*Additional Limitations (if Police Power is exercised by Delegate)

MAYOR PABLO P. MAGTAJAS vs. PRYCE PROPERTIES CORPORATION, INC.

G.R. No. 111097 July 20, 1994
There was instant opposition when PAGCOR announced the opening of a casino in Cagayan de Oro City. Civic organizations
angrily denounced the project. The religious elements echoed the objection and so did the women's groups and the youth.
Demonstrations were led by the mayor and the city legislators. The media trumpeted the protest, describing the casino as an affront
to the welfare of the city.
The trouble arose when in 1992, flush with its tremendous success in several cities, PAGCOR decided to expand its operations to
Cagayan de Oro City. To this end, it leased a portion of a building belonging to Pryce Properties Corporation, Inc., one of the
herein private respondents, renovated and equipped the same, and prepared to inaugurate its casino there during the Christmas
season.
The reaction of the Sangguniang Panlungsod of Cagayan de Oro City was swift and hostile. On December 7, 1992, it enacted
Ordinance No. 3353 reading as follows:
ORDINANCE NO. 3353
AN ORDINANCE PROHIBITING THE ISSUANCE OF BUSINESS PERMIT AND CANCELLING
EXISTING BUSINESS PERMIT TO ANY ESTABLISHMENT FOR THE USING AND ALLOWING TO BE
USED ITS PREMISES OR PORTION THEREOF FOR THE OPERATION OF CASINO.
BE IT ORDAINED by the Sangguniang Panlungsod of the City of Cagayan de Oro, in session assembled that:
Sec. 1. That pursuant to the policy of the city banning the operation of casino within its territorial jurisdiction,
no business permit shall be issued to any person, partnership or corporation for the operation of casino within the
city limits.
Sec. 2. That it shall be a violation of existing business permit by any persons, partnership or corporation to
use its business establishment or portion thereof, or allow the use thereof by others for casino operation and other
gambling activities.
Sec. 3. PENALTIES. Any violation of such existing business permit as defined in the preceding section
shall suffer the following penalties, to wit:
a) Suspension of the business permit for sixty (60) days for the first offense
and a fine of P1,000.00/day
b) Suspension of the business permit for Six (6) months for the second
offense, and a fine of P3,000.00/day
c) Permanent revocation of the business permit and imprisonment of One (1)
year, for the third and subsequent offenses.
Sec. 4. This Ordinance shall take effect ten (10) days from publication thereof.
Nor was this all. On January 4, 1993, it adopted a sterner Ordinance No. 3375-93 reading as follows:
ORDINANCE NO. 3375-93

AN ORDINANCE PROHIBITING THE OPERATION OF CASINO AND PROVIDING PENALTY FOR

VIOLATION THEREFOR.
WHEREAS, the City Council established a policy as early as 1990 against CASINO under its Resolution No.
2295;
WHEREAS, on October 14, 1992, the City Council passed another Resolution No. 2673, reiterating its policy
against the establishment of CASINO;
WHEREAS, subsequently, thereafter, it likewise passed Ordinance No. 3353, prohibiting the issuance of
Business Permit and to cancel existing Business Permit to any establishment for the using and allowing to be
used its premises or portion thereof for the operation of CASINO;
WHEREAS, under Art. 3, section 458, No. (4), sub paragraph VI of the Local Government Code of 1991 (Rep.
Act 7160) and under Art. 99, No. (4), Paragraph VI of the implementing rules of the Local Government Code,
the City Council as the Legislative Body shall enact measure to suppress any activity inimical to public morals
and general welfare of the people and/or regulate or prohibit such activity pertaining to amusement or
entertainment in order to protect social and moral welfare of the community;
NOW THEREFORE,
BE IT ORDAINED by the City Council in session duly assembled that:
Sec. 1. The operation of gambling CASINO in the City of Cagayan de Oro is hereby prohibited.
Sec. 2. Any violation of this Ordinance shall be subject to the following penalties:
a) Administrative fine of P5,000.00 shall be imposed against the proprietor, partnership or corporation
undertaking the operation, conduct, maintenance of gambling CASINO in the City and closure thereof;
b) Imprisonment of not less than six (6) months nor more than one (1) year or a fine in the amount of P5,000.00
or both at the discretion of the court against the manager, supervisor, and/or any person responsible in the
establishment, conduct and maintenance of gambling CASINO.
Sec. 3. This Ordinance shall take effect ten (10) days after its publication in a local newspaper of general
circulation.
Pryce assailed the ordinances before the Court of Appeals, where it was joined by PAGCOR as intervenor and supplemental
petitioner. Their challenge succeeded. On March 31, 1993, the Court of Appeals declared the ordinances invalid and issued the writ
prayed for to prohibit their enforcement. 1 Reconsideration of this decision was denied on July 13, 1993. 2
Cagayan de Oro City and its mayor are now before us in this petition for review under Rule 45 of the Rules of Court. 3 They aver
that the respondent Court of Appeals erred in holding that:
1. Under existing laws, the Sangguniang Panlungsod of the City of Cagayan de Oro does not have the power and
authority to prohibit the establishment and operation of a PAGCOR gambling casino within the City's territorial
limits.
2. The phrase "gambling and other prohibited games of chance" found in Sec. 458, par. (a), sub-par. (1) (v) of
R.A. 7160 could only mean "illegal gambling."
3. The questioned Ordinances in effect annul P.D. 1869 and are therefore invalid on that point.

4. The questioned Ordinances are discriminatory to casino and partial to cockfighting and are therefore invalid
on that point.
5. The questioned Ordinances are not reasonable, not consonant with the general powers and purposes of the
instrumentality concerned and inconsistent with the laws or policy of the State.
6. It had no option but to follow the ruling in the case of Basco, et al. v. PAGCOR, G.R. No. 91649, May 14,
1991, 197 SCRA 53 in disposing of the issues presented in this present case.
PAGCOR is a corporation created directly by P.D. 1869 to help centralize and regulate all games of chance, including casinos on
land and sea within the territorial jurisdiction of the Philippines. In Basco v. Philippine Amusements and Gaming
Corporation, 4 this Court sustained the constitutionality of the decree and even cited the benefits of the entity to the national
economy as the third highest revenue-earner in the government, next only to the BIR and the Bureau of Customs.
Cagayan de Oro City, like other local political subdivisions, is empowered to enact ordinances for the purposes indicated in the
Local Government Code. It is expressly vested with the police power under what is known as the General Welfare Clause now
embodied in Section 16 as follows:
Sec. 16. General Welfare. Every local government unit shall exercise the powers expressly granted, those
necessarily implied therefrom, as well as powers necessary, appropriate, or incidental for its efficient and
effective governance, and those which are essential to the promotion of the general welfare. Within their
respective territorial jurisdictions, local government units shall ensure and support, among other things, the
preservation and enrichment of culture, promote health and safety, enhance the right of the people to a balanced
ecology, encourage and support the development of appropriate and self-reliant scientific and technological
capabilities, improve public morals, enhance economic prosperity and social justice, promote full employment
among their residents, maintain peace and order, and preserve the comfort and convenience of their inhabitants.
In addition, Section 458 of the said Code specifically declares that:
Sec. 458. Powers, Duties, Functions and Compensation. (a) The Sangguniang Panlungsod, as the
legislative body of the city, shall enact ordinances, approve resolutions and appropriate funds for the general
welfare of the city and its inhabitants pursuant to Section 16 of this Code and in the proper exercise of the
corporate powers of the city as provided for under Section 22 of this Code, and shall:
(1) Approve ordinances and pass resolutions necessary for an efficient and effective city government, and in this
connection, shall:
xxx xxx xxx
(v) Enact ordinances intended to prevent, suppress and impose appropriate
penalties for habitual drunkenness in public places, vagrancy, mendicancy,
prostitution, establishment and maintenance of houses of ill
repute,gambling and other prohibited games of chance, fraudulent devices
and ways to obtain money or property, drug addiction, maintenance of drug
dens, drug pushing, juvenile delinquency, the printing, distribution or
exhibition of obscene or pornographic materials or publications, and such
other activities inimical to the welfare and morals of the inhabitants of the
city;
This section also authorizes the local government units to regulate properties and businesses within their territorial limits in the
interest of the general welfare. 5

The petitioners argue that by virtue of these provisions, the Sangguniang Panlungsod may prohibit the operation of casinos because
they involve games of chance, which are detrimental to the people. Gambling is not allowed by general law and even by the
Constitution itself. The legislative power conferred upon local government units may be exercised over all kinds of gambling and
not only over "illegal gambling" as the respondents erroneously argue. Even if the operation of casinos may have been permitted
under P.D. 1869, the government of Cagayan de Oro City has the authority to prohibit them within its territory pursuant to the
authority entrusted to it by the Local Government Code.
It is submitted that this interpretation is consonant with the policy of local autonomy as mandated in Article II, Section 25, and
Article X of the Constitution, as well as various other provisions therein seeking to strengthen the character of the nation. In giving
the local government units the power to prevent or suppress gambling and other social problems, the Local Government Code has
recognized the competence of such communities to determine and adopt the measures best expected to promote the general welfare
of their inhabitants in line with the policies of the State.
The petitioners also stress that when the Code expressly authorized the local government units to prevent and suppress gambling
and other prohibited games of chance, like craps, baccarat, blackjack and roulette, it meant allforms of gambling without
distinction. Ubi lex non distinguit, nec nos distinguere debemos. 6 Otherwise, it would have expressly excluded from the scope of
their power casinos and other forms of gambling authorized by special law, as it could have easily done. The fact that it did not do
so simply means that the local government units are permitted to prohibit all kinds of gambling within their territories, including
the operation of casinos.
The adoption of the Local Government Code, it is pointed out, had the effect of modifying the charter of the PAGCOR. The Code
is not only a later enactment than P.D. 1869 and so is deemed to prevail in case of inconsistencies between them. More than this,
the powers of the PAGCOR under the decree are expressly discontinued by the Code insofar as they do not conform to its
philosophy and provisions, pursuant to Par. (f) of its repealing clause reading as follows:
(f) All general and special laws, acts, city charters, decrees, executive orders, proclamations and administrative
regulations, or part or parts thereof which are inconsistent with any of the provisions of this Code are hereby
repealed or modified accordingly.
It is also maintained that assuming there is doubt regarding the effect of the Local Government Code on P.D. 1869, the doubt must
be resolved in favor of the petitioners, in accordance with the direction in the Code calling for its liberal interpretation in favor of
the local government units. Section 5 of the Code specifically provides:
Sec. 5. Rules of Interpretation. In the interpretation of the provisions of this Code, the following rules shall
apply:
(a) Any provision on a power of a local government unit shall be liberally interpreted in its favor, and in case of
doubt, any question thereon shall be resolved in favor of devolution of powers and of the lower local government
unit. Any fair and reasonable doubt as to the existence of the power shall be interpreted in favor of the local
government unit concerned;
xxx xxx xxx
(c) The general welfare provisions in this Code shall be liberally interpreted to give more powers to local
government units in accelerating economic development and upgrading the quality of life for the people in the
community; . . . (Emphasis supplied.)
Finally, the petitioners also attack gambling as intrinsically harmful and cite various provisions of the Constitution and several
decisions of this Court expressive of the general and official disapprobation of the vice. They invoke the State policies on the
family and the proper upbringing of the youth and, as might be expected, call attention to the old case of U.S. v. Salaveria, 7 which
sustained a municipal ordinance prohibiting the playing of panguingue. The petitioners decry the immorality of gambling. They

also impugn the wisdom of P.D. 1869 (which they describe as "a martial law instrument") in creating PAGCOR and authorizing it
to operate casinos "on land and sea within the territorial jurisdiction of the Philippines."
This is the opportune time to stress an important point.
The morality of gambling is not a justiciable issue. Gambling is not illegal per se. While it is generally considered inimical to the
interests of the people, there is nothing in the Constitution categorically proscribing or penalizing gambling or, for that matter,
even mentioning it at all. It is left to Congress to deal with the activity as it sees fit. In the exercise of its own discretion, the
legislature may prohibit gambling altogether or allow it without limitation or it may prohibit some forms of gambling and allow
others for whatever reasons it may consider sufficient. Thus, it has prohibited jueteng and monte but permits lotteries, cockfighting
and horse-racing. In making such choices, Congress has consulted its own wisdom, which this Court has no authority to review,
much less reverse. Well has it been said that courts do not sit to resolve the merits of conflicting theories. 8 That is the prerogative
of the political departments. It is settled that questions regarding the wisdom, morality, or practicibility of statutes are not
addressed to the judiciary but may be resolved only by the legislative and executive departments, to which the function belongs in
our scheme of government. That function is exclusive. Whichever way these branches decide, they are answerable only to their
own conscience and the constituents who will ultimately judge their acts, and not to the courts of justice.
The only question we can and shall resolve in this petition is the validity of Ordinance No. 3355 and Ordinance No. 3375-93 as
enacted by the Sangguniang Panlungsod of Cagayan de Oro City. And we shall do so only by the criteria laid down by law and not
by our own convictions on the propriety of gambling.
The tests of a valid ordinance are well established. A long line of decisions 9 has held that to be valid, an ordinance must conform
to the following substantive requirements:
1) It must not contravene the constitution or any statute.
2) It must not be unfair or oppressive.
3) It must not be partial or discriminatory.
4) It must not prohibit but may regulate trade.
5) It must be general and consistent with public policy.
6) It must not be unreasonable.
We begin by observing that under Sec. 458 of the Local Government Code, local government units are authorized to prevent or
suppress, among others, "gambling and other prohibited games of chance." Obviously, this provision excludes games of chance
which are not prohibited but are in fact permitted by law. The petitioners are less than accurate in claiming that the Code could
have excluded such games of chance but did not. In fact it does. The language of the section is clear and unmistakable. Under the
rule of noscitur a sociis, a word or phrase should be interpreted in relation to, or given the same meaning of, words with which it is
associated. Accordingly, we conclude that since the word "gambling" is associated with "and other prohibited games of chance,"
the word should be read as referring to only illegal gambling which, like the other prohibited games of chance, must be prevented
or suppressed.
We could stop here as this interpretation should settle the problem quite conclusively. But we will not. The vigorous efforts of the
petitioners on behalf of the inhabitants of Cagayan de Oro City, and the earnestness of their advocacy, deserve more than short
shrift from this Court.
The apparent flaw in the ordinances in question is that they contravene P.D. 1869 and the public policy embodied therein insofar as
they prevent PAGCOR from exercising the power conferred on it to operate a casino in Cagayan de Oro City. The petitioners have
an ingenious answer to this misgiving. They deny that it is the ordinances that have changed P.D. 1869 for an ordinance admittedly

cannot prevail against a statute. Their theory is that the change has been made by the Local Government Code itself, which was
also enacted by the national lawmaking authority. In their view, the decree has been, not really repealed by the Code, but merely
"modified pro tanto" in the sense that PAGCOR cannot now operate a casino over the objection of the local government unit
concerned. This modification of P.D. 1869 by the Local Government Code is permissible because one law can change or repeal
another law.
It seems to us that the petitioners are playing with words. While insisting that the decree has only been "modifiedpro tanto," they
are actually arguing that it is already dead, repealed and useless for all intents and purposes because the Code has shorn PAGCOR
of all power to centralize and regulate casinos. Strictly speaking, its operations may now be not only prohibited by the local
government unit; in fact, the prohibition is not only discretionary but mandated by Section 458 of the Code if the word "shall" as
used therein is to be given its accepted meaning. Local government units have now no choice but to prevent and suppress
gambling, which in the petitioners' view includes both legal and illegal gambling. Under this construction, PAGCOR will have no
more games of chance to regulate or centralize as they must all be prohibited by the local government units pursuant to the
mandatory duty imposed upon them by the Code. In this situation, PAGCOR cannot continue to exist except only as a toothless
tiger or a white elephant and will no longer be able to exercise its powers as a prime source of government revenue through the
operation of casinos.
It is noteworthy that the petitioners have cited only Par. (f) of the repealing clause, conveniently discarding the rest of the provision
which painstakingly mentions the specific laws or the parts thereof which are repealed (or modified) by the Code. Significantly,
P.D. 1869 is not one of them. A reading of the entire repealing clause, which is reproduced below, will disclose the omission:
Sec. 534. Repealing Clause. (a) Batas Pambansa Blg. 337, otherwise known as the "Local Government
Code," Executive Order No. 112 (1987), and Executive Order No. 319 (1988) are hereby repealed.
(b) Presidential Decree Nos. 684, 1191, 1508 and such other decrees, orders, instructions, memoranda and
issuances related to or concerning the barangay are hereby repealed.
(c) The provisions of Sections 2, 3, and 4 of Republic Act No. 1939 regarding hospital fund; Section 3, a (3) and
b (2) of Republic Act. No. 5447 regarding the Special Education Fund; Presidential Decree No. 144 as amended
by Presidential Decree Nos. 559 and 1741; Presidential Decree No. 231 as amended; Presidential Decree No.
436 as amended by Presidential Decree No. 558; and Presidential Decree Nos. 381, 436, 464, 477, 526, 632, 752,
and 1136 are hereby repealed and rendered of no force and effect.
(d) Presidential Decree No. 1594 is hereby repealed insofar as it governs locally-funded projects.
(e) The following provisions are hereby repealed or amended insofar as they are inconsistent with the provisions
of this Code: Sections 2, 16, and 29 of Presidential Decree No. 704; Sections 12 of Presidential Decree No. 87,
as amended; Sections 52, 53, 66, 67, 68, 69, 70, 71, 72, 73, and 74 of Presidential Decree No. 463, as amended;
and Section 16 of Presidential Decree No. 972, as amended, and
(f) All general and special laws, acts, city charters, decrees, executive orders, proclamations and administrative
regulations, or part or parts thereof which are inconsistent with any of the provisions of this Code are hereby
repealed or modified accordingly.
Furthermore, it is a familiar rule that implied repeals are not lightly presumed in the absence of a clear and unmistakable showing
of such intention. In Lichauco & Co. v. Apostol, 10 this Court explained:
The cases relating to the subject of repeal by implication all proceed on the assumption that if the act of later date
clearly reveals an intention on the part of the lawmaking power to abrogate the prior law, this intention must be
given effect; but there must always be a sufficient revelation of this intention, and it has become an unbending
rule of statutory construction that the intention to repeal a former law will not be imputed to the Legislature

when it appears that the two statutes, or provisions, with reference to which the question arises bear to each other
the relation of general to special.
There is no sufficient indication of an implied repeal of P.D. 1869. On the contrary, as the private respondent points out, PAGCOR
is mentioned as the source of funding in two later enactments of Congress, to wit, R.A. 7309, creating a Board of Claims under the
Department of Justice for the benefit of victims of unjust punishment or detention or of violent crimes, and R.A. 7648, providing
for measures for the solution of the power crisis. PAGCOR revenues are tapped by these two statutes. This would show that the
PAGCOR charter has not been repealed by the Local Government Code but has in fact been improved as it were to make the entity
more responsive to the fiscal problems of the government.
It is a canon of legal hermeneutics that instead of pitting one statute against another in an inevitably destructive confrontation,
courts must exert every effort to reconcile them, remembering that both laws deserve a becoming respect as the handiwork of a
coordinate branch of the government. On the assumption of a conflict between P.D. 1869 and the Code, the proper action is not to
uphold one and annul the other but to give effect to both by harmonizing them if possible. This is possible in the case before us.
The proper resolution of the problem at hand is to hold that under the Local Government Code, local government units may (and
indeed must) prevent and suppress all kinds of gambling within their territories except only those allowed by statutes like P.D.
1869. The exception reserved in such laws must be read into the Code, to make both the Code and such laws equally effective and
mutually complementary.
This approach would also affirm that there are indeed two kinds of gambling, to wit, the illegal and those authorized by law.
Legalized gambling is not a modern concept; it is probably as old as illegal gambling, if not indeed more so. The petitioners'
suggestion that the Code authorizes them to prohibit all kinds of gambling would erase the distinction between these two forms of
gambling without a clear indication that this is the will of the legislature. Plausibly, following this theory, the City of Manila could,
by mere ordinance, prohibit the Philippine Charity Sweepstakes Office from conducting a lottery as authorized by R.A. 1169 and
B.P. 42 or stop the races at the San Lazaro Hippodrome as authorized by R.A. 309 and R.A. 983.
In light of all the above considerations, we see no way of arriving at the conclusion urged on us by the petitioners that the
ordinances in question are valid. On the contrary, we find that the ordinances violate P.D. 1869, which has the character and force
of a statute, as well as the public policy expressed in the decree allowing the playing of certain games of chance despite the
prohibition of gambling in general.
The rationale of the requirement that the ordinances should not contravene a statute is obvious. Municipal governments are only
agents of the national government. Local councils exercise only delegated legislative powers conferred on them by Congress as the
national lawmaking body. The delegate cannot be superior to the principal or exercise powers higher than those of the latter. It is a
heresy to suggest that the local government units can undo the acts of Congress, from which they have derived their power in the
first place, and negate by mere ordinance the mandate of the statute.
Municipal corporations owe their origin to, and derive their powers and rights wholly from the legislature. It
breathes into them the breath of life, without which they cannot exist. As it creates, so it may destroy. As it may
destroy, it may abridge and control. Unless there is some constitutional limitation on the right, the legislature
might, by a single act, and if we can suppose it capable of so great a folly and so great a wrong, sweep from
existence all of the municipal corporations in the State, and the corporation could not prevent it. We know of no
limitation on the right so far as to the corporation themselves are concerned. They are, so to phrase it, the mere
tenants at will of the legislature. 11
This basic relationship between the national legislature and the local government units has not been enfeebled by the new
provisions in the Constitution strengthening the policy of local autonomy. Without meaning to detract from that policy, we here
confirm that Congress retains control of the local government units although in significantly reduced degree now than under our
previous Constitutions. The power to create still includes the power to destroy. The power to grant still includes the power to
withhold or recall. True, there are certain notable innovations in the Constitution, like the direct conferment on the local
government units of the power to tax, 12which cannot now be withdrawn by mere statute. By and large, however, the national
legislature is still the principal of the local government units, which cannot defy its will or modify or violate it.

The Court understands and admires the concern of the petitioners for the welfare of their constituents and their apprehensions that
the welfare of Cagayan de Oro City will be endangered by the opening of the casino. We share the view that "the hope of large or
easy gain, obtained without special effort, turns the head of the workman" 13 and that "habitual gambling is a cause of laziness and
ruin." 14 In People v. Gorostiza, 15 we declared: "The social scourge of gambling must be stamped out. The laws against gambling
must be enforced to the limit." George Washington called gambling "the child of avarice, the brother of iniquity and the father of
mischief." Nevertheless, we must recognize the power of the legislature to decide, in its own wisdom, to legalize certain forms of
gambling, as was done in P.D. 1869 and impliedly affirmed in the Local Government Code. That decision can be revoked by this
Court only if it contravenes the Constitution as the touchstone of all official acts. We do not find such contravention here.
We hold that the power of PAGCOR to centralize and regulate all games of chance, including casinos on land and sea within the
territorial jurisdiction of the Philippines, remains unimpaired. P.D. 1869 has not been modified by the Local Government Code,
which empowers the local government units to prevent or suppress only those forms of gambling prohibited by law.
Casino gambling is authorized by P.D. 1869. This decree has the status of a statute that cannot be amended or nullified by a mere
ordinance. Hence, it was not competent for the Sangguniang Panlungsod of Cagayan de Oro City to enact Ordinance No. 3353
prohibiting the use of buildings for the operation of a casino and Ordinance No. 3375-93 prohibiting the operation of casinos. For
all their praiseworthy motives, these ordinances are contrary to P.D. 1869 and the public policy announced therein and are
therefore ultra vires and void.
WHEREFORE, the petition is DENIED and the challenged decision of the respondent Court of Appeals is AFFIRMED, with costs
against the petitioners. It is so ordered.

CITY OF MANILA vs. JUDGE LAGUIO

GR. No. 118127, April 12, 2005
I know only that what is moral is what you feel good after and what is immoral is what you feel bad after.
Ernest Hermingway
Death in the Afternoon, Ch. 1
It is a moral and political axiom that any dishonorable act, if performed by oneself, is less immoral than if performed by someone
else, who would be well-intentioned in his dishonesty.
J. Christopher Gerald
Bonaparte in Egypt, Ch. I
The Courts commitment to the protection of morals is secondary to its fealty to the fundamental law of the land. It is
foremost a guardian of the Constitution but not the conscience of individuals. And if it need be, the Court will not hesitate to
make the hammer fall, and heavily in the words of Justice Laurel, and uphold the constitutional guarantees when faced with laws
that, though not lacking in zeal to promote morality, nevertheless fail to pass the test of constitutionality.
The pivotal issue in this Petition[1] under Rule 45 (then Rule 42) of the Revised Rules on Civil Procedure seeking the reversal
of the Decision[2] in Civil Case No. 93-66511 of the Regional Trial Court (RTC) of Manila, Branch 18 (lower court), [3] is the
validity of Ordinance No. 7783 (the Ordinance) of the City of Manila.[4]
The antecedents are as follows:
Private respondent Malate Tourist Development Corporation (MTDC) is a corporation engaged in the business of operating
hotels, motels, hostels and lodging houses. [5] It built and opened Victoria Court in Malate which was licensed as a motel although
duly accredited with the Department of Tourism as a hotel. [6] On 28 June 1993, MTDC filed a Petition for Declaratory Relief with
Prayer for a Writ of Preliminary Injunction and/or Temporary Restraining Order [7] (RTC Petition) with the lower court impleading
as defendants, herein petitioners City of Manila, Hon. Alfredo S. Lim (Lim), Hon. Joselito L. Atienza, and the members of the City
Council of Manila (City Council). MTDC prayed that the Ordinance, insofar as it includes motels and inns as among its
prohibited establishments, be declared invalid and unconstitutional. [8]
Enacted by the City Council[9] on 9 March 1993 and approved by petitioner City Mayor on 30 March 1993, the
said Ordinance is entitled
AN ORDINANCE PROHIBITING THE ESTABLISHMENT OR OPERATION OF BUSINESSES PROVIDING CERTAIN
FORMS OF AMUSEMENT, ENTERTAINMENT, SERVICES AND FACILITIES IN THE ERMITA-MALATE AREA,
PRESCRIBING PENALTIES FOR VIOLATION THEREOF, AND FOR OTHER PURPOSES.[10]
The Ordinance is reproduced in full, hereunder:
SECTION 1. Any provision of existing laws and ordinances to the contrary notwithstanding, no person, partnership,
corporation or entity shall, in the Ermita-Malate area bounded by Teodoro M. Kalaw Sr. Street in the North, Taft Avenue in the
East, Vito Cruz Street in the South and Roxas Boulevard in the West, pursuant to P.D. 499 be allowed or authorized to contract
and engage in, any business providing certain forms of amusement, entertainment, services and facilities where women are
used as tools in entertainment and which tend to disturb the community, annoy the inhabitants, and adversely affect the
social and moral welfare of the community, such as but not limited to:
1. Sauna Parlors
2. Massage Parlors
3. Karaoke Bars
4. Beerhouses
5. Night Clubs
6. Day Clubs
7. Super Clubs
8. Discotheques
9. Cabarets
10. Dance Halls

11. Motels
12. Inns
SEC. 2 The City Mayor, the City Treasurer or any person acting in behalf of the said officials are prohibited from issuing
permits, temporary or otherwise, or from granting licenses and accepting payments for the operation of business
enumerated in the preceding section.
SEC. 3. Owners and/or operator of establishments engaged in, or devoted to, the businesses enumerated in Section 1 hereof are
hereby given three (3) months from the date of approval of this ordinance within which to wind up business operations or to
transfer to any place outside of the Ermita-Malate area or convert said businesses to other kinds of business allowable
within the area,such as but not limited to:
1. Curio or antique shop
2. Souvenir Shops
3. Handicrafts display centers
4. Art galleries
5. Records and music shops
6. Restaurants
7. Coffee shops
8. Flower shops
9. Music lounge and sing-along restaurants, with well-defined activities for wholesome family
entertainment that cater to both local and foreign clientele.
10. Theaters engaged in the exhibition, not only of motion pictures but also of cultural shows, stage and
theatrical plays, art exhibitions, concerts and the like.
11. Businesses allowable within the law and medium intensity districts as provided for in the zoning
ordinances for Metropolitan Manila, except new warehouse or open-storage depot, dock or yard, motor repair shop,
gasoline service station, light industry with any machinery, or funeral establishments.
SEC. 4. Any person violating any provisions of this ordinance, shall upon conviction, be punished by imprisonment of one
(1) year or fine of FIVE THOUSAND (P5,000.00) PESOS, or both, at the discretion of the Court, PROVIDED, that in case of
juridical person, the President, the General Manager, or person-in-charge of operation shall be liable thereof; PROVIDED
FURTHER, that in case of subsequent violation and conviction, the premises of the erring establishment shall be closed and
padlocked permanently.
SEC. 5. This ordinance shall take effect upon approval.
Enacted by the City Council of Manila at its regular session today, March 9, 1993.
Approved by His Honor, the Mayor on March 30, 1993. (Emphasis supplied)
In the RTC Petition, MTDC argued that the Ordinance erroneously and improperly included in its enumeration of prohibited
establishments, motels and inns such as MTDCs Victoria Court considering that these were not establishments for amusement
or entertainment and they were not services or facilities for entertainment, nor did they use women as tools for
entertainment, and neither did they disturb the community, annoy the inhabitants or adversely affect the social and moral
welfare of the community.[11]
MTDC further advanced that the Ordinance was invalid and unconstitutional for the following reasons: (1) The City Council
has no power to prohibit the operation of motels as Section 458 (a) 4 (iv) [12] of the Local Government Code of 1991 (the Code)
grants to the City Council only the power to regulate the establishment, operation and maintenance of hotels, motels, inns, pension
houses, lodging houses and other similar establishments; (2) The Ordinance is void as it is violative of Presidential Decree (P.D.)
No. 499[13] which specifically declared portions of the Ermita-Malate area as a commercial zone with certain restrictions; (3)
The Ordinance does not constitute a proper exercise of police power as the compulsory closure of the motel business has no
reasonable relation to the legitimate municipal interests sought to be protected; (4) The Ordinance constitutes an ex post facto law
by punishing the operation of Victoria Court which was a legitimate business prior to its enactment; (5) The Ordinance violates
MTDCs constitutional rights in that: (a) it is confiscatory and constitutes an invasion of plaintiffs property rights; (b) the City
Council has no power to find as a fact that a particular thing is a nuisance per se nor does it have the power to extrajudicially
destroy it; and (6) TheOrdinance constitutes a denial of equal protection under the law as no reasonable basis exists for prohibiting
the operation of motels and inns, but not pension houses, hotels, lodging houses or other similar establishments, and for prohibiting
said business in the Ermita-Malate area but not outside of this area. [14]

In their Answer[15] dated 23 July 1993, petitioners City of Manila and Lim maintained that the City Council had the power to
prohibit certain forms of entertainment in order to protect the social and moral welfare of the community as provided for in
Section 458 (a) 4 (vii) of the Local Government Code,[16] which reads, thus:
Section 458. Powers, Duties, Functions and Compensation. (a) The sangguniang panlungsod, as the legislative body of the city,
shall enact ordinances, approve resolutions and appropriate funds for the general welfare of the city and its inhabitants pursuant to
Section 16 of this Code and in the proper exercise of the corporate powers of the city as provided for under Section 22 of this
Code, and shall:
....
(4) Regulate activities relative to the use of land, buildings and structures within the city in order to promote the general welfare
and for said purpose shall:
....
(vii) Regulate the establishment, operation, and maintenance of any entertainment or amusement facilities, including
theatrical performances, circuses, billiard pools, public dancing schools, public dance halls, sauna baths, massage
parlors, and other places for entertainment or amusement; regulate such other events or activities for amusement or
entertainment, particularly those which tend to disturb the community or annoy the inhabitants, or require the
suspension or suppression of the same; or, prohibit certain forms of amusement or entertainment in order to protect the
social and moral welfare of the community.
Citing Kwong Sing v. City of Manila,[17] petitioners insisted that the power of regulation spoken of in the above-quoted
provision included the power to control, to govern and to restrain places of exhibition and amusement. [18]
Petitioners likewise asserted that the Ordinance was enacted by the City Council of Manila to protect the social and moral
welfare of the community in conjunction with its police power as found in Article III, Section 18(kk) of Republic Act No. 409,
[19]
otherwise known as the Revised Charter of the City of Manila (Revised Charter of Manila)[20] which reads, thus:
ARTICLE III
THE MUNICIPAL BOARD
. . .
Section 18. Legislative powers. The Municipal Board shall have the following legislative powers:
. . .
(kk) To enact all ordinances it may deem necessary and proper for the sanitation and safety, the furtherance of the
prosperity, and the promotion of the morality, peace, good order, comfort, convenience, and general welfare of the city
and its inhabitants, and such others as may be necessary to carry into effect and discharge the powers and duties
conferred by this chapter; and to fix penalties for the violation of ordinances which shall not exceed two hundred pesos
fine or six months imprisonment, or both such fine and imprisonment, for a single offense.
Further, the petitioners noted, the Ordinance had the presumption of validity; hence, private respondent had the burden to
prove its illegality or unconstitutionality.[21]
Petitioners also maintained that there was no inconsistency between P.D. 499 and the Ordinance as the latter simply
disauthorized certain forms of businesses and allowed the Ermita-Malate area to remain a commercial zone. [22] The Ordinance, the
petitioners likewise claimed, cannot be assailed as ex post facto as it was prospective in operation.[23] The Ordinance also did not
infringe the equal protection clause and cannot be denounced as class legislation as there existed substantial and real differences
between the Ermita-Malate area and other places in the City of Manila.[24]
On 28 June 1993, respondent Judge Perfecto A.S. Laguio, Jr. (Judge Laguio) issued an ex-parte temporary restraining order
against the enforcement of the Ordinance.[25] And on 16 July 1993, again in an intrepid gesture, he granted the writ of preliminary
injunction prayed for by MTDC.[26]
After trial, on 25 November 1994, Judge Laguio rendered the assailed Decision, enjoining the petitioners from implementing
the Ordinance. The dispositive portion of said Decisionreads:[27]

WHEREFORE, judgment is hereby rendered declaring Ordinance No. 778[3], Series of 1993, of the City of Manila null and void,
and making permanent the writ of preliminary injunction that had been issued by this Court against the defendant. No costs.
SO ORDERED.[28]
Petitioners filed with the lower court a Notice of Appeal[29] on 12 December 1994, manifesting that they are elevating the case
to this Court under then Rule 42 on pure questions of law.[30]
On 11 January 1995, petitioners filed the present Petition, alleging that the following errors were committed by the lower
court in its ruling: (1) It erred in concluding that the subject ordinance is ultra vires, or otherwise, unfair, unreasonable and
oppressive exercise of police power; (2) It erred in holding that the questioned Ordinance contravenes P.D. 499[31] which allows
operators of all kinds of commercial establishments, except those specified therein; and (3) It erred in declaring
the Ordinance void and unconstitutional.[32]
In the Petition and in its Memorandum,[33] petitioners in essence repeat the assertions they made before the lower court. They
contend that the assailed Ordinance was enacted in the exercise of the inherent and plenary power of the State and the general
welfare clause exercised by local government units provided for in Art. 3, Sec. 18 (kk) of the Revised Charter of Manila and
conjunctively, Section 458 (a) 4 (vii) of the Code. [34] They allege that the Ordinance is a valid exercise of police power; it does not
contravene P.D. 499; and that it enjoys the presumption of validity.[35]
In its Memorandum[36] dated 27 May 1996, private respondent maintains that the Ordinance is ultra vires and that it is void
for being repugnant to the general law. It reiterates that the questioned Ordinance is not a valid exercise of police power; that it is
violative of due process, confiscatory and amounts to an arbitrary interference with its lawful business; that it is violative of the
equal protection clause; and that it confers on petitioner City Mayor or any officer unregulated discretion in the execution of
the Ordinance absent rules to guide and control his actions.
This is an opportune time to express the Courts deep sentiment and tenderness for the Ermita-Malate area being its home for
several decades. A long-time resident, the Court witnessed the areas many turn of events. It relished its glory days and endured its
days of infamy. Much as the Court harks back to the resplendent era of the Old Manila and yearns to restore its lost grandeur, it
believes that the Ordinance is not the fitting means to that end. The Court is of the opinion, and so holds, that the lower court did
not err in declaring theOrdinance, as it did, ultra vires and therefore null and void.
The Ordinance is so replete with constitutional infirmities that almost every sentence thereof violates a constitutional
provision. The prohibitions and sanctions therein transgress the cardinal rights of persons enshrined by the Constitution. The Court
is called upon to shelter these rights from attempts at rendering them worthless.
The tests of a valid ordinance are well established. A long line of decisions has held that for an ordinance to be valid, it must
not only be within the corporate powers of the local government unit to enact and must be passed according to the procedure
prescribed by law, it must also conform to the following substantive requirements: (1) must not contravene the Constitution or any
statute; (2) must not be unfair or oppressive; (3) must not be partial or discriminatory; (4) must not prohibit but may regulate trade;
(5) must be general and consistent with public policy; and (6) must not be unreasonable.[37]
Anent the first criterion, ordinances shall only be valid when they are not contrary to the Constitution and to the laws.
The Ordinance must satisfy two requirements: it must pass muster under the test of constitutionality and the test of consistency
with the prevailing laws. That ordinances should be constitutional uphold the principle of the supremacy of the Constitution. The
requirement that the enactment must not violate existing law gives stress to the precept that local government units are able to
legislate only by virtue of their derivative legislative power, a delegation of legislative power from the national legislature. The
delegate cannot be superior to the principal or exercise powers higher than those of the latter.[39]
[38]

This relationship between the national legislature and the local government units has not been enfeebled by the new
provisions in the Constitution strengthening the policy of local autonomy. The national legislature is still the principal of the local
government units, which cannot defy its will or modify or violate it.[40]
The Ordinance was passed by the City Council in the exercise of its police power, an enactment of the City Council acting as
agent of Congress. Local government units, as agencies of the State, are endowed with police power in order to effectively
accomplish and carry out the declared objects of their creation. [41] This delegated police power is found in Section 16 of the Code,
known as the general welfare clause, viz:
SECTION 16. General Welfare.Every local government unit shall exercise the powers expressly granted, those necessarily
implied therefrom, as well as powers necessary, appropriate, or incidental for its efficient and effective governance, and those
which are essential to the promotion of the general welfare. Within their respective territorial jurisdictions, local government units
shall ensure and support, among other things, the preservation and enrichment of culture, promote health and safety, enhance the
right of the people to a balanced ecology, encourage and support the development of appropriate and self-reliant scientific and

technological capabilities, improve public morals, enhance economic prosperity and social justice, promote full employment
among their residents, maintain peace and order, and preserve the comfort and convenience of their inhabitants.
Local government units exercise police power through their respective legislative bodies; in this case, the sangguniang
panlungsod or the city council. The Code empowers the legislative bodies to enact ordinances, approve resolutions and
appropriate funds for the general welfare of the province/city/municipality and its inhabitants pursuant to Section 16 of the Code
and in the proper exercise of the corporate powers of the province/city/ municipality provided under the Code. [42] The inquiry in
this Petition is concerned with the validity of the exercise of such delegated power.
The Ordinance contravenes
the Constitution
The police power of the City Council, however broad and far-reaching, is subordinate to the constitutional limitations
thereon; and is subject to the limitation that its exercise must be reasonable and for the public good. [43] In the case at bar, the
enactment of the Ordinance was an invalid exercise of delegated power as it is unconstitutional and repugnant to general laws.
The relevant constitutional provisions are the following:
SEC. 5. The maintenance of peace and order, the protection of life, liberty, and property, and the promotion of the general welfare
are essential for the enjoyment by all the people of the blessings of democracy.[44]
SEC. 14. The State recognizes the role of women in nation-building, and shall ensure the fundamental equality before the law of
women and men.[45]
SEC. 1. No person shall be deprived of life, liberty or property without due process of law, nor shall any person be denied the
equal protection of laws.[46]
Sec. 9. Private property shall not be taken for public use without just compensation.[47]
A. The Ordinance infringes
the Due Process Clause
The constitutional safeguard of due process is embodied in the fiat (N)o person shall be deprived of life, liberty or property
without due process of law. . . .[48]
There is no controlling and precise definition of due process. It furnishes though a standard to which governmental action
should conform in order that deprivation of life, liberty or property, in each appropriate case, be valid. This standard is aptly
described as a responsiveness to the supremacy of reason, obedience to the dictates of justice, [49] and as such it is a limitation upon
the exercise of the police power.[50]
The purpose of the guaranty is to prevent governmental encroachment against the life, liberty and property of individuals; to
secure the individual from the arbitrary exercise of the powers of the government, unrestrained by the established principles of
private rights and distributive justice; to protect property from confiscation by legislative enactments, from seizure, forfeiture, and
destruction without a trial and conviction by the ordinary mode of judicial procedure; and to secure to all persons equal and
impartial justice and the benefit of the general law.[51]
The guaranty serves as a protection against arbitrary regulation, and private corporations and partnerships are persons
within the scope of the guaranty insofar as their property is concerned.[52]
This clause has been interpreted as imposing two separate limits on government, usually called procedural due process and
substantive due process.
Procedural due process, as the phrase implies, refers to the procedures that the government must follow before it deprives a
person of life, liberty, or property. Classic procedural due process issues are concerned with what kind of notice and what form of
hearing the government must provide when it takes a particular action.[53]
Substantive due process, as that phrase connotes, asks whether the government has an adequate reason for taking away a
persons life, liberty, or property. In other words, substantive due process looks to whether there is a sufficient justification for the
governments action.[54] Case law in the United States (U.S.) tells us that whether there is such a justification depends very much
on the level of scrutiny used. [55] For example, if a law is in an area where only rational basis review is applied, substantive due
process is met so long as the law is rationally related to a legitimate government purpose. But if it is an area where strict scrutiny

is used, such as for protecting fundamental rights, then the government will meet substantive due process only if it can prove that
the law is necessary to achieve a compelling government purpose.[56]
The police power granted to local government units must always be exercised with utmost observance of the rights of the
people to due process and equal protection of the law. Such power cannot be exercised whimsically, arbitrarily or despotically [57] as
its exercise is subject to a qualification, limitation or restriction demanded by the respect and regard due to the prescription of the
fundamental law, particularly those forming part of the Bill of Rights. Individual rights, it bears emphasis, may be adversely
affected only to the extent that may fairly be required by the legitimate demands of public interest or public welfare. [58] Due
process requires the intrinsic validity of the law in interfering with the rights of the person to his life, liberty and property.[59]
Requisites for the valid exercise
of Police Power are not met
To successfully invoke the exercise of police power as the rationale for the enactment of the Ordinance, and to free it from
the imputation of constitutional infirmity, not only must it appear that the interests of the public generally, as distinguished from
those of a particular class, require an interference with private rights, but the means adopted must be reasonably necessary for the
accomplishment of the purpose and not unduly oppressive upon individuals. [60] It must be evident that no other alternative for the
accomplishment of the purpose less intrusive of private rights can work. A reasonable relation must exist between the purposes of
the police measure and the means employed for its accomplishment, for even under the guise of protecting the public interest,
personal rights and those pertaining to private property will not be permitted to be arbitrarily invaded. [61]
Lacking a concurrence of these two requisites, the police measure shall be struck down as an arbitrary intrusion into private
rights[62] a violation of the due process clause.
The Ordinance was enacted to address and arrest the social ills purportedly spawned by the establishments in the ErmitaMalate area which are allegedly operated under the deceptive veneer of legitimate, licensed and tax-paying nightclubs, bars,
karaoke bars, girlie houses, cocktail lounges, hotels and motels. Petitioners insist that even the Court in the case of Ermita-Malate
Hotel and Motel Operators Association, Inc. v. City Mayor of Manila [63] had already taken judicial notice of the alarming increase
in the rate of prostitution, adultery and fornication in Manila traceable in great part to existence of motels, which provide a
necessary atmosphere for clandestine entry, presence and exit and thus become the ideal haven for prostitutes and thrill-seekers. [64]
The object of the Ordinance was, accordingly, the promotion and protection of the social and moral values of the community.
Granting for the sake of argument that the objectives of theOrdinance are within the scope of the City Councils police powers, the
means employed for the accomplishment thereof were unreasonable and unduly oppressive.
It is undoubtedly one of the fundamental duties of the City of Manila to make all reasonable regulations looking to the
promotion of the moral and social values of the community. However, the worthy aim of fostering public morals and the
eradication of the communitys social ills can be achieved through means less restrictive of private rights; it can be attained by
reasonable restrictions rather than by an absolute prohibition. The closing down and transfer of businesses or their conversion into
businesses allowed under the Ordinance have no reasonable relation to the accomplishment of its purposes. Otherwise stated, the
prohibition of the enumerated establishments will not per se protect and promote the social and moral welfare of the community; it
will not in itself eradicate the alluded social ills of prostitution, adultery, fornication nor will it arrest the spread of sexual disease in
Manila.
Conceding for the nonce that the Ermita-Malate area teems with houses of ill-repute and establishments of the like which the
City Council may lawfully prohibit,[65] it is baseless and insupportable to bring within that classification sauna parlors, massage
parlors, karaoke bars, night clubs, day clubs, super clubs, discotheques, cabarets, dance halls, motels and inns. This is not
warranted under the accepted definitions of these terms. The enumerated establishments are lawful pursuits which are not per
se offensive to the moral welfare of the community.
That these are used as arenas to consummate illicit sexual affairs and as venues to further the illegal prostitution is of no
moment. We lay stress on the acrid truth that sexual immorality, being a human frailty, may take place in the most innocent of
places that it may even take place in the substitute establishments enumerated under Section 3 of the Ordinance. If the flawed
logic of the Ordinance were to be followed, in the remote instance that an immoral sexual act transpires in a church cloister or a
court chamber, we would behold the spectacle of the City of Manila ordering the closure of the church or court concerned. Every
house, building, park, curb, street or even vehicles for that matter will not be exempt from the prohibition. Simply because there
are no pure places where there are impure men. Indeed, even the Scripture and the Tradition of Christians churches continually
recall the presence and universality of sin in mans history.[66]
The problem, it needs to be pointed out, is not the establishment, which by its nature cannot be said to be injurious to the
health or comfort of the community and which in itself is amoral, but the deplorable human activity that may occur within its
premises. While a motel may be used as a venue for immoral sexual activity, it cannot for that reason alone be punished. It cannot
be classified as a house of ill-repute or as a nuisance per se on a mere likelihood or a naked assumption. If that were so and if that

were allowed, then the Ermita-Malate area would not only be purged of its supposed social ills, it would be extinguished of its soul
as well as every human activity, reprehensible or not, in its every nook and cranny would be laid bare to the estimation of the
authorities.
The Ordinance seeks to legislate morality but fails to address the core issues of morality. Try as the Ordinance may to shape
morality, it should not foster the illusion that it can make a moral man out of it because immorality is not a thing, a building or
establishment; it is in the hearts of men. The City Council instead should regulate human conduct that occurs inside the
establishments, but not to the detriment of liberty and privacy which are covenants, premiums and blessings of democracy.
While petitioners earnestness at curbing clearly objectionable social ills is commendable, they unwittingly punish even the
proprietors and operators of wholesome, innocent establishments. In the instant case, there is a clear invasion of personal or
property rights, personal in the case of those individuals desirous of owning, operating and patronizing those motels and property
in terms of the investments made and the salaries to be paid to those therein employed. If the City of Manila so desires to put an
end to prostitution, fornication and other social ills, it can instead impose reasonable regulations such as daily inspections of the
establishments for any violation of the conditions of their licenses or permits; it may exercise its authority to suspend or revoke
their licenses for these violations;[67] and it may even impose increased license fees. In other words, there are other means to
reasonably accomplish the desired end.
Means employed are
constitutionally infirm
The Ordinance disallows the operation of sauna parlors, massage parlors, karaoke bars, beerhouses, night clubs, day clubs,
super clubs, discotheques, cabarets, dance halls, motels and inns in the Ermita-Malate area. In Section 3 thereof, owners and/or
operators of the enumerated establishments are given three (3) months from the date of approval of the Ordinancewithin which to
wind up business operations or to transfer to any place outside the Ermita-Malate area or convert said businesses to other kinds of
business allowable within the area. Further, it states in Section 4 that in cases of subsequent violations of the provisions of the
Ordinance, the premises of the erring establishment shall be closed and padlocked permanently.
It is readily apparent that the means employed by the Ordinance for the achievement of its purposes, the governmental
interference itself, infringes on the constitutional guarantees of a persons fundamental right to liberty and property.
Liberty as guaranteed by the Constitution was defined by Justice Malcolm to include the right to exist and the right to be
free from arbitrary restraint or servitude. The term cannot be dwarfed into mere freedom from physical restraint of the person of
the citizen, but is deemed to embrace the right of man to enjoy the facilities with which he has been endowed by his Creator,
subject only to such restraint as are necessary for the common welfare. [68] In accordance with this case, the rights of the citizen to
be free to use his faculties in all lawful ways; to live and work where he will; to earn his livelihood by any lawful calling; and to
pursue any avocation are all deemed embraced in the concept of liberty.[69]
The U.S. Supreme Court in the case of Roth v. Board of Regents,[70] sought to clarify the meaning of liberty. It said:
While the Court has not attempted to define with exactness the liberty. . . guaranteed [by the Fifth and Fourteenth Amendments],
the term denotes not merely freedom from bodily restraint but also the right of the individual to contract, to engage in any of the
common occupations of life, to acquire useful knowledge, to marry, establish a home and bring up children, to worship God
according to the dictates of his own conscience, and generally to enjoy those privileges long recognizedas essential to the
orderly pursuit of happiness by free men. In a Constitution for a free people, there can be no doubt that the meaning of liberty
must be broad indeed.
In another case, it also confirmed that liberty protected by the due process clause includes personal decisions relating to
marriage, procreation, contraception, family relationships, child rearing, and education. In explaining the respect the Constitution
demands for the autonomy of the person in making these choices, the U.S. Supreme Court explained:
These matters, involving the most intimate and personal choices a person may make in a lifetime, choices central to personal
dignity and autonomy, are central to the liberty protected by the Fourteenth Amendment. At the heart of liberty is the right to
define ones own concept of existence, of meaning, of universe, and of the mystery of human life. Beliefs about these matters
could not define the attributes of personhood where they formed under compulsion of the State. [71]
Persons desirous to own, operate and patronize the enumerated establishments under Section 1 of the Ordinance may seek
autonomy for these purposes.
Motel patrons who are single and unmarried may invoke this right to autonomy to consummate their bonds in intimate sexual
conduct within the motels premisesbe it stressed that their consensual sexual behavior does not contravene any fundamental
state policy as contained in the Constitution.[72] Adults have a right to choose to forge such relationships with others in the confines

of their own private lives and still retain their dignity as free persons. The liberty protected by the Constitution allows persons the
right to make this choice. [73] Their right to liberty under the due process clause gives them the full right to engage in their conduct
without intervention of the government, as long as they do not run afoul of the law. Liberty should be the rule and restraint the
exception.
Liberty in the constitutional sense not only means freedom from unlawful government restraint; it must include privacy as
well, if it is to be a repository of freedom. The right to be let alone is the beginning of all freedomit is the most comprehensive of
rights and the right most valued by civilized men.[74]
The concept of liberty compels respect for the individual whose claim to privacy and interference demands respect. As the
case of Morfe v. Mutuc,[75] borrowing the words of Laski, so very aptly stated:
Man is one among many, obstinately refusing reduction to unity. His separateness, his isolation, are indefeasible; indeed, they are
so fundamental that they are the basis on which his civic obligations are built. He cannot abandon the consequences of his
isolation, which are, broadly speaking, that his experience is private, and the will built out of that experience personal to himself. If
he surrenders his will to others, he surrenders himself. If his will is set by the will of others, he ceases to be a master of himself. I
cannot believe that a man no longer a master of himself is in any real sense free.
Indeed, the right to privacy as a constitutional right was recognized in Morfe, the invasion of which should be justified by a
compelling state interest. Morfe accorded recognition to the right to privacy independently of its identification with liberty; in itself
it is fully deserving of constitutional protection. Governmental powers should stop short of certain intrusions into the personal life
of the citizen.[76]
There is a great temptation to have an extended discussion on these civil liberties but the Court chooses to exercise restraint
and restrict itself to the issues presented when it should. The previous pronouncements of the Court are not to be interpreted as a
license for adults to engage in criminal conduct. The reprehensibility of such conduct is not diminished. The Court only reaffirms
and guarantees their right to make this choice. Should they be prosecuted for their illegal conduct, they should suffer the
consequences of the choice they have made. That, ultimately, is their choice.
Modality employed is
unlawful taking
In addition, the Ordinance is unreasonable and oppressive as it substantially divests the respondent of the beneficial use of its
property.[77] The Ordinance in Section 1 thereof forbids the running of the enumerated businesses in the Ermita-Malate area and in
Section 3 instructs its owners/operators to wind up business operations or to transfer outside the area or convert said businesses
into allowed businesses. An ordinance which permanently restricts the use of property that it can not be used for any reasonable
purpose goes beyond regulation and must be recognized as a taking of the property without just compensation. [78] It is intrusive and
violative of the private property rights of individuals.
The Constitution expressly provides in Article III, Section 9, that private property shall not be taken for public use without
just compensation. The provision is the most important protection of property rights in the Constitution. This is a restriction on
the general power of the government to take property. The constitutional provision is about ensuring that the government does not
confiscate the property of some to give it to others. In part too, it is about loss spreading. If the government takes away a persons
property to benefit society, then society should pay. The principal purpose of the guarantee is to bar the Government from forcing
some people alone to bear public burdens which, in all fairness and justice, should be borne by the public as a whole. [79]
There are two different types of taking that can be identified. A possessory taking occurs when the government confiscates
or physically occupies property. A regulatory taking occurs when the governments regulation leaves no reasonable economically
viable use of the property.[80]
In the landmark case of Pennsylvania Coal v. Mahon,[81] it was held that a taking also could be found if government
regulation of the use of property went too far. When regulation reaches a certain magnitude, in most if not in all cases there
must be an exercise of eminent domain and compensation to support the act. While property may be regulated to a certain extent, if
regulation goes too far it will be recognized as a taking.[82]
No formula or rule can be devised to answer the questions of what is too far and when regulation becomes a taking.
In Mahon, Justice Holmes recognized that it was a question of degree and therefore cannot be disposed of by general
propositions. On many other occasions as well, the U.S. Supreme Court has said that the issue of when regulation constitutes a
taking is a matter of considering the facts in each case. The Court asks whether justice and fairness require that the economic loss
caused by public action must be compensated by the government and thus borne by the public as a whole, or whether the loss
should remain concentrated on those few persons subject to the public action.[83]

What is crucial in judicial consideration of regulatory takings is that government regulation is a taking if it leaves no
reasonable economically viable use of property in a manner that interferes with reasonable expectations for use. [84] A regulation
that permanently denies all economically beneficial or productive use of land is, from the owners point of view, equivalent to a
taking unless principles of nuisance or property law that existed when the owner acquired the land make the use prohibitable.
[85]
When the owner of real property has been called upon to sacrifice all economically beneficial uses in the name of the common
good, that is, to leave his property economically idle, he has suffered a taking.[86]
A regulation which denies all economically beneficial or productive use of land will require compensation under the takings
clause. Where a regulation places limitations on land that fall short of eliminating all economically beneficial use, a taking
nonetheless may have occurred, depending on a complex of factors including the regulations economic effect on the landowner,
the extent to which the regulation interferes with reasonable investment-backed expectations and the character of government
action. These inquiries are informed by the purpose of the takings clause which is to prevent the government from forcing some
people alone to bear public burdens which, in all fairness and justice, should be borne by the public as a whole. [87]
A restriction on use of property may also constitute a taking if not reasonably necessary to the effectuation of a substantial
public purpose or if it has an unduly harsh impact on the distinct investment-backed expectations of the owner.[88]
The Ordinance gives the owners and operators of the prohibited establishments three (3) months from its approval within
which to wind up business operations or to transfer to any place outside of the Ermita-Malate area or convert said businesses to
other kinds of business allowable within the area. The directive to wind up business operations amounts to a closure of the
establishment, a permanent deprivation of property, and is practically confiscatory. Unless the owner converts his establishment to
accommodate an allowed business, the structure which housed the previous business will be left empty and gathering dust.
Suppose he transfers it to another area, he will likewise leave the entire establishment idle. Consideration must be given to the
substantial amount of money invested to build the edifices which the owner reasonably expects to be returned within a period of
time. It is apparent that the Ordinance leaves no reasonable economically viable use of property in a manner that interferes with
reasonable expectations for use.
The second and third options to transfer to any place outside of the Ermita-Malate area or to convert into allowed
businessesare confiscatory as well. The penalty of permanent closure in cases of subsequent violations found in Section 4 of
the Ordinance is also equivalent to a taking of private property.
The second option instructs the owners to abandon their property and build another one outside the Ermita-Malate area. In
every sense, it qualifies as a taking without just compensation with an additional burden imposed on the owner to build another
establishment solely from his coffers. The proffered solution does not put an end to the problem, it merely relocates it. Not only
is this impractical, it is unreasonable, onerous and oppressive. The conversion into allowed enterprises is just as ridiculous. How
may the respondent convert a motel into a restaurant or a coffee shop, art gallery or music lounge without essentially destroying its
property? This is a taking of private property without due process of law, nay, even without compensation.
The penalty of closure likewise constitutes unlawful taking that should be compensated by the government. The burden on
the owner to convert or transfer his business, otherwise it will be closed permanently after a subsequent violation should be borne
by the public as this end benefits them as a whole.
Petitioners cannot take refuge in classifying the measure as a zoning ordinance. A zoning ordinance, although a valid exercise
of police power, which limits a wholesome property to a use which can not reasonably be made of it constitutes the taking of
such property without just compensation. Private property which is not noxious nor intended for noxious purposes may not, by
zoning, be destroyed without compensation. Such principle finds no support in the principles of justice as we know them. The
police powers of local government units which have always received broad and liberal interpretation cannot be stretched to cover
this particular taking.
Distinction should be made between destruction from necessity and eminent domain. It needs restating that the property
taken in the exercise of police power is destroyed because it is noxious or intended for a noxious purpose while the property taken
under the power of eminent domain is intended for a public use or purpose and is therefore wholesome. [89] If it be of public
benefit that a wholesome property remain unused or relegated to a particular purpose, then certainly the public should bear the
cost of reasonable compensation for the condemnation of private property for public use.[90]
Further, the Ordinance fails to set up any standard to guide or limit the petitioners actions. It in no way controls or guides the
discretion vested in them. It provides no definition of the establishments covered by it and it fails to set forth the conditions when
the establishments come within its ambit of prohibition. The Ordinance confers upon the mayor arbitrary and unrestricted power to
close down establishments. Ordinances such as this, which make possible abuses in its execution, depending upon no conditions or
qualifications whatsoever other than the unregulated arbitrary will of the city authorities as the touchstone by which its validity is
to be tested, are unreasonable and invalid. The Ordinance should have established a rule by which its impartial enforcement could
be secured.[91]

Ordinances placing restrictions upon the lawful use of property must, in order to be valid and constitutional, specify the rules
and conditions to be observed and conduct to avoid; and must not admit of the exercise, or of an opportunity for the exercise, of
unbridled discretion by the law enforcers in carrying out its provisions.[92]
Thus, in Coates v. City of Cincinnati,[93] as cited in People v. Nazario,[94] the U.S. Supreme Court struck down an ordinance
that had made it illegal for three or more persons to assemble on any sidewalk and there conduct themselves in a manner
annoying to persons passing by. The ordinance was nullified as it imposed no standard at all because one may never know in
advance what annoys some people but does not annoy others.
Similarly, the Ordinance does not specify the standards to ascertain which establishments tend to disturb the community,
annoy the inhabitants, and adversely affect the social and moral welfare of the community. The cited case supports the
nullification of the Ordinance for lack of comprehensible standards to guide the law enforcers in carrying out its provisions.
Petitioners cannot therefore order the closure of the enumerated establishments without infringing the due process clause.
These lawful establishments may be regulated, but not prevented from carrying on their business. This is a sweeping exercise of
police power that is a result of a lack of imagination on the part of the City Council and which amounts to an interference into
personal and private rights which the Court will not countenance. In this regard, we take a resolute stand to uphold the
constitutional guarantee of the right to liberty and property.
Worthy of note is an example derived from the U.S. of a reasonable regulation which is a far cry from the illconsidered Ordinance enacted by the City Council.
In FW/PBS, INC. v. Dallas,[95] the city of Dallas adopted a comprehensive ordinance regulating sexually oriented
businesses, which are defined to include adult arcades, bookstores, video stores, cabarets, motels, and theaters as well as escort
agencies, nude model studio and sexual encounter centers. Among other things, the ordinance required that such businesses be
licensed. A group of motel owners were among the three groups of businesses that filed separate suits challenging the ordinance.
The motel owners asserted that the city violated the due process clause by failing to produce adequate support for its supposition
that renting room for fewer than ten (10) hours resulted in increased crime and other secondary effects. They likewise argued than
the ten (10)-hour limitation on the rental of motel rooms placed an unconstitutional burden on the right to freedom of association.
Anent the first contention, the U.S. Supreme Court held that the reasonableness of the legislative judgment combined with a study
which the city considered, was adequate to support the citys determination that motels permitting room rentals for fewer than ten
(10 ) hours should be included within the licensing scheme. As regards the second point, the Court held that limiting motel room
rentals to ten (10) hours will have no discernible effect on personal bonds as those bonds that are formed from the use of a motel
room for fewer than ten (10) hours are not those that have played a critical role in the culture and traditions of the nation by
cultivating and transmitting shared ideals and beliefs.
The ordinance challenged in the above-cited case merely regulated the targeted businesses. It imposed reasonable restrictions;
hence, its validity was upheld.
The case of Ermita Malate Hotel and Motel Operators Association, Inc. v. City Mayor of Manila,[96] it needs pointing out, is
also different from this case in that what was involved therein was a measure which regulated the mode in which motels may
conduct business in order to put an end to practices which could encourage vice and immorality. Necessarily, there was no valid
objection on due process or equal protection grounds as the ordinance did not prohibit motels. The Ordinance in this case however
is not a regulatory measure but is an exercise of an assumed power to prohibit.[97]
The foregoing premises show that the Ordinance is an unwarranted and unlawful curtailment of property and personal rights
of citizens. For being unreasonable and an undue restraint of trade, it cannot, even under the guise of exercising police power, be
upheld as valid.
B. The Ordinance violates Equal
Protection Clause
Equal protection requires that all persons or things similarly situated should be treated alike, both as to rights conferred and
responsibilities imposed. Similar subjects, in other words, should not be treated differently, so as to give undue favor to some and
unjustly discriminate against others.[98] The guarantee means that no person or class of persons shall be denied the same protection
of laws which is enjoyed by other persons or other classes in like circumstances. [99] The equal protection of the laws is a pledge of
the protection of equal laws.[100] It limits governmental discrimination. The equal protection clause extends to artificial persons but
only insofar as their property is concerned.[101]
The Court has explained the scope of the equal protection clause in this wise:
What does it signify? To quote from J.M. Tuason & Co. v. Land Tenure Administration: The ideal situation is for the laws
benefits to be available to all, that none be placed outside the sphere of its coverage. Only thus could chance and favor be excluded
and the affairs of men governed by that serene and impartial uniformity, which is of the very essence of the idea of law. There is
recognition, however, in the opinion that what in fact exists cannot approximate the ideal. Nor is the law susceptible to the

reproach that it does not take into account the realities of the situation. The constitutional guarantee then is not to be given a
meaning that disregards what is, what does in fact exist. To assure that the general welfare be promoted, which is the end of law, a
regulatory measure may cut into the rights to liberty and property. Those adversely affected may under such circumstances invoke
the equal protection clause only if they can show that the governmental act assailed, far from being inspired by the attainment of
the common weal was prompted by the spirit of hostility, or at the very least, discrimination that finds no support in reason.
Classification is thus not ruled out, it being sufficient to quote from the Tuason decision anew that the laws operate equally and
uniformly on all persons under similar circumstances or that all persons must be treated in the same manner, the conditions not
being different, both in the privileges conferred and the liabilities imposed. Favoritism and undue preference cannot be allowed.
For the principle is that equal protection and security shall be given to every person under circumstances which, if not identical,
are analogous. If law be looked upon in terms of burden or charges, those that fall within a class should be treated in the same
fashion, whatever restrictions cast on some in the group equally binding on the rest.[102]
Legislative bodies are allowed to classify the subjects of legislation. If the classification is reasonable, the law may operate
only on some and not all of the people without violating the equal protection clause. [103] The classification must, as an
indispensable requisite, not be arbitrary. To be valid, it must conform to the following requirements:
1) It must be based on substantial distinctions.
2) It must be germane to the purposes of the law.
3) It must not be limited to existing conditions only.
4) It must apply equally to all members of the class.[104]
In the Courts view, there are no substantial distinctions between motels, inns, pension houses, hotels, lodging houses or other
similar establishments. By definition, all are commercial establishments providing lodging and usually meals and other services for
the public. No reason exists for prohibiting motels and inns but not pension houses, hotels, lodging houses or other similar
establishments. The classification in the instant case is invalid as similar subjects are not similarly treated, both as to rights
conferred and obligations imposed. It is arbitrary as it does not rest on substantial distinctions bearing a just and fair relation to the
purpose of the Ordinance.
The Court likewise cannot see the logic for prohibiting the business and operation of motels in the Ermita-Malate area but not
outside of this area. A noxious establishment does not become any less noxious if located outside the area.
The standard where women are used as tools for entertainment is also discriminatory as prostitutionone of the hinted ills
the Ordinance aims to banishis not a profession exclusive to women. Both men and women have an equal propensity to engage
in prostitution. It is not any less grave a sin when men engage in it. And why would the assumption that there is an ongoing
immoral activity apply only when women are employed and be inapposite when men are in harness? This discrimination based on
gender violates equal protection as it is not substantially related to important government objectives. [105] Thus, the discrimination is
invalid.
Failing the test of constitutionality, the Ordinance likewise failed to pass the test of consistency with prevailing laws.
C.

The Ordinance is repugnant

to general laws; it is ultra vires

The Ordinance is in contravention of the Code as the latter merely empowers local government units to regulate, and not
prohibit, the establishments enumerated in Section 1 thereof.
The power of the City Council to regulate by ordinances the establishment, operation, and maintenance of motels, hotels and
other similar establishments is found in Section 458 (a) 4 (iv), which provides that:
Section 458. Powers, Duties, Functions and Compensation. (a) The sangguniang panlungsod, as the legislative body of the city,
shall enact ordinances, approve resolutions and appropriate funds for the general welfare of the city and its inhabitants pursuant to
Section 16 of this Code and in the proper exercise of the corporate powers of the city as provided for under Section 22 of this
Code, and shall:
. . .
(4) Regulate activities relative to the use of land, buildings and structures within the city in order to promote the general welfare
and for said purpose shall:
. . .

(iv) Regulate the establishment, operation and maintenance of cafes, restaurants, beerhouses, hotels, motels, inns, pension houses,
lodging houses, and other similar establishments, including tourist guides and transports . . . .
While its power to regulate the establishment, operation and maintenance of any entertainment or amusement facilities, and
to prohibit certain forms of amusement or entertainment is provided under Section 458 (a) 4 (vii) of the Code, which reads as
follows:
Section 458. Powers, Duties, Functions and Compensation. (a) The sangguniang panlungsod, as the legislative body of the city,
shall enact ordinances, approve resolutions and appropriate funds for the general welfare of the city and its inhabitants pursuant to
Section 16 of this Code and in the proper exercise of the corporate powers of the city as provided for under Section 22 of this
Code, and shall:
. . .
(4) Regulate activities relative to the use of land, buildings and structures within the city in order to promote the general welfare
and for said purpose shall:
. . .
(vii) Regulate the establishment, operation, and maintenance of any entertainment or amusement facilities, including theatrical
performances, circuses, billiard pools, public dancing schools, public dance halls, sauna baths, massage parlors, and other places
for entertainment or amusement; regulate such other events or activities for amusement or entertainment, particularly those which
tend to disturb the community or annoy the inhabitants, or require the suspension or suppression of the same; or, prohibit certain
forms of amusement or entertainment in order to protect the social and moral welfare of the community.
Clearly, with respect to cafes, restaurants, beerhouses, hotels, motels, inns, pension houses, lodging houses, and other similar
establishments, the only power of the City Council to legislate relative thereto is to regulate them to promote the general welfare.
The Code still withholds from cities the power to suppress and prohibit altogether the establishment, operation and maintenance of
such establishments. It is well to recall the rulings of the Court in Kwong Sing v. City of Manila[106] that:
The word regulate, as used in subsection (l), section 2444 of the Administrative Code, means and includes the power to control,
to govern, and to restrain; but regulate should not be construed as synonymous with suppress or prohibit. Consequently,
under the power to regulate laundries, the municipal authorities could make proper police regulations as to the mode in which the
employment or business shall be exercised.[107]
And in People v. Esguerra,[108] wherein the Court nullified an ordinance of the Municipality of Tacloban which prohibited the
selling, giving and dispensing of liquor ratiocinating that the municipality is empowered only to regulate the same and not prohibit.
The Court therein declared that:
(A)s a general rule when a municipal corporation is specifically given authority or power to regulate or to license and regulate the
liquor traffic, power to prohibit is impliedly withheld.[109]
These doctrines still hold contrary to petitioners assertion [110] that they were modified by the Code vesting upon City
Councils prohibitory powers.
Similarly, the City Council exercises regulatory powers over public dancing schools, public dance halls, sauna baths, massage
parlors, and other places for entertainment or amusement as found in the first clause of Section 458 (a) 4 (vii). Its powers to
regulate, suppress and suspend such other events or activities for amusement or entertainment, particularly those which tend to
disturb the community or annoy the inhabitants and to prohibit certain forms of amusement or entertainment in order to protect
the social and moral welfare of the community are stated in the second and third clauses, respectively of the same Section. The
several powers of the City Council as provided in Section 458 (a) 4 (vii) of the Code, it is pertinent to emphasize, are separated by
semi-colons (;), the use of which indicates that the clauses in which these powers are set forth are independent of each other albeit
closely related to justify being put together in a single enumeration or paragraph. [111] These powers, therefore, should not be
confused, commingled or consolidated as to create a conglomerated and unified power of regulation, suppression and prohibition.
[112]

The Congress unequivocably specified the establishments and forms of amusement or entertainment subject to regulation
among which are beerhouses, hotels, motels, inns, pension houses, lodging houses, and other similar establishments (Section 458
(a) 4 (iv)), public dancing schools, public dance halls, sauna baths, massage parlors, and other places for entertainment or

amusement (Section 458 (a) 4 (vii)). This enumeration therefore cannot be included as among other events or activities for
amusement or entertainment, particularly those which tend to disturb the community or annoy the inhabitants or certain forms of
amusement or entertainment which the City Council may suspend, suppress or prohibit.
The rule is that the City Council has only such powers as are expressly granted to it and those which are necessarily implied
or incidental to the exercise thereof. By reason of its limited powers and the nature thereof, said powers are to be
construed strictissimi juris and any doubt or ambiguity arising out of the terms used in granting said powers must be construed
against the City Council.[113] Moreover, it is a general rule in statutory construction that the express mention of one person, thing, or
consequence is tantamount to an express exclusion of all others. Expressio unius est exclusio alterium. This maxim is based upon
the rules of logic and the natural workings of human mind. It is particularly applicable in the construction of such statutes as create
new rights or remedies, impose penalties or punishments, or otherwise come under the rule of strict construction. [114]
The argument that the City Council is empowered to enact the Ordinance by virtue of the general welfare clause of the Code
and of Art. 3, Sec. 18 (kk) of the Revised Charter of Manila is likewise without merit. On the first point, the ruling of the Court
in People v. Esguerra,[115] is instructive. It held that:
The powers conferred upon a municipal council in the general welfare clause, or section 2238 of the Revised Administrative Code,
refers to matters not covered by the other provisions of the same Code, and therefore it can not be applied to intoxicating liquors,
for the power to regulate the selling, giving away and dispensing thereof is granted specifically by section 2242 (g) to municipal
councils. To hold that, under the general power granted by section 2238, a municipal council may enact the ordinance in question,
notwithstanding the provision of section 2242 (g), would be to make the latter superfluous and nugatory, because the power to
prohibit, includes the power to regulate, the selling, giving away and dispensing of intoxicating liquors.
On the second point, it suffices to say that the Code being a later expression of the legislative will must necessarily prevail
and override the earlier law, the Revised Charter of Manila.Legis posteriores priores contrarias abrogant, or later statute repeals
prior ones which are repugnant thereto. As between two laws on the same subject matter, which are irreconcilably inconsistent,
that which is passed later prevails, since it is the latest expression of legislative will. [116] If there is an inconsistency or repugnance
between two statutes, both relating to the same subject matter, which cannot be removed by any fair and reasonable method of
interpretation, it is the latest expression of the legislative will which must prevail and override the earlier.[117]
Implied repeals are those which take place when a subsequently enacted law contains provisions contrary to those of an
existing law but no provisions expressly repealing them. Such repeals have been divided into two general classes: those which
occur where an act is so inconsistent or irreconcilable with an existing prior act that only one of the two can remain in force and
those which occur when an act covers the whole subject of an earlier act and is intended to be a substitute therefor. The validity of
such a repeal is sustained on the ground that the latest expression of the legislative will should prevail. [118]
In addition, Section 534(f) of the Code states that All general and special laws, acts, city charters, decrees, executive orders,
proclamations and administrative regulations, or part or parts thereof which are inconsistent with any of the provisions of this Code
are hereby repealed or modified accordingly. Thus, submitting to petitioners interpretation that the Revised Charter of Manila
empowers the City Council to prohibit motels, that portion of the Charter stating such must be considered repealed by the Code as
it is at variance with the latters provisions granting the City Council mere regulatory powers.
It is well to point out that petitioners also cannot seek cover under the general welfare clause authorizing the abatement of
nuisances without judicial proceedings. That tenet applies to a nuisance per se, or one which affects the immediate safety of
persons and property and may be summarily abated under the undefined law of necessity. It can not be said that motels are
injurious to the rights of property, health or comfort of the community. It is a legitimate business. If it be a nuisance per accidens it
may be so proven in a hearing conducted for that purpose. A motel is not per se a nuisance warranting its summary abatement
without judicial intervention.[119]
Notably, the City Council was conferred powers to prevent and prohibit certain activities and establishments in another
section of the Code which is reproduced as follows:
Section 458. Powers, Duties, Functions and Compensation. (a) The sangguniang panlungsod, as the legislative body of the city,
shall enact ordinances, approve resolutions and appropriate funds for the general welfare of the city and its inhabitants pursuant to
Section 16 of this Code and in the proper exercise of the corporate powers of the city as provided for under Section 22 of this
Code, and shall:
(1) Approve ordinances and pass resolutions necessary for an efficient and effective city government, and in this connection, shall:
. . .

(v) Enact ordinances intended to prevent, suppress and impose appropriate penalties for habitual drunkenness in public places,
vagrancy, mendicancy, prostitution, establishment and maintenance of
houses of ill repute, gambling and other prohibited
games of chance, fraudulent devices and ways to obtain money or property, drug addiction, maintenance of drug dens, drug
pushing, juvenile delinquency, the printing, distribution or exhibition of obscene or pornographic materials or publications, and
such other activities inimical to the welfare and morals of the inhabitants of the city;
. . .
If it were the intention of Congress to confer upon the City Council the power to prohibit the establishments enumerated in
Section 1 of the Ordinance, it would have so declared in uncertain terms by adding them to the list of the matters it may prohibit
under the above-quoted Section. The Ordinance now vainly attempts to lump these establishments with houses of ill-repute and
expand the City Councils powers in the second and third clauses of Section 458 (a) 4 (vii) of the Code in an effort to overreach its
prohibitory powers. It is evident that these establishments may only be regulated in their establishment, operation and
maintenance.
It is important to distinguish the punishable activities from the establishments themselves. That these establishments are
recognized legitimate enterprises can be gleaned from another Section of the Code. Section 131 under the Title on Local
Government Taxation expressly mentioned proprietors or operators of massage clinics, sauna, Turkish and Swedish baths, hotels,
motels and lodging houses as among the contractors defined in paragraph (h) thereof. The same Section also defined
amusement as a pleasurable diversion and entertainment, synonymous to relaxation, avocation, pastime or fun; and
amusement places to include theaters, cinemas, concert halls, circuses and other places of amusement where one seeks
admission to entertain oneself by seeing or viewing the show or performances. Thus, it can be inferred that the Code considers
these establishments as legitimate enterprises and activities. It is well to recall the maxim reddendo singula singulis which means
that words in different parts of a statute must be referred to their appropriate connection, giving to each in its place, its proper force
and effect, and, if possible, rendering none of them useless or superfluous, even if strict grammatical construction demands
otherwise. Likewise, where words under consideration appear in different sections or are widely dispersed throughout an act the
same principle applies.[120]
Not only does the Ordinance contravene the Code, it likewise runs counter to the provisions of P.D. 499. As correctly argued
by MTDC, the statute had already converted the residential Ermita-Malate area into a commercial area. The decree allowed the
establishment and operation of all kinds of commercial establishments except warehouse or open storage depot, dump or yard,
motor repair shop, gasoline service station, light industry with any machinery or funeral establishment. The rule is that for an
ordinance to be valid and to have force and effect, it must not only be within the powers of the council to enact but the same must
not be in conflict with or repugnant to the general law.[121] As succinctly illustrated in Solicitor General v. Metropolitan Manila
Authority:[122]
The requirement that the enactment must not violate existing law explains itself. Local political subdivisions are able to legislate
only by virtue of a valid delegation of legislative power from the national legislature (except only that the power to create their
own sources of revenue and to levy taxes is conferred by the Constitution itself). They are mere agents vested with what is called
the power of subordinate legislation. As delegates of the Congress, the local government units cannot contravene but must obey at
all times the will of their principal. In the case before us, the enactment in question, which are merely local in origin cannot prevail
against the decree, which has the force and effect of a statute.[123]
Petitioners contend that the Ordinance enjoys the presumption of validity. While this may be the rule, it has already been held
that 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. The exercise of police power by the local government is valid unless it contravenes the fundamental law of the
land, or an act of the legislature, or unless it is against public policy or is unreasonable, oppressive, partial, discriminating or in
derogation of a common right.[124]
Conclusion
All considered, the Ordinance invades fundamental personal and property rights and impairs personal privileges. It is
constitutionally infirm. The Ordinance contravenes statutes; it is discriminatory and unreasonable in its operation; it is not
sufficiently detailed and explicit that abuses may attend the enforcement of its sanctions. And not to be forgotten, the City Council
under the Code had no power to enact the Ordinance and is therefore ultra vires, null and void.
Concededly, the challenged Ordinance was enacted with the best of motives and shares the concern of the public for the
cleansing of the Ermita-Malate area of its social sins. Police power legislation of such character deserves the full endorsement of
the judiciary we reiterate our support for it. But inspite of its virtuous aims, the enactment of the Ordinance has no statutory or
constitutional authority to stand on. Local legislative bodies, in this case, the City Council, cannot prohibit the operation of the

enumerated establishments under Section 1 thereof or order their transfer or conversion without infringing the constitutional
guarantees of due process and equal protection of laws not even under the guise of police power.
WHEREFORE, the Petition is hereby DENIED and the decision of the Regional Trial Court declaring the Ordinance void is
AFFIRMED. Costs against petitioners.
SO ORDERED.

PASONG BAYABAS FARMERS ASSOCIATION, INC., VS. CA[G.R. NO. 142359. May 25, 2004]
DAR VS. CA [G.R. No. 142980. May 25, 2004]

Before the Court are petitions for review on certiorari of the Decision[1] of the Court of Appeals, in C.A.-G.R. SP No. 49363,
which set aside and reversed the decision of the Department of Agrarian Reform Adjudication Board (DARAB), in DARAB Case
No. 5191, and reinstated the decision of the Provincial Agrarian Reform Adjudication Board (PARAD) of Trece Martirez City, in
DARAB Case No. CA-0285-95 which, in turn, ordered the dismissal of the complaint for Maintenance for Peaceful Possession
and Cultivation with Damages with Prayer for the Issuance of a Temporary Restraining Order/Preliminary Injunction of petitioner
Pasong Bayabas Farmers Association, Inc. (PBFAI).

The Antecedents
Sometime in 1964, Lakeview Development Corporation (LDC, for brevity) bought a parcel of land with an area of 753,610
square meters (75.3610 hectares) located at Barrio Kabilang-Baybay, Carmona, Cavite, [2] covered by Transfer Certificate of
Titles (TCT) No. T- 91584 and T-91585. On September 20, 1977, the aforesaid titles were cancelled by TCT No. T-62972 issued
to and in the name of the LDCs successor, the Credito Asiatic, Incorporated (CAI). [3] The property was subsequently subdivided
into two parcels of land, one of which was covered by TCT No. 116658, with an area of 365,753 square meters, and the other
covered by TCT No. 116659 with an area of 387,853 square meters.[4]
Meanwhile, the LDC/CAI undertook to develop its 75-hectare property into a residential and industrial estate, where
industrial sites and a low cost housing project inceptually called the Tamanli Housing Project would be established. The LDC
applied with the Municipal Council of Carmona for an ordinance approving the zoning and the subdivision of the property. The
subdivision plan was referred by the council to the National Planning Commission as mandated by Administrative Order No. 152,
Series of 1968. The Commission approved the plan and on May 30, 1976, the Tanggapan Ng Sangguniang Bayan ng
Karmona (Municipal Council of Carmona) approved Kapasiyahang Bilang 30, granting the application and affirming the
project. The resolution reads:
Kapasiyahang Bilang 30
Sapagkat, ang TAMANLI HOUSING PROJECT at LAKEVIEW DEVELOPMENT CORP. ay nagharap ng kanilang kahilingan
dito sa ating Kapulungan, sa pamamagitan ni G. BENJAMIN F. GOMEZ, Chief, Physical Environmental Planning Service ng
DLGCD, upang makapagpatayo sila ng murang pabahay sa may Lote Blg. E-Psd-11882, na nasa Bo. Cabilang Baybay ng bayang
ito at Lote Blg. 4 (LRC) PCS 15453 saklaw ng bayang ito, ayon sa pagkakasunod-sunod;
SAPAGKAT, ang bagay na ito ay makatutulong ng malaki sa ating mga kababayan, dahil sa ito ay nagbibigay ng murang pabahay;
SAPAGKAT, DAHIL DITO, sa mungkahi ni G. DOMINADOR ESPIRITU na pinangalawahan ni G. MELQUIADES MAHABO,
ay pinagtibay, tulad nang itoy pinagtitibay, na pagtibayin ang kahilingan ng Tamanli Housing Project at Lakeview Development
Corp. na makapaglagay ng murang pabahay dito sa ating bayan, sa isang pasubaling ang mga ito ay kailangang pumailalim sa
hinihingi ng Administrative Order No. 152, S-1968 ng Pangulo ng Bansang Pilipinas at sa umiiral ng mga kautusan at patakaran ng
ating Pamahalaang Pambansa at Pamahalaang Pambayan.[5]
Subsequently, after a consolidated survey was approved by the Bureau of Lands, the lots were subdivided and the aforesaid
titles were cancelled. TCT Nos. 144149, 144150 and T-144151 were issued in lieu of the said titles.[6]
The CAI embarked on the development of the housing project into three phases: First Phase, the Hakone Subdivision;
Second Phase, the Sunshine Village & Casa de Monteverde; and, Third Phase, the Mandarin Homes. [7] The project was registered
with the National Housing Authority (NHA) as required by Presidential Decree No. 957 which issued, on July 7, 1977, a license in
favor of the LDC to sell the subdivision lots.
The property was subdivided into 728 residential lots per the consolidation subdivision plan approved by the Bureau of
Lands, each with an average area of 240 square meters. Separate titles for each of the 728 lots were issued by the Register of
Deeds of Cavite to and in the name of the CAI on September 20, 1977.

Meanwhile, the CAI secured a locational clearance for the project from the Human Settlements Regulatory Commission
(HSRC).[8] Although the Municipal Council of Carmona had already approved the conversion of the property into a residential
area, nevertheless, the CAI filed an application under Republic Act No. 3844 with the Office of the Minister of Agrarian Reform
for the conversion of a portion of the 75-hectare property consisting of 35.80 hectares covered by TCT No. 62972 located in Barrio
Kabilang-Baybay, Carmona, Cavite, from agricultural to residential. The property was to be used for the Hakone Housing
Project. The Minister referred the matter to the Regional Director for investigation and recommendation and to the Ministry of
Local Government and Community Development. On July 3, 1979, then Minister of Agrarian Reform Conrado F. Estrella issued
an Order granting the petition and approved the conversion of the 35.80 hectare portion of TCT-62972 into a residential
subdivision, pursuant to Rep. Act No. 3844, as amended. In so doing, it took into account the resolution of the Municipal Council
of Carmona, the recommendation of the Regional Director of the Ministry of Agrarian Reform, the clearance from the HSRC as
well as the Ministry of Local Government and Community Development. The order in part reads:
Considering the parcel of land to be not covered by P.D. 27, it being untenanted and not devoted to the production of palay and/or
corn as reported by the Agrarian Reform Team Leader concerned and favorably recommended for conversion by him and further,
by the Regional Director for Region IV, Pasig, Metro Manila, and considering further, that the parcel of land subject hereof was
found to be suitable for conversion to residential subdivision by the Ministry of Local Government and Community Development
and considering finally, that the herein petitioner was issued a locational clearance by the Human Settlements Regulatory
Commission, the instant request of the petitioner is hereby GRANTED pursuant to the provisions of R.A. 3844, as amended, and
P.D. 815.[9]
The grant was, however, subjected to the fulfillment of the following conditions:
1.

Physical development shall commence within one (1) year from receipt hereof;

2.

A setback of three (3) meters measured from the property lines to the edge of the normal high waterline of the
Pasong Bayabas and Patayod Rivers shall be observed pursuant to the Water Code (P.D. 705);

3.

Applicant-proponent shall undertake flood protective measures such as the construction of rip-rap walls or
terracing and cribbing along the river banks to avoid erosion and flood;

4.

Clearance from the Laguna Lake Development Authority shall be secured since the proposed project is within the
Laguna Lake Basin; and

5.

A permit to operate from the National Pollution Control Commission shall be secured and Anti-Pollution laws
(R.A. 3981, P.D. 984 and others) shall be strictly observed.

Failure, however, to comply with the aforestated terms and conditions, this Ministry shall consider such violations as sufficient
ground for the cancellation of the permit-order and this Ministry by reason thereof may take any or all course of action mentioned
in the Memorandum-Agreement between this Ministry, the Ministry of Local Government and Community Development and the
Human Settlements Regulatory Commission in addition to the penalties provided for in Presidential Decree 815, if so applicable.
[10]

On March 14, 1980, the Sangguniang Panlalawigan ng Cavite (Provincial Board of Cavite) passed Resolution No. 40
declaring the midland areas composed of Carmona, Dasmarias, parts of Silang and Trece Martirez (where the subject property is
situated) and parts of Imus, as industrial areas. [11] Under Batas Pambansa Blg. 76, approved on June 13, 1980, the resettlement
areas under the administration of the NHA in the barangays of San Gabriel, San Jose and a portion of Cabilang Baybay, all in the
Municipality of Carmona, were separated from the said municipality and constituted into a new and independent municipality
known as General Mariano Alvarez (GMA), Cavite.[12] In 1983, Asiatic Development Corporation (ADC), a sister company of
CAI, started developing the property located in GMA covered by TCT No. 144150 into a residential housing project, called the
Sunshine Village Phase IV (originally Hakone) with an area of 20.05 hectares. The ADC also secured in 1983[13] a preliminary
approval and locational clearance from the HSRC for Sunshine Village Phase IV.[14]
The CAI also secured the following for its Hakone Housing Project:
1.

HLURB License to Sell No. 0613 on November 7, 1983

2.

HSRC Development Permit on April 11, 1984

3.

HLURB Preliminary Approval and Locational Clearance on November 11, 1985

4.

HSRC Preliminary Approval and Locational Clearance on November 17, 1983

5.

HSRC Certificate of Registration No. 1069 on February 1, 1985

6.

HSRC License to Sell No. 1053 on March 18, 1985.[15]

In 1987, the CAI decided to continue with the development of its Hakone Housing Project and contracted with E.M. Aragon
Enterprises for the bulldozing of the property. However, the project was stymied by a Complaint for Damages with Prayer for
Temporary Restraining Order and Preliminary Injunction filed on May 22, 1987 against the CAI in the Regional Trial Court of
Cavite.[16] The case was docketed as Civil Case No. BCV-87-13 and was raffled to Branch 19.[17]
The plaintiffs alleged, inter alia, that while the defendant CAI was the owner of the 75.36-hectare land covered by TCT62972, they were the actual tillers of the land. The defendant had surreptitiously applied for the conversion of the 35.8-hectare
portion of the aforesaid property from agricultural to residential and the same was granted by the Ministry of Agrarian Reform, as
can be gleaned from the July 3, 1979 Order of Agrarian Reform Minister Estrella. According to the plaintiffs, they came to know
of the conversion only in January 1987. Notwithstanding the issuance of the order of conversion, Ramie Cabusbusan, the
representative of the CAI, allowed them to continue cultivating the aforementioned property. They were, however, required to pay
a rental of P400 a year per hectare. They paid the rental and continued to occupy and till the aforesaid property pursuant to the
agreement. On October 28, 1986 and November 11, 1986, the plaintiffs, together with other tillers of the land, met Cabusbusan at
the Municipal Branch of the then Ministry of Agrarian Reform and reached an agreement that the plaintiffs would remain in the
peaceful possession of their farmholdings. Notwithstanding such agreement, the defendant ordered the bulldozing of the property,
by reason of which the plaintiffs suffered actual damages. Furthermore, the plaintiffs alleged that the bulldozing was done without
any permit from the concerned public authorities.
The plaintiffs, thus, prayed that a temporary restraining order be issued against the CAI from continuing with the bulldozing
of the property, and that after due hearing, judgment be rendered in their favor, ordering the defendants to refrain from
implementing the July 3, 1979 Order of Agrarian Reform Minister Estrella.[18]
In its answer to the complaint, the CAI admitted its ownership of the 753,610 square meter property covered and described
under TCT No. 62972 and the issuance of the Order of Conversion of the 35.8 hectare portion thereof. However, it denied that it
allowed the plaintiffs to possess and cultivate the landholding with fixed rentals therefor. [19] The CAI prayed that the prayer for
preliminary injunction be denied and that judgment be issued dismissing the complaint and absolving it from any liability. It
counterclaimed for the amount paid by it to E.M. Aragon Enterprises for expenses for the rent of the bulldozer and moral damages.
[20]

Meanwhile, the CAI and six of the fourteen plaintiffs, namely, Medy Vinzon, Luz Alvarez, Godofredo Inciong, Bernardo
Poblete, Estelita Gaut and Victoria Valerio, entered into a compromise agreement whereby the defendant donated parcels of land in
consideration of the execution of deeds of quitclaims and waivers. Conformably to the said agreement, the plaintiffs executed
separate deeds of quitclaim in favor of the CAI over the portion of the property which they claimed they occupied. The six
plaintiffs filed a Motion to Dismiss the complaint on June 19, 1989. [21] On June 20, 1989, the RTC of Cavite issued an Order
dismissing the complaint but only insofar as the plaintiffs Vinzon, Alvarez, Inciong, Poblete, Gaut and Valerio were concerned.
[22]
With respect to the other eight (8) plaintiffs, the court proceeded with the scheduled hearing.
The civil case notwithstanding, the CAI decided to proceed with the third phase of its project. It developed its eleven-hectare
property into a residential property called the Mandarin Homes. The CAI applied for and was granted a separate Order of
Conversion on January 2, 1990 by the Department of Agrarian Reform (DAR). [23] In 1991, the CAI started selling the houses in its
Mandarin Homes Project.[24]
In the meantime, the remaining plaintiffs in Civil Case No. BCV-87-13 entered into a compromise agreement in which the
CAI executed Deeds of Donation[25] in their favor over parcels of land. The said plaintiffs, in turn, executed quitclaims [26] and
waivers over the portions of the property which they claimed they occupied. Thereafter, the plaintiffs and the CAI filed a motion
to dismiss the complaint. The trial court issued an Order granting the motion and dismissing the complaint on June 20, 1991.
[27]
Consequently, all the plaintiffs were issued separate titles over the parcels of land donated to them by the CAI which were
declared, for taxation purposes, in the names of the latter.[28]
With the settlement of the civil case, the CAI continued with its development of the rest of the Hakone Housing Project by
causing a survey of the property. However, the CAI was stymied anew when, on November 25, 1992, a Petition for Compulsory
Coverage under Rep. Act No. 6657, otherwise known as the Comprehensive Agrarian Reform Law (CARL) was filed before the
DAR by seventeen (17) individuals.[29] They alleged that they were farmers of Bo. 14, Pasong Bayabas River, Barangay F. De
Castro, GMA, Cavite.[30] The petitioners claimed that since 1961, they had been occupying a parcel of public agricultural land
originally owned by General Dionisio Ojeda with an area of twenty-seven hectares, more or less, adjacent to Pasong Bayabas
River. They tilled the said agricultural lands and planted it with rice, corn, vegetables, root crops, fruit trees and raised small
livestock for daily survival.[31]

The petitioners requested that the DAR order an official survey of the aforesaid agricultural lands. Pending resolution of
their petition, the petitioners and twenty (20) others banded together and formed a group called Pasong Bayabas Farmers
Association, Inc. (PBFAI) affiliated with Kalipunan ng Samahan ng Mamamayan, Inc. (KASAMA). [32]
On June 10, 1994, Domingo Banaag, in his capacity as President of PBFAI, filed a petition for compulsory coverage of a
portion of the CAI property covered by TCT No. 91585, [33] with an area of 47 hectares under Rep. Act No. 6657. On August 18,
1994, Legal Officer Maria Laarni N. Morallos of the DAR, in her Memorandum to Regional Director Percival C. Dalugdug,
reported that the Municipal Agrarian Reform Office (MARO) had taken preliminary steps for the compulsory coverage of the
property and, in fact, had interviewed its occupants. The processing was stalled, however, because documents such as the titles
and tax declarations covering the property had not yet been submitted, and the formal application had yet to be made by the
petitioners.[34] She recommended that the petition be indorsed to the MARO Office. Pending the resolution of the petition of the
PBFAI, the CAI decided to continue with its Hakone Housing Project and ordered a survey of the property on October 6,
1995. The survey was completed on October 9, 1995. On October 14 and 15, 1995, the CAI caused the bulldozing and other
development activities, which resulted in the destruction of plants and trees.
The PBFAI-KASAMA, representing the farmers-tenants, filed a complaint for Maintenance of Peaceful Possession and
Cultivation with Damages with Prayer for the Issuance of a Temporary Restraining Order and Preliminary Injunction before the
Department of Agrarian Reform Adjudication Board (DARAB), Region IV, Trece Martirez City, Cavite, against the CAI, Tan Chi,
Dionisio Ojeda, Elena Bigay, Lanrico Ministerio and Alfredo Espiritu over a portion of the property of the CAI. The case was
docketed as DARAB Case No. CA-0285-95.[35]
The plaintiffs therein alleged that since 1961, its members had been in actual possession, as tenants of General Dionisio
Ojeda, of the 27-hectare property, located in Pasong Bayabas, Cabilang Baybay, Carmona, Cavite [36] covered by TCT No. T-69813
in the name of Pan Asiatic Commercial Co., Inc.; [37] T-91584[38] and T-69810 owned by the LDC. They applied for the compulsory
coverage of the property under CARL before the DAR in 1992, and on October 6, 1995, the CAI caused the survey of the property.
The CAI commenced the bulldozing activities on the property on October 14, 1995 without any permit from the Department of
Environment and Natural Resources (DENR) or from the Office of the Barangay Captain. According to the petitioners, the said
illegal bulldozing activities would convert the land from agricultural to non-agricultural land, thereby depriving the members of
the PBFAI of their tenancy rights over the property. For this reason, the petitioners prayed that a temporary restraining order be
issued ex-parte to stop the bulldozing of the property, and that a preliminary injunction or a status quo order be later issued to
enjoin the same.
The complainants prayed that, after due proceedings, judgment be rendered in their favor, viz:
...
3.

That the Defendants Tan Chi and Dionisio Ojeda, as the most responsible officers of the Defendant Corporation
be ordered to direct persons acting under their authority to respect the peaceful possession and cultivation of the
Plaintiffs, of the subject land;

4.

That the Defendants Lanrico Ministerio and Alfredo Espiritu be ordered to respect and maintain the peaceful
tenancy of the Plaintiffs, of the subject land;

5.

That the Defendants be ordered jointly and severally to pay to the Plaintiffs:
P500,000.00 as moral damages;
P250,000.00 by way of exemplary damages;
P50,000.00 in reimbursement of litigation expenses.

6.

That the Defendants pay for the costs of this suit; and

7.

That other reliefs and remedies be afforded to the Plaintiffs as may be just and equitable under the premises. [39]

On October 27, 1995, Provincial Adjudicator Barbara P. Tan issued a Temporary Restraining Order worded as follows:
WHEREFORE, premises considered let a TEMPORARY RESTRAINING ORDER hereby issue to take effect for a period of
twenty (20) days from receipt hereof;

1)
Enjoining the defendant landowner and any/all persons acting for and in its behalf or under its authority to cease and desist
from further bulldozing the premises in question and committing acts of dispossession or tending to disturb the peaceful possession
and cultivation of the complainants of the landholdings in question.
Meantime, let the hearing of the Preliminary Injunction incident be set on November 9, 1995 at 1:30 P.M. [40]
The defendants filed their Answer with Motion to Lift Restraining Order and Preliminary Injunction. [41] Therein, they denied
the personal circumstances of the plaintiffs and the personal circumstances of the defendants Lanrico Ministerio and Alfredo
Espiritu. The defendants admitted that the CAI was the registered owner of the property, but specifically denied that the plaintiffs
were recognized by the CAI as tenants-occupants of the aforesaid property since 1961. They asserted that the CAI did not consent
to the cultivation of the property nor to the erection of the plaintiffs houses. They further averred that the CAI had entered into a
compromise agreement with the occupants of the property, the plaintiffs in Civil Case No. BCV-87-13 in the RTC of Cavite. They
also alleged that they secured a permit from the Municipal Planning and Development Offices before bulldozing activities on the
property were ordered.
The defendants raised the following as their special and affirmative defenses: (a) the plaintiffs action is barred by the
dismissal of their complaint in Civil Case No. BCV-87-13, per Order of the RTC of Cavite, Branch 19, dated June 20, 1991; (b) the
plaintiffs had waived their rights and interests over the property when they executed deeds of waiver and quitclaim in favor of the
defendant CAI; (c) then Agrarian Reform Minister Estrella had issued an Order dated July 3, 1979, converting the property into a
residential area and withdrawing the property from the coverage of the CARL; (d) the defendant partitioned the development of
the area into Phase I, II, III and IV, while the residential property subject of the petition is in Phase IV thereof; (e) before
embarking in the development of the property, the respondent CAI secured the following: (1) preliminary approval and locational
clearance for phase IV; (2) development permit for 844 units; (3) Certificate of Registration No. 1069 issued by the HSRC; and (4)
License to Sell No. 1053.[42] Finally, the defendants contended that the property had an 18% slope and was undeveloped; as such, it
was exempt from the coverage of the CARL, under Section 10 of Rep. Act No. 6657.
As compulsory counterclaim, the defendants alleged that it had entered into an Equipment Rental Requisition Contract with
E.M. Aragon Enterprises for the bulldozing of the property, for which it incurred the following expenses: an advance payment
of P200,000; rental rate of P1,000 per hour for 8 hours a day plus transportation of P50,000; and, salaries of not less thanP5,000
per month for the mechanics and drivers. They prayed that after due proceedings, judgment be rendered dismissing the plaintiffs
complaint and absolving it of any liability.[43]
The plaintiffs, for their part, averred that Civil Case No. BCV-87-13 was not decided on the merits, but was merely based
upon a compromise agreement between the parties. Moreover, there was no identity of parties between Civil Case No. BCV-87-13
and the present case, as the sole defendant was the CAI, while of the plaintiffs in DARAB Case No. CA No. 0285-95, only
Domingo Banaag and Leoncio Banaag were the plaintiffs in Civil Case No. BCV-87-13. On the claim of the defendants that the
CAI was released and discharged from any and all liabilities of the plaintiffs by virtue of the Deeds of Waiver and Quitclaim
executed by the fourteen plaintiffs in Civil Case No. BCV-87-13, the plaintiffs averred that only two of the plaintiffs, namely,
Domingo Banaag and Leoncio Banaag were among the thirty-seven (37) complainants-members of PBFAI who filed the petition
before the DARAB.
The plaintiffs posited that the conversion orders and other deeds issued by the HSRC and its successor, the HLURB, were
issued before the effectivity of Rep. Act No. 6657 when agricultural land was limited to those planted with rice and corn
crops. But upon the enactment of Rep. Act No. 6657, the reclassification of agricultural lands included those planted with fruitbearing trees, such as, the subject property. Hence, Agrarian Reform Minister Estrella did not have the authority to exempt the
property from the coverage of Rep. Act No. 6657. The plaintiffs averred that the documents procured by the respondents from the
HSRC and the HLURB cannot be given probative weight, as the authority to issue the said clearance/license is vested solely in the
DAR.
As to the defense that the property subject of the suit has some parts with an 18% slope, the plaintiffs contended that what the
law exempts are undeveloped parcels of land with an 18% slope. The entire property, however, was fully developed and planted
with fruit-bearing trees of varied kinds, with houses of strong materials constructed thereon by the members of the PBFAI.
To determine the veracity of the conflicting claims of the parties, the Provincial Agrarian Reform Adjudicator (PARAD)
issued an Order on November 23, 1995, setting an ocular inspection of the property. The parties were required to submit their
respective position papers.[44] The ocular inspection proceeded as scheduled. On December 12, 1995, the PARAD issued an
Order[45] containing the results of the inspection.
The individual tillages of the complainants were not inspected, and, as agreed upon, the physical inventory thereof was to be
undertaken by Brgy. Captain Lanrico Ministerio. The inventory was designed to determine who among the petitioners were actual
tillers, the area of tillage and the crops produced thereon; and to determine the value of the improvements in connection with a
possible pay off, as the landowner had offered to reimburse the planters the value of their permanent improvements. The PARAD

noted that the area over which the respondent CAI conducted quarrying activities had not been cultivated by any of the members
of the PBFAI, and permitted the grading and leveling activities thereon.
On April 16, 1996, the PARAD issued an order directing the provincial sheriff of Cavite to conduct a physical inventory of
the permanent improvements introduced by each of the complainants consisting of fruits and other horticultural growths, in
substitution of the Barangay Captain.
On July 15, 1996, the DAR Region IV issued a Cease and Desist Order against the respondents. [46] The defendants, in a Letter
dated July 16, 1996, informed the DAR, Region IV Office, that the land subject of the cease and desist order was also subject of
DARAB Case No. 0285-95 and, as such, was under the jurisdiction of PARAD Barbara Tan. The defendants, likewise, raised the
issue of forum shopping, per our ruling in Crisostomo v. SEC.[47]
After due hearings, PARAD Barbara P. Tan rendered a Decision on August 8, 1996 in DARAB Case No. CA-0285-95 in
favor of the defendants. The dispositive portion of the decision reads:
WHEREFORE, in view of the foregoing considerations, judgment is hereby rendered:
1.
Finding Plaintiffs Domingo Banaag, Conrado Banaag, Leoncio Banaag, Herminia Demillo, Myrna Javier, Elena,
Layaban, Maria Layaban and Oscar Layaban to have abandoned and renounced their tenancy rights over the land in question and
barred from instituting the instant complaint on the ground of Res Judicata;
2.
Finding the remaining Twenty-Nine (29) other Plaintiffs not bonafide tenants but mere interlopers on the land in question
and consequently not entitled to security of tenure;
3.

Ordering the instant complaint DISMISSED for lack of merit.

No pronouncement as to damages, attorneys fees, litigation expenses and cost of suit.[48]

The PARAD held that the plaintiffs were bound by the order of dismissal of the RTC in Civil Case No. BCV-87-13. It
declared that the plaintiffs in Civil Case No. BCV-87-13 were the kins, siblings or spouses of the complainants in the case before
it. Moreover, the complainants had executed deeds of quitclaim or waiver covering the portions of the property which they
purportedly occupied. Thus, the complainants had already waived their rights of possession and cultivation over the portions of the
property which they claimed to be occupying.
As to the remaining complainants, the PARAD ruled that they failed to prove that their cultivation and possession, were
based on a valid agricultural tenancy. It held that the complainants were merely farm helpers of their relatives. However, the
PARAD ruled that it had no jurisdiction to resolve the issues of whether the property was covered by Rep. Act No. 6657 and
exempted from the said coverage, or whether the conversion of the property to non-agricultural was legal and efficacious; hence,
the PARAD declined to resolve the same.
Aggrieved, the plaintiffs interposed an appeal to the Department of Agrarian Reform Adjudication Board on the following
grounds:
1.

That errors in the findings of fact and conclusions of law were committed which, if not corrected, would cause
grave and irreparable damage and injury to the plaintiffs/complainants-appellants; and

2.

That there is grave abuse of discretion on the part of the Provincial Agrarian Reform Adjudicator of Cavite. [49]

The appeal was docketed as DARAB Case No. 5191. The defendants, for their part, filed a motion for reconsideration of the
decision, on the ground that it failed to rule that the order of conversion of then Agrarian Reform Minister Estrella merely
confirmed the re-classification of the property, from agricultural to residential, made by the Municipal Council of Carmona, the
HSRC and the HLURB as early as 1976, and that the PARAD failed to order the eviction of the complainants despite its finding
that some had abandoned their tenancy rights by entering into a compromise settlement and executing quitclaims with the
CAI. The respondents, thus, prayed:

a.

That the subject property has been reclassified as residential land as early as 30 May 1976;

e.

b.

That the Certificate of Registration No. RS-0495, dated 9 July 1977 and License to Sell LS-0449, dated 09 July
1977 were issued in compliance to NHA Circular No. 1, Series of 1976;

c.

That the approval of the Consolidation Subdivision Plan and the consequent issuance of individual titles by the
Bureau of Lands were made in compliance of the requirements of NHA Circular No. 1;

d.

That the Order of Conversion dated 3 July 1979 was merely a confirmation of a 1976 valid re-classification of
the subject property from agricultural to residential and said Order is still valid and subsisting;

That an Order of ejectment be issued against the complainants.

As a corollary, other reliefs which are just and proper under the premises are likewise prayed. [50]
The PARAD treated the motion as an appeal, and transmitted the same to the DARAB. [51]
On September 26, 1996, the plaintiffs Clarito Sanganbayan, Edgardo Uniforme and Francisco Joven, in consideration
of P40,000, executed quitclaims, waiving their rights from the property in suit. [52] Likewise, plaintiffs Manuel Layaban, Dante
Javier, Ederlinda dela Cruz, Conrado Banaag, Eduardo Sabalsa, Diosdado Canaria, Herminia Demillo, Elizabeth Cristo, Buena
Layaban, Elena Layaban, Maria Layaban, Betty Banaag, Oscar Layaban, Carmelita Caalete, Manuel Canaria, Alfredo Diaz,
Alejandro Sanganbayan, Soledad Alcantara, Felicisimo Galzote, Vivencio Boral, Edilberto Banaag and Jose Canaria, executed
quitclaims in favor of the CAI after receiving money from it.[53]
On October 16, 1996, the respondents filed a Motion to Lift Status Quo Order and Motion to Dismiss[54] alleging that
the status quo order illegally extended the restraining order issued on September 13, 1996. It was also alleged that the
complainants-appellants were not qualified beneficiaries of the CARL. The CAI asserted that the re-classification of the land use
was valid and legal, and concluded that since the property was not agricultural, it was not covered by the CARL and, thus, beyond
the jurisdiction of the DARAB. The CAI, thus, prayed:
WHEREFORE, premises considered, it is respectfully prayed that the status quo order be immediately lifted and the writ of
preliminary injunction applied for be denied for utter lack of merit by upholding the Decision of the Honorable Provincial
Adjudicator dated 8 August 1996 with a modification which shall include an order of ejectment. [55]
In the meantime, more members of the PBFAI executed deeds of quitclaims on October 1, 1996, October 9, 1996, November
18, 1996, February 28, 1997 and March 6, 1997, respectively, all in favor of the respondent CAI over the property subject of their
petition. All in all, during the period from September 26 1996 to March 6, 1997, [56] twenty-five complainants (members of PBFAI)
executed separate deeds of quitclaims in favor of the CAI. [57] The foregoing notwithstanding, the DARAB rendered a Decision on
September 2, 1997 reversing the decision of PARAD. The dispositive portion of the decision reads:
WHEREFORE, premises considered the challenged decision is hereby REVERSED and a new judgment is hereby rendered as
follows:
1.

Declaring the subject landholding to be within the coverage of Section 4 of R.A. 6657;

2.

Ordering the PARO, MARO and all DAR officials concerned to take the necessary steps for the acquisition of the
subject land pursuant to Administrative Order No. 9, Series of 1990; and

3.

Ordering the PARO, MARO and all DAR officials concerned to distribute the subject land to qualified farmerbeneficiaries pursuant to Administrative Order No. 10, series of 1990, giving preference to the plaintiffs as actual
occupants and cultivators of the subject land.[58]

The respondents-appellees filed a motion for reconsideration[59] of the decision which was denied by the DARAB in a
Resolution dated August 28, 1998.[60]

The Case in the Court of Appeals

Aggrieved, the CAI filed a petition for review in the Court of Appeals under Rule 45 [61] of the Revised Rules of Court seeking
the reversal of the Resolution dated August 28, 1998. The following issues were raised:

1.

WHETHER OR NOT THE LAND IN SUIT IS COVERED BY CARP;

2.

WHETHER OR NOT THE MEMBERS OF PBFAI NUMBERING 37 ARE LEGITIMATE TENANTS

THEREOF;

3.

WHETHER OR NOT THE DARAB APPRECIATED THE FACTS AND LAW OF THE CASE;

4.

WHETHER OR NOT THE DARAB IN THE EXERCISE OF ITS POWERS ACTED WITH GRAVE ABUSE
OF DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION. [62]

On March 15, 2000, the CA rendered a Decision reversing the decision of the DARAB and reinstating the decision of the
PARAD, to wit:
WHEREFORE, the petition is GIVEN DUE COURSE, the assailed DARAB Decision is hereby REVERSED and SET ASIDE,
while the PARO Decision is REINSTATED and AFFIRMED.[63]
The CA ruled that under Section 10 of Rep. Act No. 6657, all lands with eighteen percent (18%) slope and over, except those
already developed, shall be exempt from the coverage of the said Act. The CA noted that the exception speaks of 18% in slope
and undeveloped land. Per report of the PARAD, the property subject of the suit has an 18% slope and was still undeveloped;
hence, it falls within the exemption.
Further, the CA held that as early as May 30, 1976, the Municipality of Carmona, Cavite, already reclassified the land as
residential in Resolution No. 30, when it allowed the LDC to build low-cost housing projects in the subject area. According to the
Court, the ruling in Fortich v. Corona[64] and reiterated in Province of Camarines Sur, et al. v. Court of Appeals, [65]settled is the rule
that local government units need not obtain the approval of DAR to convert or reclassify lands from agricultural to nonagricultural use. Thus, the subject land was validly declared residential since 1976 by competent authority through Kapasiyahang
Bilang 30. As such, the DARAB erred in ruling that the land in suit was still covered by Rep. Act No. 6657. Consequently, since
the subject land is not agricultural and not covered by the CARL, the PBFAI members could not be considered tillers/beneficiaries
thereof.[66]
Aggrieved, the PBFAI filed a petition for review under Rule 45 of the Rules of Court on April 11, 2000 before this
Court. For its part, DARAB filed a motion for extension of time to file a petition for the reversal of the decision in CA-GR SP No.
49363. The same was docketed as G.R. No. 142980. On May 11, 2000, the DARAB manifested that it was adopting as its own
the petition for review filed by PBFAI. In our Resolution dated June 28, 2000, we granted the motion of the DARAB and ordered
the consolidation of G.R. Nos. 142980 and 142359.

The Issues
The core issues for resolution are the following: (1) whether the property subject of the suit is covered by Rep. Act No. 6657,
the Agrarian Reform Law (CARL); (2) whether the DARAB had original and appellate jurisdiction over the complaint of the
petitioner PBFAI against the private respondent; (3) whether the petitioners-members of the PBFAI have a cause of action against
the private respondent for possession and cultivation of the property in suit; (4) whether the dismissal by the RTC of the complaint
in Civil Case No. BCV-87-13 is a bar to the complaint of the petitioners-members of the PBFAI; and (5) whether the appellate
court committed a reversible error in dismissing the petition for review in CA-G.R. SP No. 49363.
It is well-settled that in a petition for review on certiorari under Rule 45 of the Rules of Court, only questions of law may be
raised.[67] We have time and again ruled that the factual findings of fact by administrative agencies are generally accorded great
respect, if not finality, by the courts [68] because of the special knowledge and expertise of administrative departments over matters
falling under their jurisdiction.[69] However, due to the divergence of the findings of the PARAD, on the one hand, and the DARAB
on the other, and considering the findings of the DARAB and the Court of Appeals, we are constrained to review the records and
resolve the factual and the legal issues involved.
On the first and second issues, the petitioners contend that the property subject of the suit is agricultural land; hence, covered
by the CARL, more particularly, Rep. Act No. 6657. They assert that the reclassification of the property made by the Municipal
Council of Carmona, Cavite, under Kapasiyahang Blg. 30 on May 30, 1976 was subject to the approval of the HSRC, now the
HLURB, as provided for by Section 5 of Executive Order No. 648. [70] Since there was no such approval, the said resolution of the
Municipal Council of Carmona was ineffective. The petitioners aver that, the appellate courts reliance on the ruling of this Court
in Province of Camarines Sur v. Court of Appeals, et al.[71] is misplaced because the said case involves the power of local
government units to initiate condemnation proceedings of properties for public use or purpose. They argue that under Section 65

of Rep. Act No. 6657, the DAR is vested with exclusive authority to reclassify a landholding from agricultural to residential. The
petitioners submit that the exclusive authority of the DAR is not negated by Section 20 of Rep. Act No. 7160, otherwise known as
the Local Government Code of 1991. They also insist that the conversion of the property under Kapasiyahang Blg. 30 of the
Municipal Council of Carmona on May 30, 1976, was subject to the approval of the DAR, conformably to DOJ Opinion No. 44,
Series of 1990. Moreover, the development of the property had not yet been completed even after Rep. Act No. 6657 took
effect. Hence, it was incumbent upon the respondent to secure an exemption thereto, after complying with DAR Administrative
Order No. 6, Series of 1994.
In its Comment on the petition, the respondent CAI asserts that the property was validly reclassified by the Municipal
Council of Carmona on May 30, 1976, pursuant to its authority under Section 3, Rep. Act No. 2264, otherwise known as the Local
Autonomy Act of 1959. Until revoked, the reclassification made by the council remained valid. Per DOJ Opinion No. 40, Series
of 1990, the private respondent was not required to secure clearance or approval from the DAR since the reclassification took
place on June 15, 1988, when Rep. Act No. 6657 took effect. The respondent asserts that it had complied with all the requirements
under P.D. No. 957, as amended.
The respondent contends that, aside from the Municipal Council of Carmona, the Secretary of Agrarian Reform and
administrative agencies of the government such as the NHA, the Bureau of Lands, the HSRC, and the HLURB, found the property
unsuitable for agricultural purposes. The respondent asserts that the petitioners-individuals are mere squatters and not tenants on
the property of the private respondent. Hence, the PARAD had no jurisdiction over the petition of the PBFAI, as well as the
individual petitioners. Consequently, the DARAB had no appellate jurisdiction over the appeals from the decision of the PARAD.

The Courts Ruling

The contention of the petitioners has no merit.
Under Section 3(c) of Rep. Act No. 6657, agricultural lands refer to lands devoted to agriculture as conferred in the said law
and not classified as industrial land. Agricultural lands are only those lands which are arable or suitable lands that do not include
commercial, industrial and residential lands.[72] Section 4(e) of the law provides that it covers all private lands devoted to or
suitable for agriculture regardless of the agricultural products raised or that can be raised thereon. Rep. Act No. 6657 took effect
only on June 15, 1988. But long before the law took effect, the property subject of the suit had already been reclassified and
converted from agricultural to non-agricultural or residential land by the following administrative agencies: (a) the Bureau of
Lands, when it approved the subdivision plan of the property consisting of 728 subdivision lots; (b) the National Planning
Commission which approved the subdivision plan subdivided by the LDC/CAI for the development of the property into a low-cost
housing project; (c) the Municipal Council of Carmona, Cavite, when it approved Kapasiyahang Blg. 30 on May 30, 1976; (d)
Agrarian Reform Minister Conrado F. Estrella, on July 3, 1979, when he granted the application of the respondent for the
development of the Hakone Housing Project with an area of 35.80 hectares upon the recommendation of the Agrarian Reform
Team, Regional Director of Region IV, which found, after verification and investigation, that the property was not covered by
P.D. No. 27, it being untenanted and not devoted to the production of palay/or corn and that the property was suitable for
conversion to residential subdivision; (e) by the Ministry of Local Government and Community Development; (f) the Human
Settlements Regulatory Commission which issued a location clearance, development permit, Certificate of Inspection and License
to Sell to the LDC/private respondent; and, (g) the Housing and Land Use Regulatory Board which also issued to the respondent
CAI/LDC a license to sell the subdivision lots.
In issuing a location clearance, a development permit, a certificate of inspection over the housing project, and a license to sell
the subdivision lots in favor of LDC/CAI pursuant to its charter, the HSRC approved and confirmed the reclassification and
conversion of the land made by the Municipal Council of Carmona and Agrarian Reform Minister Estrella.
In Natalia Realty Inc. and Estate Developers and Investors Corp. v. Department of Agrarian Reform, et al., [73] we held, thus:
We now determine whether such lands are covered by the CARL. Section 4 of R.A. 6657 provides that the CARL shall cover,
regardless of tenurial arrangement and commodity produced, all public and private agricultural lands. As to what constitutes
agricultural land it is referred to as land devoted to agricultural activity as defined in this Act and not classified as mineral,
forest, residential, commercial or industrial land. The deliberations of the Constitutional Commission confirm this limitation.
Agricultural lands are only those lands which are arable and suitable agricultural lands and do not include commercial,
industrial and residential lands.
Based on the foregoing, it is clear that the undeveloped portions of the Antipolo Hills Subdivision cannot in any language be
considered as agricultural lands. These lots were intended for residential use. They ceased to be agricultural lands upon approval
of their inclusion in the Lungsod Silangan Reservation. Even today, the areas in question continued to be developed as a low-cost
housing subdivision, albeit at a snails pace. This can readily be gleaned from the fact that SAMBA members even instituted an

action to restrain petitioners from continuing with such development. The enormity of the resources needed for developing a
subdivision may have delayed its completion but this does not detract from the fact that these lands are still residential lands and
outside the ambit of the CARL.
Indeed, lands not devoted to agricultural activity are outside the coverage of CARL. These include lands previously converted
to non-agricultural uses prior to the effectivity of CARL by government agencies other than respondent DAR. In its
Revised Rules and Regulations Governing Conversion of Private Agricultural Lands to Non-Agricultural Uses, DAR itself defined
agricultural land thus
x x x Agricultural land refers to those devoted to agricultural activity as defined in R.A. 6657 and not classified as mineral or
forest by the Department of Environment and Natural Resources (DENR) and its predecessor agencies, and not classified in town
plans and zoning ordinances as approved by the Housing and Land Use Regulatory Board (HLURB) and its preceding
competent authorities prior to 15 June 1988 for residential, commercial or industrial use.[74]
Our ruling in Natalia Realty, Inc. v. DAR was reiterated in National Housing Authority v. Allarde,[75] and Sta. Rosa Realty
Development Corporation v. Court of Appeals,[76] where we stated, viz:
The authority of the municipality of Cabuyao, Laguna to issue zoning classification is an exercise of its police power, not the
power of eminent domain. A zoning ordinance is defined as a local city or municipal legislation which logically arranges,
prescribed, defines and apportions a given political subdivision into specific land uses as present and future projection of needs.
Section 3 of Rep. Act No. 2264,[77] amending the Local Government Code, specifically empowers municipal and/or city
councils to adopt zoning and subdivision ordinances or regulations in consultation with the National Planning Commission. A
zoning ordinance prescribes, defines, and apportions a given political subdivision into specific land uses as present and future
projection of needs.[78] The power of the local government to convert or reclassify lands to residential lands to non-agricultural
lands reclassified is not subject to the approval of the Department of Agrarian Reform. [79] Section 65 of Rep. Act No. 6657 relied
upon by the petitioner applies only to applications by the landlord or the beneficiary for the conversion of lands previously placed
under the agrarian reform law after the lapse of five years from its award. It does not apply to agricultural lands already converted
as residential lands prior to the passage of Rep. Act No. 6657.[80]
When Agrarian Reform Minister Conrado F. Estrella confirmed the reclassification of the property by the Municipal Council
of Carmona to non-agricultural land when he approved, on July 3, 1979, the application of the private respondent/LDC for the
conversion of 35.80 hectares of the property covered by TCT No. 62972 into non-agricultural land, he did so pursuant to his
authority under Rep. Act No. 3844, as amended, by P.D. No. 815 and P.D. No. 946.[81]
It bears stressing that in his Order, the Agrarian Reform Minister declared that the property was not tenanted and not devoted
to the production of palay and/or corn, and that the land was suitable for conversion to a residential subdivision. The order of the
Minister was not reversed by the Office of the President; as such, it became final and executory. By declaring, in its Decision
of September 2, 1997, that the property subject of the suit, was agricultural land, the petitioner DARAB thereby reversed the
Order of Agrarian Reform Minister Estrella, issued almost eighteen (18) years before, and nullified Resolution No. 30 of the
Municipal Council of Carmona, approved twenty-one (21) years earlier, on May 30, 1976, as well as the issuances of the NHA, the
HSRC, the HLURB, the Ministry of Local Government and the National Planning Commission. Thus, the petitioner DARAB
acted with grave abuse of its discretion amounting to excess or lack of jurisdiction.
The failure of the respondent to complete the housing project before June 15, 1988, even if true, did not have the effect of
reverting the property as agricultural land.
The petitioners reliance on DOJ Opinion No. 44, Series of 1990 and DAR Administrative Order No. 6, Series of 1994 is
misplaced. In the said opinion, the Secretary of Justice declared, viz:
Based on the foregoing premises, we reiterate the view that with respect to conversions of agricultural lands covered by R.A. No.
6657 to non-agricultural uses, the authority of DAR to approve such conversions may be exercised from the date of the laws
effectivity on June 15, 1988. This conclusion is based on a liberal interpretation of R.A. No. 6657 in the light of DARs mandate
and the extensive coverage of the agrarian reform program.
Following the DOJ opinion, the DAR issued Administrative Order No. 6, Series of 1994, stating that lands already classified
as non-agricultural before the enactment of Rep. Act No. 6657 no longer needed any conversion clearance:
I. Prefatory Statement

In order to streamline the issuance of exemption clearances, based on DOJ Opinion No. 44, the following guidelines are being
issued for the guidance of the DAR and the public in general.
II. Legal Basis
Sec. 3(c) of RA 6657 states that agricultural lands refers to the land devoted to agricultural activity as defined in this act and not
classified as mineral, forest, residential, commercial or industrial land.
Department of Justice Opinion No. 44, series of 1990 has ruled that, with respect to the conversion of agricultural lands covered by
RA No. 6657 to non-agricultural uses, the authority of DAR to approve such conversion may be exercised from the date of its
effectivity, on June 15, 1988. Thus, all lands that are already classified as commercial, industrial, or residential before 15 June
1988 no longer need any conversion clearance.
With our finding that the property subject of the suit was classified as residential land since 1976, the DARAB had no
original and appellate jurisdiction over the property subject of the action of the petitioner PBFAI and its members. Consequently,
the DARAB should have ordered the dismissal of the complaint.
The jurisdiction of a tribunal or quasi-judicial body over the subject matter is determined by the averments of the
complaint/petition and the law extant at the time of the commencement of the suit/complaint/petition. [82] All proceedings before a
tribunal or quasi-judicial agency bereft of jurisdiction over the subject matter of the action are null and void.[83]
Section 1, Rule II of the Revised Rules of Procedure of the DARAB provides that:
SECTION 1. Primary. Original and appellate jurisdiction The Agrarian Reform Adjudication Board shall have primary
jurisdiction, both original and appellate, to determine and adjudicate all agrarian disputes, cases, controversies, and matters or
incidents involving the implementation of the Comprehensive Agrarian Reform Program under Republic Act No. 6657, Executive
Order Nos. 229, 228 and 129-A, Republic Act No. 3844 as amended by Republic Act No. 6389, Presidential Decree No. 27 and
other agrarian laws and their implementing rules and regulations.
Section 3(d) of Rep. Act No. 6657 defines an agrarian dispute as:
Agrarian Dispute refers to any controversy relating to tenurial arrangements, whether leasehold, tenancy, stewardship or
otherwise, over lands devoted to agriculture, including disputes concerning farmworkers associations or representation of persons
negotiating, fixing, maintaining, changing or seeking to arrange terms or conditions of such tenurial arrangements.
It includes any controversy relating to compensation of lands acquired under this Act and other terms and conditions of transfer of
ownership from landowners to farmworkers, tenants and other agrarian reform beneficiaries, whether the disputants stand in the
proximate relation of farm operator and beneficiary, landowner and tenant, or lessor and lessee.
In Monsanto v. Zerna,[84] we held that for the DARAB to have jurisdiction over a case, there must exist a tenancy relationship
between the parties. In order for a tenancy agreement to take hold over a dispute, it is essential to establish all the indispensable
elements, to wit:
(1)

The parties are the landowner and the tenant or agricultural lessee;

(2)

The subject matter of the relationship is an agricultural land;

(3)

There is consent between the parties to the relationship;

(4)

The purpose of the relationship is to bring about agricultural production;

(5)

There is personal cultivation on the part of the tenant or agricultural lessee; and

(6)

The harvest is shared between the landowner and the tenant or agricultural lessee.[85]

There is no allegation in the complaint of the petitioner PBFAI in DARAB Case No. CA-0285-95 that its members were
tenants of the private respondent CAI. Neither did the petitioner adduce substantial evidence that the private respondent was the
landlord of its members from 1961, nor at any time for that matter. Indeed, as found by the PARAD:

Moreover, their waiver of rights constitutes abandonment of their rights of possession and cultivation which may yet be borne out
of a legitimate tenancy relationship. Their re-entry or continuous possession and cultivation of the land in question without the
landowners knowledge and/or consent negates the existence of tenancy relationship. Since security of tenure is a right to which
only a bona fide tenant farmer is entitled their lack of such tenurial status denies them of its exercise and enjoyment.
As to the remaining twenty and more other complainants, it is unfortunate that they have not shown that their cultivation,
possession and enjoyment of the lands they claim to till have been by authority of a valid contract of agricultural tenancy. On the
contrary, as admitted in their complaint a number of them have simply occupied the premises in suit without any specific area of
tillage being primarily mere farm helpers of their relatives. Banking on their application for CARP coverage still awaiting action
and disposition in some DAR operations office, these complainants have tenaciously held on to their occupied areas in the hope of
eventual redemption under the Comprehensive Agrarian Reform Program. [86]
Since the members of the petitioner PBFAI were not the tenants of the private respondent CAI, the petitioners and its
members had no cause of action against the private respondent for possession of the landholding to maintain possession thereof
and for damages. Besides, when the complaint was filed, twenty-five (25) of the thirty-seven (37) members of the petitioners had
already executed separate deeds of quitclaim in favor of the private respondent CAI over the portions of the landholding they
respectively claimed, after receiving from the private respondent CAI varied sums of money. In executing the said deeds, the
members of the petitioner PBFAI thereby waived their respective claims over the property. Hence, they have no right whatsoever
to still remain in possession of the same.
IN LIGHT OF THE FOREGOING, the petitions are DENIED. The assailed decision of the Court of Appeals is
AFFIRMED WITH MODIFICATIONS. The complaint of the petitioner PBFAI in DARAB Case No. CA-0285-95 is
DISMISSED. The counterclaim of the private respondent for damages in DARAB Case No. CA-0285-95 is, likewise,
DISMISSED. The thirty-seven (37) members of the petitioner PBFAI and all those occupying the property subject of the
complaint in DARAB Case No. CA-0285-95 in their behalf are ORDERED to vacate the landholding.
SO ORDERED.