consti ii batch 1

8/13/2019 Consti II Batch 1

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G.R. No. L-10572 December 21, 1915

FRANCIS A. CHURCHILL and S!"AR AI,plaintiffs-appellees,vs.#A$!S #. RAFF!R%, Co&&ec'or o( In'erna& Re)en*e,defendant-appellant.

Attorney-General Avancea for appellant.Aitken and DeSelms for appellees.

R!N, J.:

The judgment appealed from in this case perpetually restrains and prohibits the defendant and hisdeputies from collecting and enforcing against the plaintiffs and their property the annual taxmentioned and described in subsection (b) of section 100 of ct !o. "##$, effective %uly 1, 1$1&,and from destroying or removing any sign, signboard, or billboard, the property of the plaintiffs, forthe sole reason that such sign, signboard, or billboard is, or may be, offensive to the sight' and

decrees the cancellation of the bond given by the plaintiffs to secure the issuance of the preliminaryinjunction granted soon after the commencement of this action.

This case divides itself into to parts and gives rise to to main uestions' (1) that relating to thepoer of the court to restrain by injunction the collection of the tax complained of, and (") thatrelating to the validity of those provisions of subsection (b) of section 100 of ct !o. "##$, conferringpoer upon the *ollector of +nternal evenue to remove any sign, signboard, or billboard upon theground that the same is offensive to the sight or is otherise a nuisance.

The first uestion is one of the jurisdiction and is of vital importance to the overnment. The sectionsof ct !o. "##$, hich bear directly upon the subject, are 1#$ and 1&0. The first expressly forbidsthe use of an injunction to stay the collection of any internal revenue tax' the second provides a

remedy for any rong in connection ith such taxes, and this remedy as intended to be exclusive,thereby precluding the remedy by injunction, hich remedy is claimed to be constitutional. The tosections, then, involve the right of a dissatisfied taxpayers to use an exceptional remedy to test thevalidity of any tax or to determine any other uestion connected thereith, and the uestion hetherthe remedy by injunction is exceptional.

reventive remedies of the courts are extraordinary and are not the usual remedies. The origin andhistory of the rit of injunction sho that it has alays been regarded as an extraordinary, preventiveremedy, as distinguished from the common course of the la to redress evils after they have beenconsummated. !o injunction issues as of course, but is granted only upon the oath of a party andhen there is no adeuate remedy at la. The overnment does, by section 1#$ and 1&0, ta/eaay the preventive remedy of injunction, if it ever existed, and leaves the taxpayer, in a contest ithit, the same ordinary remedial actions hich prevail beteen citien and citien. The ttorney-

eneral, on behalf of the defendant, contends that there is no provisions of the paramount la hichprohibits such a course. hile, on the other hand, counsel for plaintiffs urge that the to sections areunconstitutional because (a) they attempt to deprive aggrieved taxpayers of all substantial remedyfor the protection of their property, thereby, in effect, depriving them of their property ithout dueprocess of la, and (b) they attempt to diminish the jurisdiction of the courts, as conferred upon themby cts !os. 1#2 and 1$0, hich jurisdiction as ratified and confirmed by the ct of *ongress of%uly 1, 1$0".


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+n the first place, it has been suggested that section 1#$ does not apply to the tax in uestionbecause the section, in spea/ing of a 3tax,3 means only legal taxes' and that an illegal tax (the onecomplained of) is not a tax, and, therefore, does not fall ithin the inhibition of the section, and maybe restrained by injunction. There is no force in this suggestion. The inhibition applies to all internalrevenue taxes imposes, or authoried to be imposed, by ct !o. "##$. (4nyder vs.5ar/s, 10$ 6.4.,17$.) nd, furthermore, the mere fact that a tax is illegal, or that the la, by virtue of hich it is

imposed, is unconstitutional, does not authorie a court of euity to restrain its collection byinjunction. There must be a further shoing that there are special circumstances hich bring thecase under some ell recognied head of euity jurisprudence, such as that irreparable injury,multiplicity of suits, or a cloud upon title to real estate ill result, and also that there is, as e haveindicated, no adeuate remedy at la. This is the settled la in the 6nited 4tates, even in theabsence of statutory enactments such as sections 1#$ and 1&0. (8annein/le vs.5ayor, etc., ofeorgeton, 7" 6.4., 9&:' +ndiana 5fg. *o. vs.;oehne, 177 6.4., 271' a,secs. :1, :", and :#, and cases cited therein.)

+t is also the settled la in the 6nited 4tates that 3due process of la3 does not alays reuire, inrespect to the overnment, the same process that is reuired beteen citiens, though it generallyimplies and includes regular allegations, opportunity to anser, and a trial according to some ellsettled course of judicial proceedings. The case ith hich e are dealing is in point. citien@sproperty, both real and personal, may be ta/en, and usually is ta/en, by the government in paymentof its taxes ithout any judicial proceedings hatever. +n this country, as ell as in the 6nited 4tates,the officer charged ith the collection of taxes is authoried to seie and sell the property ofdelinuent taxpayers ithout applying to the courts for assistance, and the constitutionality of the laauthoriing this procedure never has been seriously uestioned. (*ity of hiladelphia vs.ABiehlC The

*ollector, 9 all., :"0' !icholl vs.6.4., : all., 1"", and cases cited.) This must necessarily be thecourse, because it is upon taxation that the overnment chiefly relies to obtain the means to carryon its operations, and it is of the utmost importance that the modes adopted to enforce the collectionof the taxes levied should be summary and interfered ith as little as possible. !o government couldexist if every litigious man ere permitted to delay the collection of its taxes. This principle of publicpolicy must be constantly borne in mind in determining cases such as the one under consideration.

ith these principles to guide us, e ill proceed to inuire hether there is any merit in the topropositions insisted upon by counsel for the plaintiffs. 4ection 9 of the hilippine ?ill providesD 3That


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no la shall be enacted in said +slands hich shall deprive any person of life, liberty, or propertyithout due process of la, or deny to any person therein the eual protection of the la.3

The origin and history of these provisions are ell-/non. They are found in substance in the*onstitution of the 6nited 4tates and in that of ever state in the 6nion.

4ection #""& of the evised 4tatutes of the 6nited 4tates, effective since 172:, provides thatD 3!osuit for the purpose of restraining the assessment or collection of any tax shall be maintained in anycourt.3

4ection 1#$, ith hich e have been dealing, readsD 3!o court shall have authority to grant aninjunction to restrain the collection of any internal-revenue tax.3

comparison of these to sections shos that they are essentially the same. ?oth expresslyprohibit the restraining of taxes by injunction. +f the 4upreme *ourt of the 6nited 4tates has clearlyand definitely held that the provisions of section #""& do not violate the 3due process of la3 and3eual protection of the la3 clauses in the *onstitution, e ould be going too far to hold thatsection 1#$ violates those same provisions in the hilippine ?ill. That the 4upreme *ourt of the

6nited 4tates has so held, cannot be doubted.

+n *heatham vs.6nited 4tates ($" 6.4., 79,7$) hich involved the validity of an income tax levied byan act of *ongress prior to the one in issue in the case of olloc/ vs.Earmers@ >oan = Trust *o.(19: 6.4., &"$) the court, through 5r. %ustice 5iller, saidD 3+f there existed in the courts, state or!ational, any general poer of impeding or controlling the collection of taxes, or relieving thehardship incident to taxation, the very existence of the government might be placed in the poer of ahostile judiciary. (Bos vs.The *ity of *hicago, 11 all., 107.) hile a free course of remonstranceand appeal is alloed ithin the departments before the money is finally exacted, the eneralovernment has isely made the payment of the tax claimed, hether of customs or of internalrevenue, a condition precedent to a resort to the courts by the party against hom the tax isassessed. +n the internal revenue branch it has further prescribed that no such suit shall be broughtuntil the remedy by appeal has been tried' and, if brought after this, it must be ithin six months afterthe decision on the appeal. e regard this as a condition on hich alone the government consentsto litigate the lafulness of the original tax. +t is not a hard condition. Ee governments haveconceded such a right on any condition. +f the compliance ith this condition reuires the partyaggrieved to pay the money, he must do it.3

gain, in 4tate ailroad Tax *ases ($" 6.4., 9:9, 21#), the court saidD 3That there might be nomisunderstanding of the universality of this principle, it as expressly enacted, in 172:, that 3no suitfor the purpose of restraining the assessment or collection of any tax shall be maintained in anycourt.3 (ev, 4tat., sec. #""&.) nd though this as intended to apply alone to taxes levied by the6nited 4tates, it shos the sense of *ongress of the evils to be feared if courts of justice could, inany case, interfere ith the process of collecting taxes on hich the government depends for itscontinued existence. +t is a ise policy. +t is founded in the simple philosophy derived from the

experience of ages, that the payment of taxes has to be enforced by summary and stringent meansagainst a reluctant and often adverse sentiment' and to do this successfully, other instrumentalitiesand other modes of procedure are necessary, than those hich belong to courts of justice.3

nd again, in 4nyder vs.5ar/s (10$ 6.4., 17$), the court saidD 3The remedy of a suit to recoverbac/ the tax after it is paid is provided by statute, and a suit to restrain its collection is forbidden. Theremedy so given is exclusive, and no other remedy can be substituted for it. 4uch has been thecurrent of decisions in the *ircuit *ourts of the 6nited 4tates, and e are satisfied it is a correct vieof the la.3 itc-a1f


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+n the consideration of the plaintiffs@ second proposition, e ill attempt to sho (1) that thehilippine courts never have had, since the merican occupation, the poer to restrain by injunctionthe collection of any tax imposed by the +nsular overnment for its on purpose and benefit, and (")that assuming that our courts had or have such poer, this poer has not been diminished orcurtailed by sections 1#$ and 1&0.

e ill first revie briefly the former and present systems of taxation. 6pon the mericanoccupation of the hilippine, there as found a fairly complete system of taxation. This system ascontinued in force by the military authorities, ith but fe changes, until the *ivil overnmentassumed charge of the subject. The principal sources of revenue under the 4panish regime erederived from customs receipts, the so-called industrial taxes, the urbana taxes, the stamp tax, thepersonal cedula tax, and the sale of the public domain. The industrial and urbana taxes constitutedpractically an income tax of some 9 per cent on the net income of persons engaged in industrial andcommercial pursuits and on the income of oners of improved city property. The sale of stampedpaper and adhesive stamp tax. The cedula tax as a graduated tax, ranging from nothing up to#:.90. The revenue derived from the sale of the public domain as not considered a tax. The

merican authorities at once abolished the cedula tax, but later restored it in a modified form,charging for each cedula tenty centavos, an amount hich as supposed to be just sufficient tocover the cost of issuance. The urbana tax as abolished by ct !o. ""#, effective 4eptember 2,1$01.

The 35unicipal *ode3 (ct !o. 7") and the rovincial overnment ct (!o. 7#), both enacted in1$01, authorie municipal councils and provincial boards to impose an ad valoremtax on real estate.The 5unicipal *ode did not apply to the city of 5anila. This city as given a special charter (ct !o.17#), effective ugust #0, 1$01' 6nder this charter the 5unicipal ?oard of 5anila is authoried andempoered to impose taxes upon real estate and, li/e municipal councils, to license and regulatecertain occupations. *ustoms matters ere completely reorganied by ct !o. #99, effective at theport of 5anila on Eebruary :, 1$0", and at other ports in the hilippine +slands the day after thereceipt of a certified copy of the ct. The +nternal evenue >a of 1$0& (ct !o. 117$), repealed allexisting las, ordinances, etc., imposing taxes upon the persons, objects, or occupations taxedunder that act, and all industrial taxes and stamp taxes imposed under the 4panish regime ere

eliminated, but the industrial tax as continued in force until %anuary 1, 1$09. This +nternal evenue>a did not ta/e aay from municipal councils, provincial boards, and the 5unicipal ?oard of thecity of 5anila the poer to impose taxes upon real estate. This ct (!o. 117$), ith its amendments,as repealed by ct !o. "##$, an act 3revising and consolidating the las relative to internalrevenue.3

4ection 7& of ct !o. 7" provides that 3!o court shall entertain any suit assailing the validity of a taxassessed under this act until the taxpayer shall have paid, under protest, the taxes assessed againsthim, . . . .3

This inhibition as inserted in section 1: of ct !o. 7# and applies to taxes imposed by provincialboards. The inhibition as not inserted in the 5anila *harter until the passage of ct !o. 1:$#,

effective


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4ections 1#$ and 1&0 of ct !o. "##$ contain, as e have indicated, the same prohibition andremedy. The result is that the courts have been expressly forbidden, in every act creating orimposing taxes or imposts enacted by the legislative body of the hilippines since the mericanoccupation, to entertain any suit assailing the validity of any tax or impost thus imposed until the taxshall have been paid under protest. The only taxes hich have not been brought ithin the expressinhibition ere those included in that part of the old 4panish system hich completely disappeared

on or before %anuary 1, 1$09, and possibly the old customs duties hich disappeared in Eebruary,1$0".

4ection 92 of the


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The same legislative body hich enacted paragraph " on %une 12, 1$01, had, just a fe monthsprior to that time, defined the only /ind of action in hich the legality of any tax imposed by it mightbe assailed. (4ec. 7&, ct 7", enacted %anuary #1, 1$01, and sec. 1:, ct !o. 7#, enacted Eebruary2, 1$01.) That /ind of action being payment of the tax under protest and an ordinary suit to recoverand no other, there can be no doubt that *ourts of Eirst +nstance have jurisdiction over all suchactions. The subseuent legislation on the same subject shos clearly that the *ommission, in

enacting paragraph ", supra, did not intend to change or modify in any ay section 7& of ct !o. 7"and section 1: of ct !o. 7#, but, on the contrary, it as intended that 3civil actions,3 mentioned insaid paragraph, should be understood to mean, in so far as testing the legality of taxes ereconcerned, only those of the /ind and character provided for in the to sections above mentioned. +tis also urged that the poer to restrain by injunction the collection of taxes or imposts is conferredupon *ourts of Eirst +nstance by paragraph : of section 92, supra. This paragraph does empoerthose courts to grant injunctions, both preliminary and final, inanycivil action pending in theirdistricts, provided alays, that the complaint shos facts entitling the plaintiff to the relief demanded.+njunction suits, such as the one at bar, are 3civil actions,3 but of a special or extraordinary character.+t cannot be said that the *ommission intended to give a broader or different meaning to the ord3action,3 used in *hapter $ of the *ode of *ivil rocedure in connection ith injunctions, than it gaveto the same ord found in paragraph " of section 92 of the


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(!ashville vs.4mith, 72 Tenn., "1#' >ouisville = !. . *o. vs.4tate, 7 8eis/., 22#, 70&.) +t is, ascounsel observe, similar to the ct of *ongress forbidding suit for the purpose of restraining theassessment or collection of taxes under the +nternal evenue >as, in respect to hich this courtheld that the remedy by suit to recover bac/ the tax after payment, provided for by the 4tatute, asexclusive. (4nyder vs.5ar/s, of this character has been called for by the embarrassments resultingfrom the improvident employment of the rit of injunction in arresting the collection of the public

revenue' and, even in its absence, the strong arm of the court of chancery ought not to beinterposed in that direction except here resort to that court is grounded upon the settled principleshich govern its jurisdiction.3

+n >ouisville = !.. *o. vs.4tate (7 8eis/. A2& Tenn.C, 22#, 70&), cited by the 4upreme *ourt of the6nited 4tates in 4helton vs.latt, supra, the court saidD 3+t as urged that this statute (sections 1and " of the ct of 17:#,supra) is unconstitutional and void, as it deprives the citien of the remedyby certiorari, guaranteed by the organic la.3

?y the 10th section of the sixth article of the *onstitution, ATennesseeC it is provided thatD 3Thejudges or justices of inferior courts of la and euity shall have poer in all civil cases to issue ritsof certiorari, to remove any cause, or the transcript of the record thereof, from any inferior jurisdiction

into such court of la, on sufficient cause, supported by oath or affirmation.3

The court held the act valid as not being in conflict ith these provisions of the 4tate constitution.

+n Fddy vs.The Tonship of >ee (:# 5ich., 1"#), the complainants sought to enjoin the collection ofcertain taxes for the year 1772. The defendants, in support of their demurrer, insisted that theremedy by injunction had been ta/en aay by section 10: of the ct of 1779, hich section reads asfollosD 3!o injunction shall issue to stay proceedings for the assessment or collection of taxesunder this ct.3

+t as claimed by the complainants that the above uoted provisions of the ct of 1779 ereunconstitutional and void as being in conflict ith article 2, sec. 7, of the *onstitution, hich providesthatD 3The circuit courts shall have original jurisdiction in all matters, civil and criminal, not exceptedin this *onstitution, and not prohibited by la. ... They shall also have poer to issue rits of habeascorpus, mandamus, injunction, quo warranto, certiorari, and other rits necessary to carry into effecttheir orders, judgments, and decrees.3

5r. %ustice *hamplin, spea/ing for the court, saidD 3+ have no doubt that the >egislature has theconstitutional authority, here it has provided a plain, adeuate, and complete remedy at la torecover bac/ taxes illegally assessed and collected, to ta/e aay the remedy by injunction torestrain their collection.3

4ection $ of the hilippine ?ill reads in part as follosD 3That the 4upreme *ourt and the *ourts ofEirst +nstance of the hilippine +slands shall possess and exercise jurisdiction as heretofore providedand such additional jurisdiction as shall hereafter be prescribed by the overnment of said +slands,

subject to the poer of said overnment to change the practice and method of procedure.3

+t ill be seen that this section has not ta/en aay from the hilippine overnment the poer tochange the practice and method of procedure. +f sections 1#$ and 1&0, considered together, and thismust alays be done, are nothing more than a mode of procedure, then it ould seem that the>egislature did not exceed its constitutional authority in enacting them. *onceding for the momentthat the duly authoried procedure for the determination of the validity of any tax, impost, orassessment as by injunction suits and that this method as available to aggrieved taxpayers priorto the passage of ct !o. "##$, may the >egislature change this method of procedureG That the


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>egislature has the poer to do this, there can be no doubt, provided some other adeuate remedyis substituted in lieu thereof. +n spea/ing of the modes of enforcing rights created by contracts, the4upreme *ourt of the 6nited 4tates, in Tennessee vs.4need, supra, saidD 3The rule seems to bethat in modes of proceedings and of forms to enforce the contract the >egislature has the control,and may enlarge, limit or alter them, provided that it does not deny a remedy, or so embarrass it ithconditions and restrictions as seriously to impair the value of the right.3

+n that case the petitioner urged that the cts of 17:# ere las impairing the obligation of thecontract contained in the charter of the ?an/ of Tennessee, hich contract as entered into ith the4tate in 17#7. +t as claimed that this as done by placing such impediments and obstructions inthe ay of its enforcement, thereby so impairing the remedies as practically to render the obligationof no value. +n disposing of this contention, the court saidD 3+f e assume that prior to 17:# therelator had authority to prosecute his claim against the 4tate by mandamus, and that by the statutesof that year the further use of that form as prohibited to him, the uestion remains. hether aneffectual remedy as left to him or provided for him. e thin/ the regulation of the statute gave himan abundant means of enforcing such right as he possessed. +t provided that he might pay his claimto the collector under protest, giving notice thereof to the *omptroller of the Treasury' that at anytime ithin thirty days thereafter he might sue the officer ma/ing the collection' that the case shouldbe tried by any court having jurisdiction and, if found in favor of the plaintiff on the merits, the courtshould certify that the same as rongfully paid and ought to be refunded and the *omptrollershould thereupon issue his arrant therefor, hich should be paid in preference to other claim onthe Treasury.3

?ut great stress is laid upon the fact that the plaintiffs in the case under consideration are unable topay the taxes assessed against them and that if the la is enforced, they ill be compelled tosuspend business. This point may be best ansered by uoting from the case ofIoungblood vs.4exton (#" 5ich., &02), herein %udge *ooley, spea/ing for the court, saidD 3?ut ifthis consideration is sufficient to justify the transfer of a controversy from a court of la to a court ofeuity, then every controversy here money is demanded may be made the subject of euitablecogniance. To enforce against a dealer a promissory note may in some cases as effectually brea/up his business as to collect from him a tax of eual amount. This is not hat is /non to the la as

irreparable injury. The courts have never recognied the conseuences of the mere enforcement ofa money demand as falling ithin that category.3

*ertain specified sections of ct !o. "##$ ere amended by ct !o. "", enacted Becember "#,1$1&, effective %anuary 1, 1$19, by imposing increased and additional taxes. ct !o. "" asamended, ere ratified by the *ongress of the 6nited 4tates on 5arch &, 1$19. The oppositionmanifested against the taxes imposed by cts !os. "##$ and "" is a matter of local history. great many business men thought the taxes thus imposed ere too high. +f the collection of the netaxes on signs, signboards, and billboards may be restrained, e see no ell-founded reason hyinjunctions cannot be granted restraining the collection of all or at least a number of the otherincreased taxes. The fact that this may be done, shos the isdom of the >egislature in denying theuse of the rit of injunction to restrain the collection of any tax imposed by the cts. hen this asdone, an euitable remedy as made available to all dissatisfied taxpayers.

The uestion no arises hether, the case being one of hich the court belo had no jurisdiction,this court, on appeal, shall proceed to express an opinion upon the validity of provisions ofsubsection (b) of section 100 of ct !o. "##$, imposing the taxes complained of. s a general rule,an opinion on the merits of a controversy ought to be declined hen the court is poerless to givethe relief demanded. ?ut it is claimed that this case is, in many particulars, exceptional. +t is true thatit has been argued on the merits, and there is no reason for any suggestion or suspicion that it is nota bona fide controversy. The legal points involved in the merits have been presented ith force,


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clearness, and great ability by the learned counsel of both sides. +f the la assailed ere still inforce, e ould feel that an opinion on its validity ould be justifiable, but, as the amendmentbecame effective on %anuary 1, 1$19, e thin/ it advisable to proceed no further ith this branch ofthe case.

The next uestion arises in connection ith the supplementary complaint, the object of hich is to

enjoin the *ollector of +nternal evenue from removing certain billboards, the property of theplaintiffs located upon private lands in the rovince of ial. The plaintiffs allege that the billboardshere in uestion 3in no sense constitute a nuisance and are not deleterious to the health, morals, orgeneral elfare of the community, or of any persons.3 The defendant denies these allegations in hisanser and claims that after due investigation made upon the complaints of the ?ritish and erman*onsuls, he 3decided that the billboard complained of as and still is offensive to the sight, and isotherise a nuisance.3 The plaintiffs proved by 5r. *hurchill that the 3billboards ere uite adistance from the road and that they ere strongly built, not dangerous to the safety of the people,and contained no advertising matter hich is filthy, indecent, or deleterious to the morals of thecommunity.3 The defendant presented no testimony upon this point. +n the agreed statement of factssubmitted by the parties, the plaintiffs 3admit that the billboards mentioned ere and still areoffensive to the sight.3

The pertinent provisions of subsection (b) of section 100 of ct !o. "##$ readD 3+f after dueinvestigation the *ollector of +nternal evenue shall decide that any sign, signboard, or billboarddisplayed or exposed to public vie is offensive to the sight or is otherise a nuisance, he may bysummary order direct the removal of such sign, signboard, or billboard, and if same is not removedithin ten days after he has issued such order he may himself cause its removal, and the sign,signboard, or billboard shall thereupon be forfeited to the overnment, and the oner thereofcharged ith the expenses of the removal so effected. hen the sign, signboard, or billboardordered to be removed as herein provided shall not comply ith the provisions of the generalregulations of the *ollector of +nternal evenue, no rebate or refund shall be alloed for any portionof a year for hich the tax may have been paid.


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There can be no doubt that the exercise of the police poer of the hilippine overnment belongs tothe >egislature and that this poer is limited only by the cts of *ongress and those fundamentalsprinciples hich lie at the foundation of all republican forms of government. n ct of the >egislaturehich is obviously and undoubtedly foreign to any of the purposes of the police poer and interferesith the ordinary enjoyment of property ould, ithout doubt, be held to be invalid. ?ut here the

ct is reasonably ithin a proper consideration of and care for the public health, safety, or comfort, it

should not be disturbed by the courts. The courts cannot substitute their on vies for hat isproper in the premises for those of the >egislature. +n 5unn vs.+llinois ($& 6.4., 11#), the 6nited4tates 4upreme *ourt states the rule thusD 3+f no state of circumstances could exist to justify suchstatute, then e may declare this one void because in excess of the legislative poer of this state'but if it could, e must presume it did.


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good order, peace, health, protection, comfort, convenience and morals of the community, hichdoes not encroach on a li/e poer vested in congress or state legislatures by the federalconstitution, or does not violate the provisions of the organic la' and it has been expressly held thatthe fourteenth amendment to the federal constitution as not designed to interfere ith the exerciseof that poer by the state.3

+n eople vs.?raee (A5ich., 1$1&C, 1&$ !.., 109#), it as saidD 3+t Athe police poerC has for itsobject the improvement of social and economic conditioned affecting the community at large andcollectively ith a vie to bring about 3he greatest good of the greatest number.3*ourts haveconsistently and isely declined to set any fixed limitations upon subjects calling for the exercise ofthis poer. +t is elastic and is exercised from time to time as varying social conditions demandcorrection.3

+n 7 *yc., 72#, it is saidD 3olice poer is the name given to that inherent sovereignty hich it is theright and duty of the government or its agents to exercise henever public policy, in a broad sense,demands, for the benefit of society at large, regulations to guard its morals, safety, health, order or toinsure in any respect such economic conditions as an advancing civiliation of a high complexcharacter reuires.3 (s uoted ith approval in 4tettlervs.


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the present day, hoever, industry is organied along lines hich ma/e it possible for largecombinations of capital to profit at the expense of the socio-economic progress of the nation bycontrolling prices and dictating to industrial or/ers ages and conditions of labor. !ot only this butthe universal use of mechanical contrivances by producers and common carriers has enormouslyincreased the toll of human life and limb in the production and distribution of consumption goods. Tothe extent that these businesses affect not only the public health, safety, and morals, but also the

general social and economic life of the nation, it has been and ill continue to be necessary for thestate to interfere by regulation. ?y so doing, it is true that the enjoyment of private property isinterfered ith in no small degree and in ays that ould have been considered entirelyunnecessary in years gone by. The regulation of rates charged by common carriers, for instance, orthe limitation of hours of or/ in industrial establishments have only a very indirect bearing upon thepublic health, safety, and morals, but do bear directly upon social and economic conditions. Topermit each individual unit of society to feel that his industry ill bring a fair return' to see that hisor/ shall be done under conditions that ill not either immediately or eventually ruin his health' toprevent the artificial inflation of prices of the things hich are necessary for his physical ell beingare matters hich the individual is no longer capable of attending to himself. +t is ithin the provinceof the police poer to render assistance to the people to the extent that may be necessary tosafeguard these rights. 8ence, las providing for the regulation of ages and hours of labor of coalminers (ail = iver *oal *o. vs.Taylor, "#& 6.4., ""&)' reuiring payment of employees of

railroads and other industrial concerns in legal tender and reuiring salaries to be paid semimonthly(Frie .. *o. vs.illiams, "## 6.4., 279)' providing a maximum number of hours of labor foromen (5iller vs.ilson, 6.4. 4up. *t. AEeb. "#, 1$19C, dv.


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have spent millions on par/s and boulevards and other forms of civic beauty, the first aim of hich isto appeal to the sense of sight. hy, then, should the overnment not interpose to protect fromannoyance this most valuable of man@s senses as readily as to protect him from offensive noises andsmellsG

The advertising industry is a legitimate one. +t is at the same time a cause and an effect of the great

industrial age through hich the orld is no passing. 5illions are spent each year in this manner toguide the consumer to the articles hich he needs. The sense of sight is the primary essential toadvertising success. ?illboard advertising, as it is no conducted, is a comparatively recent form ofadvertising. +t is conducted out of doors and along the arteries of travel, and compels attention by thestrategic locations of the boards, hich obstruct the range of vision at points here travelers aremost li/ely to direct their eyes. ?eautiful landscapes are marred or may not be seen at all by thetraveler because of the gaudy array of posters announcing a particular /ind of brea/fast food, orunderear, the coming of a circus, an incomparable soap, nostrums or medicines for the curing of allthe ills to hich the flesh is heir, etc. +t is uite natural for people to protest against this indiscriminateand holesale use of the landscape by advertisers and the intrusion of tradesmen upon their hoursof leisure and relaxation from or/.


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e do not consider that e are in conflict ith the decision in Fuban/ vs.ichmond (""2 6.4., 1#:),here a municipal ordinance establishing a building line to hich property oners must conform asheld unconstitutional. s e have pointed out, billboard advertising is not so much a use of privateproperty as it is a use of the public thoroughfares. +t derives its value to the poer solely because theposters are exposed to the public gae. +t may ell be that the state may not reuire private propertyoners to conform to a building line, but may prescribe the conditions under hich they shall ma/e

use of the adjoining streets and highays. !or is the la in uestion to be held invalid as denyingeual protection of the las. +n ;eo/ee *o/e *o. vs.Taylor ("#& 6.4., ""&), it as saidD 3+t is morepressed that the act discriminates unconstitutionally against certain classes. ?ut hile there aredifferences of opinion as to the degree and /ind of discrimination permitted by the Eourteenth

mendment, it is established by repeated decisions that a statute aimed at hat is deemed an evil,and hitting it presumably here experience shos it to be most felt, is not to be upset by thin/ing upand enumerating other instances to hich it might have been applied eually ell, so far as the courtcan see. That is for the legislature to judge unless the case is very clear.3

?ut e have not overloo/ed the fact that e are not in harmony ith the highest courts of a numberof the states in the merican 6nion upon this point. Those courts being of the opinion that statuteshich are prompted and inspired by esthetic considerations merely, having for their sole purpose thepromotion and gratification of the esthetic sense, and not the promotion or protection of the publicsafety, the public peace and good order of society, must be held invalid and contrary to constitutionalprovisions holding inviolate the rights of private property.

said that hen the penalties for disobedience are by fines so enormous and imprisonment so severeas to intimidate the company and its officers from resorting to the courts to test the validity of thelegislation, the result is the same as if the la in terms prohibited the company from see/ing judicialconstruction of las hich deeply affect its rights.

+t is urged that there is no principle upon hich to base the claim that a person is entitled todisobey a statute at least once, for the purpose of testing its validity ithout subjectinghimself to the penalties for disobedience provided by the statute in case it is valid. This is notan accurate statement of the case.


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misdemeanors or felonies relates to a subject over hich the jurisdiction of the legislature iscomplete in any event. +n these case, hoever, of the establishment of certain rates ithoutany hearing, the validity of such rates necessarily depends upon hether they are highenough to permit at least some return upon the investment (ho much it is not nonecessary to state), and an inuiry as to that fact is a proper subject of judicial investigation.+f it turns out that the rates are too lo for that purpose, then they are illegal. !o, to impose

upon a party interested the burden of obtaining a judicial decision of such a uestion (noprior hearing having ever been given) only upon the condition that, if unsuccessful, he mustsuffer imprisonment and pay fines as provided in these acts, is, in effect, to close up allapproaches to the courts, and thus prevent any hearing upon the uestion hether the ratesas provided by the acts are not too lo, and therefore invalid. The distinction is obviousbeteen a case here the validity of the acts depends upon the existence of a fact hichcan be determined only after investigation of a very complicated and technical character, andthe ordinary case of a statute upon a subject reuiring no such investigation and over hichthe jurisdiction of the legislature is complete in any event.

n examination of the sections of our +nternal evenue >a and of the circumstances under hichand the purposes for hich they ere enacted, ill sho that, unli/e the statutes underconsideration in the above cited case, their enactment involved no attempt on the part of the>egislature to prevent dissatisfied taxpayers 3from resorting to the courts to test the validity of thelegislation'3 no effort to prevent any inuiry as to their validity. hile section 1#$ does prevent thetesting of the validity of subsection (b) of section 100 in injunction suits instituted for the purpose ofrestraining the collection of internal revenue taxes, section 1&0 provides a complete remedy for thatpurpose. nd furthermore, the validity of subsection (b) does not depend upon 3the existence of afact hich can be determined only after investigation of a very complicated and technical character,3but the jurisdiction of the >egislature over the subject ith hich the subsection deals 3is complete inany event.3 The judgment of the court in the Ioung case rests upon the proposition that theaggrieved parties had no adeuate remedy at la.

!either did e overloo/ the case of eneral


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no Eederal uestion, but only the poers and jurisdiction of the courts of the 4tate ofTennessee, in respect to hich the 4upreme *ourt of Tennessee is the final arbiter.3


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+n upholding the statute hich authories the removal of signboards or billboards upon the soleground that they are offensive to the sight, e recognied the fact that e are not in harmony ithvarious state courts in the merican 6nion. e have just examined the decision of the 4upreme*ourt of the 4tate of +llinois in the recent case (


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historic sites from the passerby, the country ill be less attractive to the tourist and the people illsuffer a district economic loss.

The motion for a rehearing is therefore denied.

Arellano! ".#.! $orres! and "arson! ##.! concur.

G.R. No. 111097 #*&+ 20, 199

$A%R A/L . $AGA#AS H! CI% F CAGA%AN D! R, petitioners,vs.R%C! R!RI!S CRRAIN, INC. HILIIN! A$US!$!N AND GA$INGCRRAIN,respondents.

Aquilino G. )imentel! #r. and Associates for petitioners.

*.*. $orralba + Associates for private respondent.

CRU, J.:

There as instant opposition hen *


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4ec. 1. J That pursuant to the policy of the city banning the operation of casinoithin its territorial jurisdiction, no business permit shall be issued to any person,partnership or corporation for the operation of casino ithin the city limits.

4ec. ". J That it shall be a violation of existing business permit by any persons,partnership or corporation to use its business establishment or portion thereof, or

allo the use thereof by others for casino operation and other gambling activities.

4ec. #. J F!>T+F4. J ny violation of such existing business permit as definedin the preceding section shall suffer the folloing penalties, to itD

a) 4uspension of the business permit for sixty (20)days for the first offense and a fine of 1,000.00Oday

b) 4uspension of the business permit for 4ix (2)months for the second offense, and a fine of#,000.00Oday

c) ermanent revocation of the business permit andimprisonment of

!


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?F +T


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constitutionality of the decree and even cited the benefits of the entity to the national economy as thethird highest revenue-earner in the government, next only to the ?+ and the ?ureau of *ustoms.

*agayan de ocal overnment *ode. +t is expressly vested ith the police poer underhat is /non as the eneral elfare *lause no embodied in 4ection 12 as follosD

4ec. 12. J eneral elfare. J Fvery local government unit shall exercise thepoers expressly granted, those necessarily implied therefrom, as ell as poersnecessary, appropriate, or incidental for its efficient and effective governance, andthose hich are essential to the promotion of the general elfare. ithin theirrespective territorial jurisdictions, local government units shall ensure and support,among other things, the preservation and enrichment of culture, promote health andsafety, enhance the right of the people to a balanced ecology, encourage andsupport the development of appropriate and self-reliant scientific and technologicalcapabilities, improve public morals, enhance economic prosperity and social justice,promote full employment among their residents, maintain peace and order, andpreserve the comfort and convenience of their inhabitants.

+n addition, 4ection &97 of the said *ode specifically declares thatD

4ec. &97. J oers, Buties, Eunctions and *ompensation. J (a) The 4anggunianganlungsod, as the legislative body of the city, shall enact ordinances, approveresolutions and appropriate funds for the general elfare of the city and itsinhabitants pursuant to 4ection 12 of this *ode and in the proper exercise of thecorporate poers of the city as provided for under 4ection "" of this *ode, and shallD

(1) pprove ordinances and pass resolutions necessary for an efficient and effectivecity government, and in this connection, shallD

xxx xxx xxx

(v) Fnact ordinances intended to prevent, suppressand impose appropriate penalties for habitualdrun/enness in public places, vagrancy, mendicancy,prostitution, establishment and maintenance ofhouses of ill repute,(amblin(and other prohibitedgames of chance, fraudulent devices and ays toobtain money or property, drug addiction,maintenance of drug dens, drug pushing, juveniledelinuency, the printing, distribution or exhibition ofobscene or pornographic materials or publications,and such other activities inimical to the elfare and

morals of the inhabitants of the city'

This section also authories the local government units to regulate properties and businesses ithintheir territorial limits in the interest of the general elfare. 5

The petitioners argue that by virtue of these provisions, the 4angguniang anlungsod may prohibitthe operation of casinos because they involve games of chance, hich are detrimental to the people.ambling is not alloed by general la and even by the *onstitution itself. The legislative poerconferred upon local government units may be exercised over all /inds of gambling and not only


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over 3illegal gambling3 as the respondents erroneously argue. Fven if the operation of casinos mayhave been permitted under .B. 172$, the government of *agayan de ocal overnment*ode.

+t is submitted that this interpretation is consonant ith the policy of local autonomy as mandated in

rticle ++, 4ection "9, and rticle N of the *onstitution, as ell as various other provisions thereinsee/ing to strengthen the character of the nation. +n giving the local government units the poer toprevent or suppress gambling and other social problems, the >ocal overnment *ode hasrecognied the competence of such communities to determine and adopt the measures bestexpected to promote the general elfare of their inhabitants in line ith the policies of the 4tate.

The petitioners also stress that hen the *ode expressly authoried the local government units toprevent and suppress gambling and other prohibited games of chance, li/e craps, baccarat,blac/jac/ and roulette, it meant allforms of gambling ithout distinction. bi le& non distin(uit! necnos distin(uere debemos. 3ocal overnment *ode, it is pointed out, had the effect of modifying the charterof the *


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Einally, the petitioners also attac/ gambling as intrinsically harmful and cite various provisions of the*onstitution and several decisions of this *ourt expressive of the general and official disapprobationof the vice. They invo/e the 4tate policies on the family and the proper upbringing of the youth and,as might be expected, call attention to the old case of .S. v. Salaveria,7hich sustained amunicipal ordinance prohibiting the playing ofpan(uin(ue. The petitioners decry the immorality ofgambling. They also impugn the isdom of .B. 172$ (hich they describe as 3a martial la

instrument3) in creating *


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unmista/able. 6nder the rule of noscitur a sociis, a ord or phrase should be interpreted in relationto, or given the same meaning of, ords ith hich it is associated. ccordingly, e conclude thatsince the ord 3gambling3 is associated ith 3and other prohibited games of chance,3 the ordshould be read as referring to only illegal gambling hich, li/e the other prohibited games of chance,must be prevented or suppressed.

e could stop here as this interpretation should settle the problem uite conclusively. ?ut e illnot. The vigorous efforts of the petitioners on behalf of the inhabitants of *agayan de


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Becree !os. #71, , &2&, &::, 9"2, 2#", :9", and 11#2 are hereby repealed andrendered of no force and effect.

(d) residential Becree !o. 19$& is hereby repealed insofar as it governs locally-funded projects.

(e) The folloing provisions are hereby repealed or amended insofar as they areinconsistent ith the provisions of this *odeD 4ections ", 12, and "$ of residentialBecree !o. :0&' 4ections 1" of residential Becree !o. 7:, as amended' 4ections9", 9#, 22, 2:, 27, 2$, :0, :1, :", :#, and :& of residential Becree !o. &2#, asamended' and 4ection 12 of residential Becree !o. $:", as amended, and

(f) ll general and special las, acts, city charters, decrees, executive orders,proclamations and administrative regulations, or part or parts thereof hich areinconsistent ith any of the provisions of this *ode are hereby repealed or modifiedaccordingly.

Eurthermore, it is a familiar rule that implied repeals are not lightly presumed in the absence of a

clear and unmista/able shoing of such intention. +n /ichauco + "o. v. Apostol,10

this *ourtexplainedD

The cases relating to the subject of repeal by implication all proceed on theassumption that if the act of later date clearly reveals an intention on the part of thelama/ing poer to abrogate the prior la, this intention must be given effect' butthere must alays be a sufficient revelation of this intention, and it has become anunbending rule of statutory construction that the intention to repeal a former la illnot be imputed to the >egislature hen it appears that the to statutes, or provisions,ith reference to hich the uestion arises bear to each other the relation of generalto special.

There is no sufficient indication of an implied repeal of .B. 172$.


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gambling, if not indeed more so. The petitioners@ suggestion that the *ode authories them toprohibit all /inds of gambling ould erase the distinction beteen these to forms of gamblingithout a clear indication that this is the ill of the legislature. lausibly, folloing this theory, the *ityof 5anila could, by mere ordinance, prohibit the hilippine *harity 4eepsta/es


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172$ has not been modified by the >ocal overnment *ode, hich empoers the local governmentunits to prevent or suppress only those forms of gambling prohibited by la.

*asino gambling is authoried by .B. 172$. This decree has the status of a statute that cannot beamended or nullified by a mere ordinance. 8ence, it as not competent for the 4anggunianganlungsod of *agayan de


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That the *


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of ppeals (formerly, +ntermediate ppellate *ourt), although prior to the effectivityof,atas )ambansa ,ilan( 19:on ugust 1&, 1$71, the latter@s competence to issuethe extraordinary rits as restricted by those 3in aid of its appellate jurisdiction.3This concurrence of jurisdiction is not, hoever, to be ta/en as according to partiessee/ing any of the rits an absolute, unrestrained freedom of choice of the court tohich application therefor ill be directed. There is after all a hierarchy of courts.

That hierarchy is determinative of the revenue of appeals, and should also serve as ageneral determinant of the appropriate forum for petitions for the extraordinary rits.

becoming regard for that judicial hierarchy most certainly indicates that petitions forthe issuance of extraordinary rits against first level (3inferior3) courts should be filedith the egional Trial *ourt, and those against the latter, ith the *ourt of ppeals.

direct invocation of the 4upreme *ourt@s original jurisdiction to issue these ritsshould be alloed only hen there are special and important reasons therefor,clearly and specifically set out in the petition. This is established policy. +t is a policythat is necessary to prevent inordinate demands upon the *ourt@s time and attentionhich are better devoted to those matters ithin its exclusive jurisdiction, and toprevent further over-croding of the *ourt@s doc/et. +ndeed, the removal of therestriction of the jurisdiction of the *ourt of ppeals in this regard, supraJ resultingfrom the deletion of the ualifying phrase, 3in aid of its appellate jurisdiction3 J as

evidently intended precisely to relieve this *ourtpro tantoof the burden of dealingith applications for extraordinary rits hich, but for the expansion of the ppellate*ourt@s corresponding jurisdiction, ould have had to be filed ith it. (citationsomitted)

nd in 4asque0, this *ourt saidD


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leased a portion of the former@s ryce laa 8otel for the operation of a gambling casino J hichresolution as vigorously reiterated in esolution !o. "2:# of 1$


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Seara'e 6n6on

G.R. No. 49494-99 c'ober 1, 1990

$UNICIALI% F $A:AI, petitioner,vs.

H! HNRA/L! CUR F A!ALS, HN. SAL8ADR . D! GU$AN, #R., a #*d;eRC o( $a


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xxx xxx xxx

(1) ccount !o. 4O "29-9#:19&-# J exclusively for the expropriation of the subjectproperty, ith an outstanding balance of $$,:.$&.

(") ccount !o. 4O "2#-9#0790-: J for statutory obligations and other purposes of

the municipal government, ith a balance of 1:0,0$7,&"1.:", as of %uly 1", 1$7$.

xxx xxx xxx

Aetition, pp. 2-:' *ollo, pp. 11-1".C

?ecause the petitioner has belatedly alleged only in this *ourt the existence of to ban/ accounts, itmay fairly be as/ed hether the second account as opened only for the purpose of underminingthe legal basis of the assailed orders of respondent T* judge and the decision of the *ourt of

ppeals, and strengthening its reliance on the doctrine that public funds are exempted fromgarnishment or execution as enunciated in *epublic v. )alacioAsupra.C t any rate, the *ourt ill givepetitioner the benefit of the doubt, and proceed to resolve the principal issues presented based on

the factual circumstances thus alleged by petitioner.

dmitting that its !? ccount !o. 4O "29-9#:19&-# as specifically opened for expropriationproceedings it had initiated over the subject property, petitioner poses no objection to thegarnishment or the levy under execution of the funds deposited therein amounting to $$,:.$&.8oever, it is petitioner@s main contention that inasmuch as the assailed orders of respondent T*

judge involved the net amount of &,$29,902.&9, the funds garnished by respondent sheriff inexcess of $$,:.$&, hich are public funds earmar/ed for the municipal government@s otherstatutory obligations, are exempted from execution ithout the proper appropriation reuired underthe la.

There is merit in this contention. The funds deposited in the second !? ccount !o. 4O "2#-

9#0790-: are public funds of the municipal government. +n this jurisdiction, ell-settled is the rulethat public funds are not subject to levy and execution, unless otherise provided for by statuteAepublic v. alacio, supra.' The *ommissioner of ublic 8ighays v. 4an Biego, .. !o. >-#00$7,Eebruary 17, 1$:0, #1 4* 212C. 5ore particularly, the properties of a municipality, hether real orpersonal, hich are necessary for public use cannot be attached and sold at execution sale tosatisfy a money judgment against the municipality. 5unicipal revenues derived from taxes, licensesand mar/et fees, and hich are intended primarily and exclusively for the purpose of financing thegovernmental activities and functions of the municipality, are exempt from execution ASeeLiuda BeTan Toco v. The 5unicipal *ouncil of +loilo, &$ hil. 9" (1$"2)D The 5unicipality of aoay, +locos!orte v. 5anaois, 72 hil. 2"$ (1$90)' 5unicipality of 4an 5iguel, ?ulacan v. Eernande, .. !o.21:&&, %une "9, 1$7&, 1#0 4* 92C. The foregoing rule finds application in the case at bar. bsenta shoing that the municipal council of 5a/ati has passed an ordinance appropriating from its publicfunds an amount corresponding to the balance due under the T* decision dated %une &, 1$7:, less

the sum of $$,:.$& deposited in ccount !o. 4O "29-9#:19&-#, no levy under execution may bevalidly effected on the public funds of petitioner deposited in ccount !o. 4O "2#-9#0790-:.

!evertheless, this is not to say that private respondent and 4? are left ith no legal recourse.here a municipality fails or refuses, ithout justifiable reason, to effect payment of a final money

judgment rendered against it, the claimant may avail of the remedy of mandamusin order to compelthe enactment and approval of the necessary appropriation ordinance, and the correspondingdisbursement of municipal funds therefor ASeeLiuda Be Tan Toco v. The 5unicipal *ouncil of+loilo, supra' ?aldivia v. >ota, 10: hil. 10$$ (1$20)' Iuviengco v. onales, 107 hil. "&: (1$20)C.


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+n the case at bar, the validity of the T* decision dated %une &, 1$7: is not disputed by petitioner.!o appeal as ta/en therefrom. Eor three years no, petitioner has enjoyed possession and use ofthe subject property notithstanding its inexcusable failure to comply ith its legal obligation to pay

just compensation. etitioner has benefited from its possession of the property since the same hasbeen the site of 5a/ati est 8igh 4chool since the school year 1$72-1$7:. This *ourt ill notcondone petitioner@s blatant refusal to settle its legal obligation arising from expropriation

proceedings it had in fact initiated. +t cannot be over-emphasied that, ithin the context of the4tate@s inherent poer of eminent domain,

. . . AjCust compensation means not only the correct determination of the amount to bepaid to the oner of the land but also the payment of the land ithin a reasonabletime from its ta/ing. ithout prompt payment, compensation cannot be considered3just3 for the property oner is made to suffer the conseuence of being immediatelydeprived of his land hile being made to ait for a decade or more before actuallyreceiving the amount necessary to cope ith his loss A*osculluela v. The 8onorable*ourt of ppeals, .. !o. :::29, ugust 19, 1$77, 12& 4* #$#, &00. Seealsorovincial overnment of 4orsogon v. Lda. de Lillaroya, .. !o. 2&0#:, ugust ":,1$7:, 19# 4* "$1C.

The 4tate@s poer of eminent domain should be exercised ithin the bounds of fair play and justice.+n the case at bar, considering that valuable property has been ta/en, the compensation to be paidfixed and the municipality is in full possession and utiliing the property for public purpose, for three(#) years, the *ourt finds that the municipality has had more than reasonable time to pay fullcompensation.

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