression of the same; or, prohibit certain forms of amusement or entertainment in order to protect the social and moral welfare of the community.CitingKwong Sing v.City of Manila,17petitioners insisted that the power of regulation spoken of in the above-quoted provision included the power to control, to govern and to restrain places of exhibition and amusement.18Petitioners likewise asserted that theOrdinancewas enacted by the City Council of Manila to protect the social and moral welfare of the community in conjunction with its police power as found in Article III, Section 18(kk) ofRepublic Act No. 409,19otherwise known as the Revised Charter of the City of Manila (Revised Charter of Manila)20which reads, thus:ARTICLE III THE MUNICIPAL BOARDxxx xxx xxxSection 18.Legislative powers. The Municipal Board shall have the following legislative powers:xxx xxx xxx(kk)To enact all ordinances it may deem necessary and proper for the sanitation and safety, the furtherance of the prosperity, and the promotion of the morality, peace, good order, comfort, convenience, and general welfare of the city and its inhabitants, and such others as may be necessary to carry into effect and discharge the powers and duties conferred by this chapter; and to fix penalties for the violation of ordinances which shall not exceed two hundred pesos fine or six months' imprisonment, or both such fine and imprisonment, for a single offense.Further, the petitioners noted, theOrdinancehad the presumption of validity; hence, private respondent had the burden to prove its illegality or unconstitutionality.21Petitioners also maintained that there was no inconsistency betweenP.D. 499and theOrdinanceas the latter simply disauthorized certain forms of businesses and allowed the Ermita-Malate area to remain a commercial zone.22TheOrdinance, the petitioners likewise claimed, cannot be assailed asex post factoas it was prospective in operation.23 TheOrdinancealso did not infringe the equal protection clause and cannot be denounced as class legislation as there existed substantial and real differences between the Ermita-Malate area and other places in the City of Manila.24On 28 June 1993, respondent Judge Perfecto A.S. Laguio, Jr. (Judge Laguio) issued anex-partetemporary restraining order against the enforcement of theOrdinance.25And on 16 July 1993, again in an intrepid gesture, he granted the writ of preliminary injunction prayed for by MTDC.26After trial, on 25 November 1994, Judge Laguio rendered the assailedDecision, enjoining the petitioners from implementing theOrdinance. The dispositive portion of saidDecisionreads:27WHEREFORE, judgment is hereby rendered declaring Ordinance No. 778[3], Series of 1993, of the City of Manila null and void, and making permanent the writ of preliminary injunction that had been issued by this Court against the defendant. No costs.SO ORDERED.28Petitioners filed with the lower court aNotice of Appeal29on 12 December 1994, manifesting that they are elevating the case to this Court under then Rule 42 on pure questions of law.30On 11 January 1995, petitioners filed the presentPetition, alleging that the following errors were committed by the lower court in its ruling: (1) It erred in concluding that the subject ordinance isultra vires, or otherwise, unfair, unreasonable and oppressive exercise of police power; (2) It erred in holding that the questionedOrdinancecontravenesP.D. 49931which allows operators of all kinds of commercial establishments, except those specified therein; and (3) It erred in declaring theOrdinancevoid and unconstitutional.32In thePetitionand in itsMemorandum,33petitioners in essence repeat the assertions they made before the lower court. They contend that the assailedOrdinancewas enacted in the exercise of the inherent and plenary power of the State and the general welfare clause exercised by local government units provided for in Art. 3, Sec. 18 (kk) of the Revised Charter of Manila and conjunctively, Section 458 (a) 4 (vii) of the Code.34They allege that theOrdinanceis a valid exercise of police power; it does not contraveneP.D. 499; and that it enjoys the presumption of validity.35In itsMemorandum36dated 27 May 1996, private respondent maintains that theOrdinanceisultra viresand that it is void for being repugnant to the general law. It reiterates that the questionedOrdinanceis not a valid exercise of police power; that it is violative of due process, confiscatory and amounts to an arbitrary interference with its lawful business; that it is violative of the equal protection clause; and that it confers on petitioner City Mayor or any officer unregulated discretion in the execution of theOrdinanceabsent rules to guide and control his actions.This is an opportune time to express the Court's deep sentiment and tenderness for the Ermita-Malate area being its home for several decades. A long-time resident, the Court witnessed the area's many turn of events. It relished its glory days and endured its days of infamy. Much as the Court harks back to the resplendant era of the Old Manila and yearns to restore its lost grandeur, it believes that theOrdinanceis not the fitting means to that end. The Court is of the opinion, and so holds, that the lower court did not err in declaring theOrdinance, as it did,ultra viresand therefore null and void.TheOrdinanceis so replete with constitutional infirmities that almost every sentence thereof violates a constitutional provision. The prohibitions and sanctions therein transgress the cardinal rights of persons enshrined by the Constitution. The Court is called upon to shelter these rights from attempts at rendering them worthless.The tests of a valid ordinance are well established. A long line of decisions has held that for an ordinance to be valid, it must not only be within the corporate powers of the local government unit to enact and must be passed according to the procedure prescribed by law, it must also conform to the following substantive requirements: (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.37Anent the first criterion, ordinances shall only be valid when they are not contrary to the Constitution and to the laws.38TheOrdinancemust satisfy two requirements: it must pass muster under the test of constitutionality and the test of consistency with the prevailing laws. That ordinances should be constitutional uphold the principle of the supremacy of the Constitution. The requirement that the enactment must not violate existing law gives stress to the precept that local government units are able to legislate only by virtue of their derivative legislative power, a delegation of legislative power from the national legislature. The delegate cannot be superior to the principal or exercise powers higher than those of the latter.39This relationship between the national legislature and the local government units has not been enfeebled by the new provisions in the Constitution strengthening the policy of local autonomy. The national legislature is still the principal of the local government units, which cannot defy its will or modify or violate it.40TheOrdinancewas passed by the City Council in the exercise of its police power, an enactment of the City Council acting as agent of Congress. Local government units, as agencies of the State, are endowed with police power in order to effectively accomplish and carry out the declared objects of their creation.41This delegated police power is found in Section 16 of the Code, known as the general welfare clause,viz:SECTION 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 units exercise police power through their respective legislative bodies; in this case, thesangguniang panlungsodor the city council. The Code empowers the legislative bodies to "enact ordinances, approve resolutions and appropriate funds for the general welfare of the province/city/municipality and its inhabitants pursuant to Section 16 of the Code and in the proper exercise of the corporate powers of the province/city/municipality provided under the Code."42The inquiry in thisPetitionis concerned with the validity of the exercise of such delegated power.The Ordinance contravenes the ConstitutionThe police power of the City Council, however broad and far-reaching, is subordinate to the constitutional limitations thereon; and is subject to the limitation that its exercise must be reasonable and for the public good.43In the case at bar, the enactment of theOrdinancewas an invalid exercise of delegated power as it is unconstitutional and repugnant to general laws.The relevant constitutional provisions are the following:SEC. 5.The maintenance of peace and order, the protection of life, liberty, and property, and the promotion of the general welfare are essential for the enjoyment by all the people of the blessings of democracy.44SEC. 14.The State recognizes the role of women in nation-building, and shall ensure the fundamental equality before the law of women and men.45SEC. 1.No person shall be deprived of life, liberty or property without due process of law, nor shall any person be denied the equal protection of laws.46SEC. 9.Private property shall not be taken for public use without just compensation.47A.TheOrdinanceinfringes the Due Process ClauseThe constitutional safeguard of due process is embodied in the fiat "(N)o person shall be deprived of life, liberty or property without due process of law. . . ."48There is no controlling and precise definition of due process. It furnishes though a standard to which governmental action should conform in order that deprivation of life, liberty or property, in each appropriate case, be valid. This standard is aptly described as a responsiveness to the supremacy of reason, obedience to the dictates of justice,49and as such it is a limitation upon the exercise of the police power.50The purpose of the guaranty is to prevent governmental encroachment against the life, liberty and property of individuals; to secure the individual from the arbitrary exercise of the powers of the government, unrestrained by the established principles of private rights and distributive justice; to protect property from confiscation by legislative enactments, from seizure, forfeiture, and destruction without a trial and conviction by the ordinary mode of judicial procedure; and to secure to all persons equal and impartial justice and the benefit of the general law.51The guaranty serves as a protection against arbitrary regulation, and private corporations and partnerships are "persons" within the scope of the guaranty insofar as their property is concerned.52This clause has been interpreted as imposing two separate limits on government, usually called "procedural due process" and "substantive due process."Procedural due process, as the phrase implies, refers to the procedures that the government must follow before it deprives a person of life, liberty, or property. Classic procedural due process issues are concerned with what kind of notice and what form of hearing the government must provide when it takes a particular action.53Substantive due process, as that phrase connotes, asks whether the government has an adequate reason for taking away a person's life, liberty, or property. In other words, substantive due process looks to whether there is a sufficient justification for the government's action.54Case law in the United States (U.S.) tells us that whether there is such a justification depends very much on the level of scrutiny used.55For example, if a law is in an area where only rational basis review is applied, substantive due process is met so long as the law is rationally related to a legitimate government purpose. But if it is an area where strict scrutiny is used, such as for protecting fundamental rights, then the government will meet substantive due process only if it can prove that the law is necessary to achieve a compelling government purpose.56The police power granted to local government units must always be exercised with utmost observance of the rights of the people to due process and equal protection of the law. Such power cannot be exercised whimsically, arbitrarily or despotically57as its exercise is subject to a qualification, limitation or restriction demanded by the respect and regard due to the prescription of the fundamental law, particularly those forming part of the Bill of Rights. Individual rights, it bears emphasis, may be adversely affected only to the extent that may fairly be required by the legitimate demands of public interest or public welfare.58Due process requires the intrinsic validity of the law in interfering with the rights of the person to his life, liberty and property.59Requisites for the valid exercise of Police Power are not metTo successfully invoke the exercise of police power as the rationale for the enactment of theOrdinance, and to free it from the imputation of constitutional infirmity, not only must it appear that the interests of the public generally, as distinguished from those of a particular class, require an interference with private rights, but the means adopted must be reasonably necessary for the accomplishment of the purpose and not unduly oppressive upon individuals.60It must be evident that no other alternative for the accomplishment of the purpose less intrusive of private rights can work. A reasonable relation must exist between the purposes of the police measure and the means employed for its accomplishment, for even under the guise of protecting the public interest, personal rights and those pertaining to private property will not be permitted to be arbitrarily invaded.61Lacking a concurrence of these two requisites, the police measure shall be struck down as an arbitrary intrusion into private rights62 a violation of the due process clause.TheOrdinancewas enacted to address and arrest the social ills purportedly spawned by the establishments in the Ermita-Malate area which are allegedly operated under the deceptive veneer of legitimate, licensed and tax-paying nightclubs, bars, karaoke bars, girlie houses, cocktail lounges, hotels and motels. Petitioners insist that even the Court in the case ofErmita-Malate Hotel and Motel Operators Association, Inc.v.City Mayor of Manila63had already taken judicial notice of the "alarming increase in the rate of prostitution, adultery and fornication in Manila traceable in great part to existence of motels, which provide a necessary atmosphere for clandestine entry, presence and exit and thus become the ideal haven for prostitutes and thrill-seekers."64The object of theOrdinancewas, accordingly, the promotion and protection of the social and moral values of the community. Granting for the sake of argument that the objectives of theOrdinanceare within the scope of the City Council's police powers, the means employed for the accomplishment thereof were unreasonable and unduly oppressive.It is undoubtedly one of the fundamental duties of the City of Manila to make all reasonable regulations looking to the promotion of the moral and social values of the community. However, the worthy aim of fostering public morals and the eradication of the community's social ills can be achieved through means less restrictive of private rights; it can be attained by reasonable restrictions rather than by an absolute prohibition. The closing down and transfer of businesses or their conversion into businesses "allowed" under theOrdinancehave no reasonable relation to the accomplishment of its purposes. Otherwise stated, the prohibition of the enumerated establishments will notper seprotect and promote the social and moral welfare of the community; it will not in itself eradicate the alluded social ills of prostitution, adultery, fornication nor will it arrest the spread of sexual disease in Manila.Conceding for the nonce that the Ermita-Malate area teems with houses of ill-repute and establishments of the like which the City Council may lawfully prohibit,65it is baseless and insupportable to bring within that classification sauna parlors, massage parlors, karaoke bars, night clubs, day clubs, super clubs, discotheques, cabarets, dance halls, motels and inns. This is not warranted under the accepted definitions of these terms. The enumerated establishments are lawful pursuits which are notper seoffensive to the moral welfare of the community.That these are used as arenas to consummate illicit sexual affairs and as venues to further the illegal prostitution is of no moment. We lay stress on the acrid truth that sexual immorality, being a human frailty, may take place in the most innocent of places that it may even take place in the substitute establishments enumerated under Section 3 of theOrdinance. If the flawed logic of theOrdinancewere to be followed, in the remote instance that an immoral sexual act transpires in a church cloister or a court chamber, we would behold the spectacle of the City of Manila ordering the closure of the church or court concerned. Every house, building, park, curb, street or even vehicles for that matter will not be exempt from the prohibition. Simply because there are no "pure" places where there are impure men. Indeed, even the Scripture and the Tradition of Christians churches continually recall the presence anduniversality of sin in man's history. (Catechism of the Catholic Church, Definitive Edition, p. 101; ECCE and Word & Life Publications, Don Bosco Compound, Makati)The problem, it needs to be pointed out, is not the establishment, which by its nature cannot be said to be injurious to the health or comfort of the community and which in itself is amoral, but the deplorable human activity that may occur within its premises. While a motel may be used as a venue for immoral sexual activity, it cannot for that reason alone be punished. It cannot be classified as a house of ill-repute or as a nuisanceper seon a mere likelihood or a naked assumption. If that were so and if that were allowed, then the Ermita-Malate area would not only be purged of its supposed social ills, it would be extinguished of its soul as well as every human activity, reprehensible or not, in its every nook and cranny would be laid bare to the estimation of the authorities.TheOrdinanceseeks to legislate morality but fails to address the core issues of morality. Try as theOrdinancemay to shape morality, it should not foster the illusion that it can make a moral man out of it because immorality is not a thing, a building or establishment; it is in the hearts of men. The City Council instead should regulate human conduct that occurs inside the establishments, but not to the detriment of liberty and privacy which are covenants, premiums and blessings of democracy.While petitioners' earnestness at curbing clearly objectionable social ills is commendable, they unwittingly punish even the proprietors and operators of "wholesome," "innocent" establishments. In the instant case, there is a clear invasion of personal or property rights, personal in the case of those individuals desirous of owning, operating and patronizing those motels and property in terms of the investments made and the salaries to be paid to those therein employed. If the City of Manila so desires to put an end to prostitution, fornication and other social ills, it can instead impose reasonable regulations such as daily inspections of the establishments for any violation of the conditions of their licenses or permits; it may exercise its authority to suspend or revoke their licenses for these violations;66and it may even impose increased license fees. In other words, there are other means to reasonably accomplish the desired end.Means employed are constitutionally infirmTheOrdinancedisallows the operation of sauna parlors, massage parlors, karaoke bars, beerhouses, night clubs, day clubs, super clubs, discotheques, cabarets, dance halls, motels and inns in the Ermita-Malate area. In Section 3 thereof, owners and/or operators of the enumerated establishments are given three (3) months from the date of approval of theOrdinancewithin which "to wind up business operations or to transfer to any place outside the Ermita-Malate area or convert said businesses to other kinds of business allowable within the area." Further, it states in Section 4 that in cases of subsequent violations of the provisions of the Ordinance, the "premises of the erring establishment shall be closed and padlocked permanently."It is readily apparent that the means employed by theOrdinancefor the achievement of its purposes, the governmental interference itself, infringes on the constitutional guarantees of a person's fundamental right to liberty and property.Liberty as guaranteed by the Constitution was defined by Justice Malcolm to include "the right to exist and the right to be free from arbitrary restraint or servitude. The term cannot be dwarfed into mere freedom from physical restraint of the person of the citizen, but is deemed to embrace the right of man to enjoy the faculties with which he has been endowed by his Creator, subject only to such restraint as are necessary for the common welfare."67In accordance with this case, the rights of the citizen to be free to use his faculties in all lawful ways; to live and work where he will; to earn his livelihood by any lawful calling; and to pursue any avocation are all deemed embraced in the concept of liberty.68The U.S. Supreme Court in the case ofRoth v.Board of Regents,69sought to clarify the meaning of "liberty." It said:While the Court has not attempted to define with exactness the liberty . . . guaranteed [by the Fifth and Fourteenth Amendments], the term denotes not merely freedom from bodily restraint but also the right of the individual to contract, to engage in any of the common occupations of life, to acquire useful knowledge, to marry, establish a home and bring up children, to worship God according to the dictates of his own conscience, and generally to enjoy those privileges long recognized . . . as essential to the orderly pursuit of happiness by free men. In a Constitution for a free people, there can be no doubt that the meaning of "liberty" must be broad indeed.In another case, it also confirmed that liberty protected by the due process clause includes personal decisions relating to marriage, procreation, contraception, family relationships, child rearing, and education. In explaining the respect the Constitution demands for the autonomy of the person in making these choices, the U.S. Supreme Court explained:These matters, involving the most intimate and personal choices a person may make in a lifetime, choices central to personal dignity and autonomy, are central to the liberty protected by the Fourteenth Amendment. At the heart of liberty is the right to define one's own concept of existence, of meaning, of universe, and of the mystery of human life. Beliefs about these matters could not define the attributes of personhood where they formed under compulsion of the State.70Persons desirous to own, operate and patronize the enumerated establishments under Section 1 of theOrdinancemay seek autonomy for these purposes.Motel patrons who are single and unmarried may invoke this right to autonomy to consummate their bonds in intimate sexual conduct within the motel's premises be it stressed that their consensual sexual behavior does not contravene any fundamental state policy as contained in the Constitution.71Adults have a right to choose to forge such relationships with others in the confines of their own private lives and still retain their dignity as free persons. The liberty protected by the Constitution allows persons the right to make this choice.72Their right to liberty under the due process clause gives them the full right to engage in their conduct without intervention of the government, as long as they do not run afoul of the law. Liberty should be the rule and restraint the exception.Liberty in the constitutional sense not only means freedom from unlawful government restraint; it must include privacy as well, if it is to be a repository of freedom. The right to be let alone is the beginning of all freedom it is the most comprehensive of rights and the right most valued by civilized men.73The concept of liberty compels respect for the individual whose claim to privacy and interference demands respect. As the case ofMorfe v.Mutuc,74borrowing the words of Laski, so very aptly stated:Man is one among many, obstinately refusing reduction to unity. His separateness, his isolation, are indefeasible; indeed, they are so fundamental that they are the basis on which his civic obligations are built. He cannot abandon the consequences of his isolation, which are, broadly speaking, that his experience is private, and the will built out of that experience personal to himself. If he surrenders his will to others, he surrenders himself. If his will is set by the will of others, he ceases to be a master of himself. I cannot believe that a man no longer a master of himself is in any real sense free.Indeed, the right to privacy as a constitutional right was recognized inMorfe, the invasion of which should be justified by a compelling state interest.Morfeaccorded recognition to the right to privacy independently of its identification with liberty; in itself it is fully deserving of constitutional protection. Governmental powers should stop short of certain intrusions into the personal life of the citizen.75There is a great temptation to have an extended discussion on these civil liberties but the Court chooses to exercise restraint and restrict itself to the issues presented when it should. The previous pronouncements of the Court are not to be interpreted as a license for adults to engage in criminal conduct. The reprehensibility of such conduct is not diminished. The Court only reaffirms and guarantees their right to make this choice. Should they be prosecuted for their illegal conduct, they should suffer the consequences of the choice they have made. That, ultimately, is their choice.Modality employed is unlawful takingIn addition, theOrdinanceis unreasonable and oppressive as it substantially divests the respondent of the beneficial use of its property.76TheOrdinancein Section 1 thereof forbids the running of the enumerated businesses in the Ermita-Malate area and in Section 3 instructs its owners/operators to wind up business operations or to transfer outside the area or convert said businesses into allowed businesses. An ordinance which permanently restricts the use of property that it can not be used for any reasonable purpose goes beyond regulation and must be recognized as a taking of the property without just compensation.77It is intrusive and violative of the private property rights of individuals.The Constitution expressly provides in Article III, Section 9, that "private property shall not be taken for public use without just compensation." The provision is the most important protection of property rights in the Constitution. This is a restriction on the general power of the government to take property. The constitutional provision is about ensuring that the government does not confiscate the property of some to give it to others. In part too, it is about loss spreading. If the government takes away a person's property to benefit society, then society should pay. The principal purpose of the guarantee is "to bar the Government from forcing some people alone to bear public burdens which, in all fairness and justice, should be borne by the public as a whole.78There are two different types of taking that can be identified. A "possessory" taking occurs when the government confiscates or physically occupies property. A "regulatory" taking occurs when the government's regulation leaves no reasonable economically viable use of the property.79In the landmark case ofPennsylvania Coal v.Mahon,80it was held that a taking also could be found if government regulation of the use of property went "too far." When regulation reaches a certain magnitude, in most if not in all cases there must be an exercise of eminent domain and compensation to support the act. While property may be regulated to a certain extent, if regulation goes too far it will be recognized as a taking.81No formula or rule can be devised to answer the questions of what is too far and when regulation becomes a taking. InMahon, Justice Holmes recognized that it was "a question of degree and therefore cannot be disposed of by general propositions." On many other occasions as well, the U.S. Supreme Court has said that the issue of when regulation constitutes a taking is a matter of considering the facts in each case. The Court asks whether justice and fairness require that the economic loss caused by public action must be compensated by the government and thus borne by the public as a whole, or whether the loss should remain concentrated on those few persons subject to the public action.82What is crucial in judicial consideration of regulatory takings is that government regulation is a taking if it leaves no reasonable economically viable use of property in a manner that interferes with reasonable expectations for use.83A regulation that permanently denies all economically beneficial or productive use of land is, from the owner's point of view, equivalent to a "taking" unless principles of nuisance or property law that existed when the owner acquired the land make the use prohibitable.84When the owner of real property has been called upon to sacrifice all economically beneficial uses in the name of the common good, that is, to leave his property economically idle, he has suffered a taking.85A regulation which denies all economically beneficial or productive use of land will require compensation under the takings clause. Where a regulation places limitations on land that fall short of eliminating all economically beneficial use, a taking nonetheless may have occurred, depending on a complex of factors including the regulation's economic effect on the landowner, the extent to which the regulation interferes with reasonable investment-backed expectations and the character of government action. These inquiries are informed by the purpose of the takings clause which is to prevent the government from forcing some people alone to bear public burdens which, in all fairness and justice, should be borne by the public as a whole.86A restriction on use of property may also constitute a "taking" if not reasonably necessary to the effectuation of a substantial public purpose or if it has an unduly harsh impact on the distinct investment-backed expectations of the owner.87TheOrdinancegives the owners and operators of the "prohibited" establishments three (3) months from its approval within which to "wind up business operations or to transfer to any place outside of the Ermita-Malate area or convert said businesses to other kinds of business allowable within the area." The directive to "wind up business operations" amounts to a closure of the establishment, a permanent deprivation of property, and is practically confiscatory. Unless the owner converts his establishment to accommodate an "allowed" business, the structure which housed the previous business will be left empty and gathering dust. Suppose he transfers it to another area, he will likewise leave the entire establishment idle. Consideration must be given to the substantial amount of money invested to build the edifices which the owner reasonably expects to be returned within a period of time. It is apparent that theOrdinanceleaves no reasonable economically viable use of property in a manner that interferes with reasonable expectations for use.The second and third options to transfer to any place outside of the Ermita-Malate area or to convert into allowed businesses are confiscatory as well. The penalty of permanent closure in cases of subsequent violations found in Section 4 of theOrdinanceis also equivalent to a "taking" of private property.The second option instructs the owners to abandon their property and build another one outside the Ermita-Malate area. In every sense, it qualifies as a taking without just compensation with an additional burden imposed on the owner to build another establishment solely from his coffers. The proffered solution does not put an end to the "problem," it merely relocates it. Not only is this impractical, it is unreasonable, onerous and oppressive. The conversion into allowed enterprises is just as ridiculous. How may the respondent convert a motel into a restaurant or a coffee shop, art gallery or music lounge without essentially destroying its property? This is a taking of private property without due process of law, nay, even without compensation.The penalty of closure likewise constitutes unlawful taking that should be compensated by the government. The burden on the owner to convert or transfer his business, otherwise it will be closed permanently after a subsequent violation should be borne by the public as this end benefits them as a whole.Petitioners cannot take refuge in classifying the measure as a zoning ordinance. A zoning ordinance, although a valid exercise of police power, which limits a "wholesome" property to a use which can not reasonably be made of it constitutes the taking of such property without just compensation. Private property which is not noxious nor intended for noxious purposes may not, by zoning, be destroyed without compensation. Such principle finds no support in the principles of justice as we know them. The police powers of local government units which have always received broad and liberal interpretation cannot be stretched to cover this particular taking.Distinction should be made between destruction from necessity and eminent domain. It needs restating that the property taken in the exercise of police power is destroyed because it is noxious or intended for a noxious purpose while the property taken under the power of eminent domain is intended for a public use or purpose and is therefore "wholesome."88If it be of public benefit that a "wholesome" property remain unused or relegated to a particular purpose, then certainly the public should bear the cost of reasonable compensation for the condemnation of private property for public use.89Further, theOrdinancefails to set up any standard to guide or limit the petitioners' actions. It in no way controls or guides the discretion vested in them. It provides no definition of the establishments covered by it and it fails to set forth the conditions when the establishments come within its ambit of prohibition. TheOrdinanceconfers upon the mayor arbitrary and unrestricted power to close down establishments. Ordinances such as this, which make possible abuses in its execution, depending upon no conditions or qualifications whatsoever other than the unregulated arbitrary will of the city authorities as the touchstone by which its validity is to be tested, are unreasonable and invalid. TheOrdinanceshould have established a rule by which its impartial enforcement could be secured.90Ordinances placing restrictions upon the lawful use of property must, in order to be valid and constitutional, specify the rules and conditions to be observed and conduct to avoid; and must not admit of the exercise, or of an opportunity for the exercise, of unbridled discretion by the law enforcers in carrying out its provisions.91Thus, inCoates v.City of Cincinnati,92as cited inPeople v.Nazario,93the U.S. Supreme Court struck down an ordinance that had made it illegal for "three or more persons to assemble on any sidewalk and there conduct themselves in a manner annoying to persons passing by." The ordinance was nullified as it imposed no standard at all "because one may never know in advance what 'annoys some people but does not annoy others.'"Similarly, theOrdinancedoes not specify the standards to ascertain which establishments "tend to disturb the community," "annoy the inhabitants," and "adversely affect the social and moral welfare of the community." The cited case supports the nullification of theOrdinancefor lack of comprehensible standards to guide the law enforcers in carrying out its provisions.Petitioners cannot therefore order the closure of the enumerated establishments without infringing the due process clause. These lawful establishments may be regulated, but not prevented from carrying on their business. This is a sweeping exercise of police power that is a result of a lack of imagination on the part of the City Council and which amounts to an interference into personal and private rights which the Court will not countenance. In this regard, we take a resolute stand to uphold the constitutional guarantee of the right to liberty and property.Worthy of note is an example derived from the U.S. of a reasonable regulation which is a far cry from the ill-consideredOrdinanceenacted by the City Council.InFW/PBS, INC. v. Dallas,94the city of Dallas adopted a comprehensive ordinance regulating "sexually oriented businesses," which are defined to include adult arcades, bookstores, video stores, cabarets, motels, and theaters as well as escort agencies, nude model studio and sexual encounter centers. Among other things, the ordinance required that such businesses be licensed. A group of motel owners were among the three groups of businesses that filed separate suits challenging the ordinance. The motel owners asserted that the city violated the due process clause by failing to produce adequate support for its supposition that renting room for fewer than ten (10) hours resulted in increased crime and other secondary effects. They likewise argued than the ten (10)-hour limitation on the rental of motel rooms placed an unconstitutional burden on the right to freedom of association. Anent the first contention, the U.S. Supreme Court held that the reasonableness of the legislative judgment combined with a study which the city considered, was adequate to support the city's determination that motels permitting room rentals for fewer than ten (10) hours should be included within the licensing scheme. As regards the second point, the Court held that limiting motel room rentals to ten (10) hours will have no discernible effect on personal bonds as those bonds that are formed from the use of a motel room for fewer than ten (10) hours are not those that have played a critical role in the culture and traditions of the nation by cultivating and transmitting shared ideals and beliefs.The ordinance challenged in the above-cited case merely regulated the targeted businesses. It imposed reasonable restrictions; hence, its validity was upheld.The case ofErmita Malate Hotel and Motel Operators Association, Inc.v.City Mayor of Manila,95it needs pointing out, is also different from this case in that what was involved therein was a measure which regulated the mode in which motels may conduct business in order to put an end to practices which could encourage vice and immorality. Necessarily, there was no valid objection on due process or equal protection grounds as the ordinance did not prohibit motels. TheOrdinancein this case however is not a regulatory measure but is an exercise of an assumed power to prohibit.96The foregoing premises show that theOrdinanceis an unwarranted and unlawful curtailment of property and personal rights of citizens. For being unreasonable and an undue restraint of trade, it cannot, even under the guise of exercising police power, be upheld as valid.B.The Ordinance violates Equal Protection ClauseEqual protection requires that all persons or things similarly situated should be treated alike, both as to rights conferred and responsibilities imposed. Similar subjects, in other words, should not be treated differently, so as to give undue favor to some and unjustly discriminate against others.97The guarantee means that no person or class of persons shall be denied the same protection of laws which is enjoyed by other persons or other classes in like circumstances.98The "equal protection of the laws is a pledge of the protection of equal laws."99It limits governmental discrimination. The equal protection clause extends to artificial persons but only insofar as their property is concerned.100The Court has explained the scope of the equal protection clause in this wise:. . . What does it signify? To quote fromJ.M. Tuason & Co.v.Land Tenure Administration: "The ideal situation is for the law's benefits to be available to all, that none be placed outside the sphere of its coverage. Only thus could chance and favor be excluded and the affairs of men governed by that serene and impartial uniformity, which is of the very essence of the idea of law." There is recognition, however, in the opinion that what in fact exists "cannot approximate the ideal. Nor is the law susceptible to the reproach that it does not take into account the realities of the situation. The constitutional guarantee then is not to be given a meaning that disregards what is, what does in fact exist. To assure that the general welfare be promoted, which is the end of law, a regulatory measure may cut into the rights to liberty and property. Those adversely affected may under such circumstances invoke the equal protection clause only if they can show that the governmental act assailed, far from being inspired by the attainment of the common weal was prompted by the spirit of hostility, or at the very least, discrimination that finds no support in reason." Classification is thus not ruled out, it being sufficient to quote from the Tuason decision anew "that the laws operate equally and uniformly on all persons under similar circumstances or that all persons must be treated in the same manner, the conditions not being different, both in the privileges conferred and the liabilities imposed. Favoritism and undue preference cannot be allowed. For the principle is that equal protection and security shall be given to every person under circumstances which, if not identical, are analogous. If law be looked upon in terms of burden or charges, those that fall within a class should be treated in the same fashion, whatever restrictions cast on some in the group equally binding on the rest.101Legislative bodies are allowed to classify the subjects of legislation. If the classification is reasonable, the law may operate only on some and not all of the people without violating the equal protection clause.102The classification must, as an indispensable requisite, not be arbitrary. To be valid, it must conform to the following requirements:1)It must be based on substantial distinctions.2)It must be germane to the purposes of the law.3)It must not be limited to existing conditions only.4)It must apply equally to all members of the class.103In the Court's view, there are no substantial distinctions between motels, inns, pension houses, hotels, lodging houses or other similar establishments. By definition, all are commercial establishments providing lodging and usually meals and other services for the public. No reason exists for prohibiting motels and inns but not pension houses, hotels, lodging houses or other similar establishments. The classification in the instant case is invalid as similar subjects are not similarly treated, both as to rights conferred and obligations imposed. It