Monday, March 19, 2012

MMDA v Viron Transport G.R. No. 170656 August 15, 2007

J. Carpio Morales

GMA declared Executive Order (E.O.) No. 179 operational, thereby creating the MMDA in 2003. Due to traffic congestion, the MMDA recommended a plan to “decongest traffic by eliminating the bus terminals now located along major Metro Manila thoroughfares and providing more and convenient access to the mass transport system.” The MMC gave a go signal for the project. Viron Transit, a bus company assailed the move. They alleged that the MMDA didn’t have the power to direct operators to abandon their terminals. In doing so they asked the court to interpret the extent and scope of MMDA’s power under RA 7924. They also asked if the MMDA law contravened the Public Service Act.
Another bus operator, Mencorp, prayed for a TRO for the implementation in a trial court. In the Pre-Trial Order17 issued by the trial court, the issues were narrowed down to whether 1) the MMDA’s power to regulate traffic in Metro Manila included the power to direct provincial bus operators to abandon and close their duly established and existing bus terminals in order to conduct business in a common terminal; (2) the E.O. is consistent with the Public Service Act and the Constitution; and (3) provincial bus operators would be deprived of their real properties without due process of law should they be required to use the common bus terminals. The trial court sustained the constitutionality.
Both bus lines filed for a MFR in the trial court. It, on September 8, 2005, reversed its Decision, this time holding that the E.O. was "an unreasonable exercise of police power"; that the authority of the MMDA under Section (5)(e) of R.A. No. 7924 does not include the power to order the closure of Viron’s and Mencorp’s existing bus terminals; and that the E.O. is inconsistent with the provisions of the Public Service Act.
MMDA filed a petition in the Supreme Court. Petitioners contend that there is no justiciable controversy in the cases for declaratory relief as nothing in the body of the E.O. mentions or orders the closure and elimination of bus terminals along the major thoroughfares of Metro Manila. To them, Viron and Mencorp failed to produce any letter or communication from the Executive Department apprising them of an immediate plan to close down their bus terminals.
And petitioners maintain that the E.O. is only an administrative directive to government agencies to coordinate with the MMDA and to make available for use government property along EDSA and South Expressway corridors. They add that the only relation created by the E.O. is that between the Chief Executive and the implementing officials, but not between third persons.

1. Is there a justiciable controversy?
2. Is the elimination of bus terminals unconstitutional?

Held: Yes to both. Petition dismissed.

1. Requisites: (a) there must be a justiciable controversy; (b) the controversy must be between persons whose interests are adverse; (c) the party seeking declaratory relief must have a legal interest in the controversy; and (d) the issue invoked must be ripe for judicial determination
It cannot be gainsaid that the E.O. would have an adverse effect on respondents. The closure of their bus terminals would mean, among other things, the loss of income from the operation and/or rentals of stalls thereat. Precisely, respondents claim a deprivation of their constitutional right to property without due process of law.
Respondents have thus amply demonstrated a "personal and substantial interest in the case such that [they have] sustained, or will sustain, direct injury as a result of [the E.O.’s] enforcement." Consequently, the established rule that the constitutionality of a law or administrative issuance can be challenged by one who will sustain a direct injury as a result of its enforcement has been satisfied by respondents.
2. Under E.O. 125 A, the DOTC was given the objective of guiding government and private investment in the development of the country’s intermodal transportation and communications systems. It was also tasked to administer all laws, rules and regulations in the field of transportation and communications.
It bears stressing that under the provisions of E.O. No. 125, as amended, it is the DOTC, and not the MMDA, which is authorized to establish and implement a project such as the one subject of the cases at bar. Thus, the President, although authorized to establish or cause the implementation of the Project, must exercise the authority through the instrumentality of the DOTC which, by law, is the primary implementing and administrative entity in the promotion, development and regulation of networks of transportation, and the one so authorized to establish and implement a project such as the Project in question.
By designating the MMDA as the implementing agency of the Project, the President clearly overstepped the limits of the authority conferred by law, rendering E.O. No. 179 ultra vires. There was no grant of authority to MMDA. It was delegated only to set the policies concerning traffic in Metro Manila, and shall coordinate and regulate the implementation of all programs and projects concerning traffic management, specifically pertaining to enforcement, engineering and education.
In light of the administrative nature of its powers and functions, the MMDA is devoid of authority to implement the Project as envisioned by the E.O; hence, it could not have been validly designated by the President to undertake the Project.
MMDA’s move didn’t satisfy police power requirements such as that (1) the interest of the public generally, as distinguished from that of a particular class, requires its exercise; and (2) the means employed are reasonably necessary for the accomplishment of the purpose and not unduly oppressive upon individuals. Stated differently, the police power legislation must be firmly grounded on public interest and welfare and a reasonable relation must exist between the purposes and the means.
As early as Calalang v. Williams, this Court recognized that traffic congestion is a public, not merely a private, concern. The Court therein held that public welfare underlies the contested statute authorizing the Director of Public Works to promulgate rules and regulations to regulate and control traffic on national roads.
Likewise, in Luque v. Villegas,46 this Court emphasized that public welfare lies at the bottom of any regulatory measure designed "to relieve congestion of traffic, which is, to say the least, a menace to public safety." As such, measures calculated to promote the safety and convenience of the people using the thoroughfares by the regulation of vehicular traffic present a proper subject for the exercise of police power.
Notably, the parties herein concede that traffic congestion is a public concern that needs to be addressed immediately. Are the means employed appropriate and reasonably necessary for the accomplishment of the purpose. Are they not duly oppressive?
De la Cruz v. Paras- Bus terminals per se do not, however, impede or help impede the flow of traffic. How the outright proscription against the existence of all terminals, apart from that franchised to petitioner, can be considered as reasonably necessary to solve the traffic problem, this Court has not been enlightened
In the subject ordinances, however, the scope of the proscription against the maintenance of terminals is so broad that even entities which might be able to provide facilities better than the franchised terminal are barred from operating at all.
Finally, an order for the closure of respondents’ terminals is not in line with the provisions of the Public Service Act.
Consonant with such grant of authority, the PSC (now the ltfrb)was empowered to "impose such conditions as to construction, equipment, maintenance, service, or operation as the public interests and convenience may reasonably require" in approving any franchise or privilege. The law mandates the ltfrb to require any public service to establish, construct, maintain, and operate any reasonable extension of its existing facilities.

NDC v Agrix G.R. Nos. 84132-33 December 10, 1990

J. Cruz

Pres. Decree No. 1717, which ordered the rehabilitation of the Agrix Group of Companies to be administered mainly by the National Development Company, outlined the procedure for filing claims against the Agrix companies and created a Claims Committee to process these claims.
Especially relevant to this case is Sec. 4(1) thereof providing that "all mortgages and other liens presently attaching to any of the assets of the dissolved corporations are hereby extinguished."
Before this, the Agrix Marketing had executed in favor of petitioner Philippine Veterans Bank a real estate mortgage dated July 7, 1978, over three (3) parcels of land situated in Los Baños, Laguna. During the existence of the mortgage, AGRIX went bankrupt. It was for the expressed purpose of salvaging this and the other Agrix companies that the aforementioned decree was issued by President Marcos.
Petitioner filed a claim with the AGRIX Claims Committee for the payment of its loan credit. In the meantime, the New Agrix, Inc. and the National Development Company,  invoking Sec. 4 (1) of the decree, filed a petition with the Regional Trial Court of Calamba, Laguna, for the cancellation of the mortgage lien in favor of Philippine Veterans.
For its part, the Philippine Veterans took steps to extrajudicially foreclose the mortgage, prompting Agrix to file a second case with the same court to stop the foreclosure.
In the trial court, the judge annulled not only the challenged provision of Sec. 4 (1), but the entire Pres. Decree No. 1717 on the grounds that: (1) the presidential exercise of legislative power was a violation of the principle of separation of powers; (2) the law impaired the obligation of contracts; and (3) the decree violated the equal protection clause.
The motion for reconsideration of this decision having been denied, the present petition was filed in the Supreme Court.
The petitioners contend that the private respondent is now estopped from contesting the validity of the decree. They cited Mendoza v. Agrix Marketing, Inc.,1 where the constitutionality of Pres. Decree No. 1717 was also raised but not resolved.
Moreover the claims committee dismissed the filing of the petition by Philippine Veterans on the ground of the aforementioned estoppel.
The petitioners stress that in that the private respondent also invoked the provisions of Pres. Decree No. 1717 by filing a claim with the AGRIX Claims Committee. Failing to get results, it sought to foreclose the real estate mortgage executed by AGRIX in its favor, which had been extinguished by the decree. It was only when the petitioners challenged the foreclosure on the basis of Sec. 4 (1) of the decree, that the private respondent attacked the validity of the provision. At that stage, however, consistent with Mendoza, the petitioners alleged that private respondent was already estopped from questioning the constitutionality of the decree.

 1. Is estoppel applicable?
2. Is PD 1717 constitutional?

Held: No. Yes. petition dismissed

1. To rule now that the private respondent is estopped for having abided with the decree instead of boldly assailing it is to close our eyes to a cynical fact of life during the Marcos time.
This case must be distinguished from Mendoza, where the petitioners, after filing their claims with the AGRIX Claims Committee, received in settlement shares of stock valued at P40,000.00 without protest or reservation.
The private respondent has not been paid a single centavo on its claim, which was kept pending for more than seven years for alleged lack of supporting papers. Significantly, the validity of that claim was not questioned by the petitioner when it sought to restrain the extrajudicial foreclosure of the mortgage by the private respondent. The petitioner limited itself to the argument that the private respondent was estopped from questioning the decree because of its earlier compliance with its provisions.
2. The Court is especially disturbed by Section 4(1) of the decree, quoted above, extinguishing all mortgages and other liens attaching to the assets of AGRIX. It also notes, the restriction in Subsection (ii) thereof that all "unsecured obligations shall not bear interest" and in Subsection (iii) that "all accrued interests, penalties or charges as of date hereof pertaining to the obligations, whether secured or unsecured, shall not be recognized."
These provisions must be read with the Bill of Rights, where it is clearly provided in Section 1 that "no person shall be deprived of life, liberty or property without due course of law nor shall any person be denied the equal protection of the law" and in Section 10 that "no law impairing the obligation of contracts shall be passed.
Petitioners argue that property rights, like all rights, are subject to regulation under the police power for the promotion of the common welfare. Hence justification of the provision.
Court- The police power is not a panacea for all constitutional maladies. Neither does its mere invocation conjure an instant and automatic justification for every act of the government depriving a person of his life, liberty or property.
A legislative act based on the police power requires the concurrence of a lawful subject and a lawful method. In more familiar words, a) the interests of the public generally, as distinguished from those of a particular class, should justify the interference of the state; and b) the means employed are reasonably necessary for the accomplishment of the purpose and not unduly oppressive upon individuals
The case is not applicable to these requirements because the interests of the public are not sufficiently involved to warrant the interference of the government with the private contracts of AGRIX. The decree speaks vaguely of the "public, particularly the small investors," who would be prejudiced if the corporation were not to be assisted. There was no record of these investors. Also, there was no public interest to be protected. The decree was to the benefit of an exclusive set of investors.
The oppressiveness is patent on the face of the decree to rehabilitate Agrix. No consideration is paid for the extinction of the mortgage rights. The accrued interests and other charges are simply rejected by the decree.
A mortgage lien is a property right derived from contract and so comes under the protection of the Bill of Rights. Private property cannot simply be taken by law from one person and given to another without compensation and any known public purpose. This is plain arbitrariness and is not permitted under the Constitution.
And not only is there arbitrary taking, there is discrimination as well. In extinguishing the mortgage and other liens, the decree lumps the secured creditors with the unsecured creditors and places them on the same level in the prosecution of their respective claims.
Under the equal protection clause, all persons or things similarly situated must be treated alike, both in the privileges conferred and the obligations imposed. Conversely, all persons or things differently situated should be treated differently. In the case at bar, persons differently situated are similarly treated, in disregard of the principle that there should be equality only among equals.
One may also well wonder why AGRIX was singled out for government help, among other corporations where the stockholders or investors were also swindled. It is not clear why other companies entitled to similar concern were not similarly treated.
On top of all this, New Agrix, Inc. was created by special decree notwithstanding the provision of Article XIV, Section 4 of the 1973 Constitution, then in force, that:
SEC. 4. The Batasang Pambansa shall not, except by general law, provide for the formation, organization, or regulation of private corporations, unless such corporations are owned or controlled by the Government or any subdivision or instrumentality thereof.
The new corporation is neither owned nor controlled by the government.
The Court also feels that the decree impairs the obligation of the contract between AGRIX and the private respondent without justification. While it is true that the police power is superior to the impairment clause, the principle will apply only where the contract is so related to the public welfare that it will be considered congenitally susceptible to change by the legislature in the interest of the greater number.
It can be seen that the contracts of loan and mortgage executed by AGRIX are purely private transactions and have not been shown to be affected with public interest.

Thursday, March 15, 2012

ACCFA v CUGCO G.R. No. L-21484. November 29, 1969.

J. Makalintal

(ACCFA) was a government agency created under Republic Act No. 821, as amended. Its administrative machinery was reorganized and its name changed to Agricultural Credit Administration (ACA) under the Land Reform Code (Republic Act No. 3844). On the other hand, the ACCFA Supervisors' Association (ASA) and the ACCFA Workers' Association (AWA), referred to as the Unions, are labor organizations composed of the supervisors and the rank-and-file employees, respectively, in the ACCFA (now ACA).

On October 30, 1962 the Unions, together with its mother union, the Confederation of Unions in Government Corporations and Offices (CUGCO), filed a complaint with the Court of Industrial Relations against the ACCFA for having allegedly committed acts of unfair labor practice, namely: violation of the collective bargaining agreement in order to discourage the members of the Unions in the exercise of their right to self-organization, discrimination against said members in the matter of promotions, and refusal to bargain.

The ACCFA moved to reconsider but was turned down in a resolution dated April 25, 1963 of the CIR en banc. Hence this appeal.

During the pendency of the case, the union filed a petition for certification election with the Court of Industrial Relations praying that they be certified as the exclusive bargaining agents for the supervisors and rank-and-file employees, respectively, in the ACA.Trial court agreed with this move.

However, the ACA filed for a stay of execution which the trial court granted.

Issue: WON the CIR has jurisdiction to entertain the petition of the Unions for certification election given that the mother company (ACA) is engaged in governmental functions

Held: The Unions are not entitled. Decision modified

Under Section 3 of the Agricultural Land Reform Code the ACA was established, among other governmental agencies, to extend credit and similar assistance to agriculture.
According to the Land Reform Code, the administrative machinery of the ACCFA shall be reorganized to enable it to align its activities with the requirements and objective of this Code and shall be known as the Agricultural Credit Administration. These include powers non really accorded to non-government entities such as tax exemptions, registration of deeds, notarial services, and prosecution of officials.

The power to audit the operations of farmers' cooperatives and otherwise inquire into their affairs, as given by Section 113, is in the nature of the visitorial power of the sovereign, which only a government agency specially delegated to do so by the Congress may legally exercise.

Moreover, the ACA was delegated under the Land Reform Project Administration , a government agency tasked t implement land reform.

Moreover, the appointing authority for officials was the President himself.

The considerations set forth above militate quite strongly against the recognition of collective bargaining powers in the respondent Unions within the context of Republic Act No. 875, and hence against the grant of their basic petition for certification election as proper bargaining units. The ACA is a government office or agency engaged in governmental, not proprietary functions.

These functions may not be strictly what President Wilson described as "constituent" (as distinguished from "ministrant"), such as those relating to the maintenance of peace and the prevention of crime, those regulating property and property rights, those relating to the administration of justice and the determination of political duties of citizens, and those relating to national defense and foreign relations. Under this traditional classification, such constituent functions are exercised by the State as attributes of sovereignty, and not merely to promote the welfare, progress and prosperity of the people — these letter functions being ministrant, he exercise of which is optional on the part of the government.

The growing complexities of modern society, however, have rendered this traditional classification of the functions of government quite unrealistic, not to say obsolete. The areas which used to be left to private enterprise and initiative and which the government was called upon to enter optionally, and only "because it was better equipped to administer for the public welfare than is any private individual or group of individuals." continue to lose their well-defined boundaries and to be absorbed within activities that the government must undertake in its sovereign capacity if it is to meet the increasing social challenges of the times.

It was in furtherance of such policy that the Land Reform Code was enacted and the various agencies, the ACA among them, established to carry out its purposes. There can be no dispute as to the fact that the land reform program contemplated in the said Code is beyond the capabilities of any private enterprise to translate into reality. It is a purely governmental function, no less than, say, the establishment and maintenance of public schools and public hospitals.

Given these, the respondent Unions are not entitled to the certification election sought in the Court below. Such certification is admittedly for purposes of bargaining in behalf of the employees with respect to terms and conditions of employment, including the right to strike as a coercive economic weapon, as in fact the said unions did strike in 1962 against the ACCFA.

This is contrary to Section 11 of Republic Act No. 875, which provides:

"SEC. 11.        Prohibition Against Strike in the Government. — The terms and conditions of employment in the Government, including any political subdivision or instrumentality thereof, are governed by law and it is declared to be the policy of this Act that employees therein shall not strike for the purposes of securing changes or modification in their terms and conditions of employment. Such employees may belong to any labor organization which does not impose the obligation to strike or to join in strike: Provided, However, that this section shall apply only to employees employed in governmental functions of the Government including but not limited to governmental corporations."

Biflex v Fiflex G.R. No. 155679 December 19, 2006

J. Carpio Morales

The officers of the Biflex labor union and the Fiflex labor union staged a work stoppage which lasted for several days, prompting respondents to file on October 31, 1990 a petition to declare the work stoppage illegal for failure to comply with procedural requirements. This was due to the rising price of oil.
On November 13, 1990, respondents resumed their operations. Petitioners claimed that they were illegally locked out by respondents and were prevented from reporting for work
Petitioners further assert that respondents were "slighted" by the workers’ no-show, and as a punishment, the workers as well as petitioners were barred from entering the company premises.
Petitioners also claim that they filed a notice of strike on October 31, 1990, explaining that those were for the convenience of union members who reported every morning to check if the management would allow them to report for work.
Respondents, on the other hand, maintain that the work stoppage was illegal since the following requirements for the staging of a valid strike were not complied with: (1) filing of notice of strike; (2) securing a strike vote, and (3) submission of a report of the strike vote to the Department of Labor and Employment.
The Labor Arbiter held that the strike was illegal. The petitioners were fired from their jobs.
On appeal, the National Labor Relations Commission (NLRC) reversed the ruling of the Labor Arbiter, it holding that there was no strike to speak of as no labor or industrial dispute existed between the parties.
The CA reversed this. The court said that the union wasn’t illegally locked out, given their failure to even file a letter of protest or complaint with the management, and that they failed to comply with the legal requirements of a valid strike.
In the supreme court they claimed:
1. Did the CA err in interpreting Art 264 A of the Labor Code to be mandatory in calling for the automatic dismissal of the petitioners for holding an illegal strike?
2. Did the CA err in not ruling that respondents erred in immediately implementing the labor arbiter’s decision dismissing petitioners from work despite the fact that the said decision hasn’t become final and executor?
3. Did the CA err in declaring petitioners guilty of holding an illegal strike when circumstances showed that respondents were guilty of an illegal lockout?

1. Was their work stoppage constitutionally protected?
2. Were they illegally locked out by the company?

Held:No, No. Petition dismissed.

1. That petitioners staged a work stoppage on October 24, 1990 in conjunction with the welga ng bayan organized by the labor sector to protest the accelerating prices of oil.
Stoppage of work due to welga ng bayan is in the nature of a general strike, an extended sympathy strike. It affects numerous employers including those who do not have a dispute with their employees regarding their terms and conditions of employment.
Employees who have no labor dispute with their employer but who, on a day they are scheduled to work, refuse to work and instead join a welga ng bayan commit an illegal work stoppage.
Even if petitioners’ joining the welga ng bayan were considered merely as an exercise of their freedom of expression, freedom of assembly or freedom to petition the government for redress of grievances, the exercise of such rights is not absolute. For the protection of other significant state interests such as the "right of enterprises to reasonable returns on investments, and to expansion and growth" enshrined in the 1987 Constitution must also be considered, otherwise, oppression or self-destruction of capital in order to promote the interests of labor would be sanctioned. And it would give imprimatur to workers’ joining demonstrations/rallies even before affording the employer an opportunity to make the necessary arrangements to counteract the implications of the work stoppage on the business, and ignore the novel "principle of shared responsibility between workers and employers" aimed at fostering industrial peace.
Their work stoppage is not protected by the law.
2. They claimed that they were locked out by the company as punishment for joining the strike.
If there was illegal lockout, why, indeed, did not petitioners file a protest with the management or a complaint therefor against respondents? As the Labor Arbiter observed, "[t]he inaction of [petitioners] betrays the weakness of their contention for normally a locked-out union will immediately bring management before the bar of justice.
Even if the petitioners adhered properly to the requirements of a strike, it would still be illegal because they blocked the company entrance. The Labor Code states that "[n]o person engaged in picketing shall … obstruct the free ingress to or egress from the employer’s premises for lawful purposes, or obstruct public thoroughfares.”
In fine, the legality of a strike is determined not only by compliance with its legal formalities but also by the means by which it is carried out.
Petitioners should bear the consequences stipulated under the Labor Code which says:
Any union officer who knowingly participates in an illegal strike and any worker or union officer who knowingly participates in the commission of illegal acts during a strike may be declared to have lost his employment status
Gold City Integrated Port Service, Inc- regarding the use of the word “may” declared "[t]he law . . . grants the employer the option of declaring a union officer who participated in an illegal strike as having lost his employment." 

German v Barangan G.R. No. L-68828 March 27, 1985

J. Escolin

Petitioners, composed of about 50 businessmen, students and office employees converged at J.P. Laurel Street, Manila, for the purpose of hearing Mass at the St. Jude Chapel which adjoins the Malacañang grounds located in the same street.
 Wearing yellow T-shirts, they started to march down said street with raised clenched fists and shouts of anti-government invectives. Along the way, however, they were barred by respondent Major lsabelo Lariosa, from proceeding any further, on the ground that St. Jude Chapel was located within the Malacañang security area.
When petitioners' protestations and pleas to allow them to get inside the church proved unavailing, they decided to leave. However, because of the alleged warning given them by respondent Major Lariosa that any similar attempt by petitioners to enter the church in the future would likewise be prevented, petitioners took this present recourse.
Petitioners' alleged purpose in converging at J.P. Laurel Street was to pray and hear mass at St. Jude church. At the hearing of this petition, respondents assured petitioners and the Court that they have never restricted, and will never restrict, any person or persons from entering and worshipping at said church. They maintain, however, that petitioners' intention was not really to perform an act of religious worship, but to conduct an anti-government demonstration at a place close to the very residence and offices of the President of the Republic.
Respondents further lament petitioners' attempt to disguise their true motive with a ritual as sacred and solemn as the Holy Sacrifice of the Mass. Undoubtedly, the yellow T-shirts worn by some of the marchers, their raised clenched fists, and chants of anti-government slogans strongly tend to substantiate respondents allegatio
Invoking their constitutional freedom to religious worship and locomotion, petitioners seek the issuance of [1] a writ of mandamus to compel respondents to allow them to enter and pray inside St. Jude Chapel located at J.P. Laurel Street, Manila; and [2] a writ of injunction to enjoin respondents from preventing them from getting into and praying in said church.

Issue: Were the respondents’ acts violative of petitioners’ free exercise of religion?

Held: No. Petition dismissed.

While it is beyond debate that every citizen has the undeniable and inviolable right to religious freedom, the exercise thereof, and of all fundamental rights for that matter, must be done in good faith. As Article 19 of the Civil Code admonishes: "Every person must in the exercise of his rights and in the performance of his duties ... observe honesty and good faith."
Even assuming that petitioners' claim to the free exercise of religion is genuine and valid, still respondents reaction to the mass action may not be characterized as violative of the freedom of religious worship. Since 1972, when mobs of demonstrators crashed through the Malacañang gates and scaled its perimeter fence, the use by the public of J.P. Laurel Street and the streets approaching it have been restricted. While travel to and from the affected thoroughfares has not been absolutely prohibited, passers-by have been subjected to courteous, unobtrusive security checks. The reasonableness of this restriction is readily perceived and appreciated if it is considered that the same is designed to protect the lives of the President and his family, as well as other government officials, diplomats and foreign guests transacting business with Malacañang. The need to secure the safety of heads of state and other government officials cannot be overemphasized. The threat to their lives and safety is constant, real and felt throughout the world.
Said restriction is moreover intended to secure the several executive offices within the Malacañang grounds from possible external attacks and disturbances. These offices include communications facilities that link the central government to all places in the land.
Freedom of religious worship is guaranteed under Section 8, Article IV of the 1973 Constitution.
The scope of religious freedom was discussed in Cantwell v. Connecticut, where it said:
The constitutional inhibition on legislation on the subject of religion has a double aspect. On the one hand, it forestalls compulsion by law of the acceptance of any creed or the practice of any form of worship. Freedom of conscience and freedom to adhere to such religious organization or form of worship as the individual may choose cannot be restricted by law. On the other hand, it safeguards the free exercise of the chosen form of religion. Thus the amendment embraces two concepts-freedom to believe and freedom to act. The first is absolute, but in the nature of things, the second cannot be.
In the case at bar, petitioners are not denied or restrained of their freedom of belief or choice of their religion, but only in the manner by which they had attempted to translate the same into action. This curtailment is in accord with the pronouncement of this Court in Gerona v. Secretary of Education, thus:
The realm of belief and creed is infinite and limitless bounded only by one's imagination and thought. So is the freedom of belief, including religious belief, limitless and without bounds. One may believe in most anything, however strange, bizarre and unreasonable the same may appear to others, even heretical when weighed in the scales of orthodoxy or doctrinal standards. But between the freedom of belief and the exercise of said belief, there is quite a stretch of road to travel. If the exercise of said religious belief clashes with the established institutions of society and with the law, then the former must yield and give way to the latter. The government steps in and either restrains said exercise or even prosecutes the one exercising it.
On freedom of movement:
Petitioners likewise invoke their freedom of locomotion under Section 5, Article IV of the Constitution.
Suffice it to say that the restriction imposed on the use of J.P. Laurel Street, the wisdom and reasonableness of which have already been discussed, is allowed under the fundamental law, having been established in the interest of national security.

De Leon v NLU G.R. No. L-7586 January 30, 1957

J. Padilla

The plaintiff Narcisa B. de Leon is the owner of a parcel of land in which stands the Dalisay Theater at Manila;
Prior to April 14, 1949, the theater was operated jointly by the motion picture firms known as the plaintiffs LVN Pictures, Inc., Premier Productions and the Sampaguita Pictures, Inc., as lessees.
De Leon leased the parcel of land to the Filipino Theatrical Enterprises, Inc., who on that date had become the owners of the building, known as Dalisay Theater; that the lease contract provided that the lessor of the land, Narcisa B. de Leon would become the owner of the building, together with all the equipment and accessories, at the expiration of the lease. During the terms of the lease, the Filipino Theatrical Enterprises, Inc., operated the theater.
Defendants, except the National Labor Union, Eulogio Lerum and Jose Hernandez, were all employees of the Filipino Theatrical Enterprises Inc., April 1949 to August 14, 1951, and said employees work at the Dalisay Theater during this period by reason of such employment.
On July 12, 1951, short before the expiration of the aforesaid lease, Filipino Theatrical Enterprises, Inc., notified its employees of the termination of their employment with it.
On August 15, 1951, after the expiration of said lease, the full and complete possession of the theater building was delivered the turned over to the plaintiff Narcisa B. de Leon who immediately demolished the building and on the same site she constructed and finished the new Dalisay Theater Building;
De Leon executed a contract with the theater companies for the operation the new Dalisay Theater as a joint venture among them, where the latter would exhibit their picture in said theater;
Plaintiffs opened the new Dalisay Theater and begun exhibiting films with the new set of personnel, retaining only the services of four old employees.
 About thirty persons among whom where the herein defendants, all members of the National Labor Union, picketed the plaintiffs the said theater from 9:00 a.m. to 2:30 p.m., more or less, by walking to and from on the side walk fronting the lobby of the theater and displaying placards which for the slogans: "Do not patronize the Dalisay Theater," "Dalisay Theater is unfair to labor." "Have mercy on the picketeers" "and sympathize with us," and others
The defendant during the picketing tried to persuade patrons or customers of the Dalisay Theater to refrain from buying tickets or seeing the show because the cine's managment is unfair to its employees, and to sympathize with the picketeers.
After the defendants Jose Ramos and Enrique Montoya had left the lobby of the theater; the iron grill door which separates the theater lobby from the sidewalk was closed, thereby confining the picketing in the side walk
The picketing was done by defendants so that they might re-employed in the Dalisay Theater. Due to this, the box-office receipts of said theater for January 10, 1952 amounted only to about P1,250; and that a premiere showing of such a film like" DIMAS" would ordinarily earned a P2,500 gross receipt for the theater.
In the trial court, the decision was that the defendants’walking slowly and peacefully back and forth on the public sidewalk in front of the premises of the Dalisay Theater and displaying placards publicizing the dispute between the theater and the management did not disturb the public peace at the place. There was no clear and present danger of destruction to life of property or of other forms of breach of the peace.
In this case, it is undisputed that after defendants were dismissed or laid off from their work at the old Dalisay Theater by the Filipino Theatrical Enterprises, Inc., the showhouse came under a totally different management when it was reopened on January 10, 1952. There was no existence of a relationship of employees between plaintiffs and defendants, although defendants purpose in picketing plaintiffs was for the defendants' reinstatement of their services in the new Dalisay Theater under the new management.
In the same court, De Leon and other plaintiffs sought to recover damages and an injunctive relief in the court for the picketing.  The defendants filed a cross-claim for damages estimated at P200 daily which was denied by the plaintiffs in their reply.
After hearing the trial court dismissed the plaintiffs complaint and defendants cross-claim and dissolved the writ of preliminary injunction issued.
From this judgment the plaintiffs appealed to the Supreme Court for the reason by the appeal would raised on the questions of law.

Issue: Did the employees picket illegally?

Held: No. Judgment affirmed

Picketing peacefully carried out is not illegal even in the absence of employer-employee relationship for peaceful picketing is a part of a freedom of speech guaranteed by the Constitution.

Wednesday, March 14, 2012

De Knecht v CA [G.R. No. 109234. May 20, 1998]

J. Puno

In 1979, the Republic of the Philippines initiated a case for expropriation against the Knechts' property. The government sought to utilize the land for  the completion of the Manila Flood Control and Drainage Project and the extension of the EDSA towards Roxas Boulevard.
The CFI issued a writ of possession.  This SC, however, held that the choice of area for the extension of EDSA was arbitrary.  The SC annulled the writ.
In 1982, the City Treasurer of Pasay discovered that the Knechts failed to pay real estate taxes on the property from 1980 to 1982. As a consequence of this deficiency, the City Treasurer sold the property at public auction on May 27, 1982 for the sum of P63,000.00, the amount of the deficiency taxes. The highest bidders were respondents Babiera and Sangalang couples.
The petitioners failed to redeem the property. Babiera then filed for registration of the land to his name. The trial court granted the petition. The Knechts, who were in possession of the property, allegedly learned of the auction sale only by the time they received the orders of the land registration courts.
The De Knechts also filed Civil Case No. 2961-P to prevent the titles from being given to the contending spouses. They put up lack of notice to the sale as defense. This was dismissed for lack of counsel to appear on the last hearing.
On March 12, 1985, Sangalang and Babiera sold the land to respondent Salem Investment Corporation (Salem) for P400,000.00.
Meanwhile, on February 17, 1983, the Batasang Pambansa passed B.P. Blg. 340 authorizing the national government to expropriate certain properties in Pasay City for the EDSA Extension. The just compensation for this purpose was docketed by the OSG under civil case 7327. The De Knecht property was covered by the expropriation. On  August 30, seven of the eight houses of the Knechts were demolished and the government took possession of the portion of land on which the houses stood. Salem instituted against them Civil Case No. 85-263 for unlawful detainer.
The SC allowed for the expropriation this time.  Meanwhile, Salem conveyed 5,611.92 square meters of the subject property to respondent spouses Mariano and Anacoreta Nocom. Part was left to Salem.
As prayed for by Salem, the trial court issued an order on September 13, 1990 for the release of P5,763,650.00 to Salem by the Philippine National Bank (PNB) as partial payment of just compensation.
The De Knechts filed a motion to intervene. On April 23, 1992, as prayed for by Mariano Nocom, the trial court ordered the release of P11,526,000.00 as third installment for his 5,611.92 square meters of the subject land. The De Knechts questioned this in the CA.
The CA quashed their motion to intervene due to the lack of legal interest. They filed an original action for the annulment of TC judgments. Therein, the Knechts challenged the validity of the orders of the land registration courts in the two petitions of the Sangalangs and Babieras for registration of their names, the reconveyance case and the just compensation proceedings.
The Court of Appeals dismissed  the petition for lack of merit on November 24, 1992.  Hence the filing of G.R. No. 108015.  In a Resolution dated February 1, 1993, the SC denied the petition finding "no reversible error" committed by the Court of Appeals. The De Knechts alleged:
1. CA committed a reversible error when it claimed 7327 was not an eminent domain proceeding
2. another error when CA upheld res judicata to bar the MFR
3. another error when CA refused for respondent judge to rule for the motion for inhibition

1. Were the De Knechts denied due process when they were not sufficiently notified of the tax delinquency, the auction sale, and the surrender of the owner’s duplicate for the tax lien?
2. Is the first civil case (2961-P) res judicata? Was there due process in this dismissal?
3. Is 7327 an expropriation case?

Held: Petition dismissed.

1. No.
The De Knechts claimed that they did not receive the notices for tax delinquency and the auction sale. That was why they were unable to claim the property.
It has been ruled that the notices and publication, as well as the legal requirements for a tax delinquency sale, are mandatory; and the failure to comply therewith can invalidate the sale. The prescribed notices must be sent to comply with the requirements of due process.
The De knechts’ claim was a factual question and not to be answered in the SC. Moreover, the question had already been answered in the previous cases in the appellate courts. Res judicata had already set in.
Res judicata is a ground for dismissal of an action. It is a rule that precludes parties from relitigating issues actually litigated and determined by a prior and final judgment. It pervades every well-regulated system of jurisprudence, and is based upon two grounds embodied in various maxims of the common law-- one, public policy and necessity, that there should be a limit to litigation; and another, the individual should not be vexed twice for the same cause.
When a right of fact has been judicially tried and determined by a court of competent jurisdiction, or an opportunity for such trial has been given, the judgment of the court, so long as it remains unreversed, should be conclusive upon the parties and those in privity with them in law or estate.
2. Yes. Yes.
Petitioners claim it wasn’t due to the lack of judgment on the merits in the said case. Moreover, it was based by the court on their “lack of interest”.
Court- "Lack of interest" is analogous to "failure to prosecute." (S 3, R 17 of ROC)
An action may be dismissed for failure to prosecute in any of the following instances:  (1) if the plaintiff fails to appear at the time of trial; or (2) if he fails to prosecute the action for an unreasonable length of time; or (3) if he fails to comply with the Rules of Court or any order of the court.
They also requested for postponments which prompted Salem to move for dismissal. The court agreed. The order of dismissal was based on the following factors: (1) pendency of the complaint for a considerable length of time; (2) failure of counsel to appear at the scheduled hearing despite notice; and (3) lack of interest of the petitioners. Under Section 3, Rule 17, a dismissal order which does not provide that it is without prejudice to the filing of another action is understood to be an adjudication on the merits.
The Knechts contend, however, that the facts of the case do not call for the application of res judicata because this amounts to "a sacrifice of justice to technicality." It must be noted that the Knechts were given the opportunity to assail the tax sale and present their evidence on its validity in Civil Case No. 2961-P, the reconveyance case.
3. Yes. The Court of Appeals erred in declaring that Civil Case No. 7327 was not an expropriation case.
It was precisely in the exercise of the state's power of eminent domain under B.P. Blg. 340 that expropriation proceedings were instituted against the owners of the lots sought to be expropriated.
B.P. Blg. 340 did not, by itself, lay down the procedure for expropriation. The law merely described the specific properties expropriated and declared that just compensation was to be determined by the court. It designated the then Ministry of Public Works and Highways as the administrator in the "prosecution of the project." Thus, in the absence of a procedure in the law for expropriation, reference must be made to the provisions on eminent domain in Rule 67 of the Revised Rules of Court.
“The complaint must join as defendants all persons owning or claiming to own, or occupying, any part thereof or interest therein.”
The defendants in an expropriation case are not limited to the  owners of the property condemned. They include all other persons owning, occupying  or claiming to own the property including a mortgagee, a lessee and a vendee in possession under an executory contract. Every person having an estate or interest at law or in equity in the land taken is entitled to share in the award.
The Knechts insist that although they were no longer the registered owners of the property at the time Civil Case No. 7327 was filed, they still occupied the property and therefore should have been joined as defendants in the expropriation proceedings. They claim that they still occupied the land when it was expropriated and therefore had a share.
Four months earlier, in January 1990, Civil Case No. 2961-P for reconveyance was dismissed with finality by this Court and judgment was entered in February 1990. The Knechts lost whatever right or colorable title they had to the property after we affirmed the order of the trial court dismissing the reconveyance case.
The Knechts' possession of the land and buildings was based on their claim of ownership not on any juridical title such as a lessee, mortgagee, or vendee.
Indeed, the Knechts had no legal interest in the property by the time the expropriation proceedings were instituted. They had no right to intervene and the trial  court did not err in denying their "Motion for Intervention and to Implead Additional Parties." Their intervention having been denied, the Knechts had no personality to move for the inhibition of respondent Judge Sayo from the case.

NAPOCOR v Henson G.R. No. 129998. December 29, 1998

J. Pardo

On March  21, 1990, the National Power Corporation initiated with the Regional Trial Court, Pampanga, a complaint for eminent domain  for the taking for public use of five (5) parcels of land, owned or claimed by respondents, with a total aggregate area of 58,311 square meters, for the expansion of the NPC Mexico Sub-Station. The respondents, 5 couples, were the owners.
The petitioner tried to fix the value of the land but was met of a price of 180 to 250 pesos due to the respondents. The respondents also filed a motion to dismiss.
In the trial court, the motion to dismiss was quashed. However, the court fixed the provisional value of the land at P100.00 per square meter, for a total area of 63,220 sqm.  The petitioner deposited the amount.  The trial court allowed respondents a motion to withdraw P5,831,100.00, with a balance of P690,900.00 as the purchase value.
3 commissioners were then authorized by the trial court to determine the provisional value of the land for just compensation. The values were in 350, 375, and 170 per sqm from Tiglao, Atienza and Orocio.
In May 19, 1993, the trial court rendered judgment fixing the amount of just compensation to be paid by petitioner for the taking of the entire area of 63,220 square meters at P400.00 per square meter, with  legal  interest  from September 11, 1990, when petitioner was placed in possession of the land, plus attorney’s fees of P20,000.00, and costs of the proceedings.
The CA merely deleted the attorney’s fees.

Issue: What  is  the  just compensation for the taking of respondents’ property for the expansion of the NPC’s Mexico Sub-station?

Held: P375.00 per sqm. CA decision modified.

The parcels of land sought to be expropriated  are undeniably idle, undeveloped, raw agricultural land, bereft of any improvement.   Except for the Henson family, all the other respondents were admittedly farmer beneficiaries under operation land transfer of the Department of Agrarian Reform.  However, the land has been re-classified as residential.  The nature and character of the land at the time of its taking is the principal criterion to determine just compensation to the landowner.
CA fixed 400.00 due to the similarity with the price in the adjacent Sto. Domingo Village. The land in question, however, was an undeveloped, idle land, principally agricultural in character, though re-classified as residential. There was no evidence for the value. It was even higher than that of the commissioners’ valuation.
On the other hand, Commissioner Atienza recommended a fair market value at P375.00 per square meter.  This appears to be the closest valuation to the market value of lots in the adjoining fully developed subdivision.  Considering that the subject parcels of land are undeveloped raw land, the price of P375.00 per square meter would appear to the Court as the just compensation for the taking of such raw land.
The court agreed with petitioner that the area of the communal irrigation canal consisting of 4,809 square meters must be excluded from the land to be expropriated.  To begin with, it is excluded in the amended complaint. Hence, the trial court and the Court of Appeals erred in including the same in the area to be taken.
The trial court erroneously ordered double payment for 3,611 square meters of lot 5 (portion) in the dispositive part of its decision, and, hence, this must be deleted.
The decision for legal interest was correct. Napocor was exempted from costs of proceedings.

Ermita Malate v City of Manila 20 SCRA 849 (1967)

J. Fernando

Ermita-Malate Hotel and Motel Operators Association, and one of its members Hotel del Mar Inc. petitioned for the prohibition of Ordinance 4670 on June 14, 1963 to be applicable in the city of Manila.
They claimed that the ordinance was beyond the powers of the Manila City Board to regulate due to the fact that hotels were not part of its regulatory powers. They also asserted that Section 1 of the challenged ordinance was unconstitutional and void for being unreasonable and violative of due process insofar because it would impose P6,000.00 license fee per annum for first class motels and P4,500.00 for second class motels;  there was also the requirement that the guests would fill up a form specifying their personal information.
There was also a provision that the premises and facilities of such hotels, motels and lodging houses would be open for inspection from city authorites. They claimed this to be violative of due process for being vague.
The law also classified motels into two classes and required the maintenance of certain minimum facilities in first class motels such as a telephone in each room, a dining room or, restaurant and laundry. The petitioners also invoked the lack of due process on this for being arbitrary.
It was also unlawful for the owner to lease any room or portion thereof more than twice every 24 hours.
There was also a prohibition for persons below 18 in the hotel.
The challenged ordinance also caused the automatic cancellation of the license of the hotels that violated the ordinance.
The lower court declared the ordinance unconstitutional.
Hence, this appeal by the city of Manila.

Whether Ordinance No. 4760 of the City of Manila is violative of the due process clause?

Held: No. Judgment reversed.

"The presumption is towards the validity of a law.” However, the Judiciary should not lightly set aside legislative action when there is not a clear invasion of personal or property rights under the guise of police regulation.
O'Gorman & Young v. Hartford Fire Insurance Co- Case was in the scope of police power. As underlying questions of fact may condition the constitutionality of legislation of this character, the resumption of constitutionality must prevail in the absence of some factual foundation of record for overthrowing the statute." No such factual foundation being laid in the present case, the lower court deciding the matter on the pleadings and the stipulation of facts, the presumption of validity must prevail and the judgment against the ordinance set aside.”
There is no question but that the challenged ordinance was precisely enacted to minimize certain practices hurtful to public morals, particularly fornication and prostitution. Moreover, the increase in the licensed fees was intended to discourage "establishments of the kind from operating for purpose other than legal" and at the same time, to increase "the income of the city government."
Police power is the power to prescribe regulations to promote the health, morals, peace, good order, safety and general welfare of the people. In view of the requirements of due process, equal protection and other applicable constitutional guaranties, however, the power must not be unreasonable or violative of due process.
There is no controlling and precise definition of due process. It has a standard to which the governmental action should conform in order that deprivation of life, liberty or property, in each appropriate case, be valid. What then is the standard of due process which must exist both as a procedural and a substantive requisite to free the challenged ordinance from legal infirmity? It is responsiveness to the supremacy of reason, obedience to the dictates of justice. Negatively put, arbitrariness is ruled out and unfairness avoided.
 Due process is not a narrow or "technical conception with fixed content unrelated to time, place and circumstances," decisions based on such a clause requiring a "close and perceptive inquiry into fundamental principles of our society." Questions of due process are not to be treated narrowly or pedantically in slavery to form or phrase.
Nothing in the petition is sufficient to prove the ordinance’s nullity for an alleged failure to meet the due process requirement.
Cu Unjieng case: Licenses for non-useful occupations are also incidental to the police power and the right to exact a fee may be implied from the power to license and regulate, but in fixing amount of the license fees the municipal corporations are allowed a much wider discretion in this class of cases than in the former, and aside from applying the well-known legal principle that municipal ordinances must not be unreasonable, oppressive, or tyrannical, courts have, as a general rule, declined to interfere with such discretion. Eg. Sale of liquors.
Lutz v. Araneta- Taxation may be made to supplement the state’s police power.
In one case- “much discretion is given to municipal corporations in determining the amount," here the license fee of the operator of a massage clinic, even if it were viewed purely as a police power measure.
On the impairment of freedom to contract by limiting duration of use to twice every 24 hours- It was not violative of due process. 'Liberty' as understood in democracies, is not license; it is 'liberty regulated by law.' Implied in the term is restraint by law for the good of the individual and for the greater good of the peace and order of society and the general well-being.
Laurel- The citizen should achieve the required balance of liberty and authority in his mind through education and personal discipline, so that there may be established the resultant equilibrium, which means peace and order and happiness for all.
The freedom to contract no longer "retains its virtuality as a living principle, unlike in the sole case of People v Pomar. The policy of laissez faire has to some extent given way to the assumption by the government of the right of intervention even in contractual relations affected with public interest.
What may be stressed sufficiently is that if the liberty involved were freedom of the mind or the person, the standard for the validity of governmental acts is much more rigorous and exacting, but where the liberty curtailed affects at the most rights of property, the permissible scope of regulatory measure is wider.
On the law being vague on the issue of personal information, the maintenance of establishments, and the “full rate of payment”- Holmes- “We agree to all the generalities about not supplying criminal laws with what they omit but there is no canon against using common sense in construing laws as saying what they obviously mean."

Radio Communications v NTC G.R. No. L-68729 May 29, 1987

J. Gutierrez Jr.

RCPI operated a radio communications system since 1957 under legislative franchise granted by Republic Act No. 2036 (1957). The petitioner established a radio telegraph service in Sorsogon, Sorsogon (1968). in San Jose, Mindoro (1971), and Catarman, Samar (1983).
Kayumanggi Radio, on the other hand, was given the rights by the NTC to operate radio networks in the same areas.
RCPI filed a complaint in the NTC and sought to prohibit Kayumanggi Radio to operate in the same areas. The NTC ruled against the RTC’s favor and commanded RCPI to desist in the operation of radio telegraphs in the three areas.
RTC filed a MFR in 1984. This was denied.
In the SC, Petitioner alleged that the  Public Service Law had sections that was still in effect even if the Public Service Commission was abolished and the NTC was established.
These were S13- the Commission shall have jurisdiction, supervision, and control over all public services and their franchises
S 14- Radio companies are exempt from the commission’s authority except with respect to the fixing of rates
And S 15-no public service shall operate in the Philippines without possessing a valid and subsisting certificate from the Public Service Commission, known as "certificate of public convenience,"

Issue: Whether or not petitioner RCPI, a grantee of a legislative franchise to operate a radio company, is required to secure a certificate of public convenience and necessity before it can validly operate its radio stations including radio telephone services in the aforementioned areas

Held: Yes. Petition dismissed.

Presidential Decree No. 1- the Public Service Commission was abolished and its functions were transferred to three specialized regulatory boards, as follows: the Board of Transportation, the Board of Communications and the Board of Power and Waterworks. The functions so transferred were still subject to the limitations provided in sections 14 and 15 of the Public Service Law, as amended.
The succeeding Executive Order No. 546- the Board of Communications and the Telecommunications Control Bureau were abolished and their functions were transferred to the National Telecommunications Commission
Section 15- b. Establish, prescribe and regulate areas of operation of particular operators of public service communications; and determine and prescribe charges or rates pertinent to the operation of such public utility facilities and services except in cases where charges or rates are established by international bodies or associations of which the Philippines is a participating member or by bodies recognized by the Philippine Government as the proper arbiter of such charges or rates;
c. Grant permits for the use of radio frequencies for wireless telephone and telegraph systems and radio communication systems including amateur radio stations and radio and television broadcasting systems;
The exemption enjoyed by radio companies from the jurisdiction of the Public Service Commission and the Board of Communications no longer exists because of the changes effected by the Reorganization Law and implementing executive orders.
The petitioner's claim that its franchise cannot be affected by Executive Order No. 546 on the ground that it has long been in operation since 1957 cannot be sustained.
Today, a franchise, being merely a privilege emanating from the sovereign power of the state and owing its existence to a grant, is subject to regulation by the state itself by virtue of its police power through its administrative agencies. Pangasinan transportation Co.- statutes enacted for the regulation of public utilities, being a proper exercise by the State of its police power, are applicable not only to those public utilities coming into existence after its passage, but likewise to those already established and in operation .
Executive Order No. 546, being an implementing measure of P.D. No. I insofar as it amends the Public Service Law (CA No. 146, as amended) is applicable to the petitioner who must be bound by its provisions.
The position of the petitioner that by the mere grant of its franchise under RA No. 2036 it can operate a radio communications system anywhere within the Philippines is erroneous.
Sec. 4(a). This franchise shall not take effect nor shall any powers thereunder be exercised by the grantee until the Secretary of Public works and Communications shall have allotted to the grantee the frequencies and wave lengths to be used, and issued to the grantee a license for such case.
Thus, in the words of R.A. No. 2036 itself, approval of the then Secretary of Public Works and Communications was a precondition before the petitioner could put up radio stations in areas where it desires to operate.
The records of the case do not show any grant of authority from the then Secretary of Public Works and Communications before the petitioner installed the questioned radio telephone services in San Jose, Mindoro in 1971. The same is true as regards the radio telephone services opened in Sorsogon, Sorsogon and Catarman, Samar in 1983. No certificate of public convenience and necessity appears to have been secured by the petitioner from the public respondent when such certificate,was required by the applicable public utility regulations.
The Constitution mandates that a franchise cannot be exclusive in nature nor can a franchise be granted except that it must be subject to amendment, alteration, or even repeal by the legislature when the common good so requires.

Balacuit v CFI G.R. No. L-38429 June 30, 1988

J. Gancayo

Petitioners, theater owners, assailed the constitutionality of Ordinance No. 640 passed by the Municipal Board of the City of Butuan on April 21, 1969. This called for a reduction to ½ of the ticket price given to minors from 7-12 years old. There was a fine from 200-600 pesos or a 2-6 month imprisonment
The complaint was issued in the trial court. A TRO was then issued to prevent the law from being enforced.  The respondent court entered its decision declaring the law valid.
Petitioners attack the validity and constitutionality of Ordinance No. 640 on the grounds that it is ultra vires and an invalid exercise of police power. Petitioners contend that Ordinance No. 640 is not within the power of' the Municipal Board to enact as provided for in Section 15(n) of Republic Act No. 523 where it states that the Muncipal board can only fix license fees for theaters and not admission rates.
The respondent attempts to justify the enactment of the ordinance by invoking the general welfare clause embodied in Section 15 (nn) of the cited law.

Does this power to regulate include the authority to interfere in the fixing of prices of admission to these places of exhibition and amusement whether under its general grant of power or under the general welfare clause as invoked by the City?

Held: The ordinance is under neither and thus unconstitutional. Petition granted.

1. Kwong Sing v. City of Manila- the word "regulate" was interpreted to include the power to control, to govern and to restrain, it would seem that under its power to regulate places of exhibitions and amusement, the Municipal Board of the City of Butuan could make proper police regulations as to the mode in which the business shall be exercised.
In this jurisdiction, it is already settled that the operation of theaters, cinematographs and other places of public exhibition are subject to regulation by the municipal council in the exercise of delegated police power by the local government.
People v. Chan- an ordinance of the City of Manila prohibiting first run cinematographs from selling tickets beyond their seating capacity was upheld as constitutional for being a valid exercise of police power.
The City of Butuan, apparently realizing that it has no authority to enact the ordinance in question under its power to regulate embodied in Section 15(n), now invokes the police power as delegated to it under the general welfare clause to justify the enactment of said ordinance
To invoke the exercise of police power, not only must it appear that the interest of the public generally requires an interference with private rights, but the means adopted must be reasonably necessary for the accomplishment of the purpose and not unduly oppressive upon individuals.
The legislature may not, under the guise of protecting the public interest, arbitrarily interfere with private business, or impose unusual and unnecessary restrictions upon lawful occupations. In other words, the determination as to what is a proper exercise of its police power is not final or conclusive, but is subject to the supervision of the courts.
Petitioners maintain that Ordinance No. 640 violates the due process clause of the Constitution for being oppressive, unfair, unjust, confiscatory, and an undue restraint of trade, and violative of the right of persons to enter into contracts, considering that the theater owners are bound under a contract with the film owners for just admission prices for general admission, balcony and lodge.
Homeowners Association- the exercise of police power is necessarily subject to a qualification, limitation or restriction demanded by the regard, the respect and the obedience due to the prescriptions of the fundamental law
The court agreed with petitioners that the ordinance is not justified by any necessity for the public interest. The police power legislation must be firmly grounded on public interest and welfare, and a reasonable relation must exist between purposes and means.
The evident purpose of the ordinance is to help ease the burden of cost on the part of parents who have to shell out the same amount of money for the admission of their children, as they would for themselves. A reduction in the price of admission would mean corresponding savings for the parents; however, the petitioners are the ones made to bear the cost of these savings. The ordinance does not only make the petitioners suffer the loss of earnings but it likewise penalizes them for failure to comply with it. Furthermore, as petitioners point out, there will be difficulty in its implementation because as already experienced by petitioners since the effectivity of the ordinance, children over 12 years of age tried to pass off their age as below 12 years in order to avail of the benefit of the ordinance. The ordinance does not provide a safeguard against this undesirable practice and as such, the respondent City of Butuan now suggests that birth certificates be exhibited by movie house patrons to prove the age of children. This is, however, not at all practicable. We can see that the ordinance is clearly unreasonable if not unduly oppressive upon the business of petitioners. Moreover, there is no discernible relation between the ordinance and the promotion of public health, safety, morals and the general welfare.
Respondent further alleges that by charging the full price, the children are being exploited by movie house operators. We fail to see how the children are exploited if they pay the full price of admission. They are treated with the same quality of entertainment as the adults.
Moreover, as a logical consequence of the ordinance, movie house and theater operators will be discouraged from exhibiting wholesome movies for general patronage, much less children's pictures if only to avoid compliance with the ordinance and still earn profits for themselves.
A theater ticket has been described to be either a mere license, revocable at the will of the proprietor of the theater or it may be evidence of a contract whereby, for a valuable consideration, the purchaser has acquired the right to enter the theater and observe the performance on condition that he behaves properly.  Such ticket, therefore, represents a right, Positive or conditional, as the case may be, according to the terms of the original contract of sale. This right is clearly a right of property. The ticket which represents that right is also, necessarily, a species of property. As such, the owner thereof, in the absence of any condition to the contrary in the contract by which he obtained it, has the clear right to dispose of it, to sell it to whom he pleases and at such price as he can obtain.
In no sense could theaters be considered public utilities. The State has not found it appropriate as a national policy to interfere with the admission prices to these performances. This does not mean however, that theaters and exhibitions are not affected with public interest even to a certain degree. Motion pictures have been considered important both as a medium for the communication of Ideas and expression of the artistic impulse. Their effects on the perceptions by our people of issues and public officials or public figures as well as the prevailing cultural traits are considerable.
While it is true that a business may be regulated, it is equally true that such regulation must be within the bounds of reason, that is, the regulatory ordinance must be reasonable, and its provisions cannot be oppressive amounting to an arbitrary interference with the business or calling subject of regulation. A lawful business or calling may not, under the guise of regulation, be unreasonably interfered with even by the exercise of police power.
A police measure for the regulation of the conduct, control and operation of a business should not encroach upon the legitimate and lawful exercise by the citizens of their property rights. 34 The right of the owner to fix a price at which his property shall be sold or used is an inherent attribute of the property itself and, as such, within the protection of the due process clause.
Although the presumption is always in favor of the validity or reasonableness of the ordinance, such presumption must nevertheless be set aside when the invalidity or unreasonableness appears on the face of the ordinance itself or is established by proper evidence

Eastern Broadcasting v Dans G.R. No. L-59329 July 19, 1985

J. Gutierrez Jr.

This petition was filed to compel the respondents to allow the reopening of Radio Station DYRE which had been summarily closed on grounds of national security.
The petitioner contended that it was denied due process when it was closed on the mere allegation that the radio station was used to incite people to sedition. It alleged that no hearing was held and not a bit of proof was submitted to establish a factual basis for the closure. The petitioner was not informed beforehand why administrative action which closed the radio station was taken against it. No action was taken by the respondents to entertain a motion seeking the reconsideration of the closure action. The petitioner also raised the issue of freedom of speech. It appears from the records that the respondents' general charge of "inciting people to commit acts of sedition" arose from the petitioner's shift towards what it stated was the coverage of public events and the airing of programs geared towards public affairs.
On March 25, 1985, before the Court could promulgate a decision squarely passing upon all the issues raised, the petitioner through its president suddenly filed a motion to withdraw or dismiss the petition.
The petitioner alleged:
1. Petitioner Eastern Broadcasting Corporation has already sold its radio broadcasting station in favor of Manuel B. Pastrana as well as its rights and interest in the radio station DYRE in Cebu including its right to operate and its equipment.
2. Respondent National Telecommunications Commission has expressed its willingness to grant to the said new owner Manuel B. Pastrana the requisite license and franchise to operate the said radio station and to approve the sale of the radio transmitter of said station DYRE.
3. In view of the foregoing, petitioner has no longer any interest in said case, and the new owner, Manuel B. Pastrana is likewise not interested in pursuing the case any further.
The case, therefore, has become moot and academic, but the court promulgated certain guidelines.

Issue: What are the guidelines for constitutional protection regarding broadcast media?

Held: Petitioner’s motion to dismiss granted due to being moot and academic.

The cardinal primary requirements in administrative proceedings laid down by this Court in Ang Tibay v. Court of Industrial Relations should be followed before a broadcast station may be closed or its operations curtailed.
It is necessary to reiterate that while there is no controlling and precise definition of due process, it furnishes an unavoidable standard to which government action must conform in order that any deprivation of life, liberty, or property, in each appropriate case, may be valid.
All forms of media, whether print or broadcast, are entitled to the broad protection of the freedom of speech and expression clause. The test for limitations on freedom of expression continues to be the clear and present danger rule — that words are used in such circumstances and are of such a nature as to create a clear and present danger that they will bring about the substantive evils that the lawmaker has a right to prevent. In his Constitution of the Philippines Chief Justice Enrique M. Fernando cites at least nine of our decisions which apply the test — (Primicias v. Fugoso, American Bible Society v. City of Manila, Cabansag v. Fernandez, Vera v. Arca, Navarro v. Villegas, Imbong v. Ferrer, Badoy v. Commission on Elections, People v. Ferrer, and the Philippine Blooming Mills Employees Organization v. Philippine Blooming Mills Co., Inc.). More recently, the clear and present danger test was applied in J.B.L. Reyes in behalf of the Anti-Bases Coalition v. Bagatsing.
The clear and present danger test, however, does not lend itself to a simplistic and all embracing interpretation applicable to all utterances in all forums.
Broadcasting has to be licensed. Airwave frequencies have to be allocated among qualified users. A broadcast corporation cannot simply appropriate a certain frequency without regard for government regulation or for the rights of others.
All forms of communication are entitled to the broad protection of the freedom of expression clause. Necessarily, however, the freedom of television and radio broadcasting is somewhat lesser in scope than the freedom accorded to newspaper and print media.
The American Court in Federal Communications Commission v. Pacifica Foundation, confronted with a patently offensive and indecent regular radio program, explained why radio broadcasting, more than other forms of communications, receives the most limited protection from the free expression clause. First, broadcast media have established a uniquely pervasive presence in the lives of all citizens, Material presented over the airwaves confronts the citizen, not only in public, but in the privacy of his home. Second, broadcasting is uniquely accessible to children. Bookstores and motion picture theaters may be prohibited from making certain material available to children, but the same selectivity cannot be done in radio or television, where the listener or viewer is constantly tuning in and out.
Similar considerations apply in the area of national security.
The broadcast media have also established a uniquely pervasive presence in the lives of all Filipinos, Newspapers and current books are found only in metropolitan areas and in the poblaciones of municipalities accessible to fast and regular transportation. Even here, there are low income masses who find the cost of books, newspapers, and magazines beyond their humble means. Basic needs like food and shelter perforce enjoy high priorities.
On the other hand, the transistor radio is found everywhere. The television set is also becoming universal. Their message may be simultaneously received by a national or regional audience of listeners including the indifferent or unwilling who happen to be within reach of a blaring radio or television set. The materials broadcast over the airwaves reach every person of every age, persons of varying susceptibilities to persuasion, persons of different I.Q.s and mental capabilities, persons whose reactions to inflammatory or offensive speech would be difficult to monitor or predict. The impact of the vibrant speech is forceful and immediate. Unlike readers of the printed work, the radio audience has lesser opportunity to cogitate analyze, and reject the utterance.
The clear and present danger test, therefore, must take the particular circumstances of broadcast media into account. The supervision of radio stations-whether by government or through self-regulation by the industry itself calls for thoughtful, intelligent and sophisticated handling.
The government has a right to be protected against broadcasts which incite the listeners to violently overthrow it. Radio and television may not be used to organize a rebellion or to signal the start of widespread uprising. At the same time, the people have a right to be informed. Radio and television would have little reason for existence if broadcasts are limited to bland, obsequious, or pleasantly entertaining utterances. Since they are the most convenient and popular means of disseminating varying views on public issues, they also deserve special protection.
The freedom to comment on public affairs is essential to the vitality of a representative democracy. In the 1918 case of United States v. Bustos this Court was already stressing that.
The interest of society and the maintenance of good government demand a full discussion of public affairs. Complete liberty to comment on the conduct of public men is a scalpel in the case of free speech. The sharp incision of its probe relieves the abscesses of officialdom. Men in public life may suffer under a hostile and an unjust accusation; the wound can be assuaged with the balm of a clear conscience. A public officer must not be too thin-skinned with reference to comment upon his official acts. Only thus can the intelligence and dignity of the individual be exalted.
Broadcast stations deserve the special protection given to all forms of media by the due process and freedom of expression clauses of the Constitution.