City of Manila v Laguio

GR 118127
April 12, 2005

FACTS:
The pivotal issue of this case is the validity of Ordinance No. 7783 of
the City of Manila.
Malate Tourist Development Corporation (MTDC) is a corporation
engaged in the business of operating hotels, motels, hostels, and lodging
houses. It built and opened Victoria Court in Malate, which is licensed as a
motel, although accredited by DOT as a hotel.
On March 30, 1993, Ordinance No. 7783 was enacted by the City
Council of Manila which prohibited any business in the Ermita-Malate area
that provided certain forms of amusement, entertainment, services, and
facilities, where women are used as tools of 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: sauna parlors, massage parlors, karaoke bars, beerhouses,
night clubs, day clubs, super clubs, discotheques, cabarets, dance halls,
motels, and inns. The said ordinance also included the order for said
owners of such establishments to either transfer their business outside
the Ermita-Malate area or to convert said businesses to another business
allowable in the said area. The said ordinance also provided for
punishments, such as imprisonment of one year or a fine of five thousand
pesos, or both.
In the RTC petition, MTDC argued that the Ordinance erroneously
included motels and ins, which were not establishments for amusement or
entertainment, nor services or facilities for entertainment, and they did
not use women as tools for entertainment, and they also did not disturb
nor annoy the community, nor did they affect the social and moral welfare
of the community. Furthermore, they argued that the Ordinance was
invalid and unconstitutional as the City Council had no power to prohibit
the operation of motels as Sec 458 of the Local Government Code of 1991
only grants them the power to regulate, but not prohibit. It is also invalid
because it violates PD 499. At the same time, it does not constitute a
proper exercise of police power, and that it constitutes as an ex-post facto
law. It also violates MTDCs constitutional rights that it is an invasion of
the plaintiffs property rights, and that it is not a nuisance per se, and that
the Ordinance constitutes a denial of equal protection under the law.
The petitioners City of Manila and then-Mayor Lim maintained that
City Council had such power as provided by Section 458, which gives the
City Council the power to enact ordinances for the general welfare of the
city and its inhabitants. The RTA ruled in favor of MTDC, however.

ISSUES:
1. W/N the Ordinance is violative of due process?
2. W/N the Ordiannce is violative of the equal protection clause?
 3. W/N the Ordinance confers on petitioners unregulated discretion in
the execution of the Ordinance, absent rules to guide and control his
actions?
HELD:
1. Yes. The said Ordinance was not a valid exercise of police power. It
did not meet the requisites for the valid exercise of police power
which are: 1. It must appear that the interests of the public
generally require an interference with private rights, 2. The means
adopted must be reasonably necessary for the accomplishment of
the purpose and not unduly oppressive upon individuals. In this
case, however, it did not comply with said requirements, and thus, it
is an arbitrary intrusion into private rights, and thus, a violation of
the due process clause. While the said ordinance was enacted for
the promotion of the moral and social values of the community,
however, said fostering of public morals and the eradication of the
communitys social ills can be achieved through means less
restrictive of private rights. It can be attained by reasonable
restrictions, rather than absolute prohibitions. The said prohibition
will not protect and promote the social and moral welfare of the
community. At the same time, the classification of sauna parlors,
massage parlors, karaoke bars, night clubs, day clubs, super clubs,
discotheques, cabarets, dance halls, motels, and inns to be the
same as houses with ill-repute and establishments is baseless. The
enumerated establishments are lawful pursuits which are not per se
offensive to the moral welfare of the community.
2. Yes. In the test for the classification of subjects of legislation, there
are four requisites: 1. It must be based on substantial distinctions. 2.
It must be germane to the purpose of the law. 3. It must not be
limited to existing conditions only. 4. It must apply equally to all
members of the class. The Court does not see any substantial
distinctions between motels, inns, pension houses, hotels, lodging
houses, or other similar establishments. By definition, they are all
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. The Court, as
well, does not see the logic for prohibiting the business and
operation of motels in the Ermita-Malate area, but not outside the
area. A noxious establishment does not become any less noxious if
outside the area. At the same time, the Ordinance is discriminatory
towards women. Men can also engage in prostitution, but the
Ordinance only seems to assume that there is an ongoing immoral
activity when women are employed, and not men, as well.
3. Yes. The said Ordinance confers on petitioners unregulated
discretion, even when it is repugnant to general laws. The Ordinance
is in contravention to the Code as the latter merely empowers local
government units to regulate the said establishments, but not
prohibit them, under Section 458 of the Local Government Code.
 The only power of the City Council to legislative relative to these
establishments is to regulate them to promote the general welfare.
At the same time, the petitioners cannot seek cover under the
general welfare cause. It cannot be said that motels are 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.

RULING:
The Petition is hereby denied and the decision of the RTC declaring
the Ordinance void is affirmed.

NOTES:
- Test of a valid ordinance:
1. It must not contravene the Constitution or any statute
a. It must not pass under the test of constitutionality and the
test of consistency with the prevailing laws.
2. Must not be fair 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
6. Must not be unreasonable
- Rational basis test (for substantive due process):
o If the law is rationally related to a legitimate government
purpose
- Valid exercise of police power:
o It must appear that the interests of the public generally
require an interference with private rights
o The means adopted must be reasonably necessary for the
accomplishment of the purpose and not unduly oppressive
upon individuals.
- Equal Protection
o Requires all persons or things similarly situated to be treated
alike, both as to rights conferred and responsibilities imposed.
- Classification of subjects of legislation:
1. It must be based on substantial distinctions.
2. It must be germane to the purpose of the law.
3. It must not be limited to existing conditions only.
4. It must apply equally to all members of the class.