De Jesus vs. Syquia, G.R. No. L-39110, November 28, 1933

Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. L-39110 November 28, 1933

ANTONIA L. DE JESUS, ET AL., plaintiff-appellant,
vs.
CESAR SYQUIA, defendant-appellant.

Jose Sotelo for plaintiffs-appellants.
Vicente J. Francisco for defendant-appellant.

STREET, J.:

This action was instituted in the Court of First Instance of Manila by Antonia Loanco de Jesus in her own right and by her mother, Pilar Marquez, as next friend and representative of Ismael and Pacita Loanco, infants, children of the first-named plaintiff, for the purpose of recovering from the defendant, Cesar Syquia, the sum of thirty thousand pesos as damages resulting to the first-named plaintiff from breach of a marriage promise, to compel the defendant to recognize Ismael and Pacita as natural children begotten by him with Antonia, and to pay for the maintenance of the three the amount of five hundred pesos per month, together with costs. Upon hearing the cause, after answer of the defendant, the trial court erred a decree requiring the defendant to recognize Ismael Loanco as his natural child and to pay maintenance for him at the rate of fifty pesos per month, with costs, dismissing the action in other respects. From this judgment both parties appealed, the plaintiffs from so much of the decision as denied part of the relief sought by them, and the defendant from that feature of the decision which required him to recognize Ismael Loanco and to pay for his maintenance.

At the time with which we are here concerned, the defendant, Cesar Syquia was of the age of twenty-three years, and an unmarried scion of the prominent family in Manila, being possessed of a considerable property in his own right. His brother-in-law, Vicente Mendoza is the owner of a barber shop in Tondo, where the defendant was accustomed to go for tonsorial attention. In the month of June Antonia Loanco, a likely unmarried girl of the age of twenty years, was taken on as cashier in this barber shop. Syquia was not long in making her acquaintance and amorous relations resulted, as a consequence of which Antonia was gotten with child and a baby boy was born on June 17, 1931. The defendant was a constant visitor at the home of Antonia in the early months of her pregnancy, and in February, 1931, he wrote and placed in her hands a note directed to the padre who has expected to christen the baby. This note was as follows:

Saturday, 1:30 p. m.
February 14, 1931

Rev. FATHER,

The baby due in June is mine and I should like for my name to be given to it.

CESAR SYQUIA

The occasion for writing this note was that the defendant was on the eve of his departure on a trip to China and Japan; and while he was abroad on this visit he wrote several letters to Antonia showing a paternal interest in the situation that had developed with her, and cautioning her to keep in good condition in order that "junior" (meaning the baby to be, "Syquia, Jr.") might be strong, and promising to return to them soon. The baby arrived at the time expected, and all necessary anticipatory preparations were made by the defendant. To this he employed his friend Dr. Crescenciano Talavera to attend at the birth, and made arrangements for the hospitalization of the mother in Saint Joseph's Hospital of the City of Manila, where she was cared for during confinement.

When Antonio was able to leave the hospital, Syquia took her, with her mother and the baby, to a house at No. 551 Camarines Street, Manila, where they lived together for about a year in regular family style, all household expenses, including gas and electric light, being defrayed by Syquia. In course of time, however, the defendant's ardor abated and, when Antonia began to show signs of a second pregnancy the defendant decamped, and he is now married to another woman. A point that should here be noted is that when the time came for christening the child, the defendant, who had charge of the arrangement for this ceremony, caused the name Ismael Loanco to be given to him, instead of Cesar Syquia, Jr., as was at first planned.

The first question that is presented in the case is whether the note to the padre, quoted above, in connection with the letters written by the defendant to the mother during pregnancy, proves an acknowledgment of paternity, within the meaning of subsection 1 of article 135 of the Civil Code. Upon this point we have no hesitancy in holding that the acknowledgment thus shown is sufficient. It is a universal rule of jurisprudence that a child, upon being conceived, becomes a bearer of legal rights and capable of being dealt with as a living person. The fact that it is yet unborn is no impediment to the acquisition of rights. The problem here presented of the recognition of unborn child is really not different from that presented in the ordinary case of the recognition of a child already born and bearing a specific name. Only the means and resources of identification are different. Even a bequest to a living child requires oral evidence to connect the particular individual intended with the name used.

It is contended however, in the present case that the words of description used in the writings before us are not legally sufficient to indemnify the child now suing as Ismael Loanco. This contention is not, in our opinion, well founded. The words of recognition contained in the note to the padre are not capable of two constructions. They refer to a baby then conceived which was expected to be born in June and which would thereafter be presented for christening. The baby came, and though it was in the end given the name of Ismael Loanco instead of Cesar Syquia, Jr., its identity as the child which the defendant intended to acknowledge is clear. Any doubt that might arise on this point is removed by the letters Exhibit F, G, H, and J. In these letters the defendant makes repeated reference to junior as the baby which Antonia, to whom the letters were addressed, was then carrying in her womb, and the writer urged Antonia to eat with good appetite in order that junior might be vigorous. In the last letter (Exhibit J) written only a few days before the birth of the child, the defendant urged her to take good care of herself and of junior also.

It seems to us that the only legal question that can here arise as to the sufficiency of acknowledgment is whether the acknowledgment contemplated in subsection 1 of article 135 of the Civil Code must be made in a single document or may be made in more than one document, of indubitable authenticity, written by the recognizing father. Upon this point we are of the opinion that the recognition can be made out by putting together the admissions of more than one document, supplementing the admission made in one letter by an admission or admissions made in another. In the case before us the admission of paternity is contained in the note to the padre and the other letters suffice to connect that admission with the child then being carried by Antonia L. de Jesus. There is no requirement in the law that the writing shall be addressed to one, or any particular individual. It is merely required that the writing shall be indubitable.

The second question that presents itself in this case is whether the trial court erred in holding that Ismael Loanco had been in the uninterrupted possession of the status of a natural child, justified by the conduct of the father himself, and that as a consequence, the defendant in this case should be compelled to acknowledge the said Ismael Loanco, under No. 2 of article 135 of the Civil Code. The facts already stated are sufficient, in our opinion, to justify the conclusion of the trial court on this point, and we may add here that our conclusion upon the first branch of the case that the defendant had acknowledged this child in writings above referred to must be taken in connection with the facts found by the court upon the second point. It is undeniable that from the birth of this child the defendant supplied a home for it and the mother, in which they lived together with the defendant. This situation continued for about a year, and until Antonia became enciente a second time, when the idea entered the defendant's head of abandoning her. The law fixes no period during which a child must be in the continuous possession of the status of a natural child; and the period in this case was long enough to evince the father's resolution to concede the status. The circumstance that he abandoned the mother and child shortly before this action was started is unimportant. The word "continuous" in subsection 2 of article 135 of the Civil Code does not mean that the concession of status shall continue forever, but only that it shall not be of an intermittent character while it continues.

What has been said disposes of the principal feature of the defendant's appeal. With respect to the appeal of the plaintiffs, we are of the opinion that the trial court was right in refusing to give damages to the plaintiff, Antonia Loanco, for supposed breach of promise to marry. Such promise is not satisfactorily proved, and we may add that the action for breach of promise to marry has no standing in the civil law, apart from the right to recover money or property advanced by the plaintiff upon the faith of such promise. This case exhibits none of the features necessary to maintain such an action. Furthermore, there is no proof upon which a judgment could be based requiring the defendant to recognize the second baby, Pacita Loanco.

Finally, we see no necessity or propriety in modifying the judgment as to the amount of the maintenance which the trial court allowed to Ismael Loanco. And in this connection we merely point out that, as conditions change, the Court of First Instance will have jurisdiction to modify the order as to the amount of the pension as circumstances will require.

The judgment appealed from is in all respects affirmed, without costs. So ordered.

Malcolm, Abad Santos, Hull, Vickers, and butte, JJ., concur.

Separate Opinions

VILLA-REAL, J., dissenting:

The majority opinion is predicated on two grounds: First, that the defendant-appellant Cesar Syquia has expressly acknowledged his paternity of the child Ismael Loanco in an indubitable writing of his; and secondly, that said child has enjoyed the uninterrupted possession of the status of a natural son of said defendant-appellant Cesar Syquia, justified by his acts, as required by article 135 of the Civil Code.

The first conclusion is drawn from Exhibits C, F, G, H, and J.

Exhibit C, which is in the handwriting of any signed by the defendant-appellant Cesar Syquia, reads as follows:

Sabado, 1.30 p. m. — 14 febrero, 1931

Rev. PADRE:

La criatura que vendra el junio es mio y que yo quisiera mi nombre que se de a la criatura.

(Fdo.) CESAR SYQUIA

Exhibit F, G, H, and j, which are letters written by the said defendant-appellant Cesar Syquia to plaintiff-appellee Antonia L. de Jesus prior to the birth of the child contain the following expressions:

Exhibit F, Feb. 18, 1931: "No hagas nada malo; ni manches mi nombre y el de junior tambien no lo manches. A cuerdate muy bien Toni que es por ti y por junior volvere alli pronto. ..."

Exhibit G. Feb. 24, 1931: "Toni por favor cuida bien a junior eh? . ..."

Exhibit H, March 25, 1931: "Toni, cuida tu bien a junior y cuidate bien, y come tu mucho. ... ."

Exhibit J, June 1, 1931: "Cuidate bien y junior tambien . ..."

Article 135, number 1, provides as follows:

ART. 135. The father may be compelled to acknowledge his natural child in the following cases:

1. When an indisputable paper written by him, expressly acknowledging his paternity, is in existence.

Maresa (Codigo Civil, Vol. 1, page 596, 4th ed.) commenting on said article, says:

Con arreglo al articulo que comentamos, no puede haber cuestion acerca de si es posible admitir por otro medio la prueba de la paternidad natural. Entendemos que no, porquel el articulo es terminante y la intencion de la ley mas terminante aun. Se establecio en la base 5.a que "no se admitira investigacion de la paternidad sino en los casos de delito, o cuando exista escrito del padre en el que conste su voluntad indubitada de reconocer por suyo al hijo, deliberadamente expresada con ese fin, o cuando medie posesion de estado", y esto mismo es lo que se ordena en el presente articulo.

No puede, pues, prosperar la demanda para obligar al padre al reconocimiento de un hijo natural, aunque solo se limite a pedir alimentos, si no se funda en el reconocimiento expreso del padre hecho por escrito, en la posesion constante de estado de hijo natural o en sentencia firme recaida en causa por de delito violacin, estupro o rapto. El escrito y la sentencia habran de acompañarse a la demandada, y no puede admitirse otra prueba que la conducente a justificar que el escrito es indubitadamente del padre que en el reconozca su paternidad, o la relativa a los actos directos del mismo padre o de su familia, que demuestren la posesion continua de dicho estado. Para la prueba de estos dos hechos podran utilizarse todos los medios que permite la Ley de Enjuiciamiento Civil, debiendo el juez rechazar la que por cualquier otro concepto se dirija a la investigacion de la paternidad.

x x x x x x x x x

En cuanto al otro requisito de ser expreso el reconocimiento, tengase presente que no basta hacerlo por incidencia; es indespensable que se consigne en el escrito la voluntad indubitada, clara y terminante del padre, de reconocer por suyo al hijo, deliberadamente expresada con este fin, como se ordena an la base 5.a antes citada, de las aprobadas por la Ley de 11 de mayo de 1888; de suerte que el escrito, aunque contenga otros particulares, como sucede en los testamentos, ha de tener por objecto el reconocimiento deliberado y expreso del hijo natural. No llena, pues, ese objecto la manifestacion que incidentalmente haga el padre de ser hijo natural suyo la persona a quien se refiera, y mucho menos el dar a una persona el titulo y tratamiento de hijo en cartas familiares. Sin embrago, en cada caso decidiran los un modo suficientemente expresivo la paternidad, servira de base para acreditar, en union con otros datos, la posesion contante del estado del hijo a los efectos de este articulo, y con arreglo a su numero 2.º

Let it first be noted that the law prohibits the investigation of paternity (Borres and Barza vs. Municipality of Panay, 42 Phil., 643; Donado vs. Menendez Donado, 55 Phil., 861). The only exceptions to this rule are those established in article 135 of the Civil Code quoted above, the first of which is that the father may be compelled to acknowledge his paternity, "When an indubitable writing of his exists in which he expressly acknowledge his paternity." The writing that is required by said provision must be complete in itself and by itself, and must contain all the statements that are necessary to constitute a full and clear acknowledgment by a father of his paternity of a child, in order that it may serve as a basis for compelling him to acknowledge said child should be afterwards deny his paternity. If several writings put together, each not being complete in itself, should be necessary in order to obtain a full and complete expression of acknowledgment by a father of his paternity of a child, the general prohibition to investigate paternity would be violated.

By the mere reading of all said letters, the one addressed to a priest and the others to the herein plaintiff-appellee, Antonia L. de Jesus, the reader cannot ascertain which is the "creature that is coming on June", which the defendant- appellant, Cesar Syquia, says in the said letter addressed to the priest is his, nor who is the "junior" that he recommends to said Antonia L. de Jesus to take good care of, as there is nothing in anyone of said letters from which it may be inferred that Antonia L. de Jesus was enciente at the time, that the "junior" was the being she was carrying in her womb, and that it was the "creature that is coming in June." To connect all these facts it was necessary to prove that Cesar Syquia had had illicit relations with Antonia L. de Jesus, that as a result of such relations the woman became pregnant, and that she gave birth to a boy in June 1931. All this certainly constitutes an investigation of the paternity of Cesar Syquia of said child outside of the documents, which is prohibited by law.

Either taken alone therefore, or in connection with Exhibits F, G, H, and J, Exhibit C is insufficient to constitute a "indubitable writing of Cesar Syquia, in which he expressly acknowledges his paternity of the child Ismael Loanco," as required by number 1 of article 135 of the Civil Code.

As to the second ground of the decision of the majority, number 2 of article 135 of the Civil Code provides:

ART. 135. The father may be compelled to acknowledge his natural child in the following cases:

x x x x x x x x x

2. When the child has been in the uninterrupted possession of the status of a natural child of the defendant father, justified by the conduct of the father himself or that of his family.

The majority decision bases its connection on the second point on Exhibits C, F, G, H, and J and the following facts, as found by the lower court in its decision:

Cuando la demandante Antonia L. de Jesus estaba para dar a luz, el demandado Cesar Syquia llamo a su comprovinciano Dr. Crescenciano Talavera, medico que entonces ejercia su profesion en la Ciudad de Manila, para que asistiera a aquella en su parto y a ese efecto llevo a la demandante Antonia L. de Jesus acompañado del Dr. Talavera al Hospital San Jose, de esta Ciudad, donde ella dio a luz el 17 de junio de 1931 asistida por dicho Dr. Talavera, que firmo el certificado de necimiento Exhibit E.

Despues del nacimiento del demandante Ismael Loanco, el demandado estuvo viviendo con este y con la demandante Antonio L. de Jesus en la casa No. 551 de la Calle Camarines, Manila, entregando a dicha demandante el dinero para los gastos de casa y el pago del consumo de gas y luz electrica, habiendo firmado el contrato para el suministro del fluido electrico en dicha casa.

Exhibit, C, F, G, H, and J, are inadmissible in evidence the purpose of showing that Ismael Loanco has enjoyed the continuous possession of the status of a natural child, because being of prior date to the birth of said child they can not be considered as direct acts of Cesar Syquia showing possession of the status of natural child, as no human being can enjoy such possession until he be born with legal capacity for acquiring civil rights (Infante vs. Figueras, 4 Phil., 738; Granados vs. Leynes, G.R. No. 31224, promulgated September 9, 1929, not reported).

It must also be stated that Cesar Syquia refused to allow his name to be given to the child Ismael when it was baptized, so that the name of its mother, Loanco, had to be given to it.

The facts which were found by the court below to have been proved by the testimony of the witnesses during the trial, are not sufficient to constitute the uninterrupted possession of the status of Ismael Loanco as natural child of said Cesar Syquia, in the light of the following authorities:

In the case of Buenaventura vs. Urbano (5 Phil., 1, 9), this court said:

. . . Confining ourselves to the acts proved to have been performed by Don Telesforo, we find that he visited the mother of the plaintiff; that he paid money for her support; that he paid money for the support of the plaintiff; that he hold one witness that the plaintiff was his son; that the plaintiff called him "Papa," and that Don Telesforo answered to this designation; that when the plaintiff visited Don Telesforo he kissed his hand; that Don Telesforo wrote letters to him; that he paid his fees for instruction in school, and secured him a position in a commercial house.

x x x x x x x x x

All these facts taken together are not sufficient to show that plaintiff possesses continuously the status of a natural child. They may have a tendency to show that Don Telesforo was the father of the child, but that it is not sufficient. It is not sufficient that the father recognize the child as his. By the express terms of article 135 that recognition must appear either in writing, made by the father, or it must appear in acts which show that the son has possessed continuously the status of a natural child. No recognition by the father of the child which comes short of the requirements of these two paragraphs is sufficient. It must appear that it was the intention of the father to recognize the child as to give him that status, and that the acts performed by him were done with that intention.

Manresa (Codigo Civil, Vol. 1, page 602, 4th ed.) in citing some decisions of the Supreme Court of Spain says:

En la sentencia de 5 de junio de 1906 declarase que para justificar la posesion de estado de hijo natural se requiere que los actos sean de tal naturaleza que revelen, a la vez que el convencimiento de la paternidad, la voluntad ostensible de tener y tratar al hijo como tal en las relaciones sociales y de la vida, y esto no accidentalmente, sino continuedamente, porque en tal supuesto los actos tiene el mismo valor que el reconocimiento expreso.lawphil.net

En el mismo criterio restrictivo se inspira la de 12 de octubre de 1907, que estima que el hecho de que dos nodrizas criaron a otros tantos niños, sufragando el gasto el demandado, quien ademas iba a casa de la demandante, los besada, los llamaba hijos y encargaba para los mismos el mayor cuidado; el de que subvenia a las necesidades de la madre y de los seis hijos que la nacieron, el primero de los cuales se llamaba como el padre; y el de que los porteros de la casa donde vivio la actora sabian que el finado visitaba a esta, se lamentaba de la mucha familia que tenia y era tenido en el concepto publico como padre de los menores, no son suficientes para fundar la declaracion de paternidad, pues no es legal confundir actos que puedan revelar mas o menos la presuncion o convencimiento en que una persona este de su paternidad con relacion a hijos naturales, con los que demuestren su proposito de poner a estos hijos en la posesion de tal estado.

It will thus be seen from the foregoing discussion and authorities that the herein defendant-appellant Cesar Syquia cannot be compelled to acknowledge the child Ismael Loanco as his natural son because there exists not an indubitable writing of his in which he expressly acknowledges his paternity of said child, and because the said child has not enjoyed the uninterrupted possession of the status of a natural child of the said
defendant-appellant, justified by his own conduct or that of his family, as required by article 135 of the Civil Code.

The decision appealed from should, therefore, be reversed and the complaint dismissed.

Avanceña, C.J. and Imperial, J., concur.

Engle vs. Doe, G.R. No. L-23317,August 7, 1925

Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. L-23317 August 7, 1925

FLOYD ENGLE, by his next friend E. Womack, plaintiff-appellee,
vs.
VICTORIA DOE (alias SILVESTRA PULGA), defendant-appellant.

Feria and La O for appellant.
Camus and Delgado for appellee.

STATEMENT

By E. Womack, his next friend, it is alleged that Floyd Engle for about two months has been an inmate of the St. Luke's Hospital in the City of Manila, where he was being treated for serious physical and mental disorders by Doctor N.M. Saleeby, the Director of the Hospital. That the defendant is a resident of the town of Tacloban, Province of Leyte, but at present is somewhere in the City of Manila. That on or about December 9, 1922, and in the hospital in the City of Manila, the defendant, through the aid of her friends and agents, induced and coerced Floyd Engle to go through some sort of a marriage ceremony with her, knowing at the time that he, Floyd Engle, was out of his mind and mentally deranged. That after the procuring of the certificate of the so-called marriage, the defendant forthwith returned to Tacloban, and endeavored to take possession of all of Engle's property who was worth at least P50,000. That the conspiracy of the defendant to marry him was for the sole purpose of obtaining his property, and to default Engle and his legitimate heirs of their property. That it is proper that the court should appoint a guardian ad litem under the provisions of sections 116 and 117 of the Code of Civil Procedure.

Wherefore, plaintiff prays that a special provisional guardian be appointed for Engle and that a preliminary injunction issue against the defendant, restraining her from interfering with his property, and that the alleged marriage be declared void ab initio, and for costs, and such other and further relief as may be deemed just and equitable.

For answer, the defendant made a general and specific denial of all the material allegations of the complaint, and as a special defense, alleges that for the last fourteen years she has been living maritally under the same roof with the plaintiff by whom she has had six children, the oldest of whom is twelve years of age. That on December 7th of last year, they were legally married. That in contracting the marriage, plaintiff was in the full enjoyment of all of his mental faculties, and that he entered into the contract freely, not only for the purpose of making his status and that of the defendant and her children legal, but to provide for her future in case of his death. That induced by his alleged friends, the plaintiff has caused and consented to the filing of the complaint, together with the application for the appointment of a guardian of his person and property, to make it appear that he is not of sound mind, when in truth and in fact he was then and is now in the full enjoyment of all of his mental faculties, and as a counterclaim, defendant alleges that when they began living together, plaintiff did not have any property, and that through her aid and assistance, he has amassed a considerable fortune, which at present is not less than P200,000. That the defendant has nothing with which to support herself and her children, and that P80 which at present the plaintiff is giving the defendant is not sufficient for that purpose. That to properly support herself and the children and to employ an attorney to defend the suit, she requires a pension of P500 per month and the sum of P800 to be paid in advance on account of attorney's fees, and the defendant prays that she be absolved from the complaint, and that the court make an order requiring the plaintiff to make such allowances for her pension and attorney's fees.

Upon such issues, testimony was taken, and in a well written opinion the lower court found:

That plaintiff at the time of said marriage ceremony in St. Luke's Hospital was mentally deranged to such an extent that he was incapable of entering into the marriage contract or any other contract, and that for this reason the marriage ceremony was null and void.

The court also finds that the defendant is not entitled to anything under her so-called counterclaim, and said counterclaim is hereby dismissed, and rendered a decree to the effect that the marriage between the plaintiff and the defendant was "illegal, null, and void ab initio, and without any legal effect as to plaintiff's and defendant's property rights, without costs to either party.

The defendant appeals, contending:

I. The lower court erred in holding that the plaintiff was mentally deranged to such an extent that he was incapable of entering into the marriage contract, and therefore

II. The lower court erred in declaring the marriage between the plaintiff and defendant to be illegal, null, and void ab initio.

JOHNS, J.:

Opposing counsel have submitted able and exhaustive briefs. The question submitted is largely one of fact.

October 18, 1922. Floyd Engle became an inmate of St. Luke's Hospital in the City of Manila with Dr. N.M. Saleeby as his physician. It appears from the hospital records that at the time of his admission his disease was defined as:

Insanity, Delusional & Melancholic & Amebic Infection & Tertiary Syphilis.

He remained in the hospital under the care of Doctor Saleeby until some time in March, 1923, when he was taken to Baguio, and upon his return to Manila in June, he left for the United States. The marriage ceremony between Engle and the defendant was performed in the hospital on December 7, 1922. December 20, 1922, a petition for the appointment of a guardian for him, alleging insanity, was filed in the Court of First Instance of Manila, and on December 29, 1922. H.C. Powers was appointed guardian of his person and J.V. House guardian of his property. After the marriage Engle and the defendant never lived together as husband and wife, and on the following day the defendant left Manila and went back to Tacloban, Leyte, which was Engle's former residence, and made an effort to obtain possession of all his business and property.

The question presented is whether or not at the time of the marriage Engle was of sound mind and mentally capable of entering into a marriage contract. It will be noted that he was admitted to the hospital October 18, 1922, and the nature of his disease at the time of his admission was described in the hospital records as: "Insanity, Delusional & Melancholic & Amebic Infection & Tertiary Syphilis," and that his alleged marriage to the defendant took place on December 7, 1922, fifty days after that time.

It appears from his testimony that Doctor Saleeby is 54 years old, and that he graduated from the University of New York Medical College in 1897, and, with the exception of four years, he has engaged in the active practice of his profession ever since and that he was in charge of St. Luke's Hospital from March, 1907, to September, 1912, and from March 1, 1921, to the present time. That during all of the time that Engle was in the hospital, he was under the personal charge of Doctor Saleeby, who was his only physician, and who testifies:

Q. Will you state to the court what was his mental condition during all the time that he was there; that is, from the time he entered the hospital in October, 1922, up to the time he left in March, 1923? — A. All the time he was under my care he was unable to exercise judgment or express his will or decision definitely on any question of any significance.

Q. Will you state to the court whether or not during all that time he had sufficient mentality to knowingly enter into a contract of any kind? — A. He was absolutely unable to make any decision of any kind, and was not fit to make a contract with any one in any business transaction of any significance.

Q. Was the mental condition of Mr. Engle the same from the time he entered the hospital up to the time he left, or did it suffer any change? — A. He was at his worst at the time the priest visited him, and he kept in that same condition until about a month prior to his discharge from the hospital. At the time of his discharge he was in better condition than when the priest visited him, but he was by no means in a fit mental condition.

Q. Will you state to the court whether or not during the time that Mr. Engle was in the hospital he was sane or insane? — A. Mr. Engle was insane from the date he entered the hospital until he was discharged.

The record is conclusive that Doctor Saleeby was a fair and impartial witness, and that he had no interest whatever in the result of this suit, and that he was in daily attendance upon Engle from the time that he entered until he left the hospital, covering a period of about five months. His testimony is materially strengthened and corroborated by the evidence of J.V. House, H.C. Powers, and E. Womack, who were lifelong personal and intimate friends of Engle.

Opposed to this is the evidence of the defendant and the Reverend H.J. Parker, who performed the marriage ceremony.

It must be conceded that the defendant is a party in interest, and the evidence of the Reverend Parker does not carry conviction. It is true that he gave it as his opinion that Engle was mentally sound, but he did not testify as to any fact or circumstance upon which he based his opinion. All of his answers to the questions propounded were more or less categorical, and it appears that any knowledge which he had as to the mental condition of Engle was confined and limited to the two conversations which he had with him in the hospital and which were about and concerning his marriage to the defendant. Much is also said about the evidence of Miguel Romualdez, the present Mayor of the City of Manila. But giving to it full force and credit, he did not see Engle after the 5th of December, 1922, and the marriage was on December 7th, and in answer to the question: "Did you notice any change or difference, in the manner of his conversation and behavior on December 5, 1922, as compared to previous conversation with Engle?" he said, "I have not noticed any change." That may all be true, and yet Engle would be of unsound mind. Be that as it may, the evidence for the defense is not sufficient to overcome that of the plaintiff.

The records of the admission of Engle to the hospital are authentic, and were made when there was no thought of any litigation.

Section 10 of General Orders No. 68 provides, among other things, that a marriage may be annulled for any of the following cases, existing at the time of the marriage:

x x x x x x x x x

3. That either party was of unsound mind, unless such party, after coming to reason, freely cohabited with the other as husband or wife.

x x x x x x x x x

6. That either party was, at the time of marriage, physically incapable of entering into the marriage state, and such incapacity continues, and appears to be incurable.

Section 9 of Act No. 2122 provides:

Within the meaning of this Act, insanity is a manifestation in language or conduct, of disease or defect of the brain, or a more or less permanently diseased or disordered condition of the mentality, functional or organic, and characterized by perversion, inhibition, or disordered function of the sensory or of the intellective faculties, or by impaired or disordered volition.

The evidence is conclusive that at the time he was admitted to the hospital Engle was of unsound mind, and it tends to show that his disease was incurable. The fact that Engle was received and treated as an insane patient on October 18, 1922, and that he was not discharged from the hospital until March, 1923, throws the burden of proof upon the defendant to establish the fact that he was of sound mind at the time of the alleged marriage.

In Corpus Juris, volume 32, pages 757 and 758, it is said:

(SEC. 561) 2. Continuance of Insanity — (a) In General. — General insanity admitted, or once proved to exist, is presumed to continue; and, if a recovery or a lucid interval is alleged to have occurred, the burden to prove such allegation is on the person making it. . . .

(SEC. 562) (b) Rebuttal of Presumption. — The presumption that a person shown to be insane continued so is rebuttable. In order to rebut the presumption of continuance of insanity it is not necessary to show that the person has been restored to the full possession of his mental vigor. However, when insanity has once existed and it is sought to be proved that a subsequent act of its subject was done in a lucid interval, sanity must be shown as of the very time of the act in question; it is not sufficient to show a lucid interval before and after the day of the act.

Ruling Case Law, vol. 14, page 622, says:

74. Burden of Proof in Civil Cases Generally. — In all civil actions it is generally held that the burden of proof of insanity rests upon him who alleges insanity, or seeks to avoid an act on account of it, and it devolves upon him to establish the fact of insanity by a preponderance of the evidence. If, however, a previous state of insanity as proved, the burden of proof is then usually considered to shift to him who asserts that the act was done while the person was sane, though it has frequently been held that insanity which is not shown to be settled or general as contradistinguished from a mere temporary aberration or hallucination will not be presumed to continue until the contrary is shown. A lucid interval is in its nature temporary and uncertain in its duration, and there is no legal presumption of its continuance.

Applying this rule, there is a failure of proof on the part of the defendant. It is not sufficient to overcome the clear, positive and convincing testimony for the plaintiff, that Engle was of unsound mind at the time of the marriage. Again, on all questions of fact the lower court found for the plaintiff, and its findings are entitled to some weight.

The judgment of the lower court is affirmed, without costs to either party. So ordered.

Avanceña, C.J., Johnson, Street, Malcolm, Villamor, and Villa-Real, JJ., concur.

Dumlao vs. Quality Plastic Products, G.R. No. L-27956 , April 30, 1976

Republic of the Philippines
SUPREME COURT
Manila

SECOND DIVISION

G.R. No. L-27956 April 30, 1976

DIONISIO DUMLAO, in his own behalf and in his capacity as Administrator of the Testate Estate of the late Pedro Oria; FAUSTA DUMLAO, AMADO DUMLAO, and BENJAMIN DUMLAO, plaintiffs-appellants,
vs.
QUALITY PLASTIC PRODUCTS, INC., defendant-appellee.

Castillo & Castillo for appellants.

Eugenio T. Estavillo for appellee.

AQUINO, J.:p

On February 28, 1962 the Court of First Instance of Pangasinan in Civil Case No.
T-662 rendered a judgment ordering defendants Vicente Soliven, Pedro Oria, Santiago Laurencio, Marcelino Sumalbag and Juana Darang to pay solidarity Quality Plastic Products, Inc. the sum of P3,667.03 plus the legal rate of interest from November, 1958. The lower court directed that in case the defendants failed to pay the said amount before its decision became final, then Quality Plastic Products, Inc. "is hereby authorized to foreclose the bond, Exhibit A, in accordance with law, for the satisfaction of the judgment". (Under that bond the four sureties bound themselves to answer solidarity for the obligations of the principal, Vicente Soliven and certain real properties of the sureties were "given as security for" their undertaking).

Upon defendants' failure to pay the amount of the judgment and after the decision had become final, the lower court, on motion of Quality Plastic Products, Inc., ordered the "foreclosure" of the surety bond and the sale at public auction of the land of Pedro Oria which he had given as security under the bond. Oria's land, which was covered by Original Certificate of Title No. 28732 and has an area of nine and six-tenths hectares, was levied upon and sold by the sheriff at public auction on September 24, 1962. The sale was confirmed by the lower court in its order of November 20, 1962.

It turned out that Oria died on April 23, 1959 or long before June 13, 1960 when the action was filed. Oria's death was not known to Quality Plastic Products, Inc. Nor were the representatives of Quality Plastic Products, Inc. aware that in the same Tayug court Special Proceeding No. T-212, Testate Estate of the deceased Pedro Oria, was pending.

The summons and copies of the complaint for the five defendants in Civil Case No.
T-662 had been personally served on June 24, 1960 by a deputy sheriff on Soliven, the principal in the bond, who acknowledged such service by signing on the back of the original summons in his own behalf and again signing for his co-defendants.

On March 1, 1963 Dionisio, Fausta, Amado and Benjamin, all surnamed Dumlao and all testamentary heirs in Oria's duly probated will, sued Quality Plastic Products, Inc., also in the Tayug court for the annulment of the judgment against Oria and the execution against his land. (Dionisio Dumlao also sued in his capacity as administrator of Oria's testate estate).

The ground for annulment was lack of jurisdiction over the person of the deceased Oria (Civil Case No. T- 873). It was only when Quality Plastic Products, Inc. received the summons in Civil Case No. T-873 that it learned that Oria was already dead at the time the prior case, Civil Case No. T-662, was filed.

Quality Plastic Products, Inc. in its answer alleged that Oria's heirs were aware of the suit against Soliven and his sureties and that the said heirs were estopped to question the court's jurisdiction over Oria.

After hearing the lower court held that it acquired jurisdiction over Soliven and the other defendants in Civil Case No. T-662 by reason of their voluntary appearance. It reasoned out that Soliven acted in bad faith because he did not apprise the court that Oria was dead. It specifically ruled that "it had acquired jurisdiction over the person" of Oria and that the judgment was valid as to him. From that decision the plaintiffs appealed.

The four assignments of error of appellants Dumlao may be boiled down to the issue as to the validity of the lower court's judgment against the deceased Pedro Oria who, being already in the other world, was never served with summons.

There is no difficulty in resolving that issue. Since no jurisdiction was acquired over Oria, the judgment against him is a patent nullity (Ang Lam vs. Rosillosa and Santiago, 86 Phil. 447; Asuncion vs. Nieto, 4 Phil. 97; Gorostiaga vs. Sarte, 68 Phil. 4).

As far as Oria was concerned, the lower court's judgment against him in Civil Case No. T-662 is void for lack of jurisdiction over his person. He was not, and he could not have been, validly served with summons. He had no more civil personality. His juridical capacity, which is the fitness to be the subject of legal relations, was lost through death. (Arts. 37 and 42, Civil Code).

The lower court erred in ruling that since Soliven's counsel also appeared as counsel for Oria, there was a voluntary appearance which enabled the court to acquire jurisdiction over Oria, as contemplated in section 23, Rule 14 of the Revised Rules of Court. Soliven's counsel could not have validly appeared for a dead co-defendant. Estoppel has no application to this case.

But from the fact that appellants Dumlao had to sue Quality Plastic Products, Inc. in order to annul the judgment against Oria, it does not follow that they are entitled to claim attorney's fees against that corporation. The parties herein agreed in their stipulation of facts that Quality Plastic Products, Inc. was unaware of Oria's death. Appellants Dumlao in effect conceded that the appellee acted in good faith in joining Oria as a co-defendant.

WHEREFORE, the lower court's decision is reversed and set aside. Its judgment in Civil Case No. T-662 against Pedro Oria is declared void for lack of jurisdiction. The execution sale of Oria's land covered by OCT No. 28732 is also void. No costs.

SO ORDERED.

Fernando, Barredo, Antonio and Concepcion, Jr., JJ., concur.

Mambulao Lumber Company vs. Philippine National Bank, G.R. No. L-22973, January 30, 1968

Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. L-22973 January 30, 1968

MAMBULAO LUMBER COMPANY, plaintiff-appellant,
vs.
PHILIPPINE NATIONAL BANK and ANACLETO HERALDO Deputy Provincial Sheriff of Camarines Norte, defendants-appellees.

Ernesto P. Vilar and Arthur Tordesillas for plaintiff-appellant.
Tomas Besa and Jose B. Galang for defendants-appellees.

ANGELES, J.:

An appeal from a decision, dated April 2, 1964, of the Court of First Instance of Manila in Civil Case No. 52089, entitled "Mambulao Lumber Company, plaintiff, versus Philippine National Bank and Anacleto Heraldo, defendants", dismissing the complaint against both defendants and sentencing the plaintiff to pay to defendant Philippine National Bank (PNB for short) the sum of P3,582.52 with interest thereon at the rate of 6% per annum from December 22, 1961 until fully paid, and the costs of suit.

In seeking the reversal of the decision, the plaintiff advances several propositions in its brief which may be restated as follows:

1. That its total indebtedness to the PNB as of November 21, 1961, was only P56,485.87 and not P58,213.51 as concluded by the court a quo; hence, the proceeds of the foreclosure sale of its real property alone in the amount of P56,908.00 on that date, added to the sum of P738.59 it remitted to the PNB thereafter was more than sufficient to liquidate its obligation, thereby rendering the subsequent foreclosure sale of its chattels unlawful;

2. That it is not liable to pay PNB the amount of P5,821.35 for attorney's fees and the additional sum of P298.54 as expenses of the foreclosure sale;

3. That the subsequent foreclosure sale of its chattels is null and void, not only because it had already settled its indebtedness to the PNB at the time the sale was effected, but also for the reason that the said sale was not conducted in accordance with the provisions of the Chattel Mortgage Law and the venue agreed upon by the parties in the mortgage contract;

4. That the PNB, having illegally sold the chattels, is liable to the plaintiff for its value; and

5. That for the acts of the PNB in proceeding with the sale of the chattels, in utter disregard of plaintiff's vigorous opposition thereto, and in taking possession thereof after the sale thru force, intimidation, coercion, and by detaining its "man-in-charge" of said properties, the PNB is liable to plaintiff for damages and attorney's fees.

The antecedent facts of the case, as found by the trial court, are as follows:

On May 5, 1956 the plaintiff applied for an industrial loan of P155,000 with the Naga Branch of defendant PNB and the former offered real estate, machinery, logging and transportation equipments as collaterals. The application, however, was approved for a loan of P100,000 only. To secure the payment of the loan, the plaintiff mortgaged to defendant PNB a parcel of land, together with the buildings and improvements existing thereon, situated in the poblacion of Jose Panganiban (formerly Mambulao), province of Camarines Norte, and covered by Transfer Certificate of Title No. 381 of the land records of said province, as well as various sawmill equipment, rolling unit and other fixed assets of the plaintiff, all situated in its compound in the aforementioned municipality.

On August 2, 1956, the PNB released from the approved loan the sum of P27,500, for which the plaintiff signed a promissory note wherein it promised to pay to the PNB the said sum in five equal yearly installments at the rate of P6,528.40 beginning July 31, 1957, and every year thereafter, the last of which would be on July 31, 1961.

On October 19, 1956, the PNB made another release of P15,500 as part of the approved loan granted to the plaintiff and so on the said date, the latter executed another promissory note wherein it agreed to pay to the former the said sum in five equal yearly installments at the rate of P3,679.64 beginning July 31, 1957, and ending on July 31, 1961.

The plaintiff failed to pay the amortization on the amounts released to and received by it. Repeated demands were made upon the plaintiff to pay its obligation but it failed or otherwise refused to do so. Upon inspection and verification made by employees of the PNB, it was found that the plaintiff had already stopped operation about the end of 1957 or early part of 1958.

On September 27, 1961, the PNB sent a letter to the Provincial Sheriff of Camarines Norte requesting him to take possession of the parcel of land, together with the improvements existing thereon, covered by Transfer Certificate of Title No. 381 of the land records of Camarines Norte, and to sell it at public auction in accordance with the provisions of Act No. 3135, as amended, for the satisfaction of the unpaid obligation of the plaintiff, which as of September 22, 1961, amounted to P57,646.59, excluding attorney's fees. In compliance with the request, on October 16, 1961, the Provincial Sheriff of Camarines Norte issued the corresponding notice of extra-judicial sale and sent a copy thereof to the plaintiff. According to the notice, the mortgaged property would be sold at public auction at 10:00 a.m. on November 21, 1961, at the ground floor of the Court House in Daet, Camarines Norte.

On November 6, 1961, the PNB sent a letter to the Provincial Sheriff of Camarines Norte requesting him to take possession of the chattels mortgaged to it by the plaintiff and sell them at public auction also on November 21, 1961, for the satisfaction of the sum of P57,646.59, plus 6% annual interest therefore from September 23, 1961, attorney's fees equivalent to 10% of the amount due and the costs and expenses of the sale. On the same day, the PNB sent notice to the plaintiff that the former was foreclosing extrajudicially the chattels mortgaged by the latter and that the auction sale thereof would be held on November 21, 1961, between 9:00 and 12:00 a.m., in Mambulao, Camarines Norte, where the mortgaged chattels were situated.

On November 8, 1961, Deputy Provincial Sheriff Anacleto Heraldo took possession of the chattels mortgaged by the plaintiff and made an inventory thereof in the presence of a PC Sergeant and a policeman of the municipality of Jose Panganiban. On November 9, 1961, the said Deputy Sheriff issued the corresponding notice of public auction sale of the mortgaged chattels to be held on November 21, 1961, at 10:00 a.m., at the plaintiff's compound situated in the municipality of Jose Panganiban, Province of Camarines Norte.

On November 19, 1961, the plaintiff sent separate letters, posted as registered air mail matter, one to the Naga Branch of the PNB and another to the Provincial Sheriff of Camarines Norte, protesting against the foreclosure of the real estate and chattel mortgages on the grounds that they could not be effected unless a Court's order was issued against it (plaintiff) for said purpose and that the foreclosure proceedings, according to the terms of the mortgage contracts, should be made in Manila. In said letter to the Naga Branch of the PNB, it was intimated that if the public auction sale would be suspended and the plaintiff would be given an extension of ninety (90) days, its obligation would be settled satisfactorily because an important negotiation was then going on for the sale of its "whole interest" for an amount more than sufficient to liquidate said obligation.

The letter of the plaintiff to the Naga Branch of the PNB was construed by the latter as a request for extension of the foreclosure sale of the mortgaged chattels and so it advised the Sheriff of Camarines Norte to defer it to December 21, 1961, at the same time and place. A copy of said advice was sent to the plaintiff for its information and guidance.

The foreclosure sale of the parcel of land, together with the buildings and improvements thereon, covered by Transfer Certificate of Title No. 381, was, however, held on November 21, 1961, and the said property was sold to the PNB for the sum of P56,908.00, subject to the right of the plaintiff to redeem the same within a period of one year. On the same date, Deputy Provincial Sheriff Heraldo executed a certificate of sale in favor of the PNB and a copy thereof was sent to the plaintiff.

In a letter dated December 14, 1961 (but apparently posted several days later), the plaintiff sent a bank draft for P738.59 to the Naga Branch of the PNB, allegedly in full settlement of the balance of the obligation of the plaintiff after the application thereto of the sum of P56,908.00 representing the proceeds of the foreclosure sale of parcel of land described in Transfer Certificate of Title No. 381. In the said letter, the plaintiff reiterated its request that the foreclosure sale of the mortgaged chattels be discontinued on the grounds that the mortgaged indebtedness had been fully paid and that it could not be legally effected at a place other than the City of Manila.

In a letter dated December 16, 1961, the plaintiff advised the Provincial Sheriff of Camarines Norte that it had fully paid its obligation to the PNB, and enclosed therewith a copy of its letter to the latter dated December 14, 1961.

On December 18, 1961, the Attorney of the Naga Branch of the PNB, wrote to the plaintiff acknowledging the remittance of P738.59 with the advice, however, that as of that date the balance of the account of the plaintiff was P9,161.76, to which should be added the expenses of guarding the mortgaged chattels at the rate of P4.00 a day beginning December 19, 1961. It was further explained in said letter that the sum of P57,646.59, which was stated in the request for the foreclosure of the real estate mortgage, did not include the 10% attorney's fees and expenses of the sale. Accordingly, the plaintiff was advised that the foreclosure sale scheduled on the 21st of said month would be stopped if a remittance of P9,161.76, plus interest thereon and guarding fees, would be made.

On December 21, 1961, the foreclosure sale of the mortgaged chattels was held at 10:00 a.m. and they were awarded to the PNB for the sum of P4,200 and the corresponding bill of sale was issued in its favor by Deputy Provincial Sheriff Heraldo.

In a letter dated December 26, 1961, the Manager of the Naga Branch of the PNB advised the plaintiff giving it priority to repurchase the chattels acquired by the former at public auction. This offer was reiterated in a letter dated January 3, 1962, of the Attorney of the Naga Branch of the PNB to the plaintiff, with the suggestion that it exercise its right of redemption and that it apply for the condonation of the attorney's fees. The plaintiff did not follow the advice but on the contrary it made known of its intention to file appropriate action or actions for the protection of its interests.

On May 24, 1962, several employees of the PNB arrived in the compound of the plaintiff in Jose Panganiban, Camarines Norte, and they informed Luis Salgado, Chief Security Guard of the premises, that the properties therein had been auctioned and bought by the PNB, which in turn sold them to Mariano Bundok. Upon being advised that the purchaser would take delivery of the things he bought, Salgado was at first reluctant to allow any piece of property to be taken out of the compound of the plaintiff. The employees of the PNB explained that should Salgado refuse, he would be exposing himself to a litigation wherein he could be held liable to pay big sum of money by way of damages. Apprehensive of the risk that he would take, Salgado immediately sent a wire to the President of the plaintiff in Manila, asking advice as to what he should do. In the meantime, Mariano Bundok was able to take out from the plaintiff's compound two truckloads of equipment.

In the afternoon of the same day, Salgado received a telegram from plaintiff's President directing him not to deliver the "chattels" without court order, with the information that the company was then filing an action for damages against the PNB. On the following day, May 25, 1962, two trucks and men of Mariano Bundok arrived but Salgado did not permit them to take out any equipment from inside the compound of the plaintiff. Thru the intervention, however, of the local police and PC soldiers, the trucks of Mariano Bundok were able finally to haul the properties originally mortgaged by the plaintiff to the PNB, which were bought by it at the foreclosure sale and subsequently sold to Mariano Bundok.

Upon the foregoing facts, the trial court rendered the decision appealed from which, as stated in the first paragraph of this opinion, sentenced the Mambulao Lumber Company to pay to the defendant PNB the sum of P3,582.52 with interest thereon at the rate of 6% per annum from December 22, 1961 (day following the date of the questioned foreclosure of plaintiff's chattels) until fully paid, and the costs. Mambulao Lumber Company interposed the instant appeal.

We shall discuss the various points raised in appellant's brief in seriatim.

The first question Mambulao Lumber Company poses is that which relates to the amount of its indebtedness to the PNB arising out of the principal loans and the accrued interest thereon. It is contended that its obligation under the terms of the two promissory notes it had executed in favor of the PNB amounts only to P56,485.87 as of November 21, 1961, when the sale of real property was effected, and not P58,213.51 as found by the trial court.

There is merit to this claim. Examining the terms of the promissory note executed by the appellant in favor of the PNB, we find that the agreed interest on the loan of P43,000.00 — P27,500.00 released on August 2, 1956 as per promissory note of even date (Exhibit C-3), and P15,500.00 released on October 19, 1956, as per promissory note of the same date (Exhibit C-4) — was six per cent (6%) per annum from the respective date of said notes "until paid". In the statement of account of the appellant as of September 22, 1961, submitted by the PNB, it appears that in arriving at the total indebtedness of P57,646.59 as of that date, the PNB had compounded the principal of the loan and the accrued 6% interest thereon each time the yearly amortizations became due, and on the basis of these compounded amounts charged additional delinquency interest on them up to September 22, 1961; and to this erroneously computed total of P57,646.59, the trial court added 6% interest per annum from September 23, 1961 to November 21 of the same year. In effect, the PNB has claimed, and the trial court has adjudicated to it, interest on accrued interests from the time the various amortizations of the loan became due until the real estate mortgage executed to secure the loan was extra-judicially foreclosed on November 21, 1961. This is an error. Section 5 of Act No. 2655 expressly provides that in computing the interest on any obligation, promissory note or other instrument or contract, compound interest shall not be reckoned, except by agreement, or in default thereof, whenever the debt is judicially claimed. This is also the clear mandate of Article 2212 of the new Civil Code which provides that interest due shall earn legal interest only from the time it is judicially demanded, and of Article 1959 of the same code which ordains that interest due and unpaid shall not earn interest. Of course, the parties may, by stipulation, capitalize the interest due and unpaid, which as added principal shall earn new interest; but such stipulation is nowhere to be found in the terms of the promissory notes involved in this case. Clearly therefore, the trial court fell into error when it awarded interest on accrued interests, without any agreement to that effect and before they had been judicially demanded.

Appellant next assails the award of attorney's fees and the expenses of the foreclosure sale in favor of the PNB. With respect to the amount of P298.54 allowed as expenses of the extra-judicial sale of the real property, appellant maintains that the same has no basis, factual or legal, and should not have been awarded. It likewise decries the award of attorney's fees which, according to the appellant, should not be deducted from the proceeds of the sale of the real property, not only because there is no express agreement in the real estate mortgage contract to pay attorney's fees in case the same is extra-judicially foreclosed, but also for the reason that the PNB neither spent nor incurred any obligation to pay attorney's fees in connection with the said extra-judicial foreclosure under consideration.

There is reason for the appellant to assail the award of P298.54 as expenses of the sale. In this respect, the trial court said:

The parcel of land, together with the buildings and improvements existing thereon covered by Transfer Certificate of Title No. 381, was sold for P56,908. There was, however, no evidence how much was the expenses of the foreclosure sale although from the pertinent provisions of the Rules of Court, the Sheriff's fees would be P1 for advertising the sale (par. k, Sec. 7, Rule 130 of the Old Rules) and P297.54 as his commission for the sale (par. n, Sec. 7, Rule 130 of the Old Rules) or a total of P298.54.

There is really no evidence of record to support the conclusion that the PNB is entitled to the amount awarded as expenses of the extra-judicial foreclosure sale. The court below committed error in applying the provisions of the Rules of Court for purposes of arriving at the amount awarded. It is to be borne in mind that the fees enumerated under paragraphs k and n, Section 7, of Rule 130 (now Rule 141) are demandable, only by a sheriff serving processes of the court in connection with judicial foreclosure of mortgages under Rule 68 of the new Rules, and not in cases of extra-judicial foreclosure of mortgages under Act 3135. The law applicable is Section 4 of Act 3135 which provides that the officer conducting the sale is entitled to collect a fee of P5.00 for each day of actual work performed in addition to his expenses in connection with the foreclosure sale. Admittedly, the PNB failed to prove during the trial of the case, that it actually spent any amount in connection with the said foreclosure sale. Neither may expenses for publication of the notice be legally allowed in the absence of evidence on record to support it. ¹ It is true, as pointed out by the appellee bank, that courts should take judicial notice of the fees provided for by law which need not be proved; but in the absence of evidence to show at least the number of working days the sheriff concerned actually spent in connection with the extra-judicial foreclosure sale, the most that he may be entitled to, would be the amount of P10.00 as a reasonable allowance for two day's work — one for the preparation of the necessary notices of sale, and the other for conducting the auction sale and issuance of the corresponding certificate of sale in favor of the buyer. Obviously, therefore, the award of P298.54 as expenses of the sale should be set aside.

But the claim of the appellant that the real estate mortgage does not provide for attorney's fees in case the same is extra-judicially foreclosed, cannot be favorably considered, as would readily be revealed by an examination of the pertinent provision of the mortgage contract. The parties to the mortgage appear to have stipulated under paragraph (c) thereof, inter alia:

. . . For the purpose of extra-judicial foreclosure, the Mortgagor hereby appoints the Mortgagee his attorney-in-fact to sell the property mortgaged under Act 3135, as amended, to sign all documents and to perform all acts requisite and necessary to accomplish said purpose and to appoint its substitute as such attorney-in-fact with the same powers as above specified. In case of judicial foreclosure, the Mortgagor hereby consents to the appointment of the Mortgagee or any of its employees as receiver, without any bond, to take charge of the mortgaged property at once, and to hold possession of the same and the rents, benefits and profits derived from the mortgaged property before the sale, less the costs and expenses of the receivership; the Mortgagor hereby agrees further that in all cases, attorney's fees hereby fixed at Ten Per cent (10%) of the total indebtedness then unpaid which in no case shall be less than P100.00 exclusive of all fees allowed by law, and the expenses of collection shall be the obligation of the Mortgagor and shall with priority, be paid to the Mortgagee out of any sums realized as rents and profits derived from the mortgaged property or from the proceeds realized from the sale of the said property and this mortgage shall likewise stand as security therefor. . . .

We find the above stipulation to pay attorney's fees clear enough to cover both cases of foreclosure sale mentioned thereunder, i.e., judicially or extra-judicially. While the phrase "in all cases" appears to be part of the second sentence, a reading of the whole context of the stipulation would readily show that it logically refers to extra-judicial foreclosure found in the first sentence and to judicial foreclosure mentioned in the next sentence. And the ambiguity in the stipulation suggested and pointed out by the appellant by reason of the faulty sentence construction should not be made to defeat the otherwise clear intention of the parties in the agreement.

It is suggested by the appellant, however, that even if the above stipulation to pay attorney's fees were applicable to the extra-judicial foreclosure sale of its real properties, still, the award of P5,821.35 for attorney's fees has no legal justification, considering the circumstance that the PNB did not actually spend anything by way of attorney's fees in connection with the sale. In support of this proposition, appellant cites authorities to the effect: (1) that when the mortgagee has neither paid nor incurred any obligation to pay an attorney in connection with the foreclosure sale, the claim for such fees should be denied; ² and (2) that attorney's fees will not be allowed when the attorney conducting the foreclosure proceedings is an officer of the corporation (mortgagee) who receives a salary for all the legal services performed by him for the corporation. ³ These authorities are indeed enlightening; but they should not be applied in this case. The very same authority first cited suggests that said principle is not absolute, for there is authority to the contrary. As to the fact that the foreclosure proceeding's were handled by an attorney of the legal staff of the PNB, we are reluctant to exonerate herein appellant from the payment of the stipulated attorney's fees on this ground alone, considering the express agreement between the parties in the mortgage contract under which appellant became liable to pay the same. At any rate, we find merit in the contention of the appellant that the award of P5,821.35 in favor of the PNB as attorney's fees is unconscionable and unreasonable, considering that all that the branch attorney of the said bank did in connection with the foreclosure sale of the real property was to file a petition with the provincial sheriff of Camarines Norte requesting the latter to sell the same in accordance with the provisions of Act 3135.

The principle that courts should reduce stipulated attorney's fees whenever it is found under the circumstances of the case that the same is unreasonable, is now deeply rooted in this jurisdiction to entertain any serious objection to it. Thus, this Court has explained:

But the principle that it may be lawfully stipulated that the legal expenses involved in the collection of a debt shall be defrayed by the debtor does not imply that such stipulations must be enforced in accordance with the terms, no matter how injurious or oppressive they may be. The lawful purpose to be accomplished by such a stipulation is to permit the creditor to receive the amount due him under his contract without a deduction of the expenses caused by the delinquency of the debtor. It should not be permitted for him to convert such a stipulation into a source of speculative profit at the expense of the debtor.

Contracts for attorney's services in this jurisdiction stands upon an entirely different footing from contracts for the payment of compensation for any other services. By express provision of section 29 of the Code of Civil Procedure, an attorney is not entitled in the absence of express contract to recover more than a reasonable compensation for his services; and even when an express contract is made the court can ignore it and limit the recovery to reasonable compensation if the amount of the stipulated fee is found by the court to be unreasonable. This is a very different rule from that announced in section 1091 of the Civil Code with reference to the obligation of contracts in general, where it is said that such obligation has the force of law between the contracting parties. Had the plaintiff herein made an express contract to pay his attorney an uncontingent fee of P2,115.25 for the services to be rendered in reducing the note here in suit to judgment, it would not have been enforced against him had he seen fit to oppose it, as such a fee is obviously far greater than is necessary to remunerate the attorney for the work involved and is therefore unreasonable. In order to enable the court to ignore an express contract for an attorney's fees, it is not necessary to show, as in other contracts, that it is contrary to morality or public policy (Art. 1255, Civil Code). It is enough that it is unreasonable or unconscionable. ⁴

Since then this Court has invariably fixed counsel fees on a quantum meruit basis whenever the fees stipulated appear excessive, unconscionable, or unreasonable, because a lawyer is primarily a court officer charged with the duty of assisting the court in administering impartial justice between the parties, and hence, the fees should be subject to judicial control. Nor should it be ignored that sound public policy demands that courts disregard stipulations for counsel fees, whenever they appear to be a source of speculative profit at the expense of the debtor or mortgagor. ⁵ And it is not material that the present action is between the debtor and the creditor, and not between attorney and client. As court have power to fix the fee as between attorney and client, it must necessarily have the right to say whether a stipulation like this, inserted in a mortgage contract, is valid. ⁶

In determining the compensation of an attorney, the following circumstances should be considered: the amount and character of the services rendered; the responsibility imposed; the amount of money or the value of the property affected by the controversy, or involved in the employment; the skill and experience called for in the performance of the service; the professional standing of the attorney; the results secured; and whether or not the fee is contingent or absolute, it being a recognized rule that an attorney may properly charge a much larger fee when it is to be contingent than when it is not. ⁷ From the stipulation in the mortgage contract earlier quoted, it appears that the agreed fee is 10% of the total indebtedness, irrespective of the manner the foreclosure of the mortgage is to be effected. The agreement is perhaps fair enough in case the foreclosure proceedings is prosecuted judicially but, surely, it is unreasonable when, as in this case, the mortgage was foreclosed extra-judicially, and all that the attorney did was to file a petition for foreclosure with the sheriff concerned. It is to be assumed though, that the said branch attorney of the PNB made a study of the case before deciding to file the petition for foreclosure; but even with this in mind, we believe the amount of P5,821.35 is far too excessive a fee for such services. Considering the above circumstances mentioned, it is our considered opinion that the amount of P1,000.00 would be more than sufficient to compensate the work aforementioned.

The next issue raised deals with the claim that the proceeds of the sale of the real properties alone together with the amount it remitted to the PNB later was more than sufficient to liquidate its total obligation to herein appellee bank. Again, we find merit in this claim. From the foregoing discussion of the first two errors assigned, and for purposes of determining the total obligation of herein appellant to the PNB as of November 21, 1961 when the real estate mortgage was foreclosed, we have the following illustration in support of this conclusion:1äwphï1.ñët

A. -
I.	Principal Loan
	(a) Promissory note dated August 2, 1956	P27,500.00
	(1) Interest at 6% per annum from Aug. 2, 1956 to Nov. 21, 1961	8,751.78
	(b) Promissory note dated October 19, 1956	P15,500.00
	(1) Interest at 6% per annum from Oct.19, 1956 to Nov. 21, 1961	4,734.08
II.	Sheriff's fees [for two (2) day's work]	10.00
III.	Attorney's fee	1,000.00
Total obligation as of Nov. 21, 1961		P57,495.86
B. -
I.	Proceeds of the foreclosure sale of the real estate mortgage on Nov. 21, 1961	P56,908.00
II.	Additional amount remitted to the PNB on Dec. 18, 1961	738.59
	Total amount of Payment made to PNB as of Dec. 18, 1961	P57,646.59
	Deduct: Total obligation to the PNB	P57,495.86
	Excess Payment to the PNB	P 150.73 ========

From the foregoing illustration or computation, it is clear that there was no further necessity to foreclose the mortgage of herein appellant's chattels on December 21, 1961; and on this ground alone, we may declare the sale of appellant's chattels on the said date, illegal and void. But we take into consideration the fact that the PNB must have been led to believe that the stipulated 10% of the unpaid loan for attorney's fees in the real estate mortgage was legally maintainable, and in accordance with such belief, herein appellee bank insisted that the proceeds of the sale of appellant's real property was deficient to liquidate the latter's total indebtedness. Be that as it may, however, we still find the subsequent sale of herein appellant's chattels illegal and objectionable on other grounds.

That appellant vigorously objected to the foreclosure of its chattel mortgage after the foreclosure of its real estate mortgage on November 21, 1961, can not be doubted, as shown not only by its letter to the PNB on November 19, 1961, but also in its letter to the provincial sheriff of Camarines Norte on the same date. These letters were followed by another letter to the appellee bank on December 14, 1961, wherein herein appellant, in no uncertain terms, reiterated its objection to the scheduled sale of its chattels on December 21, 1961 at Jose Panganiban, Camarines Norte for the reasons therein stated that: (1) it had settled in full its total obligation to the PNB by the sale of the real estate and its subsequent remittance of the amount of P738.59; and (2) that the contemplated sale at Jose Panganiban would violate their agreement embodied under paragraph (i) in the Chattel Mortgage which provides as follows:

(i) In case of both judicial and extra-judicial foreclosure under Act 1508, as amended, the parties hereto agree that the corresponding complaint for foreclosure or the petition for sale should be filed with the courts or the sheriff of the City of Manila, as the case may be; and that the Mortgagor shall pay attorney's fees hereby fixed at ten per cent (10%) of the total indebtedness then unpaid but in no case shall it be less than P100.00, exclusive of all costs and fees allowed by law and of other expenses incurred in connection with the said foreclosure. [Emphasis supplied]

Notwithstanding the abovequoted agreement in the chattel mortgage contract, and in utter disregard of the objection of herein appellant to the sale of its chattels at Jose Panganiban, Camarines Norte and not in the City of Manila as agreed upon, the PNB proceeded with the foreclosure sale of said chattels. The trial court, however, justified said action of the PNB in the decision appealed from in the following rationale:

While it is true that it was stipulated in the chattel mortgage contract that a petition for the extra-judicial foreclosure thereof should be filed with the Sheriff of the City of Manila, nevertheless, the effect thereof was merely to provide another place where the mortgage chattel could be sold in addition to those specified in the Chattel Mortgage Law. Indeed, a stipulation in a contract cannot abrogate much less impliedly repeal a specific provision of the statute. Considering that Section 14 of Act No. 1508 vests in the mortgagee the choice where the foreclosure sale should be held, hence, in the case under consideration, the PNB had three places from which to select, namely: (1) the place of residence of the mortgagor; (2) the place of the mortgaged chattels were situated; and (3) the place stipulated in the contract. The PNB selected the second and, accordingly, the foreclosure sale held in Jose Panganiban, Camarines Norte, was legal and valid.

To the foregoing conclusion, We disagree. While the law grants power and authority to the mortgagee to sell the mortgaged property at a public place in the municipality where the mortgagor resides or where the property is situated, ⁸ this Court has held that the sale of a mortgaged chattel may be made in a place other than that where it is found, provided that the owner thereof consents thereto; or that there is an agreement to this effect between the mortgagor and the mortgagee. ⁹ But when, as in this case, the parties agreed to have the sale of the mortgaged chattels in the City of Manila, which, any way, is the residence of the mortgagor, it cannot be rightly said that mortgagee still retained the power and authority to select from among the places provided for in the law and the place designated in their agreement over the objection of the mortgagor. In providing that the mortgaged chattel may be sold at the place of residence of the mortgagor or the place where it is situated, at the option of the mortgagee, the law clearly contemplated benefits not only to the mortgagor but to the mortgagee as well. Their right arising thereunder, however, are personal to them; they do not affect either public policy or the rights of third persons. They may validly be waived. So, when herein mortgagor and mortgagee agreed in the mortgage contract that in cases of both judicial and extra-judicial foreclosure under Act 1508, as amended, the corresponding complaint for foreclosure or the petition for sale should be filed with the courts or the Sheriff of Manila, as the case may be, they waived their corresponding rights under the law. The correlative obligation arising from that agreement have the force of law between them and should be complied with in good faith. ¹⁰

By said agreement the parties waived the legal venue, and such waiver is valid and legally effective, because it, was merely a personal privilege they waived, which is not contrary, to public policy or to the prejudice of third persons. It is a general principle that a person may renounce any right which the law gives unless such renunciation is expressly prohibited or the right conferred is of such nature that its renunciation would be against public policy. ¹¹

On the other hand, if a place of sale is specified in the mortgage and statutory requirements in regard thereto are complied with, a sale is properly conducted in that place. Indeed, in the absence of a statute to the contrary, a sale conducted at a place other than that stipulated for in the mortgage is invalid, unless the mortgagor consents to such sale. ¹²

Moreover, Section 14 of Act 1508, as amended, provides that the officer making the sale should make a return of his doings which shall particularly describe the articles sold and the amount received from each article. From this, it is clear that the law requires that sale be made article by article, otherwise, it would be impossible for him to state the amount received for each item. This requirement was totally disregarded by the Deputy Sheriff of Camarines Norte when he sold the chattels in question in bulk, notwithstanding the fact that the said chattels consisted of no less than twenty different items as shown in the bill of sale. ¹³ This makes the sale of the chattels manifestly objectionable. And in the absence of any evidence to show that the mortgagor had agreed or consented to such sale in gross, the same should be set aside.

It is said that the mortgagee is guilty of conversion when he sells under the mortgage but not in accordance with its terms, or where the proceedings as to the sale of foreclosure do not comply with the statute. ¹⁴ This rule applies squarely to the facts of this case where, as earlier shown, herein appellee bank insisted, and the appellee deputy sheriff of Camarines Norte proceeded with the sale of the mortgaged chattels at Jose Panganiban, Camarines Norte, in utter disregard of the valid objection of the mortgagor thereto for the reason that it is not the place of sale agreed upon in the mortgage contract; and the said deputy sheriff sold all the chattels (among which were a skagit with caterpillar engine, three GMC 6 x 6 trucks, a Herring Hall Safe, and Sawmill equipment consisting of a 150 HP Murphy Engine, plainer, large circular saws etc.) as a single lot in violation of the requirement of the law to sell the same article by article. The PNB has resold the chattels to another buyer with whom it appears to have actively cooperated in subsequently taking possession of and removing the chattels from appellant compound by force, as shown by the circumstance that they had to take along PC soldiers and municipal policemen of Jose Panganiban who placed the chief security officer of the premises in jail to deprive herein appellant of its possession thereof. To exonerate itself of any liability for the breach of peace thus committed, the PNB would want us to believe that it was the subsequent buyer alone, who is not a party to this case, that was responsible for the forcible taking of the property; but assuming this to be so, still the PNB cannot escape liability for the conversion of the mortgaged chattels by parting with its interest in the property. Neither would its claim that it afterwards gave a chance to herein appellant to repurchase or redeem the chattels, improve its position, for the mortgagor is not under obligation to take affirmative steps to repossess the chattels that were converted by the mortgagee. ¹⁵ As a consequence of the said wrongful acts of the PNB and the Deputy Sheriff of Camarines Norte, therefore, We have to declare that herein appellant is entitled to collect from them, jointly and severally, the full value of the chattels in question at the time they were illegally sold by them. To this effect was the holding of this Court in a similar situation. ¹⁶

The effect of this irregularity was, in our opinion to make the plaintiff liable to the defendant for the full value of the truck at the time the plaintiff thus carried it off to be sold; and of course, the burden is on the defendant to prove the damage to which he was thus subjected. . . .

This brings us to the problem of determining the value of the mortgaged chattels at the time of their sale in 1961. The trial court did not make any finding on the value of the chattels in the decision appealed from and denied altogether the right of the appellant to recover the same. We find enough evidence of record, however, which may be used as a guide to ascertain their value. The record shows that at the time herein appellant applied for its loan with the PNB in 1956, for which the chattels in question were mortgaged as part of the security therefore, herein appellant submitted a list of the chattels together with its application for the loan with a stated value of P107,115.85. An official of the PNB made an inspection of the chattels in the same year giving it an appraised value of P42,850.00 and a market value of P85,700.00. ¹⁷ The same chattels with some additional equipment acquired by herein appellant with part of the proceeds of the loan were reappraised in a re-inspection conducted by the same official in 1958, in the report of which he gave all the chattels an appraised value of P26,850.00 and a market value of P48,200.00. ¹⁸ Another re-inspection report in 1959 gave the appraised value as P19,400.00 and the market value at P25,600.00. ¹⁹ The said official of the PNB who made the foregoing reports of inspection and re-inspections testified in court that in giving the values appearing in the reports, he used a conservative method of appraisal which, of course, is to be expected of an official of the appellee bank. And it appears that the values were considerably reduced in all the re-inspection reports for the reason that when he went to herein appellant's premises at the time, he found the chattels no longer in use with some of the heavier equipments dismantled with parts thereof kept in the bodega; and finding it difficult to ascertain the value of the dismantled chattels in such condition, he did not give them anymore any value in his reports. Noteworthy is the fact, however, that in the last re-inspection report he made of the chattels in 1961, just a few months before the foreclosure sale, the same inspector of the PNB reported that the heavy equipment of herein appellant were "lying idle and rusty" but were "with a shed free from rains" ²⁰ showing that although they were no longer in use at the time, they were kept in a proper place and not exposed to the elements. The President of the appellant company, on the other hand, testified that its caterpillar (tractor) alone is worth P35,000.00 in the market, and that the value of its two trucks acquired by it with part of the proceeds of the loan and included as additional items in the mortgaged chattels were worth no less than P14,000.00. He likewise appraised the worth of its Murphy engine at P16,000.00 which, according to him, when taken together with the heavy equipments he mentioned, the sawmill itself and all other equipment forming part of the chattels under consideration, and bearing in mind the current cost of equipments these days which he alleged to have increased by about five (5) times, could safely be estimated at P120,000.00. This testimony, except for the appraised and market values appearing in the inspection and re-inspection reports of the PNB official earlier mentioned, stand uncontroverted in the record; but We are not inclined to accept such testimony at its par value, knowing that the equipments of herein appellant had been idle and unused since it stopped operating its sawmill in 1958 up to the time of the sale of the chattels in 1961. We have no doubt that the value of chattels was depreciated after all those years of inoperation, although from the evidence aforementioned, We may also safely conclude that the amount of P4,200.00 for which the chattels were sold in the foreclosure sale in question was grossly unfair to the mortgagor. Considering, however, the facts that the appraised value of P42,850.00 and the market value of P85,700.00 originally given by the PNB official were admittedly conservative; that two 6 x 6 trucks subsequently bought by the appellant company had thereafter been added to the chattels; and that the real value thereof, although depreciated after several years of inoperation, was in a way maintained because the depreciation is off-set by the marked increase in the cost of heavy equipment in the market, it is our opinion that the market value of the chattels at the time of the sale should be fixed at the original appraised value of P42,850.00.

Herein appellant's claim for moral damages, however, seems to have no legal or factual basis. Obviously, an artificial person like herein appellant corporation cannot experience physical sufferings, mental anguish, fright, serious anxiety, wounded feelings, moral shock or social humiliation which are basis of moral damages. ²¹ A corporation may have a good reputation which, if besmirched, may also be a ground for the award of moral damages. The same cannot be considered under the facts of this case, however, not only because it is admitted that herein appellant had already ceased in its business operation at the time of the foreclosure sale of the chattels, but also for the reason that whatever adverse effects of the foreclosure sale of the chattels could have upon its reputation or business standing would undoubtedly be the same whether the sale was conducted at Jose Panganiban, Camarines Norte, or in Manila which is the place agreed upon by the parties in the mortgage contract.

But for the wrongful acts of herein appellee bank and the deputy sheriff of Camarines Norte in proceeding with the sale in utter disregard of the agreement to have the chattels sold in Manila as provided for in the mortgage contract, to which their attentions were timely called by herein appellant, and in disposing of the chattels in gross for the miserable amount of P4,200.00, herein appellant should be awarded exemplary damages in the sum of P10,000.00. The circumstances of the case also warrant the award of P3,000.00 as attorney's fees for herein appellant.

WHEREFORE AND CONSIDERING ALL THE FOREGOING, the decision appealed from should be, as hereby, it is set aside. The Philippine National Bank and the Deputy Sheriff of the province of Camarines Norte are ordered to pay, jointly and severally, to Mambulao Lumber Company the total amount of P56,000.73, broken as follows: P150.73 overpaid by the latter to the PNB, P42,850.00 the value of the chattels at the time of the sale with interest at the rate of 6% per annum from December 21, 1961, until fully paid, P10,000.00 in exemplary damages, and P3,000.00 as attorney's fees. Costs against both appellees.

Concepcion, C.J., Reyes, J.B.L., Dizon, Makalintal, Zaldivar, Sanchez, Castro and Fernando, JJ., concur.
Bengzon, J.P. J., took no part.

Footnotes

¹See, Gorospe, et al. v. Gochangco, L-12735, October 30, 1959.

²59 C.J.S. 1547.

³59 C.J.S. 1549.

⁴Bachrach v. Golingco, 39 Phil. 138.

⁵See, Gorospe, et al. v. Gochangco, supra.

⁶Bachrach v. Golingco, supra.

⁷Delgado v. De la Rama, 43 Phil. 419.

⁸Section 14, Act No. 1508.

⁹Riosa v. Stilianopulos, Inc., 67 Phil. 422.

¹⁰Art. 1159, new Civil Code.

¹¹General Azucarera de Tarlac v. De Leon, 56 Phil. 169;See also, Bautista v. De Borja, et al., L-20600, October 28, 1966.

¹²14 C.J.S. 1030.

¹³Exhibit Q.

¹⁴C. J. S. 817-818.

¹⁵14 C. J. S. 819.

¹⁶Bachrach v. Golingco, supra.

¹⁷Exhibit 5.

¹⁸Exhibit 6.

¹⁹Exhibit 6-b.

²⁰Exhibit 6-c.

²¹See Art. 2217, Civil Code.

City of Manila vs. Laguio, G.R. No. 118127, April 12, 2005

Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. 118127 April 12, 2005

CITY OF MANILA, HON. ALFREDO S. LIM as the Mayor of the City of Manila, HON. JOSELITO L. ATIENZA, in his capacity as Vice-Mayor of the City of Manila and Presiding Officer of the City Council of Manila, HON. ERNESTO A. NIEVA, HON. GONZALO P. GONZALES, HON. AVELINO S. CAILIAN, HON. ROBERTO C. OCAMPO, HON. ALBERTO DOMINGO, HON. HONORIO U. LOPEZ, HON. FRANCISCO G. VARONA, JR., HON. ROMUALDO S. MARANAN, HON. NESTOR C. PONCE, JR., HON. HUMBERTO B. BASCO, HON. FLAVIANO F. CONCEPCION, JR., HON. ROMEO G. RIVERA, HON. MANUEL M. ZARCAL, HON. PEDRO S. DE JESUS, HON. BERNARDITO C. ANG, HON. MANUEL L. QUIN, HON. JHOSEP Y. LOPEZ, HON. CHIKA G. GO, HON. VICTORIANO A. MELENDEZ, HON. ERNESTO V.P. MACEDA, JR., HON. ROLANDO P. NIETO, HON. DANILO V. ROLEDA, HON. GERINO A. TOLENTINO, JR., HON. MA. PAZ E. HERRERA, HON. JOEY D. HIZON, HON. FELIXBERTO D. ESPIRITU, HON. KARLO Q. BUTIONG, HON. ROGELIO P. DELA PAZ, HON. BERNARDO D. RAGAZA, HON. MA. CORAZON R. CABALLES, HON. CASIMIRO C. SISON, HON. BIENVINIDO M. ABANTE, JR., HON. MA. LOURDES M. ISIP, HON. ALEXANDER S. RICAFORT, HON. ERNESTO F. RIVERA, HON. LEONARDO L. ANGAT, and HON. JOCELYN B. DAWIS, in their capacity as councilors of the City of Manila, petitioners,
vs.
HON. PERFECTO A.S. LAGUIO, JR., as Presiding Judge, RTC, Manila and MALATE TOURIST DEVELOPMENT CORPORATION, respondents.

D E C I S I O N

TINGA, J.:

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 Court's commitment to the protection of morals is secondary to its fealty to the fundamental law of the land. It is foremost a guardian of the Constitution but not the conscience of individuals. And if it need be, the Court will not hesitate to "make the hammer fall, and heavily" in the words of Justice Laurel, and uphold the constitutional guarantees when faced with laws that, though not lacking in zeal to promote morality, nevertheless fail to pass the test of constitutionality.

The pivotal issue in this Petition¹ under Rule 45 (then Rule 42) of the Revised Rules on Civil Procedure seeking the reversal of the Decision² 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 Order⁷ (RTC Petition) with the lower court impleading as defendants, herein petitioners City of Manila, Hon. Alfredo S. Lim (Lim), Hon. Joselito L. Atienza, and the members of the City Council of Manila (City Council). MTDC prayed that the Ordinance, insofar as it includes motels and inns as among its prohibited establishments, be declared invalid and unconstitutional.⁸

Enacted by the City Council⁹ 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 MTDC's Victoria Court considering that these were not establishments for "amusement" or "entertainment" and they were not "services or facilities for entertainment," nor did they use women as "tools for entertainment," and neither did they "disturb the community," "annoy the inhabitants" or "adversely affect the social and moral welfare of the community."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. 499¹³ 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 MTDC's constitutional rights in that: (a) it is confiscatory and constitutes an invasion of plaintiff's property rights; (b) the City Council has no power to find as a fact that a particular thing is a nuisance per se nor does it have the power to extrajudicially destroy it; and (6) The Ordinance 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 Answer¹⁵ 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 Decision reads: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 Appeal²⁹ 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. 499³¹ 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 Memorandum³⁶ 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 Court's deep sentiment and tenderness for the Ermita-Malate area being its home for several decades. A long-time resident, the Court witnessed the area's many turn of events. It relished its glory days and endured its days of infamy. Much as the Court harks back to the 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 the Ordinance, 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.³⁸ 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

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 person's life, liberty, or property. In other words, substantive due process looks to whether there is a sufficient justification for the government's action.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 despotically⁵⁷ 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 rights⁶² 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 Ermita-Malate area which are allegedly operated under the deceptive veneer of legitimate, licensed and tax-paying nightclubs, bars, karaoke bars, girlie houses, cocktail lounges, hotels and motels. Petitioners insist that even the Court in the case of Ermita-Malate Hotel and Motel Operators Association, Inc. v. City Mayor of Manila⁶³ 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 the Ordinance are within the scope of the City Council's police powers, the means employed for the accomplishment thereof were unreasonable and unduly oppressive.

It is undoubtedly one of the fundamental duties of the City of Manila to make all reasonable regulations looking to the promotion of the moral and social values of the community. However, the worthy aim of fostering public morals and the eradication of the community's social ills can be achieved through means less restrictive of private rights; it can be attained by reasonable restrictions rather than by an absolute prohibition. The closing down and transfer of businesses or their conversion into businesses "allowed" under 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 man's 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 Ordinance within 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 person's fundamental right to liberty and property.

Liberty as guaranteed by the Constitution was defined by Justice Malcolm to include "the right to exist and the right to be free from arbitrary restraint or servitude. The term cannot be dwarfed into mere freedom from physical restraint of the person of the citizen, but is deemed to embrace the right of man to enjoy the 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 recognized…as essential to the orderly pursuit of happiness by free men. In a Constitution for a free people, there can be no doubt that the meaning of "liberty" must be broad indeed.

In another case, it also confirmed that liberty protected by the due process clause includes personal decisions relating to marriage, procreation, contraception, family relationships, child rearing, and education. In explaining the respect the Constitution demands for the autonomy of the person in making these choices, the U.S. Supreme Court explained:

These matters, involving the most intimate and personal choices a person may make in a lifetime, choices central to personal dignity and autonomy, are central to the liberty protected by the Fourteenth Amendment. At the heart of liberty is the right to define one's own concept of existence, of meaning, of universe, and of the mystery of human life. Beliefs about these matters could not define the attributes of personhood where they formed under compulsion of the State.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 motel's premisesbe 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 freedomit 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 person's property to benefit society, then society should pay. The principal purpose of the guarantee is "to bar the Government from forcing some people alone to bear public burdens which, in all fairness and justice, should be borne by the public as a whole.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 government's 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 owner's point of view, equivalent to a "taking" unless principles of nuisance or property law that existed when the owner acquired the land make the use prohibitable.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 regulation's economic effect on the landowner, the extent to which the regulation interferes with reasonable investment-backed expectations and the character of government action. These inquiries are informed by the purpose of the takings clause which is to prevent the government from forcing some people alone to bear public burdens which, in all fairness and justice, should be borne by the public as a whole.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 businessesare 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 ill-considered 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 city's determination that motels permitting room rentals for fewer than ten (10 ) hours should be included within the licensing scheme. As regards the second point, the Court held that limiting motel room rentals to ten (10) hours will have no discernible effect on personal bonds as those bonds that are formed from the use of a motel room for fewer than ten (10) hours are not those that have played a critical role in the culture and traditions of the nation by cultivating and transmitting shared ideals and beliefs.

The ordinance challenged in the above-cited case merely regulated the targeted businesses. It imposed reasonable restrictions; hence, its validity was upheld.

The case 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 law's benefits to be available to all, that none be placed outside the sphere of its coverage. Only thus could chance and favor be excluded and the affairs of men governed by that serene and impartial uniformity, which is of the very essence of the idea of law." There is recognition, however, in the opinion that what in fact exists "cannot approximate the ideal. Nor is the law susceptible to the reproach that it does not take into account the realities of the situation. The constitutional guarantee then is not to be given a meaning that disregards what is, what does in fact exist. To assure that the general welfare be promoted, which is the end of law, a regulatory measure may cut into the rights to liberty and property. Those adversely affected may under such circumstances invoke the equal protection clause only if they can show that the governmental act assailed, far from being inspired by the attainment of the common weal was prompted by the spirit of hostility, or at the very least, discrimination that finds no support in reason." Classification is thus not ruled out, it being sufficient to quote from the Tuason decision anew "that the laws operate equally and uniformly on all persons under similar circumstances or that all persons must be treated in the same manner, the conditions not being different, both in the privileges conferred and the liabilities imposed. Favoritism and undue preference cannot be allowed. For the principle is that equal protection and security shall be given to every person under circumstances which, if not identical, are analogous. If law be looked upon in terms of burden or charges, those that fall within a class should be treated in the same fashion, whatever restrictions cast on some in the group equally binding on the rest.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 Court's view, there are no substantial distinctions between motels, inns, pension houses, hotels, lodging houses or other similar establishments. By definition, all are commercial establishments providing lodging and usually meals and other services for the public. No reason exists for prohibiting motels and inns but not pension houses, hotels, lodging houses or other similar establishments. The classification in the instant case is invalid as similar subjects are not similarly treated, both as to rights conferred and obligations imposed. It 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 prostitutionone of the hinted ills the Ordinance aims to banishis 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 Manila¹⁰⁶ 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' assertion¹¹⁰ 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 latter's 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 Council's 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.

Davide, Jr., C.J., Puno, Quisumbing, Sandoval-Gutierrez, Carpio, Austria-Martinez, Corona, Carpio-Morales, Callejo, Sr., Azcuna, Chico-Nazario and Garcia, JJ., concur
Panganiban, J., in the result.
Ynares- Santiago, J., concur in the result only.

Footnotes

¹ Dated 11 January 1995; Rollo, pp. 6-73 with annexes.

² Id. at 64-72.

³ The lower court declared the Ordinance to be null and void.

⁴ In the case of Cotton Club Corporation, etc. v. Hon. Alfredo S. Lim, etc, et al. before RTC, Branch 55 of Manila, docketed as Civil Case No. 93-66551, Judge Hermogenes R. Liwag declared the Ordinance void and unconstitutional. The defendants elevated the case to the Court of Appeals which denied their petition on procedural grounds in its Decision dated 21 May 2003. It appears that defendants Hon. Alfredo S. Lim and the City Council of Manila did not elevate the case before the Court. Entry of Judgment of the CA Decision was made on 22 April 2003.

⁵ Rollo, p. 37.

⁶ Id. at. 75; It now calls itself Hotel Victoria.

⁷ Id. at 35-47.

⁸ Id. at 46.

⁹ The principal authors of the Ordinance are: Hons. Bienvenido M. Abante, Jr.; Humberto B. Basco; Nestor C. Ponce, Jr.; Ernesto A. Nieva; Francisco G. Varona, Jr.; Jhosep Y. Lopez; Ma. Paz E. Herrera; Gerino A. Tolentino, Jr; Ma. Lourdes M. Isip; Flaviano F. Concepcion, Jr.; Ernesto V.P. Maceda, Jr.; Victoriano A. Melendez; Ma. Corazon R. Caballes; Bernardito C. Ang; Roberto C. Ocampo; Rogelio B. dela Paz; Romeo G. Rivera; Alexander S. Ricafort; Avelino S. Cailian; Bernardo D. Ragasa; Joey D. Hizon; Leonardo L. Angat; and Jocelyn B. Dawis.

¹⁰ Rollo, p. 8.

¹¹ RTC Records, pp. 10-11.

¹² Paragraph (a) 4 (iv), Section 458, Chapter 3 of the Code 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:

. . . .

(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; . . .

¹³ Presidential Decree No. 499; Dated 28 June 1974; Declaring Portions of the Ermita-Malate Area as Commercial Zones with Certain Restrictions. It reads in full:

WHEREAS, the government is committed to the promotion and development of tourism in the country, particularly in the City of Manila which is the hub of commercial and cultural activities in Manila Metropolitan Area;

WHEREAS, certain portions of the districts of Ermita and Malate known as the Tourist Belt are still classified as Class "A" Residential Zones and Class "B" Residential Zones where hotels and other business establishments such as curio stores, souvenir shops, handicraft display centers and the like are not allowed under the existing zoning plan in the City of Manila;

WHEREAS, the presence of such establishments in the area would not only serve as an attraction for tourists but are dollar earning enterprises as well, which tourist areas all over the world cannot do without;

NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by virtue of the powers vested in me under the Constitution as Commander-in-Chief of all the Armed Forces of the Philippines and pursuant to Proclamation No. 1081, dated September 21, 1972, and General Order No. 1, dated September 22, 1972, as amended, do hereby order and decree the classification as a Commercial Zone of that portion of 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. PROVIDED, HOWEVER, That no permit shall be granted for the establishment of any new warehouse or open storage depot, dump or yard, motor repair shop, gasoline service station, light industry with any machinery or funeral establishment in these areas, and PROVIDED, FURTHER, That for purposes of realty tax assessment on properties situated therein, lands and buildings used exclusively for residential purposes by the owners themselves shall remain assessed as residential properties.

All laws, ordinances, orders, rules and regulations which are inconsistent with this Decree are hereby repealed or modified accordingly.

This Decree shall take effect immediately.

Done in the City of Manila this 28^th day of June in the year of Our Lord, nineteen hundred and seventy-four.

¹⁴ RTC Records, pp. 11-13.

¹⁵ Id. at 158-171.

¹⁶ Id. at 160.

¹⁷ 41 Phil. 103 (1920); see also Samson v. Mayor of Bacolod City, G.R. No. L-28745, 23 October 1974, 60 SCRA 267.

¹⁸ RTC Records, p. 161.

¹⁹ Approved on 18 June 1949.

²⁰ RTC Records, p. 160.

²¹ Supra note 18.

²² Id. at 164.

²³ Ibid.

²⁴ Id. at 165-169.

²⁵ Id. at 84.

²⁶ Id. at 453.

²⁷ Rollo, pp. 6 and 72.

²⁸ Id. at 6.

²⁹ Dated 12 December 1994; Id. at 73.

³⁰ Id. at 2.

³¹ Supra note 13.

³² Rollo, p. 13.

³³ Id. at 190-201.

³⁴ Id. at 16, 194, 198.

³⁵ Id. at 19, 22, 25-26, 199.

³⁶ Id. at 150-180.

³⁷ Tatel v. Municipality of Virac, G.R. No. 40243, 11 March 1992, 207 SCRA 157, 161; Solicitor General v. Metropolitan Manila Authority, G.R. No. 102782, 11 December 1991, 204 SCRA 837, 845; Magtajas v. Pryce Properties Corp., Inc., G.R. No. 111097, 20 July 1994, 234 SCRA 255, 268-267.

³⁸ See ART. 7, par. (3) of the Civil Code which reads, thus:

. . .

Administrative or executive acts, orders and regulations shall be valid only when they are not contrary to the laws or the Constitution.

³⁹ Magtajas v. Pryce Properties Corp, Inc., G.R. No. 111097, 20 July 1994, 234 SCRA 255, 270-271.

⁴⁰ Id. at 273.

⁴¹ Acebedo Optical Company, Inc. v. Court of Appeals, 385 Phil. 956, 968-969 (2000).

⁴² Metropolitan Manila Devt. Authority v. Bel-Air Village Asso., 385 Phil. 586, 603 (2000), citing Sections 468 (a), 458 (a), and 447 (a), Book III, Local Government Code of 1991.

⁴³ 16 C.J.S., pp. 562-565.

⁴⁴ Art. II, Declaration of principles and state policies, 1987 const.

⁴⁵ Ibid.

⁴⁶ Art. III, Bill of Rights, 1987 Const.

⁴⁷ Ibid.

⁴⁸ Id. at Sec. 9; See also Cruz, Isagani A., Constitutional Law 97 (1998).

⁴⁹ Ermita-Malate Hotel and Motel Operators Association, Inc. v. City Mayor of Manila, 20 Phil. 849, 860 (1967).

⁵⁰ See In re Lutker, Okl. Cr., 274 P. 2d 786, 789, 790.

⁵¹ Supra note 43 at 1150-1151.

⁵² See Smith, Bell & Co. v. Natividad, 40 Phil. 136, 145 (1919).

⁵³ Chemerinsky, Erwin, Constitutional Law Principles And Policies, 2^nd Ed. 523 (2002).

⁵⁴ Id. at 523-524.

⁵⁵ See County of Sacramento v. Lewis, 523 U.S. 833, 840 (1998).

⁵⁶ Chemerinsky, supra note 53 at 524.

⁵⁷ Lim v. Court of Appeals, 435 Phil. 857, 868 (2002); This is a related case involving the same Ordinance challenged in this case. The Court denied the petition questioning the writ of prohibitory preliminary injunction issued by the RTC, enjoining the closure of a certain establishment pursuant to the Ordinance.

⁵⁸ Homeowners' Asso. of the Phil., Inc. v. Municipal Board of the City of Manila, 133 Phil. 903, 907 (1968).

⁵⁹ Cruz, Isagani A., Constitutional Law 104 (1998).

⁶⁰ See U.S. v. Toribio, 15 Phil. 85 (1910); Fabie v. City of Manila, 21 Phil. 486 (1912); Case v. Board of Health, 24 Phil. 256 (1913).

⁶¹ Balacuit v. CFI of Agusan del Norte, No. L-38429, 30 June 1988, 163 SCRA 182, 191-193.

⁶² Cruz, supra note 59 at 56.

⁶³ Ermita-Malate Hotel and Motel Operators Assoc. Inc. v. City Mayor of Manila, supra note 49.

⁶⁴ Id. at 858-859.

⁶⁵ Section 458 (a) 1 (v), the Code.

⁶⁶ Catechism of the Catholic Church, Definitive Edition, p. 101; ECCE and Word & Life Publications, Don Bosco Compound, Makati.

⁶⁷ Lim v. Court of Appeals, supra note 57 at 867.

⁶⁸ Rubi v. Provincial Board 39 Phil. 660 (1919), as cited in Morfe v. Mutuc, 130 Phil. 415 (1968).

⁶⁹ Morfe v. Mutuc, 130 Phil. 415, 440 (1968).

⁷⁰ 408 U.S. 572.

⁷¹ See Lawrence v. Texas, 539 U.S. 558 (2003).

⁷² Concerned Employee v. Glenda Espiritu Mayor, A.M. No. P-02-1564, 23 November 2004, J. Tinga, ponente.

⁷³ Lawrence v. Texas, supra note 70.

⁷⁴ Morfe v. Mutuc, supra note 68 at 442.

⁷⁵ Id. at 442-443, citing Laski, Liberty in the Modern State, 44 (1944).

⁷⁶ Id. at 444-445, citing Emerson, Nine Justices in Search of a Doctrine, 64 Mich. Law. Rev. 219, 229 (1965).

⁷⁷ People v. Fajardo, et al., 104 Phil. 443, 447 (1958).

⁷⁸ Ibid. citing Arverne Bay Const. Co. v. Thatcher (N.Y.) 117 ALR. 1110, 1116.

⁷⁹ Chemerinsky, supra note 53 at 616.

⁸⁰ Id. at 617.

⁸¹ 260 U.S. 393, 415 (1922).

⁸² Id. at 413-415.

⁸³ See Penn Central Transportation Co. v. New York City, 438 U.S. 104 (1978).

⁸⁴ Chemerinsky , supra note 53 at 623-626.

⁸⁵ See Lucas v. South Carolina Coastal Council, 505 U.S. 1003 (1992).

⁸⁶ Ibid.

⁸⁷ Chemerinsky, supra note 53 at 166.

⁸⁸ Supra note 82.

⁸⁹ Cruz, supra note 59 at 38.

⁹⁰ People v. Fajardo, supra note 76 at 443, 448 citing Tews v. Woolhiser (1933) 352 I11. 212, 185 N.E. 827.

⁹¹ Id. at 446-447.

⁹² Id. at 447, citing Schloss Poster Adv. Co., Inc. v. City of Rock Hill, et al., 2 SE (2d), pp. 394-395; People v. Nazario, No. L-44143, 31 August 1988, 165 SCRA 186, 195.

⁹³ 402 U.S. 611 (1971).

⁹⁴ No. L-44143, 31 August 1988, 165 SCRA 186, 195.

⁹⁵ 493 U.S. 215 (1990).

⁹⁶ Supra note 49.

⁹⁷ De la Cruz, et al. v. Hon. Paras, et al., 208 Phil. 490, 503 (1983).

⁹⁸ See Ichong v. Hernandez, 101 Phil. 1155 (1957).

⁹⁹ 16B Am Jur 2d 779 299 citing State of Missouri ex rel. Gaines v. Canada, 305 U.S. 337, 59 S. Ct. 232, 83 L. Ed. 208 (1938), reh'g denied, 305 U.S. 676, 59 S. Ct. 356, 83 L. Ed. 437 (1939) and mandate conformed to, 344 Mo. 1238, 131 S.W. 2d 217 (1939).

¹⁰⁰ 16B Am Jur 2d 779 299 citing Romer v. Evans, 517 U.S. 620, 116 S. Ct. 1620, 134 L. Ed. 2d 855, 109 Ed. Law Rep. 539, 70 Fair Empl. Prac. Cas. (BNA) 1180, 68 Empl. Prac. Dec. (CCH) 44013 (1996); Walker v. Board of Supervisors of Monroe County, 224 Miss. 801, 81 So. 2d 225 (1955), cert. denied, 350 U.S. 887, 76 S. Ct. 142, 100 L. Ed. 782 (1955); Preisler v. Calcaterra, 362 Mo. 662, 243 S.W. 2d 62 (1951).

¹⁰¹ Supra note 52 at 145.

¹⁰² Nuñez v. Sandiganbayan, 197 Phil. 407 (1982).

¹⁰³ Cruz, supra note 59 at 125.

¹⁰⁴ See People v. Cayat, 68 Phil. 12 (1939).

¹⁰⁵ See Craig v. Boren, 429 U.S. 190 (1976).

¹⁰⁶ Supra note 17.

¹⁰⁷ Id. at 108 (1920).

¹⁰⁸ 81 Phil. 33 (1948).

¹⁰⁹ Id. at 38.

¹¹⁰ Rollo, p. 19.

¹¹¹ RTC Records, p. 409; The Decision of the Regional Trial Court of Manila, Branch 55 in the case of Cotton Club Corporation, Inc. v. Hon. Alfredo S. Lim, etc., et al., Civil Case No. 93-66551; Dated 28 July 1993; Penned by Judge Hermogenes R. Liwag; Citing Shaw, Harry, Punctuate it Right! Everday Handbooks 125-126.

¹¹² Id. at 408.

¹¹³ City of Ozamis v. Lumapas, No. L-30727, 15 July 1975, 65 SCRA 33, 42.

¹¹⁴ Francisco, Vicente J., Statutory Construction, Second Edition 172 (1959); See Pepsi-Cola Bottling Company of the Philippines, Inc. v. Municipality of Tanauan, Leyte, et al., 161 Phil. 591, 605 (1976).

¹¹⁵ Supra note 107 at 33.

¹¹⁶ Agpalo, Ruben F., Statutory Construction 296 (1986).

¹¹⁷ Francisco, supra note 113 at 271.

¹¹⁸ Crawford, Earl T., The Construction of Statutes 196-197 (1940); See Mecano v. Commission on Audit, G.R. No. 103982, 11 December 1992, 216 SCRA 500, 505.

¹¹⁹ See Estate of Gregoria Francisco v. Court of Appeals, G.R. No. 95279, 25 July 1991, 199 SCRA 595, 601.

¹²⁰ Francisco, supra note 113 at 178-179; See King, et al. v. Hernaez, etc., et al., 114 Phil. 730, 739 (1962).

¹²¹ Chua Lao, etc., et al. v. Raymundo, etc., et al., 104 Phil. 302, 307 (1958).

¹²² G.R. No. 102782, 11 December 1991, 204 SCRA 837.

¹²³ Id. at 847.

¹²⁴ Balacuit v. CFI of Agusan del Norte, supra note 61 at 198-199.