G.R. No.

91649 May 14, 1991

ATTORNEYS HUMBERTO BASCO, EDILBERTO BALCE, SOCRATES MARANAN AND LORENZO
SANCHEZ,petitioners,
vs.
PHILIPPINE AMUSEMENTS AND GAMING CORPORATION (PAGCOR), respondent.
H.B. Basco & Associates for petitioners.
Valmonte Law Offices collaborating counsel for petitioners.
Aguirre, Laborte and Capule for respondent PAGCOR.

PARAS, J.:p
A TV ad proudly announces:
"The new PAGCOR responding through responsible gaming."
But the petitioners think otherwise, that is why, they filed the instant petition seeking to annul the Philippine
Amusement and Gaming Corporation (PAGCOR) Charter PD 1869, because it is allegedly contrary to
morals, public policy and order, and because
A. It constitutes a waiver of a right prejudicial to a third person with a right recognized by law.
It waived the Manila City government's right to impose taxes and license fees, which is
recognized by law;
B. For the same reason stated in the immediately preceding paragraph, the law has intruded
into the local government's right to impose local taxes and license fees. This, in contravention
of the constitutionally enshrined principle of local autonomy;
C. It violates the equal protection clause of the constitution in that it legalizes PAGCOR
conducted gambling, while most other forms of gambling are outlawed, together with
prostitution, drug trafficking and other vices;
D. It violates the avowed trend of the Cory government away from monopolistic and crony
economy, and toward free enterprise and privatization. (p. 2, Amended Petition; p. 7, Rollo)
In their Second Amended Petition, petitioners also claim that PD 1869 is contrary to the declared national policy
of the "new restored democracy" and the people's will as expressed in the 1987 Constitution. The decree is
said to have a "gambling objective" and therefore is contrary to Sections 11, 12 and 13 of Article II, Sec. 1 of
Article VIII and Section 3 (2) of Article XIV, of the present Constitution (p. 3, Second Amended Petition; p.
21, Rollo).
The procedural issue is whether petitioners, as taxpayers and practicing lawyers (petitioner Basco being also
the Chairman of the Committee on Laws of the City Council of Manila), can question and seek the annulment of
PD 1869 on the alleged grounds mentioned above.
The Philippine Amusements and Gaming Corporation (PAGCOR) was created by virtue of P.D. 1067-A dated
January 1, 1977 and was granted a franchise under P.D. 1067-B also dated January 1, 1977 "to establish,

operate and maintain gambling casinos on land or water within the territorial jurisdiction of the Philippines." Its
operation was originally conducted in the well known floating casino "Philippine Tourist." The operation was
considered a success for it proved to be a potential source of revenue to fund infrastructure and socioeconomic projects, thus, P.D. 1399 was passed on June 2, 1978 for PAGCOR to fully attain this objective.
Subsequently, on July 11, 1983, PAGCOR was created under P.D. 1869 to enable the Government to regulate
and centralize all games of chance authorized by existing franchise or permitted by law, under the following
declared policy
Sec. 1. Declaration of Policy. It is hereby declared to be the policy of the State to centralize
and integrate all games of chance not heretofore authorized by existing franchises or
permitted by law in order to attain the following objectives:
(a) To centralize and integrate the right and authority to operate and conduct games of chance
into one corporate entity to be controlled, administered and supervised by the Government.
(b) To establish and operate clubs and casinos, for amusement and recreation, including
sports gaming pools, (basketball, football, lotteries, etc.) and such other forms of amusement
and recreation including games of chance, which may be allowed by law within the territorial
jurisdiction of the Philippines and which will: (1) generate sources of additional revenue to
fund infrastructure and socio-civic projects, such as flood control programs, beautification,
sewerage and sewage projects, Tulungan ng Bayan Centers, Nutritional Programs,
Population Control and such other essential public services; (2) create recreation and
integrated facilities which will expand and improve the country's existing tourist attractions;
and (3) minimize, if not totally eradicate, all the evils, malpractices and corruptions that are
normally prevalent on the conduct and operation of gambling clubs and casinos without direct
government involvement. (Section 1, P.D. 1869)
To attain these objectives PAGCOR is given territorial jurisdiction all over the Philippines. Under its Charter's
repealing clause, all laws, decrees, executive orders, rules and regulations, inconsistent therewith, are
accordingly repealed, amended or modified.
It is reported that PAGCOR is the third largest source of government revenue, next to the Bureau of Internal
Revenue and the Bureau of Customs. In 1989 alone, PAGCOR earned P3.43 Billion, and directly remitted to
the National Government a total of P2.5 Billion in form of franchise tax, government's income share, the
President's Social Fund and Host Cities' share. In addition, PAGCOR sponsored other socio-cultural and
charitable projects on its own or in cooperation with various governmental agencies, and other private
associations and organizations. In its 3 1/2 years of operation under the present administration, PAGCOR
remitted to the government a total of P6.2 Billion. As of December 31, 1989, PAGCOR was employing 4,494
employees in its nine (9) casinos nationwide, directly supporting the livelihood of Four Thousand Four Hundred
Ninety-Four (4,494) families.
But the petitioners, are questioning the validity of P.D. No. 1869. They allege that the same is "null and void" for
being "contrary to morals, public policy and public order," monopolistic and tends toward "crony economy", and
is violative of the equal protection clause and local autonomy as well as for running counter to the state policies
enunciated in Sections 11 (Personal Dignity and Human Rights), 12 (Family) and 13 (Role of Youth) of Article II,
Section 1 (Social Justice) of Article XIII and Section 2 (Educational Values) of Article XIV of the 1987
Constitution.
This challenge to P.D. No. 1869 deserves a searching and thorough scrutiny and the most deliberate
consideration by the Court, involving as it does the exercise of what has been described as "the highest and
most delicate function which belongs to the judicial department of the government." (State v. Manuel, 20 N.C.
144; Lozano v. Martinez, 146 SCRA 323).

As We enter upon the task of passing on the validity of an act of a co-equal and coordinate branch of the
government We need not be reminded of the time-honored principle, deeply ingrained in our jurisprudence, that
a statute is presumed to be valid. Every presumption must be indulged in favor of its constitutionality. This is
not to say that We approach Our task with diffidence or timidity. Where it is clear that the legislature or the
executive for that matter, has over-stepped the limits of its authority under the constitution, We should not
hesitate to wield the axe and let it fall heavily, as fall it must, on the offending statute (Lozano v.
Martinez, supra).
In Victoriano v. Elizalde Rope Workers' Union, et al, 59 SCRA 54, the Court thru Mr. Justice Zaldivar
underscored the
. . . thoroughly established principle which must be followed in all cases where questions of
constitutionality as obtain in the instant cases are involved. All presumptions are indulged in
favor of constitutionality; one who attacks a statute alleging unconstitutionality must prove its
invalidity beyond a reasonable doubt; that a law may work hardship does not render it
unconstitutional; that if any reasonable basis may be conceived which supports the statute, it
will be upheld and the challenger must negate all possible basis; that the courts are not
concerned with the wisdom, justice, policy or expediency of a statute and that a liberal
interpretation of the constitution in favor of the constitutionality of legislation should be
adopted. (Danner v. Hass, 194 N.W. 2nd 534, 539; Spurbeck v. Statton, 106 N.W. 2nd 660,
663; 59 SCRA 66; see also e.g. Salas v. Jarencio, 46 SCRA 734, 739 [1970]; Peralta v.
Commission on Elections, 82 SCRA 30, 55 [1978]; and Heirs of Ordona v. Reyes, 125 SCRA
220, 241-242 [1983] cited in Citizens Alliance for Consumer Protection v. Energy Regulatory
Board, 162 SCRA 521, 540)
Of course, there is first, the procedural issue. The respondents are questioning the legal personality of
petitioners to file the instant petition.
Considering however the importance to the public of the case at bar, and in keeping with the Court's duty,
under the 1987 Constitution, to determine whether or not the other branches of government have kept
themselves within the limits of the Constitution and the laws and that they have not abused the discretion given
to them, the Court has brushed aside technicalities of procedure and has taken cognizance of this petition.
(Kapatiran ng mga Naglilingkod sa Pamahalaan ng Pilipinas Inc. v. Tan, 163 SCRA 371)
With particular regard to the requirement of proper party as applied in the cases before us, We
hold that the same is satisfied by the petitioners and intervenors because each of them has
sustained or is in danger of sustaining an immediate injury as a result of the acts or measures
complained of. And even if, strictly speaking they are not covered by the definition, it is still
within the wide discretion of the Court to waive the requirement and so remove the
impediment to its addressing and resolving the serious constitutional questions raised.
In the first Emergency Powers Cases, ordinary citizens and taxpayers were allowed to
question the constitutionality of several executive orders issued by President Quirino although
they were involving only an indirect and general interest shared in common with the public.
The Court dismissed the objection that they were not proper parties and ruled that "the
transcendental importance to the public of these cases demands that they be settled promptly
and definitely, brushing aside, if we must technicalities of procedure." We have since then
applied the exception in many other cases. (Association of Small Landowners in the
Philippines, Inc. v. Sec. of Agrarian Reform, 175 SCRA 343).
Having disposed of the procedural issue, We will now discuss the substantive issues raised.

Gambling in all its forms, unless allowed by law, is generally prohibited. But the prohibition of gambling does
not mean that the Government cannot regulate it in the exercise of its police power.
The concept of police power is well-established in this jurisdiction. It has been defined as the "state authority to
enact legislation that may interfere with personal liberty or property in order to promote the general welfare."
(Edu v. Ericta, 35 SCRA 481, 487) As defined, it consists of (1) an imposition or restraint upon liberty or
property, (2) in order to foster the common good. It is not capable of an exact definition but has been,
purposely, veiled in general terms to underscore its all-comprehensive embrace. (Philippine Association of
Service Exporters, Inc. v. Drilon, 163 SCRA 386).
Its scope, ever-expanding to meet the exigencies of the times, even to anticipate the future where it could be
done, provides enough room for an efficient and flexible response to conditions and circumstances thus
assuming the greatest benefits. (Edu v. Ericta, supra)
It finds no specific Constitutional grant for the plain reason that it does not owe its origin to the charter. Along
with the taxing power and eminent domain, it is inborn in the very fact of statehood and sovereignty. It is a
fundamental attribute of government that has enabled it to perform the most vital functions of governance.
Marshall, to whom the expression has been credited, refers to it succinctly as the plenary power of the state "to
govern its citizens". (Tribe, American Constitutional Law, 323, 1978). The police power of the State is a power
co-extensive with self-protection and is most aptly termed the "law of overwhelming necessity." (Rubi v.
Provincial Board of Mindoro, 39 Phil. 660, 708) It is "the most essential, insistent, and illimitable of powers."
(Smith Bell & Co. v. National, 40 Phil. 136) It is a dynamic force that enables the state to meet the agencies of
the winds of change.
What was the reason behind the enactment of P.D. 1869?
P.D. 1869 was enacted pursuant to the policy of the government to "regulate and centralize thru an appropriate
institution all games of chance authorized by existing franchise or permitted by law" (1st whereas clause, PD
1869). As was subsequently proved, regulating and centralizing gambling operations in one corporate entity
the PAGCOR, was beneficial not just to the Government but to society in general. It is a reliable source of much
needed revenue for the cash strapped Government. It provided funds for social impact projects and subjected
gambling to "close scrutiny, regulation, supervision and control of the Government" (4th Whereas Clause, PD
1869). With the creation of PAGCOR and the direct intervention of the Government, the evil practices and
corruptions that go with gambling will be minimized if not totally eradicated. Public welfare, then, lies at the
bottom of the enactment of PD 1896.
Petitioners contend that P.D. 1869 constitutes a waiver of the right of the City of Manila to impose taxes and
legal fees; that the exemption clause in P.D. 1869 is violative of the principle of local autonomy. They must be
referring to Section 13 par. (2) of P.D. 1869 which exempts PAGCOR, as the franchise holder from paying any
"tax of any kind or form, income or otherwise, as well as fees, charges or levies of whatever nature, whether
National or Local."
(2) Income and other taxes. a) Franchise Holder: No tax of any kind or form, income or
otherwise as well as fees, charges or levies of whatever nature, whether National or Local,
shall be assessed and collected under this franchise from the Corporation; nor shall any form
or tax or charge attach in any way to the earnings of the Corporation, except a franchise tax of
five (5%) percent of the gross revenues or earnings derived by the Corporation from its
operations under this franchise. Such tax shall be due and payable quarterly to the National
Government and shall be in lieu of all kinds of taxes, levies, fees or assessments of any kind,
nature or description, levied, established or collected by any municipal, provincial or national
government authority (Section 13 [2]).
Their contention stated hereinabove is without merit for the following reasons:

(a) The City of Manila, being a mere Municipal corporation has no inherent right to impose taxes (Icard v. City
of Baguio, 83 Phil. 870; City of Iloilo v. Villanueva, 105 Phil. 337; Santos v. Municipality of Caloocan, 7 SCRA
643). Thus, "the Charter or statute must plainly show an intent to confer that power or the municipality cannot
assume it" (Medina v. City of Baguio, 12 SCRA 62). Its "power to tax" therefore must always yield to a
legislative act which is superior having been passed upon by the state itself which has the "inherent power to
tax" (Bernas, the Revised [1973] Philippine Constitution, Vol. 1, 1983 ed. p. 445).
(b) The Charter of the City of Manila is subject to control by Congress. It should be stressed that "municipal
corporations are mere creatures of Congress" (Unson v. Lacson, G.R. No. 7909, January 18, 1957) which has
the power to "create and abolish municipal corporations" due to its "general legislative powers" (Asuncion v.
Yriantes, 28 Phil. 67; Merdanillo v. Orandia, 5 SCRA 541). Congress, therefore, has the power of control over
Local governments (Hebron v. Reyes, G.R. No. 9124, July 2, 1950). And if Congress can grant the City of
Manila the power to tax certain matters, it can also provide for exemptions or even take back the power.
(c) The City of Manila's power to impose license fees on gambling, has long been revoked. As early as 1975,
the power of local governments to regulate gambling thru the grant of "franchise, licenses or permits" was
withdrawn by P.D. No. 771 and was vested exclusively on the National Government, thus:
Sec. 1. Any provision of law to the contrary notwithstanding, the authority of chartered cities
and other local governments to issue license, permit or other form of franchise to operate,
maintain and establish horse and dog race tracks, jai-alai and other forms of gambling is
hereby revoked.
Sec. 2. Hereafter, all permits or franchises to operate, maintain and establish, horse and dog
race tracks, jai-alai and other forms of gambling shall be issued by the national government
upon proper application and verification of the qualification of the applicant . . .
Therefore, only the National Government has the power to issue "licenses or permits" for the operation of
gambling. Necessarily, the power to demand or collect license fees which is a consequence of the issuance of
"licenses or permits" is no longer vested in the City of Manila.
(d) Local governments have no power to tax instrumentalities of the National Government. PAGCOR is a
government owned or controlled corporation with an original charter, PD 1869. All of its shares of stocks are
owned by the National Government. In addition to its corporate powers (Sec. 3, Title II, PD 1869) it also
exercises regulatory powers thus:
Sec. 9. Regulatory Power. The Corporation shall maintain a Registry of the affiliated
entities, and shall exercise all the powers, authority and the responsibilities vested in the
Securities and Exchange Commission over such affiliating entities mentioned under the
preceding section, including, but not limited to amendments of Articles of Incorporation and
By-Laws, changes in corporate term, structure, capitalization and other matters concerning
the operation of the affiliated entities, the provisions of the Corporation Code of the Philippines
to the contrary notwithstanding, except only with respect to original incorporation.
PAGCOR has a dual role, to operate and to regulate gambling casinos. The latter role is governmental, which
places it in the category of an agency or instrumentality of the Government. Being an instrumentality of the
Government, PAGCOR should be and actually is exempt from local taxes. Otherwise, its operation might be
burdened, impeded or subjected to control by a mere Local government.
The states have no power by taxation or otherwise, to retard, impede, burden or in any
manner control the operation of constitutional laws enacted by Congress to carry into
execution the powers vested in the federal government. (MC Culloch v. Marland, 4 Wheat
316, 4 L Ed. 579)

This doctrine emanates from the "supremacy" of the National Government over local governments.
Justice Holmes, speaking for the Supreme Court, made reference to the entire absence of
power on the part of the States to touch, in that way (taxation) at least, the instrumentalities of
the United States (Johnson v. Maryland, 254 US 51) and it can be agreed that no state or
political subdivision can regulate a federal instrumentality in such a way as to prevent it from
consummating its federal responsibilities, or even to seriously burden it in the accomplishment
of them. (Antieau, Modern Constitutional Law, Vol. 2, p. 140, emphasis supplied)
Otherwise, mere creatures of the State can defeat National policies thru extermination of what local authorities
may perceive to be undesirable activities or enterprise using the power to tax as "a tool for regulation" (U.S. v.
Sanchez, 340 US 42).
The power to tax which was called by Justice Marshall as the "power to destroy" (Mc Culloch v.
Maryland, supra) cannot be allowed to defeat an instrumentality or creation of the very entity which has the
inherent power to wield it.
(e) Petitioners also argue that the Local Autonomy Clause of the Constitution will be violated by P.D. 1869. This
is a pointless argument. Article X of the 1987 Constitution (on Local Autonomy) provides:
Sec. 5. Each local government unit shall have the power to create its own source of revenue
and to levy taxes, fees, and other charges subject to such guidelines and limitation as the
congress may provide, consistent with the basic policy on local autonomy. Such taxes, fees
and charges shall accrue exclusively to the local government. (emphasis supplied)
The power of local government to "impose taxes and fees" is always subject to "limitations" which Congress
may provide by law. Since PD 1869 remains an "operative" law until "amended, repealed or revoked" (Sec. 3,
Art. XVIII, 1987 Constitution), its "exemption clause" remains as an exception to the exercise of the power of
local governments to impose taxes and fees. It cannot therefore be violative but rather is consistent with the
principle of local autonomy.
Besides, the principle of local autonomy under the 1987 Constitution simply means "decentralization" (III
Records of the 1987 Constitutional Commission, pp. 435-436, as cited in Bernas, The Constitution of the
Republic of the Philippines, Vol. II, First Ed., 1988, p. 374). It does not make local governments sovereign
within the state or an "imperium in imperio."
Local Government has been described as a political subdivision of a nation or state which is
constituted by law and has substantial control of local affairs. In a unitary system of
government, such as the government under the Philippine Constitution, local governments
can only be an intra sovereign subdivision of one sovereign nation, it cannot be
an imperium in imperio. Local government in such a system can only mean a measure of
decentralization of the function of government. (emphasis supplied)
As to what state powers should be "decentralized" and what may be delegated to local government units
remains a matter of policy, which concerns wisdom. It is therefore a political question. (Citizens Alliance for
Consumer Protection v. Energy Regulatory Board, 162 SCRA 539).
What is settled is that the matter of regulating, taxing or otherwise dealing with gambling is a State concern and
hence, it is the sole prerogative of the State to retain it or delegate it to local governments.
As gambling is usually an offense against the State, legislative grant or express charter power
is generally necessary to empower the local corporation to deal with the subject. . . . In the

absence of express grant of power to enact, ordinance provisions on this subject which are
inconsistent with the state laws are void. (Ligan v. Gadsden, Ala App. 107 So. 733 Ex-Parte
Solomon, 9, Cals. 440, 27 PAC 757 following in re Ah You, 88 Cal. 99, 25 PAC 974, 22 Am St.
Rep. 280, 11 LRA 480, as cited in Mc Quinllan Vol. 3 Ibid, p. 548, emphasis supplied)
Petitioners next contend that P.D. 1869 violates the equal protection clause of the Constitution, because "it
legalized PAGCOR conducted gambling, while most gambling are outlawed together with prostitution, drug
trafficking and other vices" (p. 82, Rollo).
We, likewise, find no valid ground to sustain this contention. The petitioners' posture ignores the well-accepted
meaning of the clause "equal protection of the laws." The clause does not preclude classification of individuals
who may be accorded different treatment under the law as long as the classification is not unreasonable or
arbitrary (Itchong v. Hernandez, 101 Phil. 1155). A law does not have to operate in equal force on all persons or
things to be conformable to Article III, Section 1 of the Constitution (DECS v. San Diego, G.R. No. 89572,
December 21, 1989).
The "equal protection clause" does not prohibit the Legislature from establishing classes of individuals or
objects upon which different rules shall operate (Laurel v. Misa, 43 O.G. 2847). The Constitution does not
require situations which are different in fact or opinion to be treated in law as though they were the same
(Gomez v. Palomar, 25 SCRA 827).
Just how P.D. 1869 in legalizing gambling conducted by PAGCOR is violative of the equal protection is not
clearly explained in the petition. The mere fact that some gambling activities like cockfighting (P.D 449) horse
racing (R.A. 306 as amended by RA 983), sweepstakes, lotteries and races (RA 1169 as amended by B.P. 42)
are legalized under certain conditions, while others are prohibited, does not render the applicable laws, P.D.
1869 for one, unconstitutional.
If the law presumably hits the evil where it is most felt, it is not to be overthrown because there
are other instances to which it might have been applied. (Gomez v. Palomar, 25 SCRA 827)
The equal protection clause of the 14th Amendment does not mean that all occupations called
by the same name must be treated the same way; the state may do what it can to prevent
which is deemed as evil and stop short of those cases in which harm to the few concerned is
not less than the harm to the public that would insure if the rule laid down were made
mathematically exact. (Dominican Hotel v. Arizona, 249 US 2651).
Anent petitioners' claim that PD 1869 is contrary to the "avowed trend of the Cory Government away from
monopolies and crony economy and toward free enterprise and privatization" suffice it to state that this is not a
ground for this Court to nullify P.D. 1869. If, indeed, PD 1869 runs counter to the government's policies then it is
for the Executive Department to recommend to Congress its repeal or amendment.
The judiciary does not settle policy issues. The Court can only declare what the law is and not
what the law should be. Under our system of government, policy issues are within the domain
of the political branches of government and of the people themselves as the repository of all
state power. (Valmonte v. Belmonte, Jr., 170 SCRA 256).
On the issue of "monopoly," however, the Constitution provides that:
Sec. 19. The State shall regulate or prohibit monopolies when public interest so requires. No
combinations in restraint of trade or unfair competition shall be allowed. (Art. XII, National
Economy and Patrimony)

It should be noted that, as the provision is worded, monopolies are not necessarily prohibited by the
Constitution. The state must still decide whether public interest demands that monopolies be regulated or
prohibited. Again, this is a matter of policy for the Legislature to decide.
On petitioners' allegation that P.D. 1869 violates Sections 11 (Personality Dignity) 12 (Family) and 13 (Role of
Youth) of Article II; Section 13 (Social Justice) of Article XIII and Section 2 (Educational Values) of Article XIV of
the 1987 Constitution, suffice it to state also that these are merely statements of principles and, policies. As
such, they are basically not self-executing, meaning a law should be passed by Congress to clearly define and
effectuate such principles.
In general, therefore, the 1935 provisions were not intended to be self-executing principles
ready for enforcement through the courts. They were rather directives addressed to the
executive and the legislature. If the executive and the legislature failed to heed the directives
of the articles the available remedy was not judicial or political. The electorate could express
their displeasure with the failure of the executive and the legislature through the language of
the ballot. (Bernas, Vol. II, p. 2)
Every law has in its favor the presumption of constitutionality (Yu Cong Eng v. Trinidad, 47 Phil. 387; Salas v.
Jarencio, 48 SCRA 734; Peralta v. Comelec, 82 SCRA 30; Abbas v. Comelec, 179 SCRA 287). Therefore, for
PD 1869 to be nullified, it must be shown that there is a clear and unequivocal breach of the Constitution, not
merely a doubtful and equivocal one. In other words, the grounds for nullity must be clear and beyond
reasonable doubt. (Peralta v. Comelec, supra) Those who petition this Court to declare a law, or parts thereof,
unconstitutional must clearly establish the basis for such a declaration. Otherwise, their petition must fail.
Based on the grounds raised by petitioners to challenge the constitutionality of P.D. 1869, the Court finds that
petitioners have failed to overcome the presumption. The dismissal of this petition is therefore, inevitable. But
as to whether P.D. 1869 remains a wise legislation considering the issues of "morality, monopoly, trend to free
enterprise, privatization as well as the state principles on social justice, role of youth and educational values"
being raised, is up for Congress to determine.
As this Court held in Citizens' Alliance for Consumer Protection v. Energy Regulatory Board, 162 SCRA 521
Presidential Decree No. 1956, as amended by Executive Order No. 137 has, in any case, in
its favor the presumption of validity and constitutionality which petitioners Valmonte and the
KMU have not overturned. Petitioners have not undertaken to identify the provisions in the
Constitution which they claim to have been violated by that statute. This Court, however, is not
compelled to speculate and to imagine how the assailed legislation may possibly offend some
provision of the Constitution. The Court notes, further, in this respect that petitioners have in
the main put in question the wisdom, justice and expediency of the establishment of the
OPSF, issues which are not properly addressed to this Court and which this Court may not
constitutionally pass upon. Those issues should be addressed rather to the political
departments of government: the President and the Congress.
Parenthetically, We wish to state that gambling is generally immoral, and this is precisely so when the gambling
resorted to is excessive. This excessiveness necessarily depends not only on the financial resources of the
gambler and his family but also on his mental, social, and spiritual outlook on life. However, the mere fact that
some persons may have lost their material fortunes, mental control, physical health, or even their lives does not
necessarily mean that the same are directly attributable to gambling. Gambling may have been the
antecedent,but certainly not necessarily the cause. For the same consequences could have been preceded by
an overdose of food, drink, exercise, work, and even sex.
WHEREFORE, the petition is DISMISSED for lack of merit.
SO ORDERED.

Fernan, C.J., Narvasa, Gutierrez, Jr., Cruz, Feliciano, Gancayco, Bidin, Sarmiento, Grio-Aquino, Medialdea,
Regalado and Davide, Jr., JJ., concur.

Separate Opinions

PADILLA, J., concurring:

I concur in the result of the learned decision penned by my brother Mr. Justice Paras. This means that I agree
with the decision insofar as it holds that the prohibition, control, and regulation of the entire activity known as
gambling properly pertain to "state policy." It is, therefore, the political departments of government, namely, the
legislative and the executive that should decide on what government should do in the entire area of gambling,
and assume full responsibility to the people for such policy.
The courts, as the decision states, cannot inquire into the wisdom, morality or expediency of policies adopted
by the political departments of government in areas which fall within their authority, except only when such
policies pose a clear and present danger to the life, liberty or property of the individual. This case does not
involve such a factual situation.
However, I hasten to make of record that I do not subscribe to gambling in any form. It demeans the human
personality, destroys self-confidence and eviscerates one's self-respect, which in the long run will corrode
whatever is left of the Filipino moral character. Gambling has wrecked and will continue to wreck families and
homes; it is an antithesis to individual reliance and reliability as well as personal industry which are the
touchstones of real economic progress and national development.
Gambling is reprehensible whether maintained by government or privatized. The revenues realized by the
government out of "legalized" gambling will, in the long run, be more than offset and negated by the irreparable
damage to the people's moral values.
Also, the moral standing of the government in its repeated avowals against "illegal gambling" is fatally flawed
and becomes untenable when it itself engages in the very activity it seeks to eradicate.
One can go through the Court's decision today and mentally replace the activity referred to therein
as gambling, which is legal only because it is authorized by law and run by the government, with the activity
known asprostitution. Would prostitution be any less reprehensible were it to be authorized by law, franchised,
and "regulated" by the government, in return for the substantial revenues it would yield the government to carry
out its laudable projects, such as infrastructure and social amelioration? The question, I believe, answers itself.
I submit that the sooner the legislative department outlaws all forms of gambling, as a fundamental state policy,
and the sooner the executive implements such policy, the better it will be for the nation.
Melencio-Herrera, J., concur.

Separate Opinions

PADILLA, J., concurring:

I concur in the result of the learned decision penned by my brother Mr. Justice Paras. This means that I agree
with the decision insofar as it holds that the prohibition, control, and regulation of the entire activity known as
gambling properly pertain to "state policy." It is, therefore, the political departments of government, namely, the
legislative and the executive that should decide on what government should do in the entire area of gambling,
and assume full responsibility to the people for such policy.
The courts, as the decision states, cannot inquire into the wisdom, morality or expediency of policies adopted
by the political departments of government in areas which fall within their authority, except only when such
policies pose a clear and present danger to the life, liberty or property of the individual. This case does not
involve such a factual situation.
However, I hasten to make of record that I do not subscribe to gambling in any form. It demeans the human
personality, destroys self-confidence and eviscerates one's self-respect, which in the long run will corrode
whatever is left of the Filipino moral character. Gambling has wrecked and will continue to wreck families and
homes; it is an antithesis to individual reliance and reliability as well as personal industry which are the
touchstones of real economic progress and national development.
Gambling is reprehensible whether maintained by government or privatized. The revenues realized by the
government out of "legalized" gambling will, in the long run, be more than offset and negated by the irreparable
damage to the people's moral values.
Also, the moral standing of the government in its repeated avowals against "illegal gambling" is fatally flawed
and becomes untenable when it itself engages in the very activity it seeks to eradicate.
One can go through the Court's decision today and mentally replace the activity referred to therein
as gambling, which is legal only because it is authorized by law and run by the government, with the activity
known asprostitution. Would prostitution be any less reprehensible were it to be authorized by law, franchised,
and "regulated" by the government, in return for the substantial revenues it would yield the government to carry
out its laudable projects, such as infrastructure and social amelioration? The question, I believe, answers itself.
I submit that the sooner the legislative department outlaws all forms of gambling, as a fundamental state policy,
and the sooner the executive implements such policy, the better it will be for the nation.
Melencio-Herrera, J., concurs.

Republic
SUPREME
Manila
EN BANC
G.R. No. 73155 July 11, 1986

of

the

Philippines
COURT

PATRICIO TAN, FELIX FERRER, JUAN M. HAGAD, SERGIO HILADO, VIRGILIO GASTON, CONCHITA
MINAYA, TERESITA ESTACIO, DESIDERIO DEFERIA, ROMEO GAMBOA, ALBERTO LACSON, FE
HOFILENA,
EMILY
JISON,
NIEVES
LOPEZ
AND
CECILIA
MAGSAYSAY, petitioners,
vs.
THE COMMISSION ON ELECTIONS and THE PROVINCIAL TREASURER OF NEGROS
OCCIDENTAL,respondents.
Gamboa & Hofilea Law Office for petitioners.

ALAMPAY, J.:
Prompted by the enactment of Batas Pambansa Blg. 885-An Act Creating a New Province in the Island of
Negros to be known as the Province of Negros del Norte, which took effect on December 3, 1985, Petitioners
herein, who are residents of the Province of Negros Occidental, in the various cities and municipalities therein,
on December 23, 1985, filed with this Court a case for Prohibition for the purpose of stopping respondents
Commission on Elections from conducting the plebiscite which, pursuant to and in implementation of the
aforesaid law, was scheduled for January 3, 1986. Said law provides:
SECTION 1. The Cities of Silay, Cadiz, and San Carlos and the municipalities of Calatrava,
Taboso, Escalante, Sagay, Manapla, Victorias, E.R. Magalona; and Salvador Benedicto, all in
the northern portion of the Island of Negros, are hereby separated from the province to be
known as the Province of Negros del Norte.
SEC. 2. The boundaries of the new province shall be the southern limits of the City of Silay,
the Municipality of Salvador Benedicto and the City of San Carlos on the south and the
territorial limits of the northern portion to the Island of Negros on the west, north and east,
comprising a territory of 4,019.95 square kilometers more or less.
SEC. 3. The seat of government of the new province shall be the City of Cadiz.
SEC. 4. A plebiscite shall be conducted in the proposed new province which are the areas
affected within a period of one hundred and twenty days from the approval of this Act. After
the ratification of the creation of the Province of Negros del Norte by a majority of the votes
cast in such plebiscite, the President of the Philippines shall appoint the first officials of the
province.
SEC. 5. The Commission on Elections shall conduct and supervise the plebiscite herein
provided, the expenses for which shall be charged to local funds.
SEC. 6. This Act shall takeeffect upon its approval.(Rollo, pp. 23-24)
Petitioners contend that Batas Pambansa Blg. 885 is unconstitutional and it is not in complete
accord with the Local Government Code as in Article XI, Section 3 of our Constitution, it is
expressly mandated that
See. 3. No province, city, municipality or barrio may be created, divided, merged, abolished, or
its boundary substantially altered, except in accordance with the criteria established in the
local government code, and subject to the approval by a majority of the votes in a plebiscite in
the unit or units affected.

Section 197 of the Local Government Code enumerates the conditions which must exist to provide the legal
basis for the creation of a provincial unit and these requisites are:
SEC. 197. Requisites for Creation. A province may be created if it has a territory of at least
three thousand five hundred square kilometers, a population of at least five hundred thousand
persons, an average estimated annual income, as certified by the Ministry of Finance, of not
less than ten million pesos for the last three consecutive years, and its creation shall not
reduce the population and income of the mother province or provinces at the time of said
creation to less than the minimum requirements under this section. The territory need not be
contiguous if it comprises two or more islands.
The average estimated annual income shall include the income alloted for both the general
and infrastructural funds, exclusive of trust funds, transfers and nonrecurring income. (Rollo,
p. 6)
Due to the constraints brought about by the supervening Christmas holidays during which the Court was in
recess and unable to timely consider the petition, a supplemental pleading was filed by petitioners on January
4, 1986, averring therein that the plebiscite sought to be restrained by them was held on January 3, 1986 as
scheduled but that there are still serious issues raised in the instant case affecting the legality, constitutionality
and validity of such exercise which should properly be passed upon and resolved by this Court.
The plebiscite was confined only to the inhabitants of the territory of Negros del N rte, namely: the Cities of
Silay, Cadiz, and San Carlos, and the municipalities of Calatrava, Taboso, Escalante, Sagay, Manapla,
Victorias, E.B. Magalona and Don Salvador Benedicto. Because of the exclusions of the voters from the rest of
the province of Negros Occidental, petitioners found need to change the prayer of their petition "to the end that
the constitutional issues which they have raised in the action will be ventilated and given final resolution.'"At the
same time, they asked that the effects of the plebiscite which they sought to stop be suspended until the
Supreme Court shall have rendered its decision on the very fundamental and far-reaching questions that
petitioners have brought out.
Acknowledging in their supplemental petition that supervening events rendered moot the prayer in their initial
petition that the plebiscite scheduled for January 3, 1986, be enjoined, petitioners plead, nevertheless, that... a writ of Prohibition be issued, directed to Respondent Commission on Elections to desist
from issuing official proclamation of the results of the plebiscite held on January 3, 1986.
Finding that the exclusion and non-participation of the voters of the Province of Negros
Occidental other than those living within the territory of the new province of Negros del Norte
to be not in accordance with the Constitution, that a writ of mandamus be issued, directed to
the respondent Commission on Elections, to schedule the holding of another plebiscite at
which all the qualified voters of the entire Province of Negros Occidental as now existing shall
participate, at the same time making pronouncement that the plebiscite held on January 3,
1986 has no legal effect, being a patent legal nullity;
And that a similar writ of Prohibition be issued, directed to the respondent Provincial
Treasurer, to desist from ordering the release of any local funds to answer for expenses
incurred in the holding of such plebiscite until ordered by the Court. (Rollo pp. 9-10).
Petitioners further prayed that the respondent COMELEC hold in abeyance the issuance of
any official proclamation of the results of the aforestated plebiscite.

During the pendency of this case, a motion that he be allowed to appear as amicus curiae in this case (dated
December 27, 1985 and filed with the Court on January 2, 1986) was submitted by former Senator Ambrosio
Padilla. Said motion was granted in Our resolution of January 2, 1986.
Acting on the petition, as well as on the supplemental petition for prohibition with preliminary injunction with
prayer for restraining order, the Court, on January 7, 1986 resolved, without giving due course to the same, to
require respondents to comment, not to file a motion to dismiss. Complying with said resolution, public
respondents, represented by the Office of the Solicitor General, on January 14, 1986, filed their Comment,
arguing therein that the challenged statute.-Batas Pambansa 885, should be accorded the presumption of
legality. They submit that the said law is not void on its face and that the petition does not show a clear,
categorical and undeniable demonstration of the supposed infringement of the Constitution. Respondents state
that the powers of the Batasang-Pambansa to enact the assailed law is beyond question. They claim that Batas
Pambansa Big. 885 does not infringe the Constitution because the requisites of the Local Government Code
have been complied with. Furthermore, they submit that this case has now become moot and academic with
the proclamation of the new Province of Negros del Norte.
Respondents argue that the remaining cities and municipalities of the Province of Negros Occidental not
included in the area of the new Province of Negros del Norte, de not fall within the meaning and scope of the
term "unit or units affected", as referred to in Section 3 of Art. XI of our Constitution. On this reasoning,
respondents maintain that Batas Pambansa Blg. 885 does not violate the Constitution, invoking and citing the
case of Governor Zosimo Paredes versus the Honorable Executive Secretary to the President, et al. (G.R. No.
55628, March 2, 1984 (128 SCRA 61), particularly the pronouncements therein, hereunder quoted:
1. Admittedly,this is one of those cases where the discretion of the Court is allowed
considerable leeway. There is indeed an element of ambiguity in the use of the expression
'unit or units affected'. It is plausible to assert as petitioners do that when certain Barangays
are separated from a parent municipality to form a new one, all the voters therein are affected.
It is much more persuasive, however, to contend as respondents do that the acceptable
construction is for those voters, who are not from the barangays to be separated, should be
excluded in the plebiscite.
2. For one thing, it is in accordance with the settled doctrine that between two possible
constructions, one avoiding a finding of unconstitutionality and the other yielding such a result,
the former is to be preferred. That which will save, not that which will destroy, commends itself
for acceptance. After all, the basic presumption all these years is one of validity. ...
3. ... Adherence to such philosophy compels the conclusion that when there are indications
that the inhabitants of several barangays are inclined to separate from a parent municipality
they should be allowed to do so. What is more logical than to ascertain their will in a plebiscite
called for that purpose. It is they, and they alone, who shall constitute the new unit. New
responsibilities will be assumed. New burdens will be imposed. A new municipal corporation
will come into existence. Its birth will be a matter of choice-their choice. They should be left
alone then to decide for themselves. To allow other voters to participate will not yield a true
expression of their will. They may even frustrate it, That certainly will be so if they vote against
it for selfish reasons, and they constitute the majority. That is not to abide by the fundamental
principle of the Constitution to promote local autonomy, the preference being for smaller units.
To rule as this Tribunal does is to follow an accepted principle of constitutional construction,
that in ascertaining the meaning of a particular provision that may give rise to doubts, the
intent of the framers and of the people may be gleaned from provisions in pari materia.
Respondents submit that said ruling in the aforecited case applies equally with force in the case at bar.
Respondents also maintain that the requisites under the Local Government Code (P.D. 337) for the creation of
the new province of Negros del Norte have all been duly complied with, Respondents discredit petitioners'

allegations that the requisite area of 3,500 square kilometers as so prescribed in the Local Government Code
for a new province to be created has not been satisfied. Petitioners insist that the area which would comprise
the new province of Negros del Norte, would only be about 2,856.56 square kilometers and which evidently
would be lesser than the minimum area prescribed by the governing statute. Respondents, in this regard, point
out and stress that Section 2 of Batas Pambansa Blg. 885 creating said new province plainly declares that the
territorial boundaries of Negros del Norte comprise an area of 4,019.95 square kilometers, more or less.
As a final argument, respondents insist that instant petition has been rendered moot and academic considering
that a plebiscite has been already conducted on January 3, 1986; that as a result thereof, the corresponding
certificate of canvass indicated that out of 195,134 total votes cast in said plebiscite, 164,734 were in favor of
the creation of Negros del Norte and 30,400 were against it; and because "the affirmative votes cast
represented a majority of the total votes cast in said plebiscite, the Chairman of the Board of Canvassers
proclaimed the new province which shall be known as "Negros del Norte". Thus, respondents stress the fact
that following the proclamation of Negros del Norte province, the appointments of the officials of said province
created were announced. On these considerations, respondents urge that this case should be dismissed for
having been rendered moot and academic as the creation of the new province is now a "fait accompli."
In resolving this case, it will be useful to note and emphasize the facts which appear to be agreed to by the
parties herein or stand unchallenged.
Firstly, there is no disagreement that the Provincial Treasurer of the Province of Negros Occidental has not
disbursed, nor was required to disburse any public funds in connection with the plebiscite held on January 3,
1986 as so disclosed in the Comment to the Petition filed by the respondent Provincial Treasurer of Negros
Occidental dated January 20, 1986 (Rollo, pp. 36-37). Thus, the prayer of the petitioners that said Provincial
Treasurer be directed by this Court to desist from ordering the release of any public funds on account of such
plebiscite should not longer deserve further consideration.
Secondly, in Parliamentary Bill No. 3644 which led to the enactment of Batas Pambansa Blg. 885 and the
creation of the new Province of Negros del Norte, it expressly declared in Sec. 2 of the aforementioned
Parliamentary Bill, the following:
SEC. 2. The boundaries of the new province shall be the southern limits of the City of Silay,
the Municipality of Salvador Benedicto and the City of San Carlos on the South and the
natural boundaries of the northern portion of the Island of Negros on the West, North and
East, containing an area of 285,656 hectares more or less. (Emphasis supplied).
However, when said Parliamentary Bill No. 3644 was very quickly enacted into Batas Pambansa Blg. 885, the
boundaries of the new Province of Negros del Norte were defined therein and its boundaries then stated to be
as follows:
SECTION 1. The Cities of Silay, Cadiz, and San Carlos and the municipalities of Calatrava,
Toboso, Escalante, Sagay, Manapla, Victorias, E.R. Magalona; and Salvador Benedicto, all in
the northern portion of the Island of Negros, are hereby separated from the Province of
Negros Occidental and constituted into a new province to be known as the Province of Negros
del Norte.
SEC. 1. The boundaries of the new province shall be the southern limits of the City of Silay,
the Municipality of Salvador Benedicto and the City of San Carlos on the south and the
territorial limits of the northern portion of the Island of Negros on the West, North and East,
comprising a territory of 4,019.95 square kilometers more or less.
Equally accepted by the parties is the fact that under the certification issued by Provincial Treasurer Julian L.
Ramirez of the Province of Negros Occidental, dated July 16, 1985, it was therein certified as follows:

xxx xxx xxx

This is to certify that the following cities and municipalities of Negros Occidental have the land
area as indicated hereunder based on the Special Report No. 3, Philippines 1980, Population,
Land Area and Density: 1970, 1975 and 1980 by the National Census and Statistics Office,
Manila.
Land Area
(Sq. Km.)
1. Silay City ...................................................................214.8
2. E.B. Magalona............................................................113.3
3. Victorias.....................................................................133.9
4. Manapla......................................................................112.9
5. Cadiz City ..................................................................516.5
6. Sagay .........................................................................389.6
7. Escalante ....................................................................124.0
8. Toboso.......................................................................123.4
9. Calatrava.....................................................................504.5
10. San Carlos City...........................................................451.3
11. Don Salvador Benedicto.................................... (not available)
This certification is issued upon the request of Dr. Patricio Y. Tan for whatever purpose it may
serve him.
(SGD.) JULIAN L. RAMIREZ
Provincial Treasurer (Exh. "C" of Petition, Rollo, p. 90).
Although in the above certification it is stated that the land area of the relatively new municipality of Don
Salvador Benedicto is not available, it is an uncontradicted fact that the area comprising Don Salvador
municipality, one of the component units of the new province, was derived from the City of San Carlos and from
the Municipality of Calatrava, Negros Occidental, and added thereto was a portion of about one-fourth the land
area of the town of Murcia, Negros Occidental. It is significant to note the uncontroverted submission of
petitioners that the total land area of the entire municipality of Murcia, Negros Occidental is only 322.9 square
kilometers (Exh. "D", Rollo, p. 91). One-fourth of this total land area of Murcia that was added to the portions
derived from the land area of Calatrava, Negros Occidental and San Carlos City (Negros Occidental) would
constitute, therefore, only 80.2 square kilometers. This area of 80.2 square kilometers if then added to 2,685.2
square kilometers, representing the total land area of the Cities of Silay, San Carlos and Cadiz and the
Municipalities of E.R. Magalona, Victorias, Manapla, Sagay, Escalante, Taboso and Calatrava, will result in

approximately an area of only 2,765.4 square kilometers using as basis the Special Report, Philippines 1980,
Population, Land Area and Density: 1970, 1975 and 1980 of the National Census and Statistics Office, Manila
(see Exhibit "C", Rollo, p. 90).
No controversion has been made by respondent with respect to the allegations of petitioners that the original
provision in the draft legislation, Parliamentary Bill No. 3644, reads:
SEC. 4. A plebiscite shall be conducted in the areas affected within a period of one hundred
and twenty days from the approval of this Act. After the ratification of the creation of the
Province of Negros del Norte by a majority of the votes cast in such plebiscite, the President
shall appoint the first officials of the new province.
However, when Batas Pambansa Blg. 885 was enacted, there was a significant change in the above provision.
The statute, as modified, provides that the requisite plebiscite "shall be conducted in the proposed new
province which are the areas affected."
It is this legislative determination limiting the plebiscite exclusively to the cities and towns which would comprise
the new province that is assailed by the petitioners as violative of the provisions of our Constitution. Petitioners
submit that Sec. 3, ART XI thereof, contemplates a plebiscite that would be held in the unit or units affected by
the creation of the new province as a result of the consequent division of and substantial alteration of the
boundaries of the existing province. In this instance, the voters in the remaining areas of the province of Negros
Occidental should have been allowed to participate in the questioned plebiscite.
Considering that the legality of the plebiscite itself is challenged for non-compliance with constitutional
requisites, the fact that such plebiscite had been held and a new province proclaimed and its officials
appointed, the case before Us cannot truly be viewed as already moot and academic. Continuation of the
existence of this newly proclaimed province which petitioners strongly profess to have been illegally born,
deserves to be inquired into by this Tribunal so that, if indeed, illegality attaches to its creation, the commission
of that error should not provide the very excuse for perpetuation of such wrong. For this Court to yield to the
respondents' urging that, as there has been fait accompli then this Court should passively accept and accede
to the prevailing situation is an unacceptable suggestion. Dismissal of the instant petition, as respondents so
propose is a proposition fraught with mischief. Respondents' submission will create a dangerous precedent.
Should this Court decline now to perform its duty of interpreting and indicating what the law is and should be,
this might tempt again those who strut about in the corridors of power to recklessly and with ulterior motives,
create, merge, divide and/or alter the boundaries of political subdivisions, either brazenly or stealthily, confident
that this Court will abstain from entertaining future challenges to their acts if they manage to bring about a fait
accompli.
In the light of the facts and circumstances alluded to by petitioners as attending to the unusually rapid creation
of the instant province of Negros del Norte after a swiftly scheduled plebiscite, this Tribunal has the duty to
repudiate and discourage the commission of acts which run counter to the mandate of our fundamental law,
done by whatever branch of our government. This Court gives notice that it will not look with favor upon those
who may be hereafter inclined to ram through all sorts of legislative measures and then implement the same
with indecent haste, even if such acts would violate the Constitution and the prevailing statutes of our land. It is
illogical to ask that this Tribunal be blind and deaf to protests on the ground that what is already done is done.
To such untenable argument the reply would be that, be this so, the Court, nevertheless, still has the duty and
right to correct and rectify the wrong brought to its attention.
On the merits of the case.
Aside from the simpler factual issue relative to the land area of the new province of Negros del Norte, the more
significant and pivotal issue in the present case revolves around in the interpretation and application in the case
at bar of Article XI, Section 3 of the Constitution, which being brief and for convenience, We again quote:

SEC. 3. No province, city, municipality or barrio may be created, divided, merged abolished, or
its boundary substantially altered, except in accordance with the criteria established in the
local government code, and subject to the approval by a majority of the votes in a plebiscite in
the unit or units affected.
It can be plainly seen that the aforecited constitutional provision makes it imperative that there be first obtained
"the approval of a majority of votes in the plebiscite in the unit or units affected" whenever a province is
created, divided or merged and there is substantial alteration of the boundaries. It is thus inescapable to
conclude that the boundaries of the existing province of Negros Occidental would necessarily be substantially
altered by the division of its existing boundaries in order that there can be created the proposed new province
of Negros del Norte. Plain and simple logic will demonstrate than that two political units would be affected. The
first would be the parent province of Negros Occidental because its boundaries would be substantially altered.
The other affected entity would be composed of those in the area subtracted from the mother province to
constitute the proposed province of Negros del Norte.
We find no way to reconcile the holding of a plebiscite that should conform to said constitutional requirement
but eliminates the participation of either of these two component political units. No amount of rhetorical
flourishes can justify exclusion of the parent province in the plebiscite because of an alleged intent on the part
of the authors and implementors of the challenged statute to carry out what is claimed to be a mandate to
guarantee and promote autonomy of local government units. The alleged good intentions cannot prevail and
overrule the cardinal precept that what our Constitution categorically directs to be done or imposes as a
requirement must first be observed, respected and complied with. No one should be allowed to pay homage to
a supposed fundamental policy intended to guarantee and promote autonomy of local government units but at
the same time transgress, ignore and disregard what the Constitution commands in Article XI Section 3 thereof.
Respondents would be no different from one who hurries to pray at the temple but then spits at the Idol therein.
We find no merit in the submission of the respondents that the petition should be dismissed because the motive
and wisdom in enacting the law may not be challenged by petitioners. The principal point raised by the
petitioners is not the wisdom and motive in enacting the law but the infringement of the Constitution which is a
proper subject of judicial inquiry.
Petitioners' discussion regarding the motives behind the enactment of B.P. Blg. 885 to say the least, are most
enlightening and provoking but are factual issues the Court cannot properly pass upon in this case. Mention by
petitioners of the unexplained changes or differences in the proposed Parliamentary Bill No. 3644 and the
enacted Batas Pambansa Blg. 885; the swift and surreptitious manner of passage and approval of said law; the
abrupt scheduling of the plebiscite; the reference to news articles regarding the questionable conduct of the
said plebiscite held on January 3, 1986; all serve as interesting reading but are not the decisive matters which
should be reckoned in the resolution of this case.
What the Court considers the only significant submissions lending a little support to respondents' case is their
reliance on the rulings and pronouncements made by this Court in the case of Governor Zosimo Paredes
versus The Honorable Executive Secretary to the President, et al., G.R. No. 55628, March 2, 1984 (128 SCRA
6). In said case relating to a plebiscite held to ratify the creation of a new municipality from existing barangays,
this Court upheld the legality of the plebiscite which was participated in exclusively by the people of the
barangay that would constitute the new municipality.
This Court is not unmindful of this solitary case alluded to by respondents. What is, however, highly significant
are the prefatory statements therein stating that said case is "one of those cases where the discretion of the
Court is allowed considerable leeway" and that "there is indeed an element of ambiguity in the use of the
expression unit or units affected." The ruling rendered in said case was based on a claimed prerogative of the
Court then to exercise its discretion on the matter. It did not resolve the question of how the pertinent provision
of the Constitution should be correctly interpreted.

The ruling in the aforestated case of Paredes vs. The Honorable Executive Secretary, et al. (supra) should not
be taken as a doctrinal or compelling precedent when it is acknowledged therein that "it is plausible to assert,
as petitioners do, that when certain Barangays are separated from a parent municipality to form a new one, all
the voters therein are affected."
It is relevant and most proper to mention that in the aforecited case of Paredes vs. Executive
Secretary, invoked by respondents, We find very lucidly expressed the strong dissenting view of Justice Vicente
Abad Santos, a distinguished member of this Court, as he therein voiced his opinion, which We hereunder
quote:
2. ... when the Constitution speaks of "the unit or units affected" it means all of the people of
the municipality if the municipality is to be divided such as in the case at bar or an of the
people of two or more municipalities if there be a merger. I see no ambiguity in the
Constitutional provision.
This dissenting opinion of Justice Vicente Abad Santos is the forerunner of the ruling which We now consider
applicable to the case at bar, In the analogous case of Emilio C. Lopez, Jr., versus the Honorable Commission
on Elections, L-56022, May 31, 1985, 136 SCRA 633, this dissent was reiterated by Justice Abad Santos as he
therein assailed as suffering from a constitutional infirmity a referendum which did not include all the people of
Bulacan and Rizal, when such referendum was intended to ascertain if the people of said provinces were
willing to give up some of their towns to Metropolitan Manila. His dissenting opinion served as a useful
guideline in the instant case.
Opportunity to re-examine the views formerly held in said cases is now afforded the present Court. The
reasons in the mentioned cases invoked by respondents herein were formerly considered acceptable because
of the views then taken that local autonomy would be better promoted However, even this consideration no
longer retains persuasive value.
The environmental facts in the case before Us readily disclose that the subject matter under consideration is of
greater magnitude with concomitant multifarious complicated problems. In the earlier case, what was involved
was a division of a barangay which is the smallest political unit in the Local Government Code. Understandably,
few and lesser problems are involved. In the case at bar, creation of a new province relates to the largest
political unit contemplated in Section 3, Art. XI of the Constitution. To form the new province of Negros del
Norte no less than three cities and eight municipalities will be subtracted from the parent province of Negros
Occidental. This will result in the removal of approximately 2,768.4 square kilometers from the land area of an
existing province whose boundaries will be consequently substantially altered. It becomes easy to realize that
the consequent effects cf the division of the parent province necessarily will affect all the people living in the
separate areas of Negros Occidental and the proposed province of Negros del Norte. The economy of the
parent province as well as that of the new province will be inevitably affected, either for the better or for the
worse. Whatever be the case, either or both of these political groups will be affected and they are, therefore,
the unit or units referred to in Section 3 of Article XI of the Constitution which must be included in the plebiscite
contemplated therein.
It is a well accepted rule that "in ascertaining the meaning of a particular provision that may give rise to doubts,
the intent of the framers and of the people, may be gleaned from the provisions in pari materia." Parliamentary
Bill No. 3644 which proposed the creation of the new province of Negros del Norte recites in Sec. 4 thereof that
"the plebiscite shall be conducted in the areas affected within a period of one hundred and twenty days from
the approval of this Act." As this draft legislation speaks of "areas," what was contemplated evidently
are plurality of areas to participate in the plebiscite. Logically, those to be included in such plebiscite would be
the people living in the area of the proposed new province and those living in the parent province. This
assumption will be consistent with the requirements set forth in the Constitution.

We fail to find any legal basis for the unexplained change made when Parliamentary Bill No. 3644 was enacted
into Batas Pambansa Blg. 885 so that it is now provided in said enabling law that the plebiscite "shall be
conducted in the proposed new province which are the areas affected." We are not disposed to agree that by
mere legislative fiat the unit or units affected referred in the fundamental law can be diminished or restricted by
the Batasang Pambansa to cities and municipalities comprising the new province, thereby ignoring the evident
reality that there are other people necessarily affected.
In the mind of the Court, the change made by those responsible for the enactment of Batas Pambansa Blg. 885
betrays their own misgivings. They must have entertained apprehensions that by holding the plebiscite only in
the areas of the new proposed province, this tactic will be tainted with illegality. In anticipation of a possible
strong challenge to the legality of such a plebiscite there was, therefore, deliberately added in the enacted
statute a self-serving phrase that the new province constitutes the area affected. Such additional statement
serves no useful purpose for the same is misleading, erroneous and far from truth. The remaining portion of the
parent province is as much an area affected. The substantial alteration of the boundaries of the parent
province, not to mention the other adverse economic effects it might suffer, eloquently argue the points raised
by the petitioners.
Petitioners have averred without contradiction that after the creation of Negros del Norte, the province of
Negros Occidental would be deprived of the long established Cities of Silay, Cadiz, and San Carlos, as well as
the municipality of Victorias. No controversion has been made regarding petitioners' assertion that the areas of
the Province of Negros Occidental will be diminished by about 285,656 hectares and it will lose seven of the
fifteen sugar mills which contribute to the economy of the whole province. In the language of petitioners, "to
create Negros del Norte, the existing territory and political subdivision known as Negros Occidental has to be
partitioned and dismembered. What was involved was no 'birth' but "amputation." We agree with the petitioners
that in the case of Negros what was involved was a division, a separation; and consequently, as Sec. 3 of
Article XI of the Constitution anticipates, a substantial alteration of boundary.
As contended by petitioners,
Indeed, the terms 'created', 'divided', 'merged', 'abolished' as used in the constitutional
provision do not contemplate distinct situation isolated from the mutually exclusive to each
other. A Province maybe created where an existing province is divided or two provinces
merged. Such cases necessarily will involve existing unit or units abolished and definitely the
boundary being substantially altered.
It would thus be inaccurate to state that where an existing political unit is divided or its
boundary substantially altered, as the Constitution provides, only some and not all the voters
in the whole unit which suffers dismemberment or substantial alteration of its boundary are
affected. Rather, the contrary is true.
It is also Our considered view that even hypothetically assuming that the merits of this case can depend on the
mere discretion that this Court may exercise, nevertheless, it is the petitioners' case that deserve to be favored.
It is now time for this Court to set aside the equivocations and the indecisive pronouncements in the adverted
case of Paredes vs. the Honorable Executive Secretary, et al. (supra). For the reasons already here express,
We now state that the ruling in the two mentioned cases sanctioning the exclusion of the voters belonging to an
existing political unit from which the new political unit will be derived, from participating in the plebiscite
conducted for the purpose of determining the formation of another new political unit, is hereby abandoned.
In their supplemental petition, dated January 4, 1986, it is prayed for by petitioners that a writ of mandamus be
issued, directing the respondent Commission on Elections, to schedule the holding of another plebiscite at
which all the qualified voters of the entire province of Negros Occidental as now existing shall participate and

that this Court make a pronouncement that the plebiscite held on January 3, 1986 has no legal effect for being
a patent nullity.
The Court is prepared to declare the said plebiscite held on January 3, 1986 as null and void and violative of
the provisions of Sec. 3, Article XI of the Constitution. The Court is not, however, disposed to direct the conduct
of a new plebiscite, because We find no legal basis to do so. With constitutional infirmity attaching to the
subject Batas Pambansa Big. 885 and also because the creation of the new province of Negros del Norte is not
in accordance with the criteria established in the Local Government Code, the factual and legal basis for the
creation of such new province which should justify the holding of another plebiscite does not exist.
Whatever claim it has to validity and whatever recognition has been gained by the new province of Negros del
Norte because of the appointment of the officials thereof, must now be erased. That Negros del Norte is but a
legal fiction should be announced. Its existence should be put to an end as quickly as possible, if only to settle
the complications currently attending to its creation. As has been manifested, the parent province of Negros del
Norte has been impleaded as the defendant in a suit filed by the new Province of Negros del Norte, before the
Regional Trial Court of Negros (del Norte), docketed as Civil Case No. 169-C, for the immediate allocation,
distribution and transfer of funds by the parent province to the new province, in an amount claimed to be at
least P10,000,000.00.
The final nail that puts to rest whatever pretension there is to the legality of the province of Negros del Norte is
the significant fact that this created province does not even satisfy the area requirement prescribed in Section
197 of the Local Government Code, as earlier discussed.
It is of course claimed by the respondents in their Comment to the exhibits submitted by the petitioners (Exhs.
C and D, Rollo, pp. 19 and 91), that the new province has a territory of 4,019.95 square kilometers, more or
less. This assertion is made to negate the proofs submitted, disclosing that the land area of the new province
cannot be more than 3,500 square kilometers because its land area would, at most, be only about 2,856
square kilometers, taking into account government statistics relative to the total area of the cities and
municipalities constituting Negros del Norte. Respondents insist that when Section 197 of the Local
Government Code speaks of the territory of the province to be created and requires that such territory be at
least 3,500 square kilometers, what is contemplated is not only the land area but also the land and water over
which the said province has jurisdiction and control. It is even the submission of the respondents that in this
regard the marginal sea within the three mile limit should be considered in determining the extent of the territory
of the new province. Such an interpretation is strained, incorrect, and fallacious.
The last sentence of the first paragraph of Section 197 is most revealing. As so stated therein the "territory
need not be contiguous if it comprises two or more islands." The use of the word territory in this particular
provision of the Local Government Code and in the very last sentence thereof, clearly reflects that "territory" as
therein used, has reference only to the mass of land area and excludes the waters over which the political unit
exercises control.
Said sentence states that the "territory need not be contiguous." Contiguous means (a) in physical contact; (b)
touching along all or most of one side; (c) near, text, or adjacent (Webster's New World Dictionary, 1972 Ed., p.
307). "Contiguous", when employed as an adjective, as in the above sentence, is only used when it describes
physical contact, or a touching of sides of two solid masses of matter. The meaning of particular terms in a
statute may be ascertained by reference to words associated with or related to them in the statute (Animal
Rescue League vs. Assessors, 138 A.L.R. p. 110). Therefore, in the context of the sentence above, what need
not be "contiguous" is the "territory" the physical mass of land area. There would arise no need for the
legislators to use the word contiguous if they had intended that the term "territory" embrace not only land area
but also territorial waters. It can be safely concluded that the word territory in the first paragraph of Section 197
is meant to be synonymous with "land area" only. The words and phrases used in a statute should be given the
meaning intended by the legislature (82 C.J.S., p. 636). The sense in which the words are used furnished the
rule of construction (In re Winton Lumber Co., 63 p. 2d., p. 664).

The distinction between "territory" and "land area" which respondents make is an artificial or strained
construction of the disputed provision whereby the words of the statute are arrested from their plain and
obvious meaning and made to bear an entirely different meaning to justify an absurd or unjust result. The plain
meaning in the language in a statute is the safest guide to follow in construing the statute. A construction based
on a forced or artificial meaning of its words and out of harmony of the statutory scheme is not to be favored
(Helvering vs. Hutchings, 85 L. Ed., p. 909).
It would be rather preposterous to maintain that a province with a small land area but which has a long, narrow,
extended coast line, (such as La Union province) can be said to have a larger territory than a land-locked
province (such as Ifugao or Benguet) whose land area manifestly exceeds the province first mentioned.
Allegations have been made that the enactment of the questioned state was marred by "dirty tricks", in the
introduction and passing of Parliamentary Bill No. 3644 "in secret haste" pursuant to sinister designs to achieve
"pure and simple gerrymandering; "that recent happenings more than amply demonstrate that far from
guaranteeing its autonomy it (Negros del Norte) has become the fiefdom of a local strongman" (Rollo, p. 43;
emphasis supplied).
It is not for this Court to affirm or reject such matters not only because the merits of this case can be resolved
without need of ascertaining the real motives and wisdom in the making of the questioned law. No proper
challenge on those grounds can also be made by petitioners in this proceeding. Neither may this Court venture
to guess the motives or wisdom in the exercise of legislative powers. Repudiation of improper or unwise actions
taken by tools of a political machinery rests ultimately, as recent events have shown, on the electorate and the
power of a vigilant people.
Petitioners herein deserve and should receive the gratitude of the people of the Province of Negros Occidental
and even by our Nation. Commendable is the patriotism displayed by them in daring to institute this case in
order to preserve the continued existence of their historic province. They were inspired undoubtedly by their
faithful commitment to our Constitution which they wish to be respected and obeyed. Despite the setbacks and
the hardships which petitioners aver confronted them, they valiantly and unfalteringly pursued a worthy cause.
A happy destiny for our Nation is assured as long as among our people there would be exemplary citizens such
as the petitioners herein.
WHEREFORE, Batas Pambansa Blg. 885 is hereby declared unconstitutional. The proclamation of the new
province of Negros del Norte, as well as the appointment of the officials thereof are also declared null and void.
SO ORDERED.
Abad Santos, Feria, Yap, Fernan, Narvasa, Gutierrez, Jr., Cruz and Paras, JJ., concur.
Melencio-Herrera, J., concurs in the result.

Separate Opinions

TEEHANKEE, C.J., concurring:

I congratulate my brethren for the unanimous decision we issue today striking down an Act approved in "deep
secrecy and inordinate haste" apparently on the last day of session of the Batasang Pambansa on December
3, 1985 and signed on the same day by the then President of the authoritarian regime. The Act provided for the
partitioning of the province of Negros Occidental and would substantially alter its boundaries by lopping off the
progressive cities of Silay, Cadiz and San Carlos and municipality of Victorias with seven other municipalities to
constitute the proposed new province of Negros del Norte. Negros Occidental would thereby lose 4,019.95
square kilometers in area and seven of fifteen sugar mills which contribute to the economic progress and
welfare of the whole province.
The discredited Commission on Elections of the time played its customary subservient role by setting the
plebiscite with equal "indecent haste" for January 3, 1986, notwithstanding that the Act itself provided for an
ample period of 120 days from its approval within which to inform the people of the proposed dismemberment
and allow them to freely express and discuss the momentous issue and cast their vote intelligently. This was
learned by petitioners through an item in the printed media one day before they filed the present rush petition
on December 23, 1985 to seek a restraining order to atop the plebiscite, even as no printed copies of the Act as
finally enacted and approved were available to them and the Act had not been published, as required by law,
for its effectivity. As petitioners ruefully state: "it was in vain hope" for everything had apparently been timed for
the Christmas holidays; the Court was in Christmas recess and "there was no chance to have their plea for a
restraining order acted upon speedily enough." In fact, it was only on January 7, 1986 that the Court took
cognizance of the petition and required respondents' comment.
The scenario, as petitioners urgently asserted, was "to have the creation of the new Province a fait accompli by
the time elections are held on February 7, 1986. The transparent purpose is unmistakably so that the new
Governor and other officials shall by then have been installed in office, ready to function for purposes of the
election for President and Vice-President." Thus, the petitioners reported after the event: "With indecent haste,
the plebiscite was held; Negros del Norte was set up and proclaimed by President Marcos as in existence; a
new set of government officials headed by Governor Armando Gustilo was appointed; and, by the time the
elections were held on February 7, 1986, the political machinery was in place to deliver the 'solid North' to exPresident Marcos. The rest is history. What happened in Negros del Norte during the elections-the unashamed
use of naked power and resources contributed in no small way to arousing 'people's power' and steel the
ordinary citizen to perform deeds of courage and patriotism that makes one proud to be a Filipino today.
(Record, pp. 9, 41).
The challenged Act is manifestly void and unconstitutional. Consequently, all the implementing acts complained
of, viz. the plebiscite, the proclamation of a new province of Negros del Norte and the appointment of its
officials are equally void. The limited holding of the plebiscite only in the areas of the proposed new province
(as provided by Section 4 of the Act) to the exclusion of the voters of the remaining areas of the integral
province of Negros Occidental (namely, the three cities of Bacolod, Bago and La Carlota and the Municipalities
of La Castellana, Isabela, Moises Padilla, Pontevedra, Hinigaran, Himamaylan, Kabankalan, Murcia, Valladolid,
San Enrique, Ilog, Cauayan ,Hinoba-an and Sipalay and Candoni), grossly contravenes and disregards the
mandate of Article XI, section 3 of the then prevailing 1973 Constitution that no province may be created or
divided or its boundary substantially altered without "the approval of a majority of the votes in a plebiscite in
the unit or units affected." It is plain that all the cities and municipalities of the province of Negros Occidental,
not merely those of the proposed new province, comprise the units affected. It follows that the voters of the
whole and entire province of Negros Occidental have to participate and give their approval in the plebiscite,
because the whole province is affected by its proposed division and substantial alteration of its boundary. To
limit the plebiscite to only the voters of the areas to be partitioned and seceded from the province is as absurd
and illogical as allowing only the secessionists to vote for the secession that they demanded against the wishes
of the majority and to nullify the basic principle of majority rule.
The argument of fait accompli viz. that the railroaded plebiscite of January 3, 1986 was held and can no longer
be enjoined and that the new province of Negros del Norte has been constituted, begs the issue of invalidity of
the challenged Act. This Court has always held that it "does not look with favor upon parties 'racing to beat an
injunction or restraining order' which they have reason to believe might be forthcoming from the Court by virtue

of the filing and pendency of the appropriate petition therefor. Where the restraining order or preliminary
injunction are found to have been properly issued, as in the case at bar, mandatory writs shall be issued by the
Court to restore matters to the status quo ante." (Banzon v. Cruz, 45 SCRA 475, 506 [1972]). Where, as in this
case, there was somehow a failure to properly issue the restraining order stopping the holding of the illegal
plebiscite, the Court will issue the mandatory writ or judgment to restore matters to the status quo ante and
restore the territorial integrity of the province of Negros Occidental by declaring the unconstitutionality of the
challenged Act and nullifying the invalid proclamation of the proposed new province of Negros del Norte and
the equally invalid appointment of its officials.

Separate Opinions

TEEHANKEE, C.J., concurring:

I congratulate my brethren for the unanimous decision we issue today striking down an Act approved in "deep
secrecy and inordinate haste" apparently on the last day of session of the Batasang Pambansa on December
3, 1985 and signed on the same day by the then President of the authoritarian regime. The Act provided for the
partitioning of the province of Negros Occidental and would substantially alter its boundaries by lopping off the
progressive cities of Silay, Cadiz and San Carlos and municipality of Victorias with seven other municipalities to
constitute the proposed new province of Negros del Norte. Negros Occidental would thereby lose 4,019.95
square kilometers in area and seven of fifteen sugar mills which contribute to the economic progress and
welfare of the whole province.
The discredited Commission on Elections of the time played its customary subservient role by setting the
plebiscite with equal "indecent haste" for January 3, 1986, notwithstanding that the Act itself provided for an
ample period of 120 days from its approval within which to inform the people of the proposed dismemberment
and allow them to freely express and discuss the momentous issue and cast their vote intelligently. This was
learned by petitioners through an item in the printed media one day before they filed the present rush petition
on December 23, 1985 to seek a restraining order to atop the plebiscite, even as no printed copies of the Act as
finally enacted and approved were available to them and the Act had not been published, as required by law,
for its effectivity. As petitioners ruefully state: "it was in vain hope" for everything had apparently been timed for
the Christmas holidays; the Court was in Christmas recess and "there was no chance to have their plea for a
restraining order acted upon speedily enough." In fact, it was only on January 7, 1986 that the Court took
cognizance of the petition and required respondents' comment.
The scenario, as petitioners urgently asserted, was "to have the creation of the new Province a fait accompli by
the time elections are held on February 7, 1986. The transparent purpose is unmistakably so that the new
Governor and other officials shall by then have been installed in office, ready to function for purposes of the
election for President and Vice-President." Thus, the petitioners reported after the event: "With indecent haste,
the plebiscite was held; Negros del Norte was set up and proclaimed by President Marcos as in existence; a
new set of government officials headed by Governor Armando Gustilo was appointed; and, by the time the
elections were held on February 7, 1986, the political machinery was in place to deliver the 'solid North' to exPresident Marcos. The rest is history. What happened in Negros del Norte during the elections-the unashamed
use of naked power and resources contributed in no small way to arousing 'people's power' and steel the
ordinary citizen to perform deeds of courage and patriotism that makes one proud to be a Filipino today.
(Record, pp. 9, 41).
The challenged Act is manifestly void and unconstitutional. Consequently, all the implementing acts complained
of, viz. the plebiscite, the proclamation of a new province of Negros del Norte and the appointment of its
officials are equally void. The limited holding of the plebiscite only in the areas of the proposed new province
(as provided by Section 4 of the Act) to the exclusion of the voters of the remaining areas of the integral
province of Negros Occidental (namely, the three cities of Bacolod, Bago and La Carlota and the Municipalities

of La Castellana, Isabela, Moises Padilla, Pontevedra, Hinigaran, Himamaylan, Kabankalan, Murcia, Valladolid,
San Enrique, Ilog, Cauayan ,Hinoba-an and Sipalay and Candoni), grossly contravenes and disregards the
mandate of Article XI, section 3 of the then prevailing 1973 Constitution that no province may be created or
divided or its boundary substantially altered without "the approval of a majority of the votes in a plebiscite in
the unit or units affected." It is plain that all the cities and municipalities of the province of Negros Occidental,
not merely those of the proposed new province, comprise the units affected. It follows that the voters of the
whole and entire province of Negros Occidental have to participate and give their approval in the plebiscite,
because the whole province is affected by its proposed division and substantial alteration of its boundary. To
limit the plebiscite to only the voters of the areas to be partitioned and seceded from the province is as absurd
and illogical as allowing only the secessionists to vote for the secession that they demanded against the wishes
of the majority and to nullify the basic principle of majority rule.
The argument of fait accompli viz. that the railroaded plebiscite of January 3, 1986 was held and can no longer
be enjoined and that the new province of Negros del Norte has been constituted, begs the issue of invalidity of
the challenged Act. This Court has always held that it "does not look with favor upon parties 'racing to beat an
injunction or restraining order' which they have reason to believe might be forthcoming from the Court by virtue
of the filing and pendency of the appropriate petition therefor. Where the restraining order or preliminary
injunction are found to have been properly issued, as in the case at bar, mandatory writs shall be issued by the
Court to restore matters to the status quo ante." (Banzon v. Cruz, 45 SCRA 475, 506 [1972]). Where, as in this
case, there was somehow a failure to properly issue the restraining order stopping the holding of the illegal
plebiscite, the Court will issue the mandatory writ or judgment to restore matters to the status quo ante and
restore the territorial integrity of the province of Negros Occidental by declaring the unconstitutionality of the
challenged Act and nullifying the invalid proclamation of the proposed new province of Negros del Norte and
the equally invalid appointment of its officials.

Republic
SUPREME
Manila

of

the

Philippines
COURT

EN BANC
G.R. No. 71169 December 22, 1988
JOSE D. SANGALANG and LUTGARDA D. SANGALANG, petitioners, FELIX C. GASTON and DOLORES
R. GASTON, JOSE V. BRIONES and ALICIA R. BRIONES, and BEL-AIR VILLAGE ASSOCIATION,
INC.,intervenors-petitioners,
vs.
INTERMEDIATE APPELLATE COURT, and AYALA CORPORATION, respondents.
G.R. No. 74376 December 22, 1988
BEL-AIR
VILLAGE
vs.
THE INTERMEDIATE APPELLATE
GONZALVEZ,respondents.
G.R. No. 76394 December 22,1988

ASSOCIATION,
COURT,

ROSARIO

DE

JESUS

INC., petitioner,
TENORIO,

and

CECILIA

BEL-AIR
VILLAGE
ASSOCIATION,
vs.
THE COURT OF APPEALS, and EDUARDO and BUENA ROMUALDEZ respondents.

INC., petitioner,

G.R. No. 78182 December 22, 1988

BEL-AIR
VILLAGE
ASSOCIATION,
INC., petitioner,
vs.
COURT OF APPEALS, DOLORES FILLEY, and J. ROMERO & ASSOCIATES, respondents.
G.R. No. 82281 December 22, 1988
BEL-AIR
VILLAGE
ASSOCIATION,
INC, petitioner,
vs.
COURT OF APPEALS, VIOLETA MONCAL, and MAJAL DEVELOPMENT CORPORATION, respondents.
Sangco, Anastacio, Castaneda & Duran Law Office for petitioners & private intervenors- petitioners.
Raul S. Sison Law Offices for intervenor-petitioner Bel-Air Village Association, Inc. Renato L. Dela Fuente for
respondent Ayala Corporation.
G.R. No. L-74376:
Raul S. Sison Law Offices for petitioner.
Sergio L. Guadiz for private respondents.
G.R. No. L-76394:
Raul S. Sison Law Offices for petitioner.
Gruba, Tanlimco Lamso and Apuhin Law Offices for respondents.
G.R. No. L-78182:
Funk & Associates for petitioners.
Tee Tomas & Associates for respondents.
G.R. No. L-82281:
Funk & Associates for petitioner.
Castillo, Laman, Tan & Associates for private respondents.

SARMIENTO, J.:

Before the Court are five consolidated petitions, 1 docketed as G.R. Nos. 71169, 74376, 76394, 78182, and

82281 hereof, in the nature of appeals (by certiorari under Rule 45 of the Rules of Court) from five
decisions of the Court of Appeals, denying specific performance and damages.
The proceedings were commenced at the first instance by Jose Sangalang, joined by his wife Lutgarda
Sangalang, both residents of No. 110 Jupiter Street, Makati, Metro Manila (G.R. No. 71169) to enforce by
specific performance restrictive easement upon property, specifically the Bel- Air Village subdivision in Makati,
Metro Manila, pursuant to stipulations embodied in the deeds of sale covering the subdivision, and for
damages. Later, the Sangalangs were joined by Felix Gaston, a resident of No. 64 Jupiter Street of the same
municipality, and by Mr. and Mrs. Jose and Alicia Briones, both of No. 66 Jupiter Street. Pending further
proceedings, the Bel-Air Village Association, Inc. (BAVA), an incorporated homeowners' association, entered its
appearance as plaintiff-in-intervention.
BAVA itself had brought its own complaints, four in number, likewise for specific performance and damages to
enforce the same 'deed restrictions.' (See G.R. Nos. 74376, 76394, 78182, and 82281.)
ANTECEDENTS FACTS
I. G.R. No. 71169
The facts are stated in the decision appealed from. We quote:
xxxxxxxxx
(1) Bel-Air Village is located north of Buendia Avenue extension (now Sen. Gil J. Puyat Ave.)
across a stretch of commercial block from Reposo Street in the west up to Zodiac Street in the
east, When Bel-Air Village was planned, this block between Reposo and Zodiac Streets
adjoining Buendia Avenue in front of the village was designated as a commercial block.
(Copuyoc TSN, p. 10, Feb. 12, 1982).
(2) Bel-Air Village was owned and developed into a residential subdivision in the 1950s by
Makati Development Corporation (hereinafter referred to as MDC), which in 1968 was merged
with appellant Ayala Corporation.
(3) Appellees-spouses Sangalang reside at No. 11O Jupiter Street between Makati Avenue
and Reposo Street; appellees-spouses Gaston reside at No. 64 Jupiter Street between Makati
Avenue and Zodiac Street; appellees-spouses Briones reside at No. 66 Jupiter Street also
between Makati Avenue and Zodiac Street; while appellee Bel-Air Village Association, Inc.
(hereinafter referred to as BAVA) is the homeowners' association in Bel-Air Village which
takes care of the sanitation, security, traffic regulations and general welfare of the village.
(4) The lots which were acquired by appellees Sangalang and spouse Gaston and spouse
and Briones and spouse in 1960, 1957 and 1958, respectively, were all sold by MDC subject
to certain conditions and easements contained in Deed Restrictions which formed a part of
each deed of sale. The pertinent provisions in said Deed Restrictions, which are common to
all lot owners in Bel-Air Village, are as follows:
I-BEL-AIR ASSOCIATION
The owner of this lot/s or his successors in interest is required to be and is automatically a
member of the Bel-Air Association and must abide by such rules and regulations laid down by

the Association in the interest of the sanitation, security and the general welfare of the
community.
The association will also provide for and collect assessments, which will constitute as a lien
on the property junior only to liens of the government for taxes and to voluntary mortgages for
sufficient consideration entered into in good faith.
II-USE OF LOTS
Subject to such amendments and additional restrictions, reservations, servitudes, etc., as the
Bel- Air Association may from time to time adopt and prescribe, this lot is subject to the
following restrictions:
a. This lot/s shall not be subdivided. However, three or more lots may be consolidated and
subdivided into a lesser number of lots provided that none of the resulting lots be smaller in
area than the smallest lot before the consolidation and that the consolidation and subdivision
plan be duly approved by the governing body of the Bel-Air Association.
b. This lot/s shall only be used for residential purposes.
c. Only one single family house may be constructed on a single lot, although separate
servants' quarters or garage may be built.
d. Commercial or advertising signs shall not be placed, constructed, or erected on this lot.
Name plates and professional signs of homeowners are permitted so long as they do not
exceed 80 x 40 centimeters in size.
e. No cattle, pigs, sheep, goats, ducks, geese, roosters or rabbits shall be maintained in the
lot, except that pets may be maintained but must be controlled in accordance with the rulings
of the Association. The term "pets' includes chickens not in commercial quantities.
f. The property is subject to an easement of two (2) meters within the lot and adjacent to the
rear and sides thereof not fronting a street for the purpose of drainage, sewage, water and
other public facilities as may be necessary and desirable; and the owner, lessee or his
representative shall permit access thereto by authorized representatives of the Bel-Air
Association or public utility entities for the purposes for which the easement is created.
g. This lot shall not be used for any immoral or illegal trade or activity.
h. The owner and/or lessee of this lot/s shall at all times keep the grass cut and trimmed to
reduce the fire hazard of the property.
xxx xxx xxx
VI-TERM OF RESTRICTIONS
The foregoing restrictions shall remain in force for fifty years from January 15, 1957, unless
sooner cancelled in its entirety by two thirds vote of members in good standing of the Bel-Air
Association. However, the Association may, from time to time, add new ones, amend or
abolish particular restrictions or parts thereof by majority rule.
VII--ENFORCEMENT OF RESTRICTIONS

The foregoing restrictions may be enjoined and/or enforced by court action by the Bel-Air
Association, or by the Makati Development Corporation or its assigns, or by any registered
owner of land within the boundaries of the Bel-Air Subdivision (Sub-division plan PSD-49226
and Lot 7-B, Psd-47848) or by any member in good standing of the Bel-Air association." (Exh.
1 -b; Exh. 22, Annex "B"). (Appellant's Brief, pp. 4- 6)
(5) When MDC sold the above-mentioned lots to appellees' predecessors-in-interest, the
whole stretch of the commercial block between Buendia Avenue and Jupiter Street, from
Reposo Street in the west to Zodiac Street in the east, was still undeveloped. Access,
therefore, to Bel-Air Village was opened to all kinds of people and even animals. So in 1966,
although it was not part of the original plan, MDC constructed a fence or wall on the
commercial block along Jupiter Street. In 1970, the fence or wall was partly destroyed by
typhoon "Yoling." The destroyed portions were subsequently rebuilt by the appellant.
(Copuyoc TSN, pp. 31-34, Feb. 12, 1982). When Jupiter Street was widened in 1972 by 3.5
meters, the fence or wall had to be destroyed. Upon request of BAVA, the wall was rebuilt
inside the boundary of the commercial block. (Copuyoc TSN, pp. 4447, Feb. 12,1982).
(6) When the appellant finally decided to subdivide and sell the lots in the commercial block
between Buendia and Jupiter, BAVA wrote the appellant on May 9, 1972, requesting for
confirmation on the use of the commercial lots. The appellant replied on May 16, 1972,
informing BAVA of the restrictions intended to be imposed in the sale and use of the lots.
Among these restrictions are: that the building shall have a set back of 19 meters; and that
with respect to vehicular traffic along Buendia Avenue, entrance only will be allowed, and
along Jupiter Street and side streets, both entrance and exit will be allowed.
(7) On June 30, 1972, appellant informed BAVA that in a few months it shall subdivide and sell
the commercial lots bordering the north side of Buendia Avenue Extension from Reposo
Street up to Zodiac Street. Appellant also informed BAVA that it had taken all precautions and
will impose upon the commercial lot owners deed restrictions which will harmonize and blend
with the development and welfare of Bel-Air Village. Appellant further applied for special
membership in BAVA of the commercial lot owners. A copy of the deed restrictions for the
commercial lots was also enclosed. The proposed deed restrictions shall include the 19 meter
set back of buildings from Jupiter Street, the requirement for parking space within the lot of
one (1) parking slot for every seventy five (75) meters of office space in the building and the
limitation of vehicular traffic along Buendia to entrance only, but allowing both vehicular
entrance and vehicular exit through Jupiter Street and any side street.
In its letter of July 10, 1972, BAVA acknowledged the above letter of appellant and informed
the latter that the application for special membership of the commercial lot owners in BAVA
would be submitted to BAVA's board of governors for decision.
(8) On September 25, 1972, appellant notified BAVA that, after a careful study, it was finally
decided that the height limitation of buildings on the commercial lots shall be increased from
12.5 meters to 15 meters. Appellant further informed BAVA that Jupiter Street shall be
widened by 3.5 meters to improve traffic flow in said street. BAVA did not reply to said letter,
but on January 22, 1973, BAVA wrote a letter to the appellant informing the latter that the
Association had assessed the appellant, as special member of the association, the amount of
P40,795.00 (based on 81,590 square meters at P.50 per square meter) representing the
membership dues to the commercial lot owners for the year 1973, and requested the
appellant to remit the amount which its board of governors had already included in its current
budget. In reply, appellant on January 31, 1973 informed BAVA that due to the widening of
Jupiter Street, the area of the lots which were accepted by the Association as members was
reduced to 76,726 square meters. Thus, the corresponding dues at P.50 per square meter
should be reduced to P38,363.00. This amount, therefore, was remitted by the appellant to

BAVA. Since then, the latter has been collecting membership dues from the owners of the
commercial lots as special members of the Association. As a matter of fact, the dues were
increased several times. In 1980, the commercial lot owners were already being charged dues
at the rate of P3.00 per square meter. (Domingo, TSN, p. 36, March 19, 1980). At this rate, the
total membership dues of the commercial lot owners amount to P230,178. 00 annually based
on the total area of 76,726 square meters of the commercial lots.
(9) Meantime, on April 4, 1975, the municipal council of Makati enacted its ordinance No. 81,
providing for the zonification of Makati (Exh. 18). Under this Ordinance, Bel-Air Village was
classified as a Class A Residential Zone, with its boundary in the south extending to the center
line of Jupiter Street (Exh. 18-A).
Thus, Chapter III, Article 1, Section 3.03, par. F. of the Ordinance provides:
F. Bel-Air Village area, as bounded on the N by Polaris and Mercedes streets and on the NE
by Estrella Street; on the SE by Epifanio de los Santos Avenue and on the SW by the center
line of Jupiter Street. Then bounded on the N by the abandoned MRR Pasig Line; on the E by
Makati Avenue; on the S by the center line of Jupiter Street and on the W by the center line of
Reposo Street." (Exh. 18-A)
Similarly, the Buendia Avenue Extension area was classified as Administrative Office Zone
with its boundary in the North-North East Extending also up to the center line of Jupiter Street
(Exh. 18b).
Thus, Chapter III, Article I, Section 3.05, par. C. of the Ordinance provides:
C. The Buendia Avenue Extension areas, as bounded on the N-NE by the center line of
Jupiter Street, on the SE by Epifanio de los Santos Avenue; on the SW by Buendia Avenue
and on the NW by the center line of Reposo Street, then on the NE by Malugay Street; on the
SE by Buendia Avenue and on the W by Ayala Avenue Extension." (Exh. 18-B)
The Residential Zone and the Administrative Office Zone, therefore, have a common
boundary along the center line of Jupiter Street.
The above zoning under Ordinance No. 81 of Makati was later followed under the
Comprehensive Zoning Ordinance for the National Capital Region adopted by the Metro
Manila Commission as Ordinance 81 -01 on March 14, 1981 (Exh. 19). However, under this
ordinance, Bel-Air Village is simply bounded in the South-Southeast by Jupiter Street-not
anymore up to the center line of Jupiter Street (Exh. B). Likewise, the blockdeep strip along
the northwest side of Buendia Avenue Extension from Reposo to EDSA was classified as a
High Intensity Commercial Zone (Exh. 19-c).
Thus, the Zoning District Boundaries -Makati, in Annex B of the Ordinance provides:
R-I-Low Intensity Residential
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4. Bel-Air 1, 3, 4
Bounded on the North -- J.P. Rizal and Amapola St.

South - Rockwell
Northwest - P. Burgos
Southeast - Jupiter
Southwest - Epifanio de los Santos Ave. (EDSA)
5. Bel-Air 2
Bounded on the Northwest - J.P. Rizal
Southwest - Makati Avenue
South --- Jupiter
Southeast -- Pasig Line
East - South Avenue" (Exh. 19-b)
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C-3-High Intensity Commercial Zone
2. A block deep strip along the northwest side of Buendia Ave. Ext. from Reposo to EDSA."
(Exh, 19-c)
Under the above zoning classifications, Jupiter Street, therefore, is a common boundary of
Bel-Air Village and the commercial zone.
(10) Meanwhile, in 1972, BAVA had installed gates at strategic locations across Jupiter Street
which were manned and operated by its own security guards who were employed to maintain,
supervise and enforce traffic regulations in the roads and streets of the village. (Villavicencio,
TSN, pp, 22-25, Oct. 30, 1980; BAVA Petition, par. 11, Exh. 17).
Then, on January 17, 1977, the Office of the Mayor of Makati wrote BAVA directing that, in the
interest of public welfare and for the purpose of easing traffic congestion, the following streets
in Bel-Air Village should be opened for public use:
Amapola Street - from Estrella Street to Mercedes Street
Amapola Street -junction of Palma Street gate going to J. Villena Street
Mercedes Street -- from EDSA to Imelda Avenue and Amapola junction
Zodiac Street - from Mercedes Street to Buendia Avenue
Jupiter Street -- from Zodiac Street to Reposo Street connecting Metropolitan Avenue to
Pasong Tamo and V. Cruz Extension intersection

Neptune Street - from Makati Avenue to Reposo Street Orbit Street - from F. Zobel-Candelaria
intersection to Jupiter Street
Paseo de Roxas - from Mercedes Street to Buendia Avenue (Exh. 17, Annex A, BAVA Petition)
On February 10, 1977, BAVA wrote the Mayor of Makati, expressing the concern of the
residents about the opening of the streets to the general public, and requesting specifically the
indefinite postponement of the plan to open Jupiter Street to public vehicles. (Exh. 17, Annex
B, BAVA Petition).
However, BAVA voluntarily opened to the public Amapola, Mercedes, Zodiac, Neptune and
Paseo de Roxas streets. (Exh. 17-A, Answer of Makati par. 3-7).
Later, on June 17,1977, the Barangay Captain of Bel-Air Village was advised by the Office of
the Mayor that, in accordance with the agreement entered into during the meeting on January
28, 1 977, the Municipal Engineer and the Station Commander of the Makati Police were
ordered to open for public use Jupiter Street from Makati Avenue to Reposo Street.
Accordingly, he was requested to advise the village residents of the necessity of the opening
of the street in the interest of public welfare. (Exh. 17, Annex E, BAVA Petition).
Then, on June 10, 1977, the Municipal Engineer of Makati in a letter addressed to BAVA
advised the latter to open for vehicular and pedestrian traffic the entire portion of Jupiter Street
from Makati Avenue to Reposo Street (Exh. 17, BAVA Petition, par. 14).
Finally, on August 12, 1977, the municipal officials of Makati concerned allegedly opened,
destroyed and removed the gates constructed/located at the corner of Reposo Street and
Jupiter Street as well as the gates/fences located/constructed at Jupiter Street and Makati
Avenue forcibly, and then opened the entire length of Jupiter Street to public traffic. (Exh. 17,
BAVA Petition, pars. 16 and 17).
(11) Before the gates were-removed, there was no parking problem or traffic problem in
Jupiter Street, because Jupiter Street was not allowed to be used by the general public
(Villavicencio, TSN, pp. 24-25, Oct. 30, 1980). However, with the opening of Zodiac Street
from Estrella Street to Jupiter Street and also the opening to the public of the entire length of
Jupiter Street, there was a tremendous increase in the volume of traffic passing along Jupiter
Street coming from EDSA to Estrella Street, then to Zodiac Street to Jupiter Street, and along
the entire length of Jupiter Street to its other end at Reposo Street. (Villavicencio, TSN, pp.
30-32, Oct. 30, 1980).
In the meantime, the purchasers of the commercial lots between Jupiter Street and Buendia
Avenue extension had started constructing their respective buildings in 1974-1975. They
demolished the portions of the fence or wall standing within the boundary of their lots. Many of
the owners constructed their own fences or walls in lieu of the wall and they employed their
own security guards. (TSN, p. 83, Feb. 20,1981; TSN, pp. 53-54; 72-74, March 20,1981; TSN,
pp. 54-55, July 23, 1981).
(12) Then, on January 27, 1978, appellant donated the entire Jupiter Street from Metropolitan
Avenue to Zodiac Street to BAVA (Exh. 7)- However, even before 1978, the Makati Police and
the security force of BAVA were already the ones regulating the traffic along Jupiter Street
after the gates were opened in 1977. Sancianco TSN, pp. 26-30, Oct. 2,1981).
In October, 1979, the fence at the corner of Orbit and Neptune Streets was opened and
removed (BAVA Petition, par. 22, Exh. 17). The opening of the whole stretch of Orbit Street

from J.P. Rizal Avenue up to Imelda Avenue and later to Jupiter Street was agreed to at the
conference attended by the President of BAVA in the office of the Station Commander of
Makati, subject to certain conditions, to wit:
That, maintenance of Orbit St. up to Jupiter St. shall be shouldered by the Municipality of
Makati.
That, street lights will be installed and maintenance of the same along Orbit St. from J.P. Rizal
Ave. up to Jupiter St. shall be undertaken by the Municipality.
That for the security of the residents of San Miguel Village and Bel-Air Village, as a result of
the opening of Orbit Street, police outposts shall be constructed by the Municipality of Makati
to be headed by personnel of Station No. 4, in close coordination with the Security Guards of
San Miguel Village and Bel-Air Village." (CF. Exh. 3 to Counter-Affidavit, of Station
Commander, Ruperto Acle p. 253, records)" (Order, Civil Case No. 34948, Exh. 17-c).
(13) Thus, with the opening of the entire length of Jupiter Street to public traffic, the different
residential lots located in the northern side of Jupiter Street ceased to be used for purely
residential purposes. They became, for all purposes, commercial in character.
(14) Subsequently, on October 29, 1979, the plaintiffs-appellees Jose D. Sangalang and
Lutgarda D. Sangalang brought the present action for damages against the defendantappellant Ayala Corporation predicated on both breach of contract and on tort or quasi-delict A
supplemental complaint was later filed by said appellees seeking to augment the reliefs
prayed for in the original complaint because of alleged supervening events which occurred
during the trial of the case. Claiming to be similarly situated as the plaintiffs-appellees, the
spouses Felix C. Gaston and Dolores R. Gaston, Jose V. Briones and Alicia R. Briones, and
the homeowners' association (BAVA) intervened in the case.
(15) After trial on the merits, the then Court of First Instance of Rizal, Pasig, Metro Manila,
rendered a decision in favor of the appellees the dispositive portion of which is as follows:
WHEREFORE, judgment is hereby accordingly rendered as follows:
ON PLAINTIFFS' COMPLAINT:
Defendant is ordered to pay to the plaintiffs-spouses Sangalang the following damages:
1. The sum of P500,000.00 as actual and consequential damages;
2. The sum of P2,000,000.00 as moral damages;
3. The sum of P500,000.00 as exemplary damages;
4. The sum of P100,000.00 as attorney's fees; and
5. The costs of suit.
ON INTERVENORS FELIX and DOLORES GASTON'S COMPLAINT:
Defendant is ordered to pay to the spouses Felix and Dolores Gaston, the following damages:

1 . The sum of P400,000.00 as consequential damages;

2 The sum of P500,000.00 as moral damages;
3 The sum of P500,000.00 as exemplary damages:
4 The sum of P50,000.00 as attorney's fees; and
5 The costs of suit.
ON INTERVENORS JOSE and ALICIA BRIONES' COMPLAINT:
Defendant is ordered to pay to the spouses Jose and Alicia Briones, the following damages:
1 . The sum of P400,000.00 as consequential damages;
2 The sum of P500,000.00 as moral damages;
3 The sum of P500,000.00 as exemplary damages;
4 The sum of P50,000.00 as attorney's fees; and
5 The costs of suit.
ON INTERVENOR BAVA'S COMPLAINT:
Defendant is ordered to pay intervenor BAVA, the following damages:
1. The sum of P400,000.00 as consequential damages;
2. The sum of P500,000.00 as exemplary damages;
3. The sum of P50,000.00 as attorney's fees; and
4. The costs of suit.
The above damages awarded to the plaintiffs and intervenors shall bear legal interest from the
filing of the complaint.
Defendant is further ordered to restore/reconstruct the perimeter wall at its original position in
1966 from Reposo Street in the west to Zodiac Street in the east, at its own expense, within
SIX (6) MONTHS from finality of judgment.
SO ORDERED.
(Record on Appeal, pp. 400-401) 2

xxxxxxxxx
On appeal, the Court of Appeals 3 rendered a reversal, and disposed as follows:

ACCORDINGLY, finding the decision appealed from as not supported by the facts and the law
on the matter, the same is hereby SET ASIDE and another one entered dismissing the case
for lack of a cause of action. Without pronouncement as to costs.
SO ORDERED. 4
II. G.R. No. 74376
This petition was similarly brought by BAVA to enforce the aforesaid restrictions stipulated in the deeds of sale
executed by the Ayala Corporation. The petitioner originally brought the complaint in the Regional Trial Court of
Makati, 5 principally for specific performance, plaintiff [now, petitioner] alleging that the defendant [now,

private respondent] Tenorio allowed defendant [Tenorio's co-private respondent] Gonzalves to occupy and
convert the house at 50 Jupiter Street, Bel-Air Village, Makati, Metro Manila, into a restaurant, without its
knowledge and consent, and in violation of the deed restrictions which provide that the lot and building
thereon must be used only for residential purposes upon which the prayed for main relief was for 'the
defendants to permanently refrain from using the premises as commercial and to comply with the terms of
the Deed Restrictions." 6 The trial court dismissed the complaint on a procedural ground, i.e., pendency of
an Identical action, Civil Case No. 32346, entitled "Bel-Air Village Association, Inc. v. Jesus Tenorio." The
Court of Appeals7 affirmed, and held, in addition, that Jupiter Street "is classified as High density
commercial (C-3) zone as per Comprehensive Zoning Ordinance No. 81-01 for National Capital
Region," 8 following its own ruling in AC-G.R. No. 66649, entitled "Bel-Air Village Association, Inc. vs. HyLand Realty & Development Corporation, et al."
III. G.R. No. 76394
xxxxxxxxx
Defendants-spouses Eduardo V. Romualdez, Jr. and Buena Tioseco are the owners of a
house and lot located at 108 Jupiter St., Makati, Metro Manila as evidenced by Transfer
Certificate of Title No. 332394 of the Registry of Deeds of Rizal. The fact is undisputed that at
the time the defendants acquired the subject house and lot, several restrictions were already
annotated on the reverse side of their title; however, for purposes of this appeal we shall
quote hereunder only the pertinent ones, to wit:
(b,) This lot/shall be used only for residential purposes.
xxxxxxxxx
IV. Term of Restriction
The foregoing restriction(s) shall remain in force for fifty years from January 15, 1957, unless
sooner cancelled in its entirety by two-thirds vote of the members in good standing of the BelAir Association. However, the Association may from time to time, add new ones, amend or
abolish particular restrictions or parts thereof by majority rule.
During the early part of 1979, plaintiff noted that certain renovations and constructions were
being made by the defendants on the subject premises, for which reason the defendants were
advised to inform the plaintiff of the kind of construction that was going on. Because the
defendants failed to comply with the request of the plaintiff, the latter's chief security officer
visited the subject premises on March 23, 1979 and found out that the defendants were
putting up a bake and coffee shop, which fact was confirmed by defendant Mrs. Romualdez
herself. Thereafter, the plaintiff reminded defendants that they were violating the deed

restriction. Despite said reminder, the defendants proceeded with the construction of the bake
shop. Consequently, plaintiff sent defendants a letter dated April 30, 1979 warning them that if
they will not desist from using the premises in question for commercial purposes, they will be
sued for violations of the deed restrictions.
Despite the warning, the defendants proceeded with the construction of their bake shop.

xxxxxxxxx
The trial court 10 adjudged in favor of BAVA. On appeal, the Court of Appeals

11

reversed, on the strength of

its holding in AC-G.R. No. 66649 earlier referred to.

initially denied
the petition "for lack of merit, it appearing that the conclusions of the respondent Court of Appeals that
private respondents' bake and coffee shop lies within a commercial zone and that said private
respondents are released from their obligations to maintain the lot known as 108 Jupiter Street for
residential purposes by virtue of Ordinance No. 81 of the Municipality of Makati and Comprehensive
Zoning Ordinance No. 81-01 of the Metropolitan Manila Commission, are in accord with law and
jurisprudence," 13 for which BAVA sought a reconsideration. Pending resolution, the case was referred to
the Second Division of this Court, 14 and thereafter, to the Court En Banc en consulta. 15 Per our
Resolution, dated April 29, 1988, we consolidated this case with G.R. Nos. 74376 and 82281. 16
BAVA then elevated the matter to the Court by a petition for review on certiorari. The Court

12

IV. G.R. No. 78182.

xxxxxxxxx
The case stemmed from the leasing by defendant Dolores Filley of her building and lot
situated at No. 205 Reposo Street, Bel-Air Village Makati, Metro Manila to her co-defendant,
the advertising firm J. Romero and Associates, in alleged violation of deed restrictions which
stipulated that Filley's lot could only be used for residential purposes. Plaintiff sought judgment
from the lower court ordering the defendants to "permanently refrain" from using the premises
in question "as commercial" and to comply with the terms of the deed restrictions.
After the proper proceedings, the court granted the plaintiff the sought for relief with the
additional imposition of exemplary damages of P50,000.00 and attorney's fees of P10,000.00.
The trial court gave emphasis to the restrictive clauses contained in Filley's deed of sale from
the plaintiff, which made the conversion of the building into a commercial one a violation.
Defendants now seek review and reversal on three (3) assignments of errors, namely:
I.
THE TRIAL COURT ERRED IN NOT FINDING THAT THE REGULATIONS PROMULGATED
BY THE MUNICIPAL AUTHORITIES IN MAKATI AND THE MINISTRY OF HUMAN
SETTLEMENT'S CHANGING THE CHARACTER OF THE AREAS IN QUESTION HAD
RENDERED THE RESTRICTIVE EASEMENT ON THE TITLE OF THE APPELLANTS
VACATED.
II.
THE COURT ERRED IN NOT RULING THAT BECAUSE THE APPELLEE(S) HAD ALLOWED
THE USE OF THE PROPERTY WITHIN THE VILLAGE FOR NON- RESIDENTIAL

PURPOSES, IT IS NOW ESTOPPED FROM

PROHIBITIONS SUBJECT MATTER OF THIS CASE.

ENFORCING

THE

RESTRICTIVE

III.
THE COURT ERRED IN NOT FINDING THAT THERE EXISTED A BILATERAL CONTRACT
BETWEEN THE PARTIES AND THAT SINCE APPELLEE HAD NOT PERFORMED ITS
OBLIGATIONS UNDER THIS ARRANGEMENT THE APPELLANT IN TURN WAS UNDER
NO OBLIGATION TO ANNOTATE THE RESTRICTIVE PROHIBITIONS ON THE BACK OF
THE TITLE.
Appellants anchor their appeal on the proposition that the Bel-Air Village area, contrary to
plaintiff- appellee's pretension of being a strictly residential zone, is in fact commercial and
characterize the restrictions contained in appellant Filley's deed of sale from the appellee as
completely outmoded, which have lost all relevance to the present-day realities in Makati, now
the premier business hub of the nation, where there is a proliferation of numerous commercial
enterprises established through the years, in fact even within the heart of so-called
"residential" villages. Thus, it may be said that appellants base their position on the inexorable
march of progress which has rendered at naught the continued efficacy of the restrictions.
Appellant on the other hand, relies on a rigid interpretation of the contractual stipulations
agreed upon with appellant Filley, in effect arguing that the restrictions are valid ad infinitum.
The lower court quite properly found that other commercial establishments exist in the same
area (in fact, on the same street) but ignored it just the same and saidThe fact that defendants were able to prove the existence of several commercial
establishments inside the village does not exempt them from liability for violating some of the
restrictions evidently choosing to accord primacy to contractual stipulation. 17

xxxxxxxxx
18
overturned the lower court, 19 likewise based on AC-G.R. No. 66649. The
respondent Court observed also that J. Romero & Associates had been given authority to open a
commercial office by the Human Settlements Regulatory Commission.

The Court of Appeals

V. G.R. No. 82281

The facts of this case have been based on stipulation. We quote:
COMES NOW, the Parties, assisted by their respective counsel and to this Honorable Court,
respectfully enter into the following stipulations of facts, to wit:
1. The parties admit the personal circumstances of each other as well as their capacities to
sue and be sued.
2. The parties admit that plaintiff BAVA for short) is the legally constituted homeowners'
association in Bel-Air Subdivision, Makati, Metro Manila.
3. The parties admit that defendant Violets Moncal is the registered owner of a parcel of land
with a residential house constructed thereon situated at No. 104 Jupiter Street, Bel-Air Village,
Makati, Metro Manila; that as such lot owner, she is a member of the plaintiff association.

4. The parties admit that defendant Majal Development Corporation (Majal for short) is the
lessee of defendant Moncal's house and lot located at No. 104 Jupiter Street.
5. The parties admit that a deed restrictions is annotated on the title of defendant Moncal,
which provides, among others, that the lot in question must be used only for residential
purposes;' that at time Moncal purchased her aforesaid lot in 1959 said deed restrictions was
already annotated in the said title.
6. The parties admit that when Moncal leased her subject property to Majal, she did not
secure the consent of BAVA to lease the said house and lot to the present lessee.
7. The parties admit that along Jupiter Street and on the same side where Moncal's property
is located, there are restaurants, clinics placement or employment agencies and other
commercial or business establishments. These establishments, however, were sued by BAVA
in the proper court.
8. The parties admit that at the time Moncal purchased the subject property from the Makati
Development Corporation, there was a perimeter wall, running along Jupiter Street, which wall
was constructed by the subdivision owner; that at that time the gates of the entrances to
Jupiter Street were closed to public traffic. In short, the entire length of Jupiter which was
inside the perimeter wall was not then open to public traffic
9. The parties admit that subsequent thereto, Ayala tore down the perimeter wall to give way
to the commercial building fronting Buendia Avenue (now Gil J. Puyat Avenue).
10. The parties admit that on August 12, 1977, the Mayor of Makati forcibly opened and
removed the street gates constructed on Jupiter Street and Reposo Street, thereby opening
said streets to the public.
11. The parties admit plaintiffs letters of October 10, 23 and 31, 1984; as well as defendants'
letters-reply dated October 17 and 29, 1984. 20
xxxxxxxxx
The trial court 21 dismissed the petitioner's complaint, a dismissal affirmed on appeal,

According to the
appellate court, the opening of Jupiter Street to human and vehicular traffic, and the commercialization of
the Municipality of Makati in general, were circumstances that had made compliance by Moncal with the
aforesaid "deed restrictions" "extremely difficult and unreasonable," 23 a development that had excused
compliance altogether under Article 1267 of the Civil Code.
22

VI. The cases before the Court; the Court's decision.

In brief, G.R. Nos. 74376, 76394, 78182, and 82281 are efforts to enforce the "deed restrictions" in question
against specific residents (private respondents in the petitions) of Jupiter Street and with respect to G.R. No.
78182, Reposo Street. The private respondents are alleged to have converted their residences into commercial
establishments (a restaurant in G.R. No. 74376, a bakery and coffee shop in G.R. No. 76394, an advertising
firm in G.R. No. 78182; and a construction company, apparently, in G.R. No. 82281) in violation of the said
restrictions. 24
Their mother case, G. R. No. 71169 is, on the other hand, a petition to hold the vendor itself, Ayala Corporation
(formerly Makati Development Corporation), liable for tearing down the perimeter wall along Jupiter Street that

had therefore closed its commercial section from the residences of Bel-Air Village and ushering in, as a
consequence, the full "commercialization" of Jupiter Street, in violation of the very restrictions it had authored.
As We indicated, the Court of Appeals dismissed all five appeals on the basis primarily of its ruling in AC-G.R.
No. 66649, "Bel-Air Village, Inc. v. Hy-Land Realty Development Corporation, et al.," in which the appellate
court explicitly rejected claims under the same 'deed restrictions" as a result of Ordinance No. 81 enacted by
the Government of the Municipality of Makati, as well as Comprehensive Zoning Ordinance No. 8101
promulgated by the Metropolitan Manila Commission, which two ordinances allegedly allowed the use of
Jupiter Street both for residential and commercial purposes. It was likewise held that these twin measures were
valid as a legitimate exercise of police power.
The Court of Appeals' reliance on Ordinance Nos. 81. and 8101 is now assailed in these petitions, particularly
the Sangalang, et al. petition.
Aside from this fundamental issue, the petitioners likewise raise procedural questions. G.R. No. 71169, the
mother case, begins with one.
1. G.R. No. 71169
In this petition, the following questions are specifically put to the Court:
May the Honorable Intermediate Appellate Court reverse the decision of the trial court on
issues which were neither raised by AYALA in its Answers either to the Complaint or
Supplemental Complaint nor specifically assigned as one of the alleged errors on appeal? 25
May the Honorable Intermediate Appellate Court arbitrarily ignore the decisive findings of fact
of the trial court, even if uncontradicted and/or documented, and premised mainly on its own
unsupported conclusions totally reverse the trial court's decision? 26
May the Honorable Intermediate Appellate Court disregard the trial court's documented
findings that respondent Ayala for its own self-interest and commercial purposes contrived in
bad faith to do away with the Jupiter Street perimeter wall it put up three times which wall was
really intended to separate the residential from the commercial areas and thereby insure the
privacy and security of Bel Air Village pursuant to respondent Ayala's express continuing
representation and/or covenant to do so?27
a.
The first question represents an attack on the appellate court's reliance on Ordinances Nos. 81 and 81-01, a
matter not supposedly taken up at the trial or assigned as an error on appeal. As a rule, the Court of Appeals
(then the Intermediate Appellate Court) may determine only such questions as have been properly raised to it,
yet, this is not an inflexible rule of procedure. In Hernandez v. Andal, 28 it was stated that "an unassigned error

closely related to an error properly assigned, or upon which the determination of the question raised by
the error properly assigned is dependent, will be considered by the appellate court notwithstanding the
failure to assign it as error." 29
we referred to the " modern trend of procedure . . . according] the courts
broad discretionary power" 31 and in which we allowed consideration of matters "having some bearing on
the issue submitted which the parties failed to raise or the lower court ignore[d]. 32 And in Vda. de
Javellana v. Court of Appeals, 33 we permitted the consideration of a 'patent error' of the trial court by the
Court of Appeals under Section 7, of Rule 51, of the Rules of Court, 34 although such an error had not
been raised in the brief. But what we note is the fact that the Ayala Corporation did raise the zoning
In Baquiran v. Court of Appeals,

30

measures as affirmative defenses, first in its answers 35 and second, in its brief, 36 and submitted at the trial
as exhibits. 37 There is accordingly no cause for complaint on the part of the petitioners for Ayala's
violation of the Rules. But while there was reason for the consideration, on appeal, of the said zoning
ordinances in question, this Court nevertheless finds as inaccurate the Court of Appeals' holding that such
measures, had "in effect, [made] Jupiter Street ... a street which could be used not only for residential
purposes," 38 and that "[It lost its character as a street for the exclusive benefit of those residing in Bel-Air
Village completely." 39
Among other things, there is a recognition under both Ordinances Nos. 81 and 8 1-01 that Jupiter Street lies as
the boundary between Bel-Air Village and Ayala Corporation's commercial section. And since 1957, it had been
considered as a boundary not as a part of either the residential or commercial zones of Ayala Corporation's real
estate development projects. Thus, the Bel-Air Village Association's articles of incorporation state that Bel-Air
Village is 'bounded on the NE., from Amapola St., to de los Santos Ave., by Estrella St., on the SE from Extrella
St., to Pedestrian Lane by E. De los Santos Ave., on the SW., from Pedestrian Lane to Reposo St., by Jupiter
Street
. . . . 40 Hence, it cannot be said to have been "for the exclusive benefit" of Bel-Air Village residents.
We come to the perimeter wall then standing on the commercial side of Jupiter Street the destruction of which
opened the street to the public. The petitioners contend that the opening of the thoroughfare had opened, in
turn, the floodgates to the commercialization of Bel-Air Village. The wall, so they allege, was designed precisely
to protect the peace and privacy of Bel-Air Village residents from the din and uproar of mercantile pursuits, and
that the Ayala Corporation had committed itself to maintain it. It was the opinion of the Court of Appeals, as we
said, that Ayala's liability therefor, if one existed, had been overtaken by the passage of Ordinances Nos. 81
and 82-01, opening Jupiter Street to commerce.
It is our ruling, we reiterate, that Jupiter Street lies as a mere boundary, a fact acknowledged by the authorities
of Makati and the National Government and, as a scrutiny of the records themselves reveals, by the petitioners
themselves, as the articles of incorporation of Bel-Air Village Association itself would confirm. As a
consequence, Jupiter Street was intended for the use by both -the commercial and residential blocks. It was
not originally constructed, therefore, for the exclusive use of either block, least of all the residents of Bel-Air
Village, but, we repeat, in favor of both, as distinguished from the general public.
When the wall was erected in 1966 and rebuilt twice, in 1970 and 1972, it was not for the purpose of physically
separating the two blocks. According to Ayala Corporation, it was put up to enable the Bel-Air Village
Association "better control of the security in the area, 41 and as the Ayala Corporation's "show of goodwill

" 42 a view we find acceptable in the premises. For it cannot be denied that at that time, the commercial
area was vacant, "open for [sic] animals and people to have access to Bel-Air Village." 43 There was
hence a necessity for a wall.
In any case, we find the petitioners' theory, that maintaining the wall was a matter of a contractual obligation on
the part of Ayala, to be pure conjecture. The records do not establish the existence of such a purported
commitment. For one, the subdivision plans submitted did not mention anything about it. For another, there is
nothing in the "deed restrictions" that would point to any covenant regarding the construction of a wall. There is
no representation or promise whatsoever therein to that effect.
With the construction of the commercial buildings in 1974, the reason for which the wall was built- to secure
Bel-Air Village from interlopers had naturally ceased to exist. The buildings themselves had provided
formidable curtains of security for the residents. It should be noted that the commercial lot buyers themselves
were forced to demolish parts of the wall to gain access to Jupiter Street, which they had after all equal right to
use.

In fine, we cannot hold the Ayala Corporation liable for damages for a commitment it did not make, much less
for alleged resort to machinations in evading it. The records, on the contrary, will show that the Bel-Air Village
Association had been informed, at the very outset, about the impending use of Jupiter Street by commercial lot
buyers. We quote:
xxxxxxxxx
1. Exh. I of appellee, the memorandum of Mr. Carmelo Caluag, President of BAVA, dated May
10, 1972, informing the BAVA Board of Governors and Barrio Council members about the
future use of Jupiter Street by the lot owners fronting Buendia Avenue. The use of Jupiter
Street by the owners of the commercial lots would necessarily require the demolition of the
wall along the commercial block adjoining Jupiter Street.
2. Exh. J of appellee, the minutes of the joint meeting of BAVA Board of Governors and the
Bel-Air Barrio Council where the matter that "Buendia lot owners will have equal rights to use
Jupiter Street," and that Ayala's "plans about the sale of lots and use of Jupiter Street" were
precisely taken up. This confirms that from the start BAVA was informed that the commercial
lot owners will use Jupiter Street and that necessarily the wall along Jupiter Street would be
demolished.
3. Exh. 10, the letter of Mr. Demetrio Copuyoc to the President of BAVA, dated May 16, 1972,
expressly stating that vehicular entrance and exit to the commercial lots would be allowed
along Jupiter and side streets.
4. Exhs. 27, 27-A, 27-B, the letter of Atty. Salvador J. Lorayes dated June 30, 1972, with
enclosed copy of proposed restriction for the commercial lots to BAVA. He proposed
restriction again expressly stated that "Vehicular entrances and exits are allowed thru Jupiter
and any side streets."
5. Exh. L of appellee, the minutes of the meeting of the members of BAVA, dated August 26,
1972, where it is stated "Recently, Ayala Corporation informed the Board that the lots fronting
Buendia Avenue will soon be offered for sale, and that future lot owners will be given equal
rights to use Jupiter Street as well as members of the Association."
6. Exh. 25, the letter of Atty. Lorayes dated September 25, 1972, informing BAVA of the
widening of Jupiter Street by 3.5 meters to improve traffic flow in said street to benefit both the
residents of Bel-Air and the future owners of the commercial lots. 44
The petitioners cannot successfully rely on the alleged promise by Demetrio Copuyoc, Ayala's manager, to
build a "[f]ence along Jupiter with gate for entrance and/or exit 45 as evidence of Ayala's alleged continuing

obligation to maintain a wall between the residential and commercial sections. It should be observed that
the fence referred to included a "gate for entrance and or exit" which would have defeated the purpose of
a wall, in the sense the petitioners would put in one, that is to say, an impenetrable barrier. But as Ayala
would point out subsequently, the proposed fence was not constructed because it had become
unnecessary when the commercial lot owners commenced constructions thereon.
Be that as it may, the Court cannot visualize any purported obligation by Ayala Corporation to keep the wall on
the strength of this supposed promise alone. If truly Ayala promised anything assuming that Capuyoc was
authorized to bind the corporation with a promise it would have been with respect to the fence. It would not
have established the pre-existing obligation alleged with respect to the wall.

If Ayala, then, were bound by an obligation, it would

have been pursuant to a contract. A contract, however, is characterized by a "meeting of minds between
two persons . 47 As a consensual relation, it must be shown to exist as a fact, clearly and convincingly. But
it cannot be inferred from a mishmash of circumstances alone disclosing some kind of an
"understanding," when especially, those disparate circumstances are not themselves incompatible with
contentions that no accord had existed or had been reached. 48
Obligations arise, among other things, from contract.

46

The petitioners cannot simply assume that the wall was there for the purpose with which they now give it, by
the bare coincidence that it had divided the residential block from the commercial section of Bel-Air. The burden
of proof rests with them to show that it had indeed been built precisely for that objective, a proof that must
satisfy the requirements of our rules of evidence. It cannot be made to stand on the strength of plain
inferences.
b.
This likewise answers the petitioners' second query, whether or not the Court of Appeals had "arbitrarily
ignore(d) the decisive findings of the trial court." 49 i.e., findings pointing to alleged acts performed by the

Ayala Corporation proving its commitment to maintain the wall abovesaid. Specifically, the petitioners
refer to, among other things: (1) Ayala's alleged announcement to Bel- Air Village Association members
that "[the perimeter wall along Jupiter Street will not be demolished," 50 (2) Ayala's alleged commitment
"during the pendency of the case in the trial court" to restore the wall; (3) alleged assurances by Copuyoc
that the wall will not be removed; (4) alleged contrivances by the corporation to make the association
admit as members the commercial lot buyers which provided them equal access to Jupiter Street; and (5)
Ayala's donation to the association of Jupiter Street for "private use" of Bel-Air residents. 51
682 (1903), where it was held that "whether the plaintiffs services were solicited or whether they were offered to
the defendant for his assistance, inasmuch as these services were accepted and made use of by the latter, we
must consider that there was a tacit and mutual consent as to the rendition of services." (At 686.) In that case,
the defendant had enormously benefitted from the services that entitled the plaintiff to compensation on the
theory that no one may unjustly enrich himself at the expense of another (Solutio indebiti) The facts of this case
differ.
As we stated, the Ayala Corporation's alleged conduct prior to or during the proceedings below are not
necessarily at war with claims that no commitment had been in fact made.
With respect to Ayala's alleged announcement before the association, the Court does not agree that Ayala had
categorically assumed as an obligation to maintain the wall "perpetually," i.e., until the year 2007 (the expiration
date under the "deed restrictions.") There is nothing in its statement that would bare any commitment. In
connection with the conference between the parties "during the pendency" of the trial, it is to be noted that the
Ayala Corporation denies having warranted the restoration of the said wall therein. What, on the other hand,
appears in the records is the fact that Ayala did make that promise, but provided that the Mayor allowed it. It
turned out, however, that the Mayor balked at the Idea. 52 But assuming that Ayala did promise to rebuild the

wall (in that conference), it does not seem to us that it did consequently promise to maintain it in
perpetuity.
It is unfair to say, as the trial court did, that the Ayala had "contrived to make future commercial lot owners
special members of BAVA and thereby acquire equal right with the regular members thereof to use Jupiter
Street 53since, as we stated, the commercial lot buyers have the right, in any event, to make use of Jupiter

Street, whether or not they are members of the association. It is not their memberships that give them the
right to use it. They share that right with Bel-Air residents from the outset.

The objective of making the commercial lot owners special members of the Bel-Air Village Association was not
to accord them equal access to Jupiter Street and inferentially, to give them the right to knock down the
perimeter wall. It was, rather, to regulate the use of the street owing precisely to the "planned" nature of Ayala's
development project, and real estate development in general, and this could best be done by placing the
commercial lot owners under the association's jurisdiction.
Moreover, Ayala's overtures with the association concerning the membership of commercial lot buyers therein
have been shown to be neither perfidious nor unethical nor devious (paraphrasing the lower court). We quote
anew:
xxxxxxxxx
(7) On June 30, 1972, appellant informed BAVA that in a few months it shall subdivide and sell
the commercial lots bordering the north side of Buendia Avenue Extension from Reposo
Street up to Zodiac Street. Appellant also informed BAVA that it had taken all precautions and
will impose upon the commercial lot owners deed restrictions which will harmonize and blend
with the development and welfare of Bel-Air Village. Appellant further applied for special
membership in BAVA of the commercial lot owners. A copy of the deed restrictions for the
commercial lots was also enclosed. The proposed deed restrictions shall include the 19 meter
set back of buildings from Jupiter Street, the requirement for parking space within the lot of
one (1) parking slot for every seventy five (75) meters of office space in the building and the
limitation of vehicular traffic along Buendia to entrance only, but allowing both vehicular
entrance and vehicular exit through Jupiter Street and any side street.
In its letter of July 10, 1972, BAVA acknowledged the above letter of appellant and informed the latter that the
application for special membership of the commercial lot owners in BAVA would be submitted to BAVA's board
of governors for decision.
(8) On September 25,1972, appellant notified BAVA that, after a careful study, it was finally
decided that the height limitation of buildings on the commercial lots shall be increased from
12.5 meters to 15 meters. Appellant further informed BAVA that Jupiter Street shall be
widened by 3.5 meters to improve traffic flow in said street. BAVA did not reply to said letter,
but on January 22, 1973, BAVA wrote a letter to the appellant informing the latter that the
Association had assessed the appellant, as special member of the association, the amount of
P40,795.00 (based on 81,590 square meters at P.50 per square meter) representing the
membership dues of the commercial lot owners for the year 1973, and requested the
appellant to remit the amount which its board of governors had already included in its current
budget. In reply, appellant on January 31, 1973 informed BAVA that due to the widening of
Jupiter Street, the area of the lots which were accepted by the Association as members was
reduced to 76,726 square meters. Thus, the corresponding due at P.50 per square meter
should be reduced to P38,363.00. This amount, therefore, was remitted by the appellant to
BAVA. Since then, the latter has been collecting membership dues from the owners of the
commercial lots as special members of the Association. As a matter of fact, the dues were
increased several times. In 1980, the commercial lot owners were already being charged dues
at the rate of P3.00 per square meter. (Domingo, TSN, p. 36, March 19, 1980). At this rate, the
total membership dues of the commercial lot owners amount to P230,178.00 annually based
on the total area of 76,726 square meters of the commercial lots. 54
xxxxxxxxx
The alleged undertaking, finally, by Ayala in the deed of donation (over Jupiter Street) to leave Jupiter Street for
the private use of Bel-Air residents is belied by the very provisions of the deed. We quote:

xxxxxxxxx
IV. That the offer made by the DONOR had been accepted by the DONEE subject to the
condition that the property will be used as a street for the use of the members of the DONEE,
their families, personnel, guests, domestic help and, under certain reasonable conditions and
restrictions, by the general public, and in the event that said lots or parts thereof cease to be
used as such, ownership thereof shall automatically revert to the DONOR. The DONEE shall
always have Reposo Street, Makati Avenue, and Paseo de Roxas open for the use of the
general public. It is also understood that the DONOR shall continue the maintenance of the
street at its expense for a period of three years from date hereof." (Deed of Donation, p. 6,
Exh. 7) 55

xxxxxxxxx
The donation, on the contrary, gave the general public equal right to it.
The Court cannot then say, accepting the veracity of the petitioners' facts" enumerated above, that the Ayala
Corporation may be held liable for specific performance of a demandable obligation, let alone damages.
The Court adds that Ayala can hardly be held responsible for the alleged deterioration of "living and
environmental conditions" 56 of the Bel-Air area, as a consequence of "Ayala's authorized demolition of the

Jupiter perimeter wall in 1974-1975. " 57 We agree with Ayala that until 1976, "there was peace and quiet"
at Jupiter Street, as the petitioners' (Sangalang, Gaston, and Briones) complaints admit. Hence, the
degeneration of peace and order in Bel-Air cannot be ascribed to the destruction of the wall in 1974 and
1975.
But this
was upon orders of the Mayor, and for which the homeowners' association had precisely filed suit (Civil
Case No. 34998) 59 to contest the act of the Mayor.
What Ayala submits as the real cause was the opening of Jupiter Street to vehicular traffic in 1977.,

58

c.
This likewise disposes of the third question presented. The petitioners' reliance on Ayala's alleged conduct
(proving its alleged commitment), so we have ruled, is not well-taken. Ayala's alleged acts do not, by
themselves, reflect a commitment to maintain the wall in dispute. It cannot be therefore said that the Court of
Appeals "arbitrarily ignore(d]" 60 the lower court's findings. Precisely, it is the duty of the appellate court to

review the findings of the trial judge, be they of fact or law. 61 It is not bound by the conclusions of the
judge, for which reason it makes its own findings and arrives at its own conclusions. Unless a grave
abuse of discretion may be imputed to it, it may accept or reject the lower tribunal's determinations and
rely solely on the records.
Accordingly, the Court affirms the Court of Appeals' holding that the Ayala Corporation, in its dealings with the
petitioners, the Bel-Air Village Association in particular, had "acted with justice, gave the appellees [petitioners]
their due and observed honesty and good faith." 62 "Therefore, under both Articles 19 and 21 of the Civil

Code, the appellant [Ayala] cannot be held liable for damages."

63

2. G.R. Nos. 74376, 76394, 78182, & 82281

Our decision also resolves, quite anticlimactically, these companion cases. But we do so for various other
reasons. In the Sangalang case, we absolve the Ayala Corporation primarily owing to our finding that it is not
liable for the opening of Jupiter Street to the general public. Insofar as these petitions are concerned, we
likewise exculpate the private respondents, not only because of the fact that Jupiter Street is not covered by the

restrictive easements based on the "deed restrictions" but chiefly because the National Government itself,
through the Metro Manila Commission (MMC), had reclassified Jupiter Street into high density commercial (C3) zone, 64 pursuant to its Ordinance No. 81-01. Hence, the petitioners have no cause of action on the

strength alone of the said "deed restrictions.

In view thereof, we find no need in resolving the questions raised as to procedure, since this disposition is
sufficient to resolve these cases.
It is not that we are saying that restrictive easements, especially the easements herein in question, are invalid
or ineffective. As far as the Bel-Air subdivision itself is concerned, certainly, they are valid and enforceable. But
they are, like all contracts, subject to the overriding demands, needs, and interests of the greater number as
the State may determine in the legitimate exercise of police power. Our jurisdiction guarantees sanctity of
contract and is said to be the "law between the contracting parties, 65 but while it is so, it cannot contravene

'law, morals, good customs, public order, or public policy. 66 Above all, it cannot be raised as a deterrent to
police power, designed precisely to promote health, safety, peace, and enhance the common good, at the
expense of contractual rights, whenever necessary. In Ortigas & Co., Limited Partnership v. Feati Bank
and Trust Co., 67 we are told:
xxxxxxxxx
2. With regard to the contention that said resolution cannot nullify the contractual obligations
assumed by the defendant-appellee referring to the restrictions incorporated in the deeds of
sale and later in the corresponding Transfer Certificates of Title issued to defendant-appellee
it should be stressed, that while non-impairment of contracts is constitutionally guaranteed,
the rule is not absolute, since it has to be reconciled with the legitimate exercise of police
power, i.e., "the power to prescribe regulations to promote the health, morals, peace,
education, good order or safety and general welfare of the people.' Invariably described as
"the most essential, insistent, and illimitable of powers" and "in a sense, the greatest and most
powerful attribute of government," the exercise of the power may be judicially inquired into
and corrected only if it is capricious, whimsical, unjust or unreasonable, there having been a
denial of due process or a violation of any other applicable constitutional guarantee. As this
Court held through Justice Jose P. Bengson in Philippine Long Distance Company vs. City of
Davao, et al. police power 'is elastic and must be responsive to various social conditions; it is
not confined within narrow circumscriptions of precedents resting on past conditions; it must
follow the legal progress of a democratic way of life.' We were even more emphatic in Vda. de
Genuino vs. The Court of agrarian Relations, et al., when We declared: "We do not see why
public welfare when clashing with the individual right to property should not be made to prevail
through the state's exercise of its police power."
Resolution No. 27, 1960 declaring the western part of High way 54, now E. de los Santos
Avenue (EDSA, for short) from Shaw Boulevard to the Pasig River as an industrial and
commercial zone, was obviously passed by the Municipal Council of Mandaluyong, Rizal in
the exercise of police power to safeguard or promote the health, safety, peace, good order
and general welfare of the people in the locality. Judicial notice may be taken of the conditions
prevailing in the area, especially where Lots Nos. 5 and 6 are located. The lots themselves not
only front the highway; industrial and commercial complexes have flourished about the place.
EDSA, a main traffic artery which runs through several cities and municipalities in the Metro
Manila area, supports an endless stream of traffic and the resulting activity, noise and
pollution are hardly conducive to the health, safety or welfare of the residents in its route.
Having been expressly granted the power to adopt zoning and subdivision ordinances or
regulations, the municipality of Mandaluyong, through its Municipal Council, was reasonably, if
not perfectly, justified under the circumstances, in passing the subject resolution. 68

xxxxxxxxx
Undoubtedly, the MMC Ordinance represents a legitimate exercise of police power. The petitioners have not
shown why we should hold otherwise other than for the supposed "non-impairment" guaranty of the
Constitution, which, as we have declared, is secondary to the more compelling interests of general welfare. The
Ordinance has not been shown to be capricious or arbitrary or unreasonable to warrant the reversal of the
judgments so appealed. In that connection, we find no reversible error to have been committed by the Court of
Appeals.
WHEREFORE, premises considered, these petitions are DENIED No pronouncement as to costs.
IT IS SO ORDERED.
Fernan, (C.J.), Melencio-Herrera, Gutierrez, Jr., Cruz, Gancayco, Bidin, Cortes, Grio-Aquino, Medialdea and
Regalado, JJ., concur.
Narvasa, J., on leave.
Paras, J., Took no part;
Feliciano, J., Took no part;
Padilla, J., Took no part;

Footnotes
1 Consolidated pursuant to our Resolution dated July 18, 1988.
2 ollo, G.R. No. 71169, 102-113. The decision of the Court of Appeals makes mention of
specified areas in Makati having been converted into a "High Intensity Commercial Zone" as
well as "Low Intensity Residential" (see page 9 of this Decision). This should be either "high"
or "low" density.
3 Jurado Desiderio, J.; Campos, Jr., Jose and Camilon, Serafin, JJ., Concurring. Pascual,
Crisolito J., Dissenting. The decision set aside, dated October 1, 1982, was penned by Hon.
Gregorio Pineda, Presiding Judge, Court of First Instance of Rizal, Seventh Judicial District,
Pasig, Metro Manila, Branch XXI.
4 Rollo, Id., 128.
5 Civil Case No. 49217, Hon. Rafael T. Mendoza, Presiding Judge; rollo, G.R. No. 74376, 82.
6 Rollo. Id.
7 Camilon, Serafin, J.; Pascual. Crisolito Campos Jr., Jose, and Jurado, Desiderio, JJ.
Concurring.
8 Rollo, Id., 34; emphasis in original.

9 Rollo, G.R. No. 76394, 24-25.

10 Civil Case No. 33112; see Id., 8, 10.
11 Jurado, Desiderio, J.; Campos, J., Jose and Camilon, Serafin JJ. Concurring; Pascual,
Crisolito J., Chairman, on leave.
12 First Division.
13 Rollo, Id., 81.
14 Per Resolution, dated February 22, 1988.
15 Per Resolution, dated April 4, 1988.
16 See fn. 1, supra.
17 Rollo, G.R, No. 78182, 36-38.
18 Camilon, Serafin, J.; Pronove, Ricardo and Cacdac, Bonifacio, JJ., Concurring.
19 Civil Case No. 27719, Regional Trial Court, Makati, Branch 145.
20 Rollo, G.R. No. 82281, 33-35.
21 Civil Case No. 8936, Regional Trial Court of Makati, Branch CXL, Hon. Ansberto P.
Paredes, presiding, see Id., 32.
22 Bengzon, Eduardo, J.; Kapunan, Santiago and Buena, Arturo, JJ., Concurring.
23 Rollo, Id., 38.
24 See supra, 103-108.
25 Id., 32.
26 Id., 38.
27 Id., 50-51.
28 78 Phil. 196 (1947).
29 Supra, 209; emphasis supplied.
30 No. L-14551, July 31, 1961, 2 SCRA 873.
31 Supra 877.
32 Supra.

33 No. L-60129, July 29, 1983, 123 SCRA 799.

34 The rule states: Questions that may be decided. No which does not affect the jurisdiction
over the subject matter will be considered unless stated in the assignment of errors and
properly argued in the brief, save as the court, as its option, may notice plain errors See rollo,
G.R. No. 71169, Id., 168. The pertinent paragraph of the answer states:
10. That in 1975, the Municipal Government of Makati enacted a zoning ordinance and
classified the blocks between Buendia Avenue Extension and Jupiter Street as an
administrative office zone with the north-northeast boundary of the zone extending up to the
center line of Jupiter street. Under the said ordinance, Bel-Air Village has likewise been called
into a residential zone, with its boundary at the southwest being delimited only up to the
center line of the Jupiter Street. Similarly, under Ordinance No. 81-01 of the Metro Manila
Commission, Jupiter Street has been made a common boundary of the commercial blocks
along the north side of the Buendia Avenue Extension and the Bel-Air Village Subdivision, so
that the said street is subject to the common use of the owners of both the commercial blocks
as well as the residential areas.
11. That the restoration reconstruction of the wall on the blocks along the southern side of
Jupiter Street will come the entire southside portion of Jupiter Street and will illegally deprive
the abutting lot owners on the commercial blocks of their rights to have the street kept open
and to have access to the street, in violation of Act 496, as amended by Republic Act 440.
36 See Id., 169.
37 Exhibits Nos. "18" and "19"; see Id., 168.
38 Id., 116.
39 Id.
40 Id., 66.
41 Rollo, G.R. No. 71169, Id., 124.
42 Id.
43 Id.
44 Id., 124-126; emphasis in original.
45 Id., 52.
46 CIVIL CODE, art. 1157, par. (2).
47 Supra, art. 1305.
48 This case should be distinguished from Perez v. Pomar, 2 Phil.
49 Rollo, Id., 38.

50 Id., 40.
51 Id., 47.
52 Id., 183-185.
53 Id., 92.
54 Id., 105-106.
55 Id., 193; emphasis in original.
56 Id., 45.
57 Id.
58 Id., 108-110.
59 Id., 193.
60 Id., 38.
61 RULES OF COURT, Rule 46, sec. 18.
62 Rollo, G.R. No. 71169, Id., 126.
63 Id.
64 See rollo, G.R. No. 71169, Id., 117.
65 CIVIL CODE, supra, art. 1159.
66 Supra, art. 1306.
67 No. L-24670, December 14, 1979, 94 SCRA 533.
68 Supra, 545-547.

Republic
SUPREME
Manila
SECOND DIVISION
G.R. No. 52159 December 22, 1989

of

the

Philippines
COURT

JOSE
PILAPIL, petitioner,
vs.
HON. COURT OF APPEALS and ALATCO TRANSPORTATION COMPANY, INC., respondents.
Martin Badong, Jr. for petitioner.
Eufronio K. Maristela for private respondent.

PADILLA, J.:
This is a petition to review on certiorari the decision* rendered by the Court of Appeals dated 19 October 1979
in CA-G.R. No. 57354-R entitled "Jose Pilapil, plaintiff-appellee versus Alatco Transportation Co., Inc.,
defendant-appellant," which reversed and set aside the judgment of the Court of First Instance of Camarines
Sur in Civil Case No. 7230 ordering respondent transportation company to pay to petitioner damages in the
total sum of sixteen thousand three hundred pesos (P 16,300.00).
The record discloses the following facts:
Petitioner-plaintiff Jose Pilapil, a paying passenger, boarded respondent-defendant's bus bearing No. 409 at
San Nicolas, Iriga City on 16 September 1971 at about 6:00 P.M. While said bus No. 409 was in due course
negotiating the distance between Iriga City and Naga City, upon reaching the vicinity of the cemetery of the
Municipality of Baao, Camarines Sur, on the way to Naga City, an unidentified man, a bystander along said
national highway, hurled a stone at the left side of the bus, which hit petitioner above his left eye. Private
respondent's personnel lost no time in bringing the petitioner to the provincial hospital in Naga City where he
was confined and treated.
Considering that the sight of his left eye was impaired, petitioner was taken to Dr. Malabanan of Iriga City
where he was treated for another week. Since there was no improvement in his left eye's vision, petitioner went
to V. Luna Hospital, Quezon City where he was treated by Dr. Capulong. Despite the treatment accorded to him
by Dr. Capulong, petitioner lost partially his left eye's vision and sustained a permanent scar above the left eye.
Thereupon, petitioner instituted before the Court of First Instance of Camarines Sur, Branch I an action for
recovery of damages sustained as a result of the stone-throwing incident. After trial, the court a quo rendered
judgment with the following dispositive part:
Wherefore, judgment is hereby entered:
1. Ordering defendant transportation company to pay plaintiff Jose Pilapil the
sum of P 10,000.00, Philippine Currency, representing actual and material
damages for causing a permanent scar on the face and injuring the eye-sight
of the plaintiff;
2. Ordering further defendant transportation company to pay the sum of P
5,000.00, Philippine Currency, to the plaintiff as moral and exemplary
damages;
3. Ordering furthermore, defendant transportation company to reimburse
plaintiff the sum of P 300.00 for his medical expenses and attorney's fees in
the sum of P 1,000.00, Philippine Currency; and

4. To pay the costs.

SO ORDERED 1
From the judgment, private respondent appealed to the Court of Appeals where the appeal was docketed as
CA-G.R. No. 57354R. On 19 October 1979, the Court of Appeals, in a Special Division of Five, rendered
judgment reversing and setting aside the judgment of the court a quo.
Hence the present petition.
In seeking a reversal of the decision of the Court of Appeals, petitioner contends that said court has decided
the issue not in accord with law. Specifically, petitioner argues that the nature of the business of a
transportation company requires the assumption of certain risks, and the stoning of the bus by a stranger
resulting in injury to petitioner-passenger is one such risk from which the common carrier may not exempt itself
from liability.
We do not agree.
In consideration of the right granted to it by the public to engage in the business of transporting passengers and
goods, a common carrier does not give its consent to become an insurer of any and all risks to passengers and
goods. It merely undertakes to perform certain duties to the public as the law imposes, and holds itself liable for
any breach thereof.
Under Article 1733 of the Civil Code, common carriers are required to observe extraordinary diligence for the
safety of the passenger transported by them, according to all the circumstances of each case. The requirement
of extraordinary diligence imposed upon common carriers is restated in Article 1755: "A common carrier is
bound to carry the passengers safely as far as human care and foresight can provide, using the utmost
diligence of very cautious persons, with due regard for all the circumstances." Further, in case of death of or
injuries to passengers, the law presumes said common carriers to be at fault or to have acted negligently. 2
While the law requires the highest degree of diligence from common carriers in the safe transport of their
passengers and creates a presumption of negligence against them, it does not, however, make the carrier an
insurer of the absolute safety of its passengers. 3
Article 1755 of the Civil Code qualifies the duty of extraordinary care, vigilance and precaution in the carriage of
passengers by common carriers to only such as human care and foresight can provide. what constitutes
compliance with said duty is adjudged with due regard to all the circumstances.
Article 1756 of the Civil Code, in creating a presumption of fault or negligence on the part of the common
carrier when its passenger is injured, merely relieves the latter, for the time being, from introducing evidence to
fasten the negligence on the former, because the presumption stands in the place of evidence. Being a mere
presumption, however, the same is rebuttable by proof that the common carrier had exercised extraordinary
diligence as required by law in the performance of its contractual obligation, or that the injury suffered by the
passenger was solely due to a fortuitous event. 4
In fine, we can only infer from the law the intention of the Code Commission and Congress to curb the
recklessness of drivers and operators of common carriers in the conduct of their business.
Thus, it is clear that neither the law nor the nature of the business of a transportation company makes it an
insurer of the passenger's safety, but that its liability for personal injuries sustained by its passenger rests upon
its negligence, its failure to exercise the degree of diligence that the law requires. 5

Petitioner contends that respondent common carrier failed to rebut the presumption of negligence against it by
proof on its part that it exercised extraordinary diligence for the safety of its passengers.
We do not agree.
First, as stated earlier, the presumption of fault or negligence against the carrier is only a disputable
presumption. It gives in where contrary facts are established proving either that the carrier had exercised the
degree of diligence required by law or the injury suffered by the passenger was due to a fortuitous event.
Where, as in the instant case, the injury sustained by the petitioner was in no way due to any defect in the
means of transport or in the method of transporting or to the negligent or willful acts of private respondent's
employees, and therefore involving no issue of negligence in its duty to provide safe and suitable cars as well
as competent employees, with the injury arising wholly from causes created by strangers over which the carrier
had no control or even knowledge or could not have prevented, the presumption is rebutted and the carrier is
not and ought not to be held liable. To rule otherwise would make the common carrier the insurer of the
absolute safety of its passengers which is not the intention of the lawmakers.
Second, while as a general rule, common carriers are bound to exercise extraordinary diligence in the safe
transport of their passengers, it would seem that this is not the standard by which its liability is to be determined
when intervening acts of strangers is to be determined directly cause the injury, while the contract of carriage
Article 1763 governs:
Article 1763. A common carrier is responsible for injuries suffered by a passenger on account
of the wilful acts or negligence of other passengers or of strangers, if the common carrier's
employees through the exercise of the diligence of a good father of a family could have
prevented or stopped the act or omission.
Clearly under the above provision, a tort committed by a stranger which causes injury to a passenger does not
accord the latter a cause of action against the carrier. The negligence for which a common carrier is held
responsible is the negligent omission by the carrier's employees to prevent the tort from being committed when
the same could have been foreseen and prevented by them. Further, under the same provision, it is to be noted
that when the violation of the contract is due to the willful acts of strangers, as in the instant case, the degree of
care essential to be exercised by the common carrier for the protection of its passenger is only that of a good
father of a family.
Petitioner has charged respondent carrier of negligence on the ground that the injury complained of could have
been prevented by the common carrier if something like mesh-work grills had covered the windows of its bus.
We do not agree.
Although the suggested precaution could have prevented the injury complained of, the rule of ordinary care and
prudence is not so exacting as to require one charged with its exercise to take doubtful or unreasonable
precautions to guard against unlawful acts of strangers. The carrier is not charged with the duty of providing or
maintaining vehicles as to absolutely prevent any and all injuries to passengers. Where the carrier uses cars of
the most approved type, in general use by others engaged in the same occupation, and exercises a high
degree of care in maintaining them in suitable condition, the carrier cannot be charged with negligence in this
respect. 6
Finally, petitioner contends that it is to the greater interest of the State if a carrier were made liable for such
stone-throwing incidents rather than have the bus riding public lose confidence in the transportation system.
Sad to say, we are not in a position to so hold; such a policy would be better left to the consideration of
Congress which is empowered to enact laws to protect the public from the increasing risks and dangers of
lawlessness in society.

WHEREFORE, the judgment appealed from is hereby AFFIRMED.

SO ORDERED.
Melencio-Herrera (Chairperson), Sarmiento and Regalado, concur.
Paras, J., took no part.

Footnotes
* .. Penned by Justice Hugo E. Gutierrez, Jr., with Justices Edgardo L. Paras, Milagros A.
German, Jorge R. Coquia, concurring. Justice Ramon G. Gaviola, Jr. dissented.
1. Record on Appeal, Annex "B", Rollo, p. 31.
2. Article 1756, New Civil Code.
3. Strong v. Iloilo-Negros Air Express Co., 40 OG Supp. 12 p. 274; Alfaro v. Ayson, 54 OG
Dec. 1, 1958, p. 7920.
4. Art. 1174, Civil Code; Lasam v. Smith, 45 Phil. 657.
5. Art. 1170, 1173, Civil Code; Alfaro v. Ayson, Supra; Necesito, et al. vs. Paras, et al., 104
Phil. 75.
6 Irwin v. Louisville & N.R. Co., 50 Southern Reporter 62.

G.R. No. 83754 February 18, 1991

TEODORO
B.
vs.
COURT OF APPEALS, Fifteenth Division, respondents.

CRUZ,

JR., petitioner,

Cruz, Enverga & Del Mundo for petitioner.

CRUZ, J.:p
Petitioner Teodoro D. Cruz, Jr. raises procedural issues in this petition to review the decision of the respondent
Court of Appeals in C.A.-G.R. SP No. 11771 dated April 29, 1988, and its resolution of June 6, 1988, denying
his motion for reconsideration.

The petitioner was charged before the Regional Trial Court of Makati, along with several others, in four
separate informations for estafa thru falsification of public documents.
It was alleged that the petitioner, together with Melania Guerrero, who produced a special power of attorney
claimed establish have been executed by the late Clemente Guerrero, had conspired with their co-accused in
selling some properties of the decedent to the widow's sister, Luz Andico, through fictitious deeds of sale
notarized by the petitioner sometime in November and December of 1980.
Upon arraignment on June 1, 1984, the petitioner and his co-accused entered a plea of not guilty.
Subsequently, the petitioner filed a motion to dismiss on the ground that the four informations "(did) not charge
an offense." At the hearing on this motion, the petitioner submitted testimonial and documentary evidence
which was not refuted by the prosecution. For its part, the prosecution submitted no evidence at an but later
moved to deny the motion.
The motion to dismiss-to was eventually denied by the trial court, 1 as so was the subsequent motion for

reconsideration. 2 The petitioner questioned the denial of the motions before this Court, which referred the
case to the Court of Appeals. On April 29, 1988, the respondent courts 3 dismissed the petition,
holding inter alia as follows:
Petitioner unabashedly admits that the motion to dismiss in the instant criminal cases was
filed after the arraignment so that the cases could not be refiled again considering the
principle of double jeopardy. But this precisely begs the issue. The respondent Court, then
presided over by Judge Madayag, cited as ground of the denial of the motion to dismiss to
avoid technicalities that may arise later. This is interrelated to the first ground in the denial
interest of substantial justice that the prosecution could adduce evidence during the trial.
Thus, to hold otherwise is to sanction a shrewd maneuver by petitioner wherein he files a
motion to quasi/dismiss after arraignment, presents his evidence supporting his ground
therefor, and without the State being able to present its evidence in chief. Under the
circumstances, what is needed is a full-blown hearing.
xxx xxx xxx
Moreover, assuming that the procedure pursued by the petitioner in outright presenting his
evidence in support of his motion to dismiss, although the prosecution has not as yet
presented its evidence in chief is sanctioned by the Rules, still the respondent Court, under
the circumstances, did not abuse its discretion in denying the motion to dismiss and
subsequently, the motion for reconsideration. Respondent Court must have been not
convinced of the evidence presented, hence, its judicial prerogative to deny the dismissal of
the charges.
What is essential and important is for the petitioner to show by his own evidence that the
documents, subject of the charges, were prepared and notarized by him clearly prior to the
death of Clemente Guerrero on June 24, 1980 and not simply prior to the months of
November and December, 1980 when the offense was committed, as alleged in the
Information because each Information may be amended as regards the date of the
commission of the offense without impairing the rights of the petitioner (People v. Gerardo
Rivera, et al., 33 SCRA 746). The amendment will only be a matter of form and will not "affect
the nature and essence of the crime as only charged."
The petitioner is now before us on certiorari and faults the above-quoted decision on the following grounds:
(1) The court proceedings on petitioner's motion to dismiss are clearly sanctioned by law and
jurisprudence.

(2) The prosecution is in estoppel to question said proceedings.

(3) The informations do not charge an offense.
(4) There exists a variance between the allegations in the information and the evidence
presented in the motion to dismiss.
(5) The documents were notarized on their stated dates.
(6) Substantial justice demands the dismissal of the informations filed against herein
petitioner.
The petition must fail.
It is axiomatic that a complaint or information must state every single fact necessary to constitute the offense
charged; otherwise, a motion to dismiss/quash on the ground that it charges no offense may be properly
sustained. The fundamental test in considering a motion to quash on this ground is whether the facts alleged, if
hypothetically admitted, will establish the essential elements of the offense as defined in the law. 4
Contrary to the petitioner's contention, a reading of the informations will disclose that the essential elements of
the offense charged are sufficiently alleged. It is not proper therefore to resolve the charges at the very outset,
in a preliminary hearing only and without the benefit of a full-blown trial. The issues require a fuller examination.
Given the circumstances of this case, we feel it would be unfair to shut off the prosecution at this stage of the
proceedings and to dismiss the informations of the basis only of the petitioner's evidence, such as it is.
It is clear that the trial judge did not commit grave abuse of discretion when he denied the motion to dismiss on
the grounds that "(a) interest of substantial justice that the prosecution could adduce evidence during the trial;
and (b) to avoid technicalities that may arise later." 5 On the contrary, his action was authorized under U.S.

v. Barredo,6 where this Court said:

Upon a motion of the provincial fiscal to dismiss a complaint upon which an accused person
has been remanded for trial by a justice of the peace, it rests in the sound discretion of the
judge whether to accede to such motion or not. Ordinarily, of course, he will dismiss the action
in accordance with the suggestion of an experienced fiscal who has personally investigated
the facts. But if he is not satisfied with the reason assigned by the fiscal, or if it appears to him
from the record of the proceedings in the court of the justice of the peace, or as a result of
information furnished by the private prosecutor, or otherwise, that the case should not be
dismissed, he may deny the motion.
Indeed, as pointed out by the Solicitor General, this denial was proper because the petitioner failed to
controvert in his motion to dismiss the following substantial circumstances alleged in the affidavit complaint:
(1) That the vendee, Luz Andico (sister of the accused Melania Guerrero), has no visible
means to purchase said properties;
(2) That the capital gains taxes for the alleged sales were paid only in December 1980, when
it should have been paid within 30 days from the date of the sale (National Internal Revenue
Code);
(3) That the Deeds of Sale were presented for registration to the registries concerned only in
November and December, 1980;

(4) That the antedating of the documents was made possible by the fact that notary public
Teodoro B. Cruz, Jr. (herein petitioner) as late as March, 1981 had not submitted his notarial
report together with the copies of the documents he notarized for 1980.
The petitioner's contention that the questioned transactions were already in existence before the months of
November and December 1980, when they were supposedly falsified, is a matter of defense best examined
during the trial rather than in the preliminary hearing on his motion to dismiss. The prosecution should be given
ample opportunity to prove the allegations in the informations at the appropriate time, and that is the trial itself.
The proper time to offer it, following the normal procedure prescribed in Rule 119, Section 3 of the Rules of
Court, is after the prosecution shall have presented its pay evidence during the trial. This is in accord
,with People v.Cadabis, 7 where this Court held:
Save where the Rules expressly permit the investigation of facts alleged in a motion to quash,
the general principle is that in the hearing of such motion only such facts as are alleged in the
information, and those admitted by the fiscal, should be taken into account in the resolution
thereof.Matters of defense can not be produced during the hearing of such motions, except
where the rules expressly permit, such as extinction of criminal liability, prescription and
former jeopardy. (Emphasis supplied).
But we do not agree with the ruling of the respondent court that the motion to quash should have been filed
before the petitioner and his co-accused were arraigned, conformably to Section 1 of Rule 117 of the Rules of
Court, which provides:
Sec. 1. Time to move to quash. At any time before entering his plea, the accused may
move to quash the complaint or information.
It is true that a person who does not move to quash a complaint or information until after he has pleaded is
deemed to have waived all objections then available which are grounds of a motion to quash. 8 However, this

is subject to exception. By express provision of Sec. 8 of the same rule, failure to assert certain grounds
in a motion to quash filed prior to the plea does not operate as a waiver of the right to invoke them later.
Even after arraignment, a motion to dismiss the information may be filed if it is based on the ground that:
(a) the information charges no offense; (b) the trial court has no jurisdiction; (c) the penalty or the offense
has been extinguished; and (d) that double jeopardy has attached.
The petitioner contends that the prosecution is now estopped from questioning the motion to dismiss, having
participated without objection in the hearing thereof and not having controverted the evidence adduced by the
movant at that time. This is untenable. Estoppel does not he against the government because of the
supposedly mistaken acts or omissions of its agents. As we declared in People v. Castaeda, 9 "there is the

long familiar rule that erroneous application and enforcement of the law by public officers do not block
subsequent correct application of the statute and that the government is never estopped by mistake or
error on the part of its agents."
It remains to observe that an order denying a motion to quash is interlocutory and therefore not appealable, nor
can it be the subject of a petition for certiorari. Such order may only be reviewed in the ordinary course of law
by an appeal from the judgment after trial. The petitioner should have proceeded with the trial of the case in the
court below, without prejudice to his right, if final judgment is rendered against him, to raise the same question
before the proper appellate court.
The procedure was well defined in Acharon v. Purisima, 10 thus:
. . . Moreover, when the motion to quash filed by Acharon to nullify the criminal cases filed
against him was denied by the Municipal Court of General Santos his remedy was not to file a

petition forcertiorari but to go to trial without prejudice on his part to reiterate the special
defenses he had invoked in his motion and, if, after trial on the merits, an adverse decision is
rendered, to appeal therefrom in the manner authorized by law. This is the procedure that he
should have followed as authorized by law and precedents. Instead, he took the usual step of
filing a writ of certiorari before the Court of First Instance which in our opinion is unwarranted it
being contrary to the usual course of law.
Where it is clear that the information does not really charge an offense, the case against the accused must be
dropped immediately instead of subjecting him to the anxiety and inconvenience of a useless trial. The accused
is entitled to such consideration. And indeed, even the prosecution will benefit from such a dismissal because it
can then file a corrected information provided the accused had not yet pleaded and jeopardy has not yet
attached. There is no point in proceeding under a defective information that can never be the basis of a valid
conviction.
But such is not the situation in the case at bar. As already observed, the challenged informations are not
insufficient on their face and neither did the evidence presented at the preliminary hearing justify their dismissal
even before the trial had commenced. If "substantial justice" is to be accorded by this Court, as the petitioner
insists, then the step it must take is to sustain the denial of the motion to dismiss and allow the criminal cases
to follow their normal course. That is what we rule now.
WHEREFORE, the petition is DENIED. Criminal Cases Nos. 7332, 7333, 7334 and 7335 are remanded to the
Regional Trial Court of Makati, Branch 145, for further proceedings. Costs against the petitioner.
SO ORDERED.
Narvasa, Gancayco, Grio-Aquino and Medialdea, JJ., concur.

Footnotes
1 By Judge Job Madayag.
2 By Judge Consuelo Yares Santiago.
3 Kalalo, J., ponente, with M.T. Reyes and Ordoez-Benitez, JJ., concurring.
4 U.S. v. Pompeya, 31 Phil. 245; People v. De la Rosa, 98 SCRA 190.
5 Rollo, p. 97.
6 32 Phil. 444.
7 97 Phil. 829.
8 People v. Casiano, 1 SCRA 478; Palanca v. Querubin, 30 SCRA 738.
9 165 SCRA 327.
10 13 SCRA 309.

G.R. No. L-61311 September 2l, 1987

FELICIDAD VILLANUEVA, FERNANDO CAISIP, ANTONIO LIANG, FELINA MIRANDA, RICARDO PUNO,
FLORENCIO
LAXA,
and
RENE
OCAMPO, petitioners,
vs.
HON. MARIANO CASTAEDA, JR., Presiding Judge of the Court of First Instance of Pampanga, Branch
III, VICENTE A. MACALINO, Officer-in-Charge, Office of the Mayor, San Fernando,
Pampanga, respondents.

CRUZ, J.:
There is in the vicinity of the public market of San Fernando, Pampanga, along Mercado Street, a strip of land
measuring 12 by 77 meters on which stands a conglomeration of vendors stalls together forming what is
commonly known as a talipapa. This is the subject of the herein petition. The petitioners claim they have a right
to remain in and conduct business in this area by virtue of a previous authorization granted to them by the
municipal government. The respondents deny this and justify the demolition of their stalls as illegal
constructions on public property. At the petitioners' behest, we have issued a temporary restraining order to
preserve the status quobetween the parties pending our decision. 1 Now we shall rule on the merits.
This dispute goes back to November 7, 1961, when the municipal council of San Fernando adopted Resolution
No. 218 authorizing some 24 members of the Fernandino United Merchants and Traders Association to
construct permanent stags and sell in the above-mentioned place. 2 The action was protested on November

10, 1961, in Civil Case No. 2040, where the Court of First Instance of Pampanga, Branch 2, issued a writ
of preliminary injunction that prevented the defendants from constructing the said stalls until final
resolution of the controversy. 3 On January 18, 1964, while this case was pending, the municipal council
of San Fernando adopted Resolution G.R. No. 29, which declared the subject area as "the parking place
and as the public plaza of the municipality, 4 thereby impliedly revoking Resolution No. 218, series of
1961. Four years later, on November 2, 1968, Judge Andres C. Aguilar decided the aforesaid case and
held that the land occupied by the petitioners, being public in nature, was beyond the commerce of man
and therefore could not be the subject of private occupancy. 5 The writ of preliminary injunction was made
permanent. 6
The decision was apparently not enforced, for the petitioners were not evicted from the place; in fact, according
to then they and the 128 other persons were in 1971 assigned specific areas or space allotments therein for
which they paid daily fees to the municipal government. 7 The problem appears to have festered for some

more years under a presumably uneasy truce among the protagonists, none of whom made any move, for
some reason that does not appear in the record. Then, on January 12, 1982, the Association of
Concerned Citizens and Consumers of San Fernando filed a petition for the immediate implementation of
Resolution No. 29, to restore the subject property "to its original and customary use as a public plaza. 8
Acting thereon after an investigation conducted by the municipal attorney, 9 respondent Vicente A. Macalino,

as officer-in-charge of the office of the mayor of San Fernando, issued on June 14, 1982, a resolution
requiring the municipal treasurer and the municipal engineer to demolish the stalls in the subject place

beginning July 1, 1982.

10 The reaction of the petitioners was to file a petition for prohibition with the Court of First Instance of
Pampanga, docketed as Civil Case No. 6470, on June 26, 1982. The respondent judge denied the petition on July 19, 1982, 11 and the
motion for reconsideration on August 5, 1982, 12 prompting the petitioners to come to this Court on certiorari to challenge his decision. 13

As required, respondent Macalino filed his comment

14 on the petition, and the petitioners countered with their reply. 15 In

compliance with our resolution of February 2, 1983, the petitioners submitted their memorandum 16 and respondent Macalino, for his part,
asked that his comment be considered his memorandum. 17 On July 28, 1986, the new officer-in-charge of the office of the mayor of San
Fernando, Paterno S. Guevarra, was impleaded in lieu of Virgilio Sanchez, who had himself earlier replaced the original respondent
Macalino. 18

After considering the issues and the arguments raised by the parties in their respective pleadings, we rule for
the respondents. The petition must be dismissed.
There is no question that the place occupied by the petitioners and from which they are sought to be evicted is
a public plaza, as found by the trial court in Civil Case No. 2040. This finding was made after consideration of
the antecedent facts as especially established by the testimony of former San Fernando Mayor Rodolfo Hizon,
who later became governor of Pampanga, that the National Planning Commission had reserved the area for a
public plaza as early as 1951. This intention was reiterated in 1964 through the adoption of Resolution No.
29. 19
It does not appear that the decision in this case was appealed or has been reversed. In Civil Case G.R. No.
6740, which is the subject of this petition, the respondent judge saw no reason to disturb the finding in Civil
Case No. 2040 and indeed used it as a basis for his own decision sustaining the questioned order. 20
The basic contention of the petitioners is that the disputed area is under lease to them by virtue of contracts
they had entered into with the municipal government, first in 1961 insofar as the original occupants were
concerned, and later with them and the other petitioners by virtue of the space allocations made in their favor in
1971 for which they saw they are paying daily fees. 21 The municipal government has denied making such

agreements. In any case, they argue, since the fees were collected daily, the leases, assuming their
validity, could be terminated at will, or any day, as the claimed rentals indicated that the period of the
leases was from day to day. 22
The parties belabor this argument needlessly.
A public plaza is beyond the commerce of man and so cannot be the subject of lease or any other contractual
undertaking. This is elementary. Indeed, this point was settled as early as in Municipality of Cavite vs.
Rojas, 23decided in 1915, where the Court declared as null and void the lease of a public plaza of the said

municipality in favor of a private person.

Justice Torres said in that case:
According to article 344 of the Civil Code: "Property for public use in provinces and in towns
comprises the provincial and town roads, the squares, streets, fountains, and public waters,
the promenades, and public works of general service supported by said towns or provinces.
The said Plaza Soledad being a promenade for public use, the municipal council of Cavite
could not in 1907 withdraw or exclude from public use a portion thereof in order to lease it for
the sole benefit of the defendant Hilaria Rojas. In leasing a portion of said plaza or public
place to the defendant for private use the plaintiff municipality exceeded its authority in the
exercise of its powers by executing a contract over a thing of which it could not dispose, nor is
it empowered so to do.

The Civil Code, article 1271, prescribes that everything which is not outside the commerce of
man may be the object of a contract, and plazas and streets are outside of this commerce, as
was decided by the supreme court of Spain in its decision of February 12, 1895, which says:
"communal things that cannot be sold because they are by their very nature outside of
commerce are those for public use, such as the plazas, streets, common lands, rivers,
fountains, etc."
Therefore, it must be concluded that the contract, Exhibit C, whereby the municipality of
Cavite leased to Hilaria Rojas a portion of the Plaza Soledad is null and void and of no force
or effect, because it is contrary to the law and the thing leased cannot be the object of a was
held that the City of contract.
In Muyot vs. de la Fuente, 24 it was held that the City of Manila could not lease a portion of a public sidewalk

on Plaza Sta. Cruz, being likewise beyond the commerce of man.

Echoing Rojas, the decision said:
Appellants claim that they had obtained permit from the present of the City of Manila, to
connect booths Nos. 1 and 2, along the premises in question, and for the use of spaces where
the booths were constructed, they had paid and continued paying the corresponding rentals.
Granting this claim to be true, one should not entertain any doubt that such permit was not
legal, because the City of Manila does not have any power or authority at all to lease a portion
of a public sidewalk. The sidewalk in question, forming part of the public plaza of Sta. Cruz,
could not be a proper subject matter of the contract, as it was not within the commerce of man
(Article 1347, new Civil Code, and article 1271, old Civil Code). Any contract entered into by
the City of Manila in connection with the sidewalk, is ipso facto null and ultra
vires. (Municipality of Cavite vs. Roxas, et a1, 30 Phil. 603.) The sidewalk in question was
intended for and was used by the public, in going from one place to another. "The streets and
public places of the city shall be kept free and clear for the use of the public, and the
sidewalks and crossings for the pedestrians, and the same shall only be used or occupied for
other purpose as provided by ordinance or regulation; ..." (Sec. 1119, Revised Ordinances of
the City of Manila.) The booths in question served as fruit stands for their owners and often, if
not always, blocked the fire passage of pedestrians who had to take the plaza itself which
used to be clogged with vehicular traffic.
Exactly in point is Espiritu vs. Municipal Council of Pozorrubio, 25 where the Supreme Court declared:
There is absolutely no question that the town plaza cannot be used for the construction of
market stalls, specially of residences, and that such structures constitute a nuisance subject
to abatement according to law. Town plazas are properties of public dominion, to be devoted
to public use and to be made available to the public in general They are outside the common
of man and cannot be disposed of or even leased by the municipality to private parties.
Applying this well-settled doctrine, we rule that the petitioners had no right in the first place to occupy the
disputed premises and cannot insist in remaining there now on the strength of their alleged lease contracts.
They should have realized and accepted this earlier, considering that even before Civil Case No. 2040 was
decided, the municipalcouncil of San Fernando had already adopted Resolution No. 29, series of 1964,
declaring the area as the parking place and public plaza of the municipality.
It is the decision in Civil Case No. 2040 and the said resolution of the municipal council of San Fernando that
respondent Macalino was seeking to enforce when he ordered the demolition of the stags constructed in the
disputed area. As officer-in-charge of the office of the mayor, he had the duty to clear the area and restore it to
its intended use as a parking place and public plaza of the municipality of San Fernando, conformably to the

aforementioned orders from the court and the council. It is, therefore, not correct to say that he had acted
without authority or taken the law into his hands in issuing his order.
Neither can it be said that he acted whimsically in exercising his authority for it has been established that he
directed the demolition of the stalls only after, upon his instructions, the municipal attorney had conducted an
investigation, to look into the complaint filed by the Association of Concerned Citizens and Consumers of San
Fernando. 26 There is evidence that the petitioners were notified of this hearing, 27which they chose to

disregard. Photographs of the disputed area, 28 which does look congested and ugly, show that the
complaint was valid and that the area really needed to be cleared, as recommended by the municipal
attorney.
The Court observes that even without such investigation and recommendation, the respondent mayor was
justified in ordering the area cleared on the strength alone of its status as a public plaza as declared by the
judicial and legislative authorities. In calling first for the investigation (which the petitioner saw fit to boycott), he
was just scrupulously paying deference to the requirements of due process, to remove an taint of arbitrariness
in the action he was caged upon to take.
Since the occupation of the place in question in 1961 by the original 24 stallholders (whose number later
ballooned to almost 200), it has deteriorated increasingly to the great prejudice of the community in general.
The proliferation of stags therein, most of them makeshift and of flammable materials, has converted it into a
veritable fire trap, which, added to the fact that it obstructs access to and from the public market itself, has
seriously endangered public safety. The filthy condition of the talipapa, where fish and other wet items are sold,
has aggravated health and sanitation problems, besides pervading the place with a foul odor that has spread
into the surrounding areas. The entire place is unsightly, to the dismay and embarrassment of the inhabitants,
who want it converted into a showcase of the town of which they can all be proud. The vendors in
the talipapa have also spilled into the street and obstruct the flow of traffic, thereby impairing the convenience
of motorists and pedestrians alike. The regular stallholders in the public market, who pay substantial rentals to
the municipality, are deprived of a sizable volume of business from prospective customers who are intercepted
by the talipapa vendors before they can reach the market proper. On top of all these, the people are denied the
proper use of the place as a public plaza, where they may spend their leisure in a relaxed and even beautiful
environment and civic and other communal activities of the town can be held.
The problems caused by the usurpation of the place by the petitioners are covered by the police power as
delegated to the municipality under the general welfare clause. 29 This authorizes the municipal council "to

enact such ordinances and make such regulations, not repugnant to law, as may be necessary to carry
into effect and discharge the powers and duties conferred upon it by law and such as shall seem
necessary and proper to provide for the health and safety, promote the prosperity, improve the morals,
peace, good order, comfort, and convenience of the municipality and the inhabitants thereof, and for the
protection of property therein." This authority was validly exercised in this casethrough the adoption of
Resolution No. 29, series of 1964, by the municipal council of San Fernando.
Even assuming a valid lease of the property in dispute, the resolution could have effectively terminated the
agreement for it is settled that the police power cannot be surrendered or bargained away through the medium
of a contract. 30 In fact, every contract affecting the public interest suffers a congenital infirmity in that it

contains an implied reservation of the police power as a postulate of the existing legal order. 31 This power
can be activated at any time to change the provisions of the contract, or even abrogate it entirely, for the
promotion or protection of the general welfare. Such an act will not militate against the impairment clause,
which is subject to and limited by the paramount police power.32
We hold that the respondent judge did not commit grave abuse of discretion in denying the petition for
prohibition. On the contrary, he acted correctly in sustaining the right and responsibility of the mayor to evict the
petitioners from the disputed area and clear it of an the structures illegally constructed therein.

The Court feels that it would have been far more amiable if the petitioners themselves, recognizing their own
civic duty, had at the outset desisted from their original stance and withdrawn in good grace from the disputed
area to permit its peaceful restoration as a public plaza and parking place for the benefit of the whole
municipality. They owned this little sacrifice to the community in general which has suffered all these many
years because of their intransigence. Regrettably, they have refused to recognize that in the truly democratic
society, the interests of the few should yield to those of the greater number in deference to the principles that
the welfare of the people is the supreme law and overriding purpose. We do not see any altruism here. The
traditional ties of sharing are absent here. What we find, sad to say, is a cynical disdaining of the spirit of
"bayanihan," a selfish rejection of the cordial virtues of "pakikisama " and "pagbibigayan" which are the
hallmarks of our people.
WHEREFORE, the petition is DISMISSED. The decision dated July 19, 1982, and the order-dated August 5,
1982, are AFFIRMED. The temporary restraining order dated August 9, 1982, is LIFTED. This decision is
immediately executory. Costs against the petitioners.
SO ORDERED.
Teehankee, C.J., Narvasa and Paras, JJ., concur.

Footnotes
1 Rollo, pp. 47-48.
2 Ibid., p. 33.
3 Id., p. 67.
4 Id., p. 65.
5 Id., pp. 68-71.
6 Id., p. 72.
7 Id., p. 4.
8 Id., pp. 75-76.
9 Id., pp. 10-12.
10 Id., pp. 10-12.
11 Id., pp. 30-39.
12 Id., p. 44.
13 Id., pp. 3-8.
14 Id., pp. 55-64.

15 Id., pp. 98-101.

16 Id., pp. 126-130.
17 Id., pp. 120-121.
18 Id., p. 177
19 Id., pp. 69-70.
20 Id., pp. 30-39.
21 Id., p. 30.
22 Id., p. 32.
23 30 Phil. 602.
24 G.R. No. L-653448 O.R. 4860.
25 102 Phil. 869-870.
26 Rollo, pp. 32-34.
27 Ibid., p. 84.
28 Id., p. 82.
29 Section 2238, Revised Administrative Code.
30 16 C.S.S. 549; 37 Am. Jur. 901.
31 Stone v. Mississipi, 101 U.S. 814.
32 Ortigas & Co. v. Feati Bank, 94 SCRA 533.

G.R. No. 93654 May 6, 1992

FRANCISCO
U.
DACANAY, petitioner,
vs.
MAYOR MACARIO ASISTIO, JR., CITY ENGR. LUCIANO SARNE, JR. of Kalookan City, Metro Manila,
MILA PASTRANA AND/OR RODOLFO TEOFE, STALLHOLDERS AND REPRESENTING COSTALLHOLDERS,respondents.
David D. Advincula, Jr. for petitioner.
Juan P. Banaga for private respondents.

GRIO-AQUINO, J.:
May public streets or thoroughfares be leased or licensed to market stallholders by virtue of a city ordinance or
resolution of the Metro Manila Commission? This issue is posed by the petitioner, an aggrieved Caloocan City
resident who filed a special civil action of mandamus against the incumbent city mayor and city engineer, to
compel these city officials to remove the market stalls from certain city streets which the aforementioned city
officials have designated as flea markets, and the private respondents (stallholders) to vacate the streets.
On January 5, 1979, MMC Ordinance No. 79-02 was enacted by the Metropolitan Manila Commission,
designating certain city and municipal streets, roads and open spaces as sites for flea markets. Pursuant,
thereto, the Caloocan City mayor opened up seven (7) flea markets in that city. One of those streets was the
"Heroes del '96" where the petitioner lives. Upon application of vendors Rodolfo Teope, Mila Pastrana, Carmen
Barbosa, Merle Castillo, Bienvenido Menes, Nancy Bugarin, Jose Manuel, Crisaldo Paguirigan, Alejandro
Castron, Ruben Araneta, Juanita and Rafael Malibaran, and others, the respondents city mayor and city
engineer, issued them licenses to conduct vending activities on said street.
In 1987, Antonio Martinez, as OIC city mayor of Caloocan City, caused the demolition of the market stalls on
Heroes del '96, V. Gozon and Gonzales streets. To stop Mayor Martinez' efforts to clear the city streets, Rodolfo
Teope, Mila Pastrana and other stallowners filed an action for prohibition against the City of Caloocan, the OIC
City Mayor and the City Engineer and/or their deputies (Civil Case No. C-12921) in the Regional Trial Court of
Caloocan City, Branch 122, praying the court to issue a writ of preliminary injunction ordering these city officials
to discontinue the demolition of their stalls during the pendency of the action.
The court issued the writ prayed for. However, on December 20, 1987, it dismissed the petition and lifted the
writ of preliminary injunction which it had earlier issued. The trial court observed that:
A perusal of Ordinance 2, series of 1979 of the Metropolitan Manila Commission will show on
the title itself that it is an ordinance
Authorizing and regulating the use of certain city and/or municipal streets,
roads and open spaces within Metropolitan Manila as sites for flea market
and/or vending areas, under certain terms and conditions, subject to the
approval of the Metropolitan Manila Commission, and for other purposes
which is further amplified in Section 2 of the said ordinance, quoted hereunder:
Sec. 2. The streets, roads and open spaces to be used as sites for flea markets (tiangge) or
vending areas; the design, measurement or specification of the structures, equipment and
apparatuses to be used or put up; the allowable distances; the days and time allowed for the
conduct of the businesses and/or activities herein authorized; the rates or fees or charges to
be imposed, levied and collected; the kinds of merchandise, goods and commodities sold and
services rendered; and other matters and activities related to the establishment, maintenance
and management and operation of flea markets and vending areas, shall be determined and
prescribed by the mayors of the cities and municipalities in the Metropolitan Manila where the
same are located, subject to the approval of the Metropolitan Manila Commission and
consistent with the guidelines hereby prescribed.
Further, it is so provided in the guidelines under the said Ordinance No. 2 of the MMC that

Sec. 6. In the establishment, operation, maintenance and management of flea markets and
vending areas, the following guidelines, among others, shall be observed:
xxx xxx xxx
(m) That the permittee shall remove the equipment, facilities and other appurtenances used
by him in the conduct of his business after the close or termination of business
hours. (Emphasis ours; pp. 15-16, Rollo.)
The trial court found that Heroes del '96, Gozon and Gonzales streets are of public dominion, hence, outside
the commerce of man:
The Heroes del '96 street, V. Gozon street and Gonzales street, being of public dominion
must, therefore, be outside of the commerce of man. Considering the nature of the subject
premises, the following jurisprudence co/principles are applicable on the matter:
1) They cannot be alienated or leased or otherwise be the subject matter of
contracts. (Municipality of Cavite vs. Rojas, 30 Phil. 602);
2) They cannot be acquired by prescription against the state (Insular
Government vs. Aldecoa, 19 Phil. 505). Even municipalities can not acquire
them for use as communal lands against the state (City of Manila vs. Insular
Government, 10 Phil. 327);
3) They are not subject to attachment and execution (Tan Toco vs. Municipal
Council of Iloilo, 49 Phil. 52);
4) They cannot be burdened by any voluntary easement (2-II Colin &
Capitant 520) (Tolentino, Civil Code of the Phils., Vol. II, 1983 Ed. pp. 29-30).
In the aforecited case of Municipality of Cavite vs. Rojas, it was held
that properties for public use may not be leased to private individuals. Such a
lease is null and void for the reason that a municipal council cannot withdraw
part of the plaza from public use. If possession has already been given, the
lessee must restore possession by vacating it and the municipality must
thereupon restore to him any sums it may have collected as rent.
In the case of City of Manila vs. Gerardo Garcia, 19 SCRA 413, the Supreme
Court held:
The property being a public one, the Manila Mayors did not
have the authority to give permits, written or oral, to the
squatters, and that the permits granted are therefore
considered null and void.
This doctrine was reiterated in the case of Baguio Citizens
Action Inc. vs. The City Council, 121 SCRA 368, where it
was held that:
An ordinance legalizing the occupancy by squatters of
public land is null and void.

The authority of respondent Municipality of Makati to demolish the shanties

of
the
petitioner's
members
is
mandated
by
P.D. 772, and Sec. 1 of Letter of Instruction No. 19 orders certain public
officials, one of whom is the Municipal Mayor to remove all illegal
constructions including buildings on and along esteros and river banks, those
along railroad tracks and those built without permits on public or private
property (Zansibarian Residents Association vs. Mun. of Makati, 135 SCRA
235). The City Engineer is also among those required to comply with said
Letter of Instruction.
The occupation and use of private individuals of sidewalks and other public
places devoted for public use constitute both public and private nuisances
and nuisance per se, and this applies to even case involving the use or lease
of public places under permits and licenses issued by competent authority,
upon the theory that such holders could not take advantage of their unlawful
permits and license and claim that the land in question is a part of a public
street or a public place devoted to public use, hence, beyond the commerce
of man. (Padilla, Civil Code Annotated, Vol. II, p. 59, 6th Ed., citing Umali vs.
Aquino, IC. A. Rep. 339.)
From the aforequoted jurisprudence/principles, the Court opines that defendants have the
right to demolish the subject stalls of the plaintiffs, more so when Section 185, par. 4 of Batas
Pambansa Blg. 337, otherwise known as the Local Government Code provides that the City
Engineer shall:
(4) . . .
(c) Prevent the encroachment of private buildings and
fences on the streets and public places;
xxx xxx xxx
(j) Inspect and supervise the construction, repair, removal
and safety of private buildings;
xxx xxx xxx
(k) With the previous approval of the City Mayor in each
case, order the removal of materials employed in the
construction or repair of any building or structures made in
violation of law or ordinance, and cause buildings and
structures dangerous to the public to made secure or torn
down;
xxx xxx xxx
Further, the Charter of the City of Caloocan, Republic Act No. 5502, Art. VII, Sec. 27, par. g, 1
and m, grants the City Engineer similar powers. (Emphasis supplied; pp. 17-20, Rollo.)
However, shortly after the decision came out, the city administration in Caloocan City changed hands. City
Mayor Macario Asistio, Jr., as successor of Mayor Martinez, did not pursue the latter's policy of clearing and
cleaning up the city streets.

Invoking the trial court's decision in Civil Case No. C-12921, Francisco U. Dacanay, a concerned citizen,
taxpayer and registered voter of Barangay 74, Zone 7, District II of Caloocan City, who resides on Heroes del
'96 Street, one of the affected streets, wrote a letter dated March 7, 1988 to Mayor Asistio, Jr., calling his
attention to the illegally-constructed stalls on Heroes del '96 Street and asked for their demolition.
Dacanay followed up that letter with another one dated April 7, 1988 addressed to the mayor and the city
engineer, Luciano Sarne, Jr. (who replaced Engineer Arturo Samonte), inviting their attention to the Regional
Trial Court's decision in Civil Case No. 12921. There was still no response.
Dacanay sought President Corazon C. Aquino's intervention by writing her a letter on the matter. His letter was
referred to the city mayor for appropriate action. The acting Caloocan City secretary, Asuncion Manalo, in a
letter dated August 1, 1988, informed the Presidential Staff Director that the city officials were still studying the
issue of whether or not to proceed with the demolition of the market stalls.
Dacanay filed a complaint against Mayor Asistio and Engineer Sarne (OMB-0-89-0146) in the Office of the
OMBUDSMAN. In their letter-comment dated April 3, 1989, said city officials explained that in view of the huge
number of stallholders involved, not to mention their dependents, it would be harsh and inhuman to eject them
from the area in question, for their relocation would not be an easy task.
In reply, Dacanay maintained that respondents have been derelict in the performance of their duties and
through manifest partiality constituting a violation of Section 3(e) of R.A. 3019, have caused undue injury to the
Government and given unwarranted benefits to the stallholders.
After conducting a preliminary investigation, the OMBUDSMAN rendered a final evaluation and report on
August 28, 1989, finding that the respondents' inaction is purely motivated by their perceived moral and social
responsibility toward their constituents, but "the fact remains that there is an omission of an act which ought to
be performed, in clear violation of Sections 3(e) and (f) of Republic Act 3019." (pp. 83-84, Rollo.) The
OMBUDSMAN recommended the filing of the corresponding information in court.
As the stallholders continued to occupy Heroes del '96 Street, through the tolerance of the public respondents,
and in clear violation of the decision it Civil Case No. C-12921, Dacanay filed the present petition
for mandamuson June 19, 1990, praying that the public respondents be ordered to enforce the final decision in
Civil Case No. C-12921 which upheld the city mayor's authority to order the demolition of market stalls on V.
Gozon, Gonzales and Heroes del '96 Streets and to enforce P.D. No. 772 and other pertinent laws.
On August 16, 1990, the public respondents, through the City Legal Officer, filed their Comment' on the petition.
The Office of the Solicitor General asked to be excused from filing a separate Comment in behalf of the public
respondents. The City Legal Officer alleged that the vending area was transferred to Heroes del '96 Street to
decongest Malonzo Street, which is comparatively a busier thoroughfare; that the transfer was made by virtue
of Barangay Resolution No. 30 s'78 dated January 15, 1978; that while the resolution was awaiting approval by
the Metropolitan Manila Commission, the latter passed Ordinance No. 79-2, authorizing the use of certain
streets and open spaces as sites for flea markets and/or vending areas; that pursuant thereto, Acting MMC
Mayor Virgilio P. Robles issued Executive Order No. 135 dated January 10, 1979, ordering the establishment
and operation of flea markets in specified areas and created the Caloocan City Flea Market Authority as a
regulatory body; and that among the sites chosen and approved by the Metro Manila Commission, Heroes del
'96 Street has considered "most viable and progressive, lessening unemployment in the city and servicing the
residents with affordable basic necessities."
The petition for mandamus is meritorious.
There is no doubt that the disputed areas from which the private respondents' market stalls are sought to be
evicted are public streets, as found by the trial court in Civil Case No. C-12921. A public street is property for
public use hence outside the commerce of man (Arts. 420, 424, Civil Code). Being outside the commerce of

man, it may not be the subject of lease or other contract (Villanueva et al. vs. Castaeda and Macalino, 15
SCRA 142, citing the Municipality of Cavite vs. Rojas, 30 SCRA 602; Espiritu vs. Municipal Council of
Pozorrubio, 102 Phil. 869; and Muyot vs. De la Fuente, 48 O.G. 4860).
As the stallholders pay fees to the City Government for the right to occupy portions of the public street, the City
Government, contrary to law, has been leasing portions of the streets to them. Such leases or licenses are null
and void for being contrary to law. The right of the public to use the city streets may not be bargained away
through contract. The interests of a few should not prevail over the good of the greater number in the
community whose health, peace, safety, good order and general welfare, the respondent city officials are under
legal obligation to protect.
The Executive Order issued by Acting Mayor Robles authorizing the use of Heroes del '96 Street as a vending
area for stallholders who were granted licenses by the city government contravenes the general law that
reserves city streets and roads for public use. Mayor Robles' Executive Order may not infringe upon the vested
right of the public to use city streets for the purpose they were intended to serve: i.e., as arteries of travel for
vehicles and pedestrians. As early as 1989, the public respondents bad started to look for feasible alternative
sites for flea markets. They have had more than ample time to relocate the street vendors.
WHEREFORE, it having been established that the petitioner and the general public have a legal right to the
relief demanded and that the public respondents have the corresponding duty, arising from public office, to
clear the city streets and restore them to their specific public purpose (Enriquez vs. Bidin, 47 SCRA 183; City of
Manila vs. Garcia et al., 19 SCRA, 413 citing Unson vs. Lacson, 100 Phil. 695), the respondents City Mayor
and City Engineer of Caloocan City or their successors in office are hereby ordered to immediately enforce and
implement the decision in Civil Case No. C-1292 declaring that Heroes del '96, V. Gozon, and Gonzales Streets
are public streets for public use, and they are ordered to remove or demolish, or cause to be removed or
demolished, the market stalls occupying said city streets with utmost dispatch within thirty (30)days from notice
of this decision. This decision is immediately executory.
SO ORDERED.
Narvasa, C.J., Melecio-Herrera, Gutierrez, Jr. Cruz, Paras, Feliciano, Padilla, Bidin, Medialdea, Regalado,
Davide, Jr., Romero and Nocon, JJ., concur.
Bellosillo, J., took no part.