due process - digests tibay to castellvi

7/30/2019 Due Process - Digests Tibay to Castellvi

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ANG TIBAY vs. COURT of INDUSTRIAL RELATIONS

Justice Laurel:

A motion for reconsideration was filed by the Sol-Gen in behalf of the respondent Court ofIndustrial Relations on the case of National Labor Union Inc. praying that their labor case beremanded to the CIR for a new trial.

Petitioner, Ang Tibay has filed an opposition for both the motion for reconsideration of CIR andthe motion for a new trial by the National Labor Union.

The National Labor Unions case:

they alleged that Toribio Teodoro, who dominated the National Workers Brotherhoodof Ang Tibay, made a false claim that there was a shortage of leather soles in ANgTibay that made it necessary for him to lay off workers, however, claim wasunsupported by records of the Bureau of Customs & the accounts of native dealers ofleather. Such was just a scheme adopted to systematically discharge all the membersof the NLU, inc., from work.

unfair labor practice for discriminating against the National Labor Union, Inc., andunjustly favoring the National Workers' Brotherhood.

That the exhibits hereto attached are so inaccessible to the respondents that evenwith the exercise of due diligence they could not be expected to have obtained themand offered as evidence in the Court of Industrial Relations.

That the attached documents and exhibits are of such far-reaching importance andeffect that their admission would necessarily mean the modification and reversal of the

judgment rendered herein .

HELD: motion for reconsideration denied, motion for new trial granted.

Discussion of the Nature of the CIR to emphasize certain guiding principles which should beobserved in the trial of cases brought before it.

Court of Industrial Relations an administrative court- exercises judicial or quasi-judicial functions in the determination of disputes between

employers and employees- has jurisdiction over the entire Philippines, to consider, investigate, decide, and settle

any question, matter controversy or dispute arising between, and/or affecting employers andemployees or laborers, and regulate the relations between them, subject to, and in accordancewith, the provisions of Commonwealth Act No. 103 (section 1).

There is in reality here a mingling of executive and judicial functions, which is a departure fromthe rigid doctrine of the separation of governmental powers.In the case ofGoseco vs. Court of Industrial

Court of Industrial Relations is not narrowly constrained by technical rules of procedure, andthe Act requires it to "act according to justice and equity and substantial merits of thecase, without regard to technicalities or legal forms and shall not be bound by anytechnicalities or legal forms and shall not be bound by any technical rules of legal evidencebut may inform its mind in such manner as it may deem just and equitable." (Section 20,Commonwealth Act No. 103.)

requirements of due process in trials and investigations of an administrative character.1. right to a hearing, which includes the right of the party interested or affected to present hisown case and submit evidence in support thereof.2. tribunal must considerthe evidence presented.3. have something to support the decision

4. evidence must be "substantial." - such relevant evidence as a reasonable mind accepts asadequate to support a conclusion." The statute provides that "the rules of evidence prevailing

in courts of law and equity shall not be controlling.' The obvious purpose of this and similarprovisions is to free administrative boards from the compulsion of technical rules so that themere admission of matter which would be deemed incompetent inn judicial proceedings wouldnot invalidate the administrative order. But this assurance of a desirable flexibility inadministrative procedure does not go far as to justify orders without a basis in evidencehaving rational probative force. Mere uncorroborated hearsay or rumor does not constitutesubstantial evidence5. The decision must be rendered on the evidence presented at the hearing, or at leastcontained in the record and disclosed to the parties affected. Only by confining theadministrative tribunal to the evidence disclosed to the parties, can the latter be protected intheir right to know and meet the case against them. It should not, however, detract from theirduty actively to see that the law is enforced, and for that purpose, to use the authorized legalmethods of securing evidence and informing itself of facts material and relevant to thecontroversy.

Boards of inquiry may be appointed for the purpose of investigating and determining the facts inany given case, but their report and decision are only advisory, such delegation shall not affectthe exercise of the Court itself of any of its powers.

6. The Court of Industrial Relations or any of its judges, therefore, must act on its or his ownindependent consideration of the law and facts of the controversy, and not simply accept theviews of a subordinate in arriving at a decision. It may be that the volume of work is such that itis literally Relations personally to decide all controversies coming before them.

8.The Court of Industrial Relations should, in all controversial questions, render its decision insuch a manner that the parties to the proceeding can know the various issues involved, and the

reasons for the decision rendered. The performance of this duty is inseparable from the authorityconferred upon it.

The court observed that, except as to the alleged agreement between the Ang Tibay and theNational Worker's Brotherhood, the record is barren and does not satisfy the thirst for a factualbasis upon which to predicate, in a national way, a conclusion of law. Therefore, in the interestof justice, a new trial should commence giving the movant the opportunity to present newevidence.

NON VS. DAMES II (1990)Cortes

Nature: Petition for certiorari to review orders of RTC of Daet, Camarines Norte

Facts: Petitioners, students in private respondent Mabini Colleges, Inc., were not allowed toenroll by the school for AY 1988-89 for leading/participating in student mass actions against theschool in the preceding semester. They filed a petition in court seeking their re-admission/re-enrollment, but TC dismissed and motion for reconsideration was denied, stating that studentswaived their privilege to be admitted when they signed the schools enrollment form 1, and in viewof the academic freedom enjoyed by the school. CA certified the case back to SC.

Issue: WON school officials can deny admission/enrollment as disciplinary action to studentswho practice their right to free speech and assembly

Held: NO.

Reasoning:

1Mabini College reserves the right to deny admission of students whose scholarship andattendance are unsatisfactory and to require withdrawal of students whose conduct discredits

the institution and/or whose activities disrupts or interferes with the efficient operation of the

college.


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Alcuaz et al. vs. PSBA a college student, once admitted by the school, is considered enrolledfor only one semester and hence may be refused readmission after the semester is over, as thecontract between the student and the school is deemed terminated

- Obiter: Court respects right to resort to rallies and demonstrations for redress ofgrievances as part of freedom of speech and right to assemble

1. The student does not shed his constitutionally protected rights at theschoolgate (specifically Sec. 4 AIII, 1973 AVI Sec.9, 1935 AIII Sec.8, Jones Law Sec.13[3], PB 1902 Sec.15[13]). Freedom was upheld as early as 1907 in People vs.

Apurado.

The protection to cognate rights of speech and assembly are also available to students(Malabanan vs. Ramento they do not shed their constitutional rights to freedom ofspeech or expression at the schoolhouse gate).Villar vs. TIP exercise of freedom of assembly could not be a basis for barring thestudents from enrolling. Court enjoined the school and its officials from acts of surveillance,blacklisting, suspension, and refusal to enroll. But the Court allowed the non-enrollment ofstudents who clearly incurred marked academic deficiency.Arreza vs. Gregorio Araneta University Foundation Court rejected infliction of highly-disproportionate penalty of denial of enrolmentGuzman vs. National University respondent school was directed to allow petitioningstudents to enroll without prejudice to any disciplinary proceedings in connection with theirparticipation in protests

2. Permissible limitations on exercise of constitutional rights school authoritiesare not virtually powerless to discipline students (Tinker vs. Des Moines conduct by the

student is not immunized by the constitutional guarantee of freedom of speech)But as stated in Guzman, the imposition of disciplinary sanctions requires the observanceofprocedural due process:

a. Students must be informed in writing of the nature and cause of any accusationagainst them

b. They shall have the right to answer the charges against them, with theassistance of counsel if desired

c. They shall be informed of the evidence against themd. They shall have the right to adduce evidence in their own behalfe. Evidence must be duly considered by their investigating committee

Moreover, penalty must be proportionate to the offense committed.

3. A new variation of strategy was created by school officials: Refusing studentsreadmission/re-enrollment on grounds not related to their participation in mass actions butdue to academic deficiency.

4. Nature of contract between a school and its student Alcaraz anchored its decisionon termination of contract theory. But the contract between the school and student isimbued with public interest considering the high priority given by the Constitution toeducation and the States supervisory and regulatory powers over all educationalinstitutions (AXIV, Secs. 1-2, 4[1]). Respondent school cannot justify its actions based onParagraph 137 of the Manual of Regulations for Private Schools, which when read as awhole only grants protection to schools wherein tuition fees are collected and paid on aninstallment basis. Even the Manual itself recognizes the right of the student to be enrolledin his course for the entire period he is expected to complete it (par. 107). This presumptionis translated into a right in BP 232 (Education Act of 1982).

5. Academic freedom not a ground for denying students rights the cases ofGarcia vs. Loyola School of Theology and Tangonan vs. Pano involve different facts and

issues and cannot be used in the instant case.

Villar the right of an institution to set academic standards cannot be utilized todiscriminate against students who exercise their constitutional right to speech andassembly, for otherwise there will be a violation of their right to equal protection.6. Capitol Medical Center vs. CA students had no clear legal right to demand thereopening of the school (closed due to labor disputes with faculty)Licup vs. University of San Carlos issue was WON students were afforded proceduraldue process before disciplinary action was taken against them

7. Petitioners have not denied that 8 of 13 of them incurred failing grades, but counteredthat:

a. 3 of 13 were graduatingb. Academic deficiencies do not warrant non-readmissionc. Breach of discipline was not seriousd. Improper conduct attributed to them was during the exercise of their rightsof free speech and peacable assemblye. No due investigationf. Respondents admit students with worse deficiencies (equal protection)g. Respondent is their choice institution

The 5 students who did not incur failing marks were refused enrollment without just cause.It does not appear that petitioners were afforded due process. Failures cannot beconsidered marked academic deficiency within the context of Villar. It is also not clearwhether the failures were incurred in only one semester or through several semesters.Neither were the academic standards of the school alleged by the respondents to serve asgauge WON the students are academically deficient.

However, these should not be taken to mean that no disciplinary action can be takenagainst petitioners for breach of discipline if the facts so warranted (Malabanan; Guzman must be imposed only after the requirements of procedural due process have beencomplied with, explicit in par. 145 of Manual). But this matter of disciplinary proceedingshave become moot and academic, for the students have been sufficiently penalized whenthey have been excluded from school for 4 semesters.

Dispositive: Petition granted. Orders of RTC judge annulled. Mabini College ordered to readmitand allow re-enrollment of petitioners, without prejudice to its taking the appropriate action, ifshown that they have failed to satisfy the schools prescribed academic standards.

Concurring:Sarmiento Termination of contract theory allowed schools to circumvent the guarantees of theConstitution by denying erring students of their right to enroll, when the single error committedby the students was to participate in political activities. The school must convincingly show that

they demonstrators had deliberately turned to lawlessness.

ROXAS & CO., INC.,petitioner, vs. CA

FACTS:Petitioner Roxas & Co. is a domestic corporation and is the registered owner of three haciendas,namely, Haciendas Palico, Banilad and Caylaway, all located in the Municipality of Nasugbu,Batangas.The events of this case occurred during the incumbency of then President Corazon C.

Aquino who issued Proclamation No.3 promulgating a Provisional Constitution.Before the law s effectivity, petitioner filed with respondent DAR a voluntary offer to sell Hacienda Caylawaypursuant to the provisions ofE.O. No.229. Haciendas Palico and Banilad were later placed undercompulsory acquisition by respondent DAR in accordance with the Republic Act No. 6657, theComprehensive Agrarian Reform Law of 1988(CARL).

In a letter, respondent DAR Secretary informed petitioner that a reclassification of the landwould not exempt it from agrarian reform.Respondent Secretary also denied petitioner s


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withdrawal of the Voluntary Offer to Sell (VOS) on the ground that withdrawal could only bebased on specific grounds such as unsuitability of the soil for agriculture, or if the slope of theland is over 18 degrees and that the land is undeveloped. Despite the denial of the VOSwithdrawal of Hacienda Caylaway, petitioner filed its application for conversion of bothHaciendas Palico and Banilad.

petitioner, through its President, Eduardo Roxas, reiterated its request to withdraw the VOS overHacienda Caylaway Petitioner instituted Case with respondent DAR Adjudication Board(DARAB) praying for the cancellation of the CLOA s issued by respondent DAR in the name of several persons.Petitioner alleged that the haciendas had been declared a tourist zone, is notsuitable for agricultural production. DARAB held that the case involved the prejudicial question

of whether the property was subject to agrarian reform, hence, this question should be submittedto the Office of the Secretary of Agrarian Reform for determination. Petitioner filed with the Courtof Appeals.It questioned the expropriation of its properties under the CARL and the denial of dueprocess in the acquisition of its landholdings.

Meanwhile, the petition for conversion of the three haciendas was denied by the MARO.Petitioner s petition was dismissed by the Court of Appeals. Petitioner moved for reconsideration but the motion was denied by court of Appeals.

ISSUES:Whether or not the DAR observes due process of the proceedings over the three haciendas

HELD:The acquisition proceedings over the three haciendas are nullified for respondent DAR'sfailure to observe due process therein.In accordance with the guidelines set forth in this decision

and the applicable administrative procedure, the case is hereby remanded to respondent DARfor proper acquisition proceedings and determination of petitioner's application for conversion.Failure of respondent DAR to comply with the requisites of due process in the acquisitionproceedings does not give this Court the power to nullify the CLOA s already issued to the farmer beneficiaries.To assume the power is to short-circuit the administrative process, whichhas yet to run its regular course.Respondent DAR must be given the chance to correct itsprocedural lapses in the acquisition proceedings. In Hacienda Palico alone, CLOA's were issuedto 177 farmer beneficiaries in 1993. Since then until the present, these farmers have beencultivating their lands. It goes against the basic precepts of justice, fairness and equity to deprivethese people, through no fault of their own, of the land they till.

Tanada vs. Tuvera

Facts: The Supreme Court, in an earlier decision, affirmed the necessity of the publication ofsecret presidential decrees. Petitioners move for clarification of the courts decision.

Issues:1. Whether publication is necessary for a law to be enforceable2. Whether all laws require publication3. Whether publication must be through the Official Gazette

Held:1. Yes. Art. 2 (Sec. 18) of the Civil Code provides that Laws shall take effect after fifteen

days following the completion of their publication in the Official Gazette, unless it isotherwise provided The Solicitor-General argues that the phrase unless otherwiseprovided refers to publication. The court held that the phrase refers to the fifteen-dayperiod. Publication is a requirement, although the effectivity date may be shorter orlonger than 15 days after publication. Section 6 of the Bill of Rights recognizes theright of people to information on matters of public concern, and this applies to thelegislative enactments of government.

2. Yes. All statutes, including those of general and local applications and private laws,

shall be published as a condition for their effectivity. Covered by this rule are

presidential decrees and executive orders. And so are administrative rules andregulations. Interpretative rules an those internal in nature need not be published.

3. Yes. Although the OG has erratic releases and limited leadership, publication must bethrough OG because it is what is specifically provided by the law (Art. 2 of the CC)*

*superseded by EO 200, allowing publication by OG ornewspaper of gen.circ.

ERMITA-MALATE HOTEL AND MOTEL OPERATORS ASSOCIATION, INC. VS CITYMAYOR OF MANILADate: July 31, 1967

Ponente: Fernando, J.

Facts:

June 13, 1963: The Municipal Board of City of Manila enacted Ordinance No. 4760 which was approved on June 14, 1961 by the then Vice Mayor Herminio Astorga (acting mayor).

July5: 1963: A petition for prohibition against the ordinance was filed by the petititoners Ermita-Malate Hotel and Motel Operators Association, one of its members, Hotel del Mar Inc., acertain Go Chiu (president and general manager of Hotel del Mar Inc.) against the respondentCity Mayor of Manila who was sued in his capacity as such charged with general power.

ALLEGED GRIEVANCES AGAINST THE ORDINANCE:1. It was beyond the powers of the Municipal Board of the City of Manila to enact insofar as itwould regulate motels, on the ground that in the revised charter of the City of Manila or in any

other law, no reference is made to motels;

2. that Section 1 of the challenged ordinance is unconstitutional and void for being unreasonableand violative of due process insofar as it would impose P6000.00 fee per annum for first classmotels and P4,500.00 for second class motels;

3. that the provision in the same section which would require the owner, manager, keeper orduly authorized representative of a hotel, motel or lodging house to refrain from entertaining oraccepting any guest or customer or letting any room or other quarter to any person or personswithout his filling up the prescribed form in a lobby open to public view at all times and in hispresence, wherein the surname, given name and middle name, the date of birth, the address,the occupation, the sex , the nationality, the length of stay and the number of companions in theroom, if any, with the name, relationship, age and sex would be specified, with data furnished asto his residence certificate as well as his passport number, if any coupled with a certification thata person signing such form has personally filled it up and affixed his signature in the presence of

such owner, manager, keeper or duly authorized representative, with such registration formsandrecords kept and bound together, it also being provided that the premises and facilities of such

hotels, motels and lodging houses would be open for inspection either by the City Mayor, or theChief of Police or their duly authorized representatives is unconstitutional and void on dueprocess grounds, not only for being arbitrary, unreasonable or oppressive but also for beingvague, indefinite and uncertain, and for the alleged invasion of the right to privacy and theguaranty against self-incrimination;

4. that Section 2 which prohibits a person less than 18 years old from being accepted in suchhotels, motels, lodging houses, tavern or common inn unless accompanied by parents or alawful guardian and making it unlawful for the owner, manager, keeper or duly authorizedrepresentative of such establishments to lease any room or portion thereof more than twiceevery 24 hours, runs counter to the due process guaranty for lack of certainty and for itsunreasonable, arbitrary and oppressive character;


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5. and that insofar as the penalty provide for in Section 4 of the challenged ordinance for asubsequent conviction would cause the automatic cancellation of the license of the offendedparty, in effect causing the destruction of the business and loss of its investments, there is onceagain a transgression of the due process clause.

At the lower court, both parties did not present evidence but instead submitted a stipulation of facts. The lower court concluded that Ordinance No. 4760 of the City of Manila, would beunconstitutional and therefore null and void. It made permanent the preliminary injunction torestrain the mayor and his agents from enforcing the ordinance in question.

Issue/Held:

Is ordinance No. 4760 of the City of Manila violative of the due process clause? NO

Ratio:LOWER COURT DECISION MUST BE REVERSED. There is absence of any evidence to

offset the presumption of validity that attaches to a challenged statute or ordinance. There beinga presumption of validity, the necessity for evidence to rebut it is unavoidable, unless the statuteor ordinance is void on its face which is the case here. No such factual foundation being laid, thelower court deciding the matter on the pleadings and stipulation of facts, the presumption ofvalidity must prevail and the judgment against the ordinance set aside.

PETITIONERS CANNOT ASSERT WITH PLAUSIBILITY THAT ON ITS FACE, THE ORDINANCE IS FATALLY DEFECTIVE AD BEING REPUGNANT TO THE DUE PROCESSCLAUSE OF THE CONSTITUTION. The ordinance as a manifestation of police power,specifically aimed to safeguard public morals, is immune from imputation of nullity resting purelyon conjecture and unsupported by anything of substance. To do otherwise, would be to unduly

restrict and narrow the scope of police power characterized as the most essential, insistent andthe least limitable of powers extending as it does to all the great public needs.

THE CHALLENGED ORDINANCE WAS PRECISELY ENACTED TO MINIMIZE CERTAIN PRACTICES HURTFUL TO PUBLIC MORAL, as a response to the alarming increase in the rateof prostitution, adultery and fornication in Manila traceable in great part to the existence ofmotels which provide a necessary atmosphere or clandestine entry, presence and exit. Thus,the ordinance seeks to shatter the privacy of clandestine harbouring and transients and guestsby requiring them to fill up registration forms in a lobby open to public view at all times. Theincrease in the license fees is for the purpose of discouraging establishments of this kind fromoperating for purpose other than legal and to increase income of government.

The exercise of police power, the power to prescribe regulations to promote the health, morals peace, good order, safety and general welfare of the people, insofar as it affects the life,liberty, property of any persons is subject to judicial inquiry. IN THIS CASE, THE OBJECTION IS

RAISED TO THE QUESTION OF DUE PROCESS. There is no controlling and precise definitionof due process but it provides a standard to which governmental action should conform in orderthat deprivation of life, liberty and property in each appropriate case may be valid. This standardis RESPONSIVENESS TO THE SUPREMACY OF REASON, OBEDIENCE TO THEDICATATES OF JUSTICE. To satisfy the due process requirement, official action must notoutrun the bounds of reason and result in sheer oppression. Due process is freedom fromarbitrariness. However, due process is not a narrow or technical conception with fixed contentunrelated to time, place and circumstances. Decisions based on the due process clause requirea close and perceptive inquiry into the fundamental principles of our society. Thus, it would bean affront to reason to stigmatize an ordinance enacted precisely to meet what a municipal law-making body considers an evil of rather serious proportion an arbitrary and capricious exerciseof authority.

The ordinance provided for an increase in the license fees provided by the challenged ordinance. It has been the settled law however as far back as 1922 that municipal license fees

could be classified into those imposed for regulating occupations or regular enterprises, for theregulation or restriction of non-useful occupations or enterprises and for revenue purposes only.

Licenses for non-useful occupations are also incidental to the police power and the right to exacta fee may be implied from the power to license and regulate, but in fixing amount of license feesthe municipal corporations are allowed much wider discretion in this class of class than in theformer, and courts have, as a general rule, declined to interfere with such discretion. Thedesirability of imposing restraint upon the number of persons who might otherwise engage innon-useful enterprises is generally an important factor in the determination of the amount of thiskind of license fee. In Lutz v. Araneta, it was held that taxation may be made to implement thestates police power. The mere fact that some individuals in the community may be deprived oftheir present business or a particular mode of earning a living cannot prevent the exercise of thepolice power

The restriction on the freedom to contract is also neither unreasonable nor arbitrary. It was intended to curb the opportunity for the immoral or illegitimate use to which such premises couldbe and are being devoted. It cannot be arbitrary when there is a correspondence between theundeniable existence of an undesirable situation and the legislative attempt at correction. Thepolicy of Laissez fare has to some extent give way to the assumption by government of the rightof intervention even in contractual relations affected with public interest. If the liberty involvedwere freedom of the mind or the person, the standard for the validity of governmental acts ismuch more rigorous and exacting but were the liberty curtailed affects the at the most rights theproperty, the permissible scope of regulatory measure is wider.

Petitioners charge the ordinance as vague and uncertain but the SC holds that the converse is true, i.e., they are too detailed and specific. (Petitioners are contending on the definition ofcompanions as to whether they refer to those arriving with the customer or guest at the time ofthe registry or coming at any indefinite later time to join him; whether the maintenance of themotel rests on its owners or operators; and whether the full rate of payment means a full days or

merely a half-days rate.) What makes a statue susceptible to such a charge is an enactmenteither forbidding or requiring the doing of an act that men of common intelligence mustnecessarily guess at its meaning and differ as to its application.

Magtajas v. Pryce Properties Corporation, Inc. (1994)

FACTS:PAGCOR announced the opening of a casino in Cagayan de Oro. The SangguniangPanglungsod of Cagayan de Oro attempted to prevent the opening by enacting two differentordinances.

Ordinance No. 3353:Prohibits the issuance of business permit and cancels existing business permit to anyestablishment for the using and allowing to be used its premises or portion thereof for theoperation of casino.

And

Ordinance No. 3375-93:Prohibits the operation of casino and provides the penalty for violation therefor.WHEREAS, the City Council as the Legislative Body shall enact measure to suppress anyactivity inimical to public morals and general welfare of the people and/or regulate or prohibitsuch activity pertaining to amusement or entertainment in order to protect social and moralwelfare of the community.

COURT OF APPEALS: Declared the ordinances invalid

ISSUE: WON the two aforementioned ordinances are valid.

T OPICAL ISSUE: WON the phrase gambling and other prohibited games of chance

found in Sec 458, (a), sub-par (1)-(v) of RA 7160 could only mean illegal gambling.


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HELD: No. The two ordinances are contrary to P.D. 1869 (law creating PAGCOR)Yes. The phrase gambling and other prohibited games of chance only means illegal

gambling AND NOT all kinds of gambling. (see 1st point of SCs ratio.

RATIO: Petitioner (Magtajas and Cagayande Oro)

Supreme Court

1. Petitioners contend thatthe legislative powerconferred upon localgovernment units may beexercised over all kindsof gambling and not onlyover illegal gambling.

They also argue that theLocal Government Codeexpressly authorized theLGUs to prevent andsuppress gambling andother prohibited gamesof chance.

Under the rule ofnoscitur a sociis, a word orphrase should be interpreted in relation to, orgiven the same meaning of, words with whichit is associated.Since the word gambling is associated

with and other prohibited games ofchance, the word should be read asreferring to only illegal gambling which, like theother prohibited games of chance must beprevented or suppressed.

2. The adoption of the

Local Government Code(through its repealingclause) modif ied theCharter of the PAGCOR,insofar that it gives theLGUs the discretion toallow/prohibit gambling

P.D. 2869 (the law creating PAGCOR) is notfound in the repealing clause of the Local

Government Code. Repeals are not lightlypresumed in the absence of a clear andunmistakable showing of such intention.

CARLOS SUPERDRUG CORP., ET. AL. vs. DSWDG.R. No. 166494 June 29, 2007

FACTS

Petitioners are domestic corporations and proprietors operating drugstores in the

Philippines. Meanwhile, AO 171 or the Policies and Guidelines to Implement the RelevantProvisions of Republic Act 9257, otherwise known as the Expanded Senior Citizens Act of2003was issued by the DOH, providing the grant of twenty percent (20%) discount in thepurchase of unbranded generic medicines from all establishments dispensing medicines for theexclusive use of the senior citizens.

DOH issued Administrative Order No 177 amending A.O. No. 171. Under A.O. No.177, the twenty percent discount shall not be limited to the purchase of unbranded genericmedicines only, but shall extend to both prescription and non-prescription medicines whetherbranded or generic. Thus, it stated that [t]he grant of twenty percent (20%) discount shall beprovided in the purchase of medicines from all establishments dispensing medicines for theexclusive use of the senior citizens.

Petitioners assert that Section 4(a) of the law is unconstitutional because it constitutesdeprivation 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 wherebydrugstores will be justly compensated for the discount.

RULING

The permanent reduction in their total revenues is a forced subsidy corresponding tothe taking of private property for public use or benefit. This constitutes compensable taking forwhich 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 takers gain but the owners loss. The wordjust is used to intensify the meaning of the word compensation, and to convey the idea that theequivalent to be rendered for the property to be taken shall be real, substantial, full and ample.

A tax deduction does not offer full reimbursement of the senior citizen discount. As

such, it would not meet the definition of just compensation.Having 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 ofpartly subsidizing a government program.

The Court believes so.

The law grants a twenty percent discount to senior citizens for medical and dentalservices, and diagnostic and laboratory fees; admission fees charged by theaters, concert halls,circuses, carnivals, and other similar places of culture, leisure and amusement; fares fordomestic land, air and sea travel; utilization of services in hotels and similar lodgingestablishments, restaurants and recreation centers; and purchases of medicines for theexclusive use or enjoyment of senior citizens. As a form of reimbursement, the law provides thatbusiness establishments extending the twenty percent discount to senior citizens may claim thediscount as a tax deduction.

The law is a legitimate exercise of police power which, similar to the power of eminentdomain, has general welfare for its object. Police power is not capable of an exact definition, buthas been purposely veiled in general terms to underscore its comprehensiveness to meet allexigencies and provide enough room for an efficient and flexible response to conditions andcircumstances, thus assuring the greatest benefits.Accordingly, it has been described as themost essential, insistent and the least limitable of powers, extending as it does to all the great

public needs. It is [t]he power vested in the legislature by the constitution to make, ordain, andestablish all manner of wholesome and reasonable laws, statutes, and ordinances, either withpenalties or without, not repugnant to the constitution, as they shall judge to be for the good andwelfare of the commonwealth, and of the subjects of the same.

For 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, thoughsheltered by due process, must yield to general welfare.

Police power as an attribute to promote the common good would be dilutedconsiderably 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 thealleged confiscatory effect of the provision in question, there is no basis for its nullification inview of the presumption of validity which every law has in its favor.

Given these, it is incorrect for petitioners to insist that the grant of the senior citizendiscount is unduly oppressive to their business, because petitioners have not taken time to


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calculate correctly and come up with a financial report, so that they have not been able to showproperly whether or not the tax deduction scheme really works greatly to their disadvantage.

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 propertyrights 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, continuouslyserve as a reminder that the right to property can be relinquished upon the command of theState for the promotion of public good.

MMDA vs. Vron Transportation

Facts:

Pursuant to the E.O., the Metro Manila Council (MMC), the governing board and policymakingbody of the MMDA, issued Resolution No. 03-07 series of 20037 expressing full support of theProject. Recognizing the imperative to integrate the different transport modes via theestablishment of common bus parking terminal areas, the MMC cited the need to remove thebus te rmina ls l oca ted along major thoroughfares o f Metro Man ila.8On February 24, 2003, Viron Transport Co., Inc. (Viron), a domestic corporation engaged in the

business of public transportation with a provincial bus operation,9 filed a petition for declaratoryrelief10 before the RTC11 of Manila.

In its petition which was docketed as Civil Case No. 03-105850, Viron alleged that the MMDA,through Chairman Fernando, was "poised to issue a Circular, Memorandum or Order closing, ortantamount to closing, all provincial bus terminals along EDSA and in the whole of theMetropolis under the pretext of traffic regulation."12 This impending move, it stressed, wouldmean the closure of its bus terminal in Sampaloc, Manila and two others in Quezon City.

Issue: Will the elimination of the terminal a valid exercise of police powers by the MMDA

Ruling: No, the MMDA cannot order the closure of respondents terminals not only because noauthority to implement the Project has been granted nor legislative or police power beendelegated to it, but also because the elimination of the terminals does not satisfy the standardsof a valid police power measure.

Social Justice Society, et al. vs. Atienza, Jr., G.R. No. 156052, 7 March 2007; Corona, J.;First Division) Digest

Facts: On November 20, 2001, the Sangguniang Panlungsod of Manila enacted Ordinance No.8027, which ordinance became effective on December 28, 2001, after its publication. OrdinanceNo. 8027 reclassified the area described therein from industrial to commercial and directed theowners and operators of businesses disallowed under Section 1 to cease and desist fromoperating their businesses within six months from the date of effectivity of the ordinance. Amongthe businesses situated in the area are the so-called Pandacan Terminals of the oil companiesCaltex, Petron and Shell.

However, on June 26, 2002, the City of Manila and the Department of Energy (DOE) enteredinto a memorandum of understanding (MOU) with the oil companies in which they agreed thatthe scaling down of the Pandacan Terminals [was] the most viable and practicable option. Underthe MOU, the City of Manila and the DOE committed, among others, to enable the OIL

COMPANIES to continuously operate in compliance with legal requirements, within the limitedarea resulting from the joint operations and the scale down program.

The Sangguniang Panlungsod ratified the MOU in Resolution No. 97. In the same resolution, theSanggunian declared that the MOU was effective only for a period of six months starting July 25,2002. Thereafter, on January 30, 2003, the Sanggunian adopted Resolution No. 13 extendingthe validity of Resolution No. 97 to April 30, 2003 and authorizing Mayor Atienza to issue specialbusiness permits to the oil companies. Resolution No. 13, s. 2003 also called for areassessment of the ordinance.

Petitioners filed this original action for mandamus on December 4, 2002 praying that Mayor

Atienza be compelled to enfo rce Ordinance No. 8027 and order the immediate removal of theterminals of the oil companies.

Issue: Whether or not respondent has the mandatory legal duty to enforce Ordinance No. 8027and order the removal of the Pandacan Terminals.

Under Rule 65, Section 3 of the Rules of Court, a petition for mandamus may be filed when anytribunal, corporation, board, officer or person unlawfully neglects the performance of an actwhich the law specifically enjoins as a duty resulting from an office, trust or station. Mandamus isan extraordinary writ that is employed to compel the performance, when refused, of a ministerialduty that is already imposed on the respondent and there is no other plain, speedy andadequate remedy in the ordinary course of law. The petitioner should have a well-defined, clearand certain legal right to the performance of the act and it must be the clear and imperative dutyof respondent to do the act required to be done.

When a mandamus proceeding concerns a public right and its object is to compel a public duty,the people who are interested in the execution of the laws are regarded as the real parties ininterest and they need not show any specific interest. Besides, as residents of Manila,petitioners have a direct interest in the enforcement of the city's ordinances. Respondent neverquestioned the right of petitioners to institute this proceeding.

On the other hand, the Local Government Code imposes upon respondent the duty, as citymayor, to enforce all laws and ordinances relative to the governance of the city. One of these isOrdinance No. 8027. As the chief executive of the city, he has the duty to enforce Ordinance No.8027 as long as it has not been repealed by the Sanggunian or annulled by the courts. He hasno other choice. It is his ministerial duty to do so.

Issue: Whether or not the June 26, 2002 MOU and the resolutions ratifying it can amend orrepeal Ordinance No. 8027.

This issue need not be resolved. Assuming that the terms of the MOU were inconsistent withOrdinance No. 8027, the resolutions which ratified it and made it binding on the City of Manilaexpressly gave it full force and effect only until April 30, 2003. There is nothing that legallyhinders respondent from enforcing Ordinance No. 8027.

ICHONG V. HERNANDEZNature: Original Action in the Supreme Court for injunction and mandamusDate: May 31, 1957Ponente: Labrador, J.

Doctrine: The power of the legislature to make distinctions and classifications among persons isnot curtailed or denied by the equal protection of the laws clause. The legislative power admitsof a wide scope of discretion and a law can be violative of the constitutional limitation only whenthe classification is without reasonable basis. In this case, citizenship is a legal and valid groundfor classification.

Facts:


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Congress enacted Republic Act No. 1180 entitled An Act to Regulate the Retail Business. Essentially, it nationalizes the retail trade business and regulates the participation of alienretailers in the domestic market.

The main provisions of the Act are as follows:(1) A prohibition against persons, not citizens of the Philippines, and against associations,partnerships, or corporations the capital of which are not wholly owned by citizens of thePhilippines, from engaging directly or indirectly in the retail trade;

(2) An exception from the above prohibition in favor of aliens actually engaged in said business

on May 15, 1954, who are allowed to continue to engage therein, unless their licenses areforfeited in accordance with the law, until their death or voluntary retirement in case of naturalpersons, and for 10 years after the approval ofthe Act or until the expiration of term in case of juridical persons;

(3) An exception therefrom in favor ofcitizens and juridical entities of the United States;

(4) A provision for the forfeiture of licenses (to engage in the retail business) for violation of lawson nationalization, economic control weights and measures and labor and other laws relating totrade, commerce and industry;

(5) A prohibition against the establishment or opening by aliens actually engaged in the retailbusiness of additional stores or branches of retail business;

(6) A provision requiring aliens actually engaged in the retail business to present for registration

with the proper authorities a verified statement concerning their businesses, giving, among othermatters, the nature of the business, their assets and liabilities and their offices and principaloffices of juridical entities; and

(7) A provision allowing the heirs of aliens now engaged in the retail business who die, tocontinue such business for a period of 6 months for purposes of liquidation

Petitioner Ichong (for his behalf and on behalf of other alien residents, corporations, and partnerships) brought this action to obtain a judicial declaration that RA 1180 is unconstitutionaland to enjoin the Secretary of Finance and all other persons under him from enforcing itsprovisions

Petitioners contentions:(1) It denies alien residents the equal protection of the laws and deprives them of their libertyand property without due process of law;

(2) The subject of the Act is not expressed or comprehended in the title thereof;(3) The Act violates international and treaty obligations of the Republic of the Philippines;(4) The provisions of the Act against the transmission by aliens of their retail business thruhereditary succession, and those requiring 100% Filipino capitalization for a corporation or entityto entitle to engage in the retail business, violate Sections 1 and 5 of Article XIII and Section 8 of

Article XIV of the Constitution

In response, the Solicitor-General and the Fiscal of the City of Manila argue that:(1) The Act was passed in the valid exercise of the police power of the State, which exercise isauthorized in the Constitution in the interest of national economic survival;(2) The Act has only one subject embraced in the title;(3) No treaty or international obligations are infringed;(4) As regards hereditary succession, only the form is affected but the value of the property isnot impaired, and the institution of inheritance is only of statutory origin

Issue:

Whether or not Republic Act No. 1180 (An Act to Regulate the Retail Business) is valid andconstitutional

Held/Ratio:Yes, RA 1180 is constitutional. It was enacted to remedy a real actual threat and danger to

national economy posed by alien dominance and control andsuch enactment clearly falls within the scope of the police power of the state. Aside from this,RA 1180 does not violate the equal protection clause because sufficient grounds exist for thedistinction between alien and citizen in the exercise of the occupation regulated, nor the dueprocess of law clause because the law is prospective in operation and recognizes the privilegeof aliens already engaged in the occupation.

RA 1180 was approved in the exercise of police power. Police power is so far-reaching in scope that it has become almost impossible to limit its sweep. It derives its existence from thevery existence of the State itself; it is co-extensive with self-protection and survival. The field andscope of police power has become almost boundless, just as the fields of public interest andpublic welfare have become almost all-embracing and have transcended human foresight. Inthis regard, the Constitution does not define the scope or extent of the police power of the State,what it does is to set forth its limitations the most important of which are the due processclause and the equal protection clause.

The basic limitations on police power are manifested in Section 1 of Article III of the Philippine Constitution: 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 the laws. These constitutionalguarantees are not limited to citizens but are universal in their application, without regard to anydifferences of race, of color, or of nationality.

The equal protection clause is against undue favor and individual or class privilege, as well as hostile discrimination or the oppression of inequality. However, it does not demand absoluteequality among residents; it merely requires that all persons shall be treated alike, under likecircumstances and conditions both as to privileges conferred and liabilities enforced. Moreover,the equal protection clause is not infringed by legislation which applies to people in a specifiedclass, if such applies to all persons within such class and if reasonable grounds exist for makinga distinction between such classes.

The due process clause has to do with the reasonableness of legislation enacted in pursuance of the police power. There must be a public interest, public purpose, or public welfareinvolved in order to justify the pursuance of police power.

The retailer performs important functions in the economy, they see to it that daily commoditiesare within easy reach of consumers. In the Philippines, there is a general feeling on the part of

the public about the controlling and dominant position that the alien retailer holds in the nationseconomy. Statistics reveal that alien participation has steadily increased throughout the years(1941-1951). Although Filipinos have the edge in the number of retailers, alien retailers make upfor it through their assets and gross sales which average between six and seven times those ofthe many Filipino retailers.

Dangers of alien control and dominance in retail: (1) alien retailers and merchants can act in unison and concert on such vital matters as the fixing of prices, the determination of the amountof goods to be available in the market, etc.; (2) nationals, producers, and consumers can all beplaced completely at their mercy; (3)pernicious and intolerable practices of alien retailers (suchas hoarding, creating artificial scarcities, bribing public officials).

RA 1180 is not the product of racial hostility but the expression of the legitimate desire and determination to free the nation from economic disadvantage. The law is clearly in the interest ofthe public, of national interest itself, and indisputably falls within the scope of police power, thru

which and by which the State insures its existence and security and the supreme welfare of itscitizens.


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Objections to alien participation in retail trade: (1) the alien retailer has shown such utter disregard for his customers; (2) the alien retailer never really makes a genuine contribution tonational income and wealth; (3) secret manipulations of stock commodities and prices; and (4)the aliens transient and temporary interest in the country.

The difference in alien aims and purposes is sufficient basis for distinction of retail traders into nationals and aliens. Aside from this, the wisdom behind the legislatures classification is theprerogative of the law-making power. The Court held that the classification is actual, real andreasonable, and all persons of one class are treated alike, therefore the legislature acted withinits legitimate prerogative and within the bounds of the Constitution.

RA 1180 is not an arbitrary exercise of legislative power. Rather, it is only a continuance of thenationalistic protective policy laid down in the Constitution. In the Preamble, for instance, it isstated that a principal objective is the conservation of the patrimony of the nation and limiting toFilipino citizens the exploitation, development, and utilization of its natural resources. Section 8of Article XIV also provides that no franchise, certificate, or any other form of authorization forthe operation of a public utility shall be granted except to citizens of the Philippines.

The provisions of RA 1180 are not unreasonable. It even shows how tolerant the Legislature has been. It must be noted that the law is made prospective and recognizes the right andprivilege of those already engaged in the occupation to continue therein during the rest of theirlives. The only by way by which they will be denied the right and privilege is upon conviction ofcertain offenses.

Dispositive: Petition denied.

Padilla, J., concurring and dissenting:- Concurs with the proposition, principle, or rule that courts may not inquire into the wisdom of an

Act passed by the Congress and duly approved by the President of the Republic.- However, he is satisfied that the Act assailed is violative of the due process of law and theequal protection of the law clauses of the Constitution insofar as it affects associations andpartnerships referred to in the Act and to aliens who are and have been engaged in the saidbusiness.- The prohibition to engage in retail business by associations and partnerships, the capital ofwhich is not wholly owned by citizens of the Philippines, after ten years from the date of theapproval of the Act, even before the end of the term of their existence as agreed upon by theassociates and partners, and by alien heirs to whom the retail business is transmitted by thedeath of an alien engaged in the business amounts to a deprivation of their property without dueprocess of law.- Section 1 of the Act, insofar as it compels associations and partnerships to therein wind up

their retail business within 10 years from the date of the approval of the Act and Section 3insofar as it compels the alien heirs of a deceased alien engaged in retail business in hislifetime, his executor or administrator, to liquidate the business, are invalid for they violate thedue process of law and the equal protection of the laws clauses of the Constitution.

Tatad vs. Secretary of the Department of Energy | PunoG.R. No. 124360 and 127867, November 5, 1997 | SCRAKeywords: Oil Deregulation Law

FACTS

The petitions at bar challenge the constitutionality of R.A. 8180 entitled An Act

Deregulating the Downstream Oil Industry and For Other Purposes. R.A. 8180 endstwenty six years of government regulation of the downstream oil industry.

Until the early seventies, the downstream oil industry was controlled by multinational

companies. On November 9, 1973, President Marcos created the Philippine National Oil Corporation

(PNOC) to break the control by foreigners of our oil industry. PNOC later operated under thebusiness name PETRON Corporation. For the first time, there was a Filipino presence in theoil market.

By 1985, three oil companies were operating in the countryCaltex, Shell, and thegovernment-owned PNOC.

On December 9, 1992, Congress enacted R.A. No. 7638 which:o Created the Department of Energy

o The thrust of the Philippine energy program was privatization and

deregulation among others. The law also aimed to encourage free andactive participation and investment by the private sector in all energyactivities.

o Section 5(e) of the law states that at the end of four years from the

effectivity of this act, the Department shall, upon approval of the President,institute the programs and timetable of deregulation of appropriate energyprojects and activities of the energy industry.

Pursuant to R.A. No. 7638, government approved the privatization of Petron Corporation.

On March 1996, Congress took the audacious step of deregulating the downstream oil

industry. It enacted R.A. 8180, entitled the Downstream Oil Industry Deregulation Act of1996. Under the deregulated environment, any person or entity may import or purchaseany quantity of crude oil and petroleum products from a foreign or domestic source, lease orown and operate refineries and other downstream oil facilities and market such as crude oilor use the same for his own requirement, subject only to monitoring by the DOE.

o The deregulation has two phases: the transition phase (controls the non-

pricing aspects of the oil industry were to be lifted), and the full deregulationphase (controls on the price of oil and the foreign exchange cover were to

be lifted and the Oil Price Stabilization Fund, OPSF was to be abolished).

On February 8, 1997, the President implemented the full deregulation of the

Downstream Oil Industry through E.O. No. 372.

The petitioners assail the constitutionality of various provisions of R.A. No. 8180 and E.O.No. 372.

ISSUES & ARGUMENTS

Petitioner Francisco S. Tatad seeks the annulment of Section 5(b) of R.A. No. 8180.

The imposition of tariff rates on imported crude oil and imported refined petroleum products

violates the equal protection clause.o The 3%-7% tariff differential unduly favors the three existing oil refineries

and discriminates against prospective investors in the downstream oilindustry who do not have their own refineries and will have to source refinedpetroleum products from abroad.

The imposition of different tariff rates does not deregulate the downstream oil industry but

instead controls the oil industry, contrary to the avowed policy of the law.o It protects the interest of oil companies with existing refineries.

That the inclusion of the tariff provision violates Section 26(1) Article VI of the Constitution

requiring every law to have only one subject which shall be expressed in its title.o The imposition of tariff rates in Section 5(b) of R.A. No. 8180 is foreign to

the subject of the law which is the deregulation of the downstream oilindustry.

Petitioners Edcel C. Lagman, Joker P. Arroyo, Enrique Garcia, Wigberto Tanada, FlagHuman Right Foundatio, Inc., Freedom from Debt Coalition (FDC) and Sanlakas contestthe constitutionality of Section 15 of R.A. No. 8180 and E.O. No. 392.

Section 15 of R.A. No. 8180 constitutes an undue delegation of legislative power to the

President and the Secretary of Energy.o Law does not provide a determinate and determinable standard to guide the


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Executive Branch in determining when to implement the full deregulation ofthe downstream oil industry.

o Petitioners contend that the phrases as far as practicable, decline of

crude oil prices in the world market and stability of the peso exchange rateto the US dollar are ambivalent, unclear, and inconcrete in meaning.

E.O. No. 392 implementing the full deregulating of the downstream oil industry is arbitrary

and unreasonableo It was enacted due to the alleged depletion of the OPSF Funda condition

not found in R.A. 8180.

Section 15 of R.A. No. 8180 and E.O. 392 allow the formation of a de facto cartel among the

three existing oil companiesPetron, Caltex, and Shellin violation of Section 19 of ArticleXII of the 1987 Constitution against monopolies, combina tions in restraint of trade and unfaircompetition. The alleged violative prohibitions are Section 5(b), Section 6, and Section 9(b).

Respondent defend the constitutionality of the R.A. No. 8180 and E.O. 392. In addition,respondents contend:

That the issues raised are not justiciable as they pertain to the wisdom of the law.

Petitioners have no locus standi as the did not nor will they sustain direct injury as a result ofthe implementation of R.A. No. 8180.

PROCEDURAL ISSUES:(1) WoN the petitioners raise a justiciable controversy.(2) WoN the petitioners have standing to assail the validity of the subject law and the

executive order.SUBSTANTIVE ISSUES:

(1) WoN Section 5(b) violates the one title-one subject requirement of the Constitution.(2) WoN the same section violates the equal protection clause of the Constitution.(3) WoN Section 15 violates the constitutional prohibition on undue delegation of power.(4) WoN E.O. 392 is arbitrary and unreasonable; and(5) WoN R.A. 8180 violates Section 19 of Article XII of the 1987 Constitution against

monopolies, combinations in restraint of trade and unfair competition.

HELD

. PROCEDURAL ISSUES:(1) Yes, petitioners raise a justiciable controversy. The Court may resolve the

constitutionality of the said law while prudentially refusing to pass on its wisdom.(2) Yes, the petitioners have standing to assail the validity of the subject law and the

executive order because of the issues transcendental significance to the people.SUBSTANTIVE ISSUES:

(1) No, Section 5(b) does not violate the one title-one subject requirement of theConstitution. Section 5(b) providing for tariff differential is germane to the subject ofR.A. No. 8180 which is the deregulation of the downstream oil industry.

(2) WoN the same section violates the equal protection clause of the Constitution.(3) No, Section 15 does not violate the constitutional prohibition on undue delegation of

power. Section 15 can hurdle both the completeness test and the sufficient standardtest.

(4) Yes, E.O. 392 is arbitrary and unreasonable. The Executive department failed tofollow faithfully the standards set by R.A. No. 8180 when it considered the extraneousfactor of the depletion of the OPSF fund.

(5) Yes, R.A. 8180 violates Section 19 of Article XII of the 1987 Constitution againstmonopolies, combinations in restraint of trade and unfair competition as its provisionson tariff differential, inventory reserves and predatory prices impose substantialbarriers to the entry and exit of new players in our downstream oil industry.

RATIONALE

Procedural Issues(1) The principle of separation of power mandates that challenges on the constitutionality of a

law should be resolved in our courts of justice while doubts on the wisdom of a law shouldbe debated in the halls of Congress.

Judicial power includes:a. The duty to settle actual controversies involving rights which are legally

demandable and enforceableb. The duty to determine whether or not there has been a grave abuse of

discretion amounting to lack or excess of jurisdiction on the part of any branchor instrumentality of the government.

Where a statute violates the Constitution, it is not only the right but the duty of the judiciaryto declare such act as unconstitutional and void.

Petitioners have raised constitutional issues which deserve the resolution of this Court inview of their seriousness and their value as precedents.

(2) The court has adopted a liberal stance on petitioners locus standiwhere petitioner is ableto craft an issue of transcendental significance to the people.

Substantive Issues(1) This Court has adopted a liberal construction of the one titleone subject rule.

A law having a single general subject indicated in the title may contain any number ofprovisions, no matter how diverse they may be, so long as they are not inconsistent with orforeign to the general subject, and may be considered in furtherance of such subject byproviding for the method and means of carrying out the general subject.

(2)

(3) There are two accepted tests to determine whether or not there is a valid delegation of

legislative power.

a. Completeness Test: The law must be complete in all its terms and conditionswhen it leaves the legislative such that when it reaches the delegate the onlything he will have to do is enforce it.

Full deregulation at the end of the March 1997 is mandatory and theExecutive has no discretion to postpone it for any purported reason.Thus, the law is complete on the question of the final date of fullderegulation.

b. The Sufficient Standard Test: there must be adequate guidelines or limitationsin the law to map out the boundaries of the delegates authority and prevent thedelegation from running riot.

Section 15 lays down the standard to guide the judgment of the

Presidenthe is to time it as far as practicable when the prices ofcrude oil and petroleum products in the world market are decliningand when the exchange rate of the peso in relation to the US dollar isstable.

The courts bend as far back as possible to sustain the constitutionality of laws which areassailed as unduly delegating legislative powers.

The dictionary meaning of the words as far as practicable, declining and stable are wellsettled and cannot confuse men of reasonable intelligence.

(4) Section 15 did not mention the depletion of the OPSF fund as a factor to be given weightby the Executive before ordering full deregulation.

By considering another factor to hasten full deregulation, the Executive department rewrotethe standards set forth in R.A. 8180. The Executive is bereft of any right to alter either bysubtraction or addition the standards set in R.A. 8180 for it has no power to make laws.

The Executive co-mingled the factor of depletion of the OPSF fund with the factors of

decline of the price of crude oil in the world market and the stability of the peso to the USdollar.


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The early deregulation under E.O. 392 constitutes a misapplication of R.A. No. 8180.

(5)A monopoly is a form of a market structure in which one or on ly a few firms dominate thetotal sales of a product or service. A combination in restraint of trade is an agreement orunderstanding between two or more persons, in the form of a contract, trust, pool, holdingcompany, or other form of association, for the purpose of unduly restricting competition,monopolizing trade and commerce in a certain commodity, controlling its production,distribution and price, or otherwise interfering with the freedom of trade without statutoryauthority. Combination in restraint of trade refers to the means while monopoly refers tothe end.

Respondents aver that Sections 5(b), 6, and 9(b) implement the policies and objectives ofR.A. No. 8180.o The 4% tariff differential is designed to encourage new entrants to invest in

refineries.o The inventory requirement is meant to guaranty continuous domestic

supply of petroleum.o The prohibition against predatory pricing is intended to protect prospective

entrants.

Competition that is fighting yet fair, which requires several players, is the underlyingprinciple of Section 19, Article XII of our Constitution for it alone can release thecreative forces of the market. This cannot be violated by R.A. No. 8180.

The provisions on tariff differential, inventory reserves and predatory prices imposesubstantial barriers to the entry and exit of new players in our downstream oilindustry.

o On the tariff differential: new players that intend to equalize the market

power of Petron, Shell, and Caltex by building refineries of their own willhave to spend billions of pesos. Those who will not build refineries butcompete with them will suffer the huge disadvantage of increasing theirproduct cost by 4%. The first need is to attract new players and theycannot be attracted by burdening them with heavy disincentives.

o On the inventory reserves: Prospective competitors will find compliance

with this requirement difficult as it will entail prohibitive cost.

o On predatory pricing: Predatory pricing will be profitable only if the market

contains significant barriers to new entry. Considering these significantbarriers established by R.A. No. 8180 and the lack of players with thecomparable clout of PETRON, SHELL, and CALTEX, the temptation for adominant player to engage in predatory pricing and succeed is a chillingreality.

The separability clause notwithstanding, the offending provisions of the R.A. No. 8180 sopermeate its essence that the entire law has to be struck down. Congress could not havederegulated the downstream oil industry without these provisions.

The Court is annulling R.A. No. 8180 not because it disagrees with deregulation as an economicpolicy but because as cobbled by Congress in its present form, the law violates the Constitution.The right call therefore should be for Congress to write a new oil deregulation law that conformswith the Constitution and not for this Court to shirk its duty of striking down a law that offends theConstitution.

INTERNATIONAL SCHOOL ALLIANCE vs. QUISIMBING

FACTSInternational School Inc., pursuant to PD 732, is an educational institution targeted towards

dependents of foreign diplomats and other temporary residents. As such, they hire their teachersboth from the Philippines and from abroad.

To indicate whether they are foreign hires or local hires, they take into consideration 1) domicile2) home economy 3) economic allegiance 4) was the school responsible for bringing theindividual to the Philippines.

The problem lies in the salary of the teachers. As foreign hires, they are accorded benefits thatlocal hires do not have. These include, housing, transportation, shipping costs, taxes, and homeleave travel allowance. Their salaries are also higher by 25%. The school gives 2 reasons: 1)dislocation factor and 2) limited tenure.

In a new collective bargaining agreement, ISA educators contested this difference in salary.

Filing a strike, DOLE assumed jurisdiction. Acting secretary Trajano decided in favor of theschool, and DOLE secretary Quisumbing denied the motion for reconsideration.

Petitioner claims that the point-of-hire classification is discriminatory to Filipinos. Respondentsclaim, however, that this is not so as a number of their foreign educators are in fact local-hires.

ISSUE:Whether or not the 25% difference in salary is discriminatory.HELD:Yes it is.

RATIO:In deciding the case, the court points first to the 1987 Constitution, particularly the Article onSocial Justice and Human Rights, which the court says this discrimination is against.

They also point to international law, which likewise looks down on discrimination. It then goesfurther to say that this is even worse when the discrimination is done in the workplace. Pointingagain to the Constitution, they assert that it promotes equality of employment opportunities toall, as well as the Labor Code, which ensure equal opportunity for all.

Article 135 of the Labor Code looks down on discrimination in terms of wages. Article 248declares such a practice unfair.

Also cited is the International Covenant on Economic, Social and Cultural Rights. Article 7 talksabout the ensuring of remuneration, as well as fair and equal wages and remuneration.

In this case, there is no evidence in a difference of workload nor of performance, so thepresumption is that all the employees are performing at equal levels. There is no evidence of theforeign hires being 25% more efficient. The schools claimed need to entice these foreign hiresis not a good defense, either. As for compensation, the other forms of compensation are

enough.Before ending, the court says, however, that the foreign and local hires are not part of the samebargaining unit, nor is there any showing of an attempt to consolidate the two.

Republic v Castelvi

FACTS:1. Republic (Philippine Air Force) occupied Castellvis land on July 1, 1947, by virtue of acontract of lease, on a year to year basis..

2. Before the expiration of the contract of lease in 1956, the Republic sought to renew thecontract but Castellvi refused.

3. The AFP refused to vacate the land. Castellvi wrote to the AFP Chief of Staff informing himthat the heirs of the property had decided to subdivide the land for sale to the general public.


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4. The Chief of Staff answered that it was difficult for the AFP to vacate in view of the permanentinstallations erected and that the acquisition of the property by expropriation proceedings wouldbe the only option.

5. Castellvi brought a suit to eject the Phil. Air Force from the land. While the suit was pending,the Republic of the Phil. filed a complaint for eminent domain against Vda. De Castellvi andToledo-Gozun over parcels of land owned by the two.

6. Trial Court issued an order fixing the provisional value of lands at P259, 669

7. Castellvi filed a Motion to Dismiss for the following reasons:

a) the total value of the parcels land should have been valued at P15/sq.m. because these areresidential lands.b) the Republic (through the Philippine Air Force), despite repeated demands had been illegallyoccupying the property since July 1, 1956.

The defendants prayed that the complaint be dismissed OR that the Republic be ordered to payP15/ sq. m. plus interest at 6% per annum from July 1, 1956 AND the Republic be ordered topay 5 million as unrealized profits.

Gozun (co-defendant and owner of another parcel of land) also filed a Motion to Dismissbecause her lands should have been valued at P15/sq.m. as these were residential and aportion had already been subdivided into diff. Lots for sale to the general public.

8. After the Republic had deposited the provisional value of the land, it was actually placed in the

actual possessions of the lands. (1959)

9. The Commissioners appointed to determine the value of the land recommended that thelowest price that should be paid was P10/sq.m. The trial court accepted the recommendation.

10. 1961 Republic filed a motion for a new trial upon the grounds of newly-discoveredevidence but was denied by the court. A series of appeals and counter appeals followed.

11. Republic elevated the case to the Supreme Court.

Important Issues:1. WON the lower court erred holding that the taking of the properties commenced with the fillingof the action.2. WON the lower court erred in finding the price of P10/sq.m. of the lands.

DECISION:Issue #1.The trial court is correct in ruling that the taking of the land started only with the filing of thecomplaint for eminent domain in 1959 and not in 1947 (start of the contract of lease).1. Two essential elements in the taking of the property were not present when the Republicentered and occupied the property in 1947.a) that the entrance and occupation must be for a permanent, or indefinite periodb) that in devoting the property to public use the owner was ousted from the property anddeprived of its financial use.2. The right of eminent domain may not be exercised by simply leasing the premises to beexpropriated. Nor can it be accepted that the Republic wouldenter into a contract of lease where its real intention was to buy.3. To sustain the contention of the Republic would result in a practice wherein the Republicwould just lease the land for many years then expropriate the land when the lease is about toterminate, then claim that the taking of the property be considered as of the date when the

Govt started to occupy the land, in spite of the fact that the value of the property had increasedduring the period of the lease. This would be sanctioning what obviously is a defective

scheme, which would have the effect of depriving the owner of the property of its trueand fair value at the time when the expropriation proceedings were actually instituted incourt.

Issue # 2The price of P10/sq.m. is quite high. The Supreme Court fixed it at P5/sq.m.1. There is evidence that the lands in question had ceased to be devoted to the production ofagricultural crops, that they had become adaptable for residential purposes, and that thedefendants had actually taken steps to convert their lands into residential subdivisions evenbefore the Republic filed the complaint for eminent domain.2. In expropriation proceedings, the owner of the land has the right to its value for the use for

which it would bring the most in the market.3. The Court has weighed all the circumstances (such as the prevailing price of the land inPampanga in 1959) and in fixing the price of the lands the Court arrived at a happy mediumbetween the price as recommended by the commissioners and approved by the lower court(P10) and the price advocated by the Republic (20 centavos /sq.m.


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due process - digests tibay to castellvi

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