Pil 2014

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Republic of the PhilippinesSUPREME COURT

Manila

EN BANC

G.R. No. L-16749 January 31, 1963

IN THE MATTER OF THE TESTATE ESTATE OF EDWARD E. CHRISTENSEN,DECEASED.ADOLFO C. AZNAR, Executor and LUCY CHRISTENSEN, Heir of thedeceased, Executor and Heir-appellees,vs.HELEN CHRISTENSEN GARCIA, oppositor-appellant.

M. R. Sotelo for executor and heir-appellees.Leopoldo M. Abellera and Jovito Salonga for oppositor-appellant.

LABRADOR, J.:

This is an appeal from a decision of the Court of First Instance of Davao, Hon.Vicente N. Cusi, Jr., presiding, in Special Proceeding No. 622 of said court, datedSeptember 14, 1949, approving among things the final accounts of the executor,directing the executor to reimburse Maria Lucy Christensen the amount ofP3,600 paid by her to Helen Christensen Garcia as her legacy, and declaring MariaLucy Christensen entitled to the residue of the property to be enjoyed during herlifetime, and in case of death without issue, one-half of said residue to be payableto Mrs. Carrie Louise C. Borton, etc., in accordance with the provisions of the willof the testator Edward E. Christensen. The will was executed in Manila on March5, 1951 and contains the following provisions:

3. I declare ... that I have but ONE (1) child, named MARIA LUCYCHRISTENSEN (now Mrs. Bernard Daney), who was born in thePhilippines about twenty-eight years ago, and who is now residing at No.665 Rodger Young Village, Los Angeles, California, U.S.A.

4. I further declare that I now have no living ascendants, and nodescendants except my above named daughter, MARIA LUCYCHRISTENSEN DANEY.

x x x x x x x x x

7. I give, devise and bequeath unto MARIA HELEN CHRISTENSEN, nowmarried to Eduardo Garcia, about eighteen years of age and who,notwithstanding the fact that she was baptized Christensen, is not inany way related to me, nor has she been at any time adopted by me, andwho, from all information I have now resides in Egpit, Digos, Davao,Philippines, the sum of THREE THOUSAND SIX HUNDRED PESOS(P3,600.00), Philippine Currency the same to be deposited in trust forthe said Maria Helen Christensen with the Davao Branch of thePhilippine National Bank, and paid to her at the rate of One HundredPesos (P100.00), Philippine Currency per month until the principalthereof as well as any interest which may have accrued thereon, isexhausted..

x x x x x x x x x

12. I hereby give, devise and bequeath, unto my well -beloved daughter,the said MARIA LUCY CHRISTENSEN DANEY (Mrs. Bernard Daney), nowresiding as aforesaid at No. 665 Rodger Young Village, Los Angeles,California, U.S.A., all the income from the rest, remainder, and residue ofmy property and estate, real, personal and/or mixed, of whatsoever kindor character, and wheresoever situated, of which I may be possessed atmy death and which may have come to me from any source whatsoever,during her lifetime: ....

It is in accordance with the above-quoted provisions that the executor in his finalaccount and project of partition ratified the payment of only P3,600 to HelenChristensen Garcia and proposed that the residue of the estate be transferred tohis daughter, Maria Lucy Christensen.

Opposition to the approval of the project of partition was filed by HelenChristensen Garcia, insofar as it deprives her (Helen) of her legitime as anacknowledged natural child, she having been declared by Us in G.R. Nos. L-11483-84 an acknowledged natural child of the deceased Edward E. Christensen. Thelegal grounds of opposition are (a) that the distribution should be governed bythe laws of the Philippines, and (b) that said order of distribution is contrary

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thereto insofar as it denies to Helen Christensen, one of two acknowledgednatural children, one-half of the estate in full ownership. In amplification of theabove grounds it was alleged that the law that should govern the estate of thedeceased Christensen should not be the internal law of California alone, but theentire law thereof because several foreign elements are involved, that the forumis the Philippines and even if the case were decided in California, Section 946 ofthe California Civil Code, which requires that the domicile of the decedent shouldapply, should be applicable. It was also alleged that Maria Helen Christensen

having been declared an acknowledged natural child of the decedent, she isdeemed for all purposes legitimate from the time of her birth.

The court below ruled that as Edward E. Christensen was a citizen of the UnitedStates and of the State of California at the time of his death, the successionalrights and intrinsic validity of the provisions in his will are to be governed by thelaw of California, in accordance with which a testator has the right to dispose ofhis property in the way he desires, because the right of absolute dominion overhis property is sacred and inviolable (In re McDaniel's Estate, 77 Cal. Appl. 2d 877,176 P. 2d 952, and In re Kaufman, 117 Cal. 286, 49 Pac. 192, cited in page 179,Record on Appeal). Oppositor Maria Helen Christensen, through counsel, filed

various motions for reconsideration, but these were denied. Hence, this appeal.

The most important assignments of error are as f ollows:

I

THE LOWER COURT ERRED IN IGNORING THE DECISION OF THE HONORABLESUPREME COURT THAT HELEN IS THE ACKNOWLEDGED NATURAL CHILD OFEDWARD E. CHRISTENSEN AND, CONSEQUENTLY, IN DEPRIVING HER OF HERJUST SHARE IN THE INHERITANCE.

II

THE LOWER COURT ERRED IN ENTIRELY IGNORING AND/OR FAILING TORECOGNIZE THE EXISTENCE OF SEVERAL FACTORS, ELEMENTS ANDCIRCUMSTANCES CALLING FOR THE APPLICATION OF INTERNAL LAW.

III

THE LOWER COURT ERRED IN FAILING TO RECOGNIZE THAT UNDERINTERNATIONAL LAW, PARTICULARLY UNDER THE RENVOI DOCTRINE, THE

INTRINSIC VALIDITY OF THE TESTAMENTARY DISPOSITION OF THEDISTRIBUTION OF THE ESTATE OF THE DECEASED EDWARD E. CHRISTENSENSHOULD BE GOVERNED BY THE LAWS OF THE PHILIPPINES.

IV

THE LOWER COURT ERRED IN NOT DECLARING THAT THE SCHEDULE OFDISTRIBUTION SUBMITTED BY THE EXECUTOR IS CONTRARY TO THE PHILIPPINELAWS.

V

THE LOWER COURT ERRED IN NOT DECLARING THAT UNDER THE PHILIPPINELAWS HELEN CHRISTENSEN GARCIA IS ENTITLED TO ONE-HALF (1/2) OF THEESTATE IN FULL OWNERSHIP.

There is no question that Edward E. Christensen was a citizen of the UnitedStates and of the State of California at the time of his death. But there is also noquestion that at the time of his death he was domiciled in the Philippines, aswitness the following facts admitted by the executor himself in appellee's brief:

In the proceedings for admission of the will to probate, the facts ofrecord show that the deceased Edward E. Christensen was born onNovember 29, 1875 in New York City, N.Y., U.S.A.; his first arrival in thePhilippines, as an appointed school teacher, was on July 1, 1901, onboard the U.S. Army Transport "Sheridan" with Port of Embarkation asthe City of San Francisco, in the State of California, U.S.A. He stayed inthe Philippines until 1904.

In December, 1904, Mr. Christensen returned to the United States andstayed there for the following nine years until 1913, during which time heresided in, and was teaching school in Sacramento, California.

Mr. Christensen's next arrival in the Philippines was in July of the year1913. However, in 1928, he again departed the Philippines for the UnitedStates and came back here the following year, 1929. Some nine yearslater, in 1938, he again returned to his own country, and came back tothe Philippines the following year, 1939.

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Wherefore, the parties respectfully pray that the foregoing stipulationof facts be admitted and approved by this Honorable Court, withoutprejudice to the parties adducing other evidence to prove their case notcovered by this stipulation of facts. 1äwphï1.ñët

Being an American citizen, Mr. Christensen was interned by theJapanese Military Forces in the Philippines during World War II. Uponliberation, in April 1945, he left for the United States but returned to the

Philippines in December, 1945. Appellees Collective Exhibits "6", CFIDavao, Sp. Proc. 622, as Exhibits "AA", "BB" and "CC-Daney"; Exhs."MM", "MM-l", "MM-2-Daney" and p. 473, t.s.n., July 21, 1953.)

In April, 1951, Edward E. Christensen returned once more to Californiashortly after the making of his last will and testament (now in questionherein) which he executed at his lawyers' off ices in Manila on March 5,1951. He died at the St. Luke's Hospital in the City of Manila on April 30,1953. (pp. 2-3)

In arriving at the conclusion that the domicile of the deceased is the Philippines,

we are persuaded by the fact that he was born in New York, migrated toCalifornia and resided there for nine years, and since he came to the Philippinesin 1913 he returned to California very rarely and only for short visits (perhaps torelatives), and considering that he appears never to have owned or acquired ahome or properties in that state, which would indicate that he would ultimatelyabandon the Philippines and make home in the State of California.

Sec. 16. Residence is a term used with many shades of meaning frommere temporary presence to the most permanent abode. Generally,however, it is used to denote something more than mere physicalpresence. (Goodrich on Conflict of Laws, p. 29)

As to his citizenship, however, We find that the citizenship that he acquired inCalifornia when he resided in Sacramento, California from 1904 to 1913, wasnever lost by his stay in the Philippines, for the latter was a territory of theUnited States (not a state) until 1946 and the deceased appears to haveconsidered himself as a citizen of Calif ornia by the fact that when he executed hiswill in 1951 he declared that he was a citizen of that State; so that he appearsnever to have intended to abandon his California citizenship by acquiringanother. This conclusion is in accordance with the following principle expoundedby Goodrich in his Conflict of Laws.

The terms "'residence" and "domicile" might well be taken to mean thesame thing, a place of permanent abode. But domicile, as has beenshown, has acquired a technical meaning. Thus one may be domiciled ina place where he has never been. And he may reside in a place where hehas no domicile. The man with two homes, between which he divides histime, certainly resides in each one, while living in it. But if he went onbusiness which would require his presence f or several weeks or months,he might properly be said to have sufficient connection with the place to

be called a resident. It is clear, however, that, if he treated hissettlement as continuing only for the particular business in hand, notgiving up his former "home," he could not be a domiciled New Yorker.Acquisition of a domicile of choice requires the exercise of intention aswell as physical presence. "Residence simply requires bodily presence ofan inhabitant in a given place, while domicile requires bodily presence inthat place and also an intention to make it one's domicile." Residence,however, is a term used with many shades of meaning, from the meresttemporary presence to the most permanent abode, and it is not safe toinsist that any one use et the only proper one. (Goodrich, p. 29)

The law that governs the validity of his testamentary dispositions is defined inArticle 16 of the Civil Code of the Philippines, which is as follows:

ART. 16. Real property as well as personal property is subject to the lawof the country where it is situated.

However, intestate and testamentary successions, both with respect tothe order of succession and to the amount of successional rights and tothe intrinsic validity of testamentary provisions, shall be regulated by thenational law of the person whose succession is under consideration,whatever may be the nature of the property and regardless of the

country where said property may be found.

The application of this article in the case at bar requires the determination of themeaning of the term "national law" is used therein.

There is no single American law governing the validity of testamentary provisionsin the United States, each state of the Union having its own private lawapplicable to its citizens only and in force only within the state. The "nationallaw" indicated in Article 16 of the Civil Code above quoted can not, therefore,possibly mean or apply to any general American law. So it can refer to no otherthan the private law of the State of California.

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The next question is: What is the law in California governing the disposition ofpersonal property? The decision of the court below, sustains the contention ofthe executor-appellee that under the California Probate Code, a testator maydispose of his property by will in the form and manner he desires, citing the caseof Estate of McDaniel, 77 Cal. Appl. 2d 877, 176 P. 2d 952. But appellant invokesthe provisions of Article 946 of the Civil Code of California, which is as f ollows:

If there is no law to the contrary, in the place where personal property is

situated, it is deemed to follow the person of its owner, and is governedby the law of his domicile.

The existence of this provision is alleged in appellant's opposition and is notdenied. We have checked it in the California Civil Code and it is there. Appellee,on the other hand, relies on the case cited in the decision and testified to by awitness. (Only the case of Kaufman is correctly cited.) It is argued on executor'sbehalf that as the deceased Christensen was a citizen of the State of California,the internal law thereof, which is that given in the abovecited case, shouldgovern the determination of the validity of the testamentary provisions ofChristensen's will, such law being in force in the State of California of which

Christensen was a citizen. Appellant, on the other hand, insists that Article 946should be applicable, and in accordance therewith and following the doctrine oftherenvoi, the question of the validity of the testamentary provision in questionshould be referred back to the law of the decedent's domicile, which is thePhilippines.

The theory of doctrine of renvoi has been defined by various authors, thus:

The problem has been stated in this way: "When the Conflict of Lawsrule of the forum refers a jural matter to a foreign law for decision, is thereference to the purely internal rules of law of the foreign system; i.e.,

to the totality of the foreign law minus its Conflict of Laws rules?"

On logic, the solution is not an easy one. The Michigan court chose toaccept the renvoi, that is, applied the Conflict of Laws rule of Illinoiswhich referred the matter back to Michigan law. But once havingdetermined the the Conflict of Laws principle is the rule looked to, it isdifficult to see why the reference back should not have been toMichigan Conflict of Laws. This would have resulted in the "endlesschain of references" which has so often been criticized be legal writers.The opponents of the renvoi would have looked merely to the internallaw of Illinois, thus rejecting the renvoi or the reference back. Yet there

seems no compelling logical reason why the original reference should bethe internal law rather than to the Conflict of Laws rule. It is true thatsuch a solution avoids going on a merry-go-round, but those who haveaccepted the renvoi theory avoid this inextricabilis circulas by getting offat the second reference and at that point applying internal law. Perhapsthe opponents of the renvoi are a bit more consistent for they lookalways to internal law as the rule of reference.

Strangely enough, both the advocates for and the objectors tothe renvoi plead that greater uniformity will result from adoption oftheir respective views. And still more strange is the fact that the onlyway to achieve uniformity in this choice-of-law problem is if in thedispute the two states whose laws form the legal basis of the litigationdisagree as to whether the renvoi should be accepted. If both reject, orboth accept the doctrine, the result of the litigation will vary with thechoice of the forum. In the case stated above, had the Michigan courtrejected the renvoi, judgment would have been against the woman; ifthe suit had been brought in the Illinois courts, and they too rejectedthe renvoi, judgment would be for the woman. The same result would

happen, though the courts would switch with respect to which wouldhold liability, if both courts accepted the renvoi.

The Restatement accepts the renvoi theory in two instances: where thetitle to land is in question, and where the validity of a decree of divorceis challenged. In these cases the Conflict of Laws rule of the situs of theland, or the domicile of the parties in the divorce case, is applied by theforum, but any further reference goes only to the internal law. Thus, aperson's title to land, recognized by the situs, will be recognized byevery court; and every divorce, valid by the domicile of the parties, willbe valid everywhere. (Goodrich, Conflict of Laws, Sec. 7, pp. 13-14.)

X, a citizen of Massachusetts, dies intestate, domiciled in France, leavingmovable property in Massachusetts, England, and France. The questionarises as to how this property is to be distributed among X's next of kin.

Assume (1) that this question arises in a Massachusetts court. There therule of the conflict of laws as to intestate succession to movables callsfor an application of the law of the deceased's last domicile. Since byhypothesis X's last domicile was France, the natural thing for theMassachusetts court to do would be to turn to French statute ofdistributions, or whatever corresponds thereto in French law, and

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decree a distribution accordingly. An examination of French law,however, would show that if a French court were called upon todetermine how this property should be distributed, it would refer thedistribution to the national law of the deceased, thus applying theMassachusetts statute of distributions. So on the surface of things theMassachusetts court has open to it alternative course of action: (a)either to apply the French law is to intestate succession, or (b) to resolveitself into a French court and apply the Massachusetts statute of

distributions, on the assumption that this is what a French court woulddo. If it accepts the so-called renvoidoctrine, it will follow the lattercourse, thus applying its own law.

This is one type of renvoi. A jural matter is presented which the conflict-of-laws rule of the forum refers to a foreign law, the conflict-of-laws ruleof which, in turn, refers the matter back again to the law of the forum.This is renvoi in the narrower sense. The German term for this judicialprocess is 'Ruckverweisung.'" (Harvard Law Review, Vol. 31, pp. 523-571.)

After a decision has been arrived at that a foreign law is t o be resorted

to as governing a particular case, the further question may arise: Are therules as to the conflict of laws contained in such foreign law also to beresorted to? This is a question which, while it has been considered by thecourts in but a few instances, has been the subject of frequentdiscussion by textwriters and essayists; and the doctrine involved hasbeen descriptively designated by them as the "Renvoyer" to send back,or the "Ruchversweisung", or the "Weiterverweisung", since anaffirmative answer to the question postulated and the operation of theadoption of the foreign law in toto would in many cases result inreturning the main controversy to be decided according to the law ofthe forum. ... (16 C.J.S. 872.)

Another theory, known as the "doctrine of renvoi", has been advanced.The theory of the doctrine of renvoiis that the court of the forum, indetermining the question before it, must take into account the wholelaw of the other jurisdiction, but also its rules as to conflict of laws, andthen apply the law to the actual question which the rules of the otherjurisdiction prescribe. This may be the law of the forum. The doctrine oftherenvoi has generally been repudiated by the American authorities. (2Am. Jur. 296)

The scope of the theory of renvoi has also been defined and the reasons for itsapplication in a country explained by Prof. Lorenzen in an article in the Yale LawJournal, Vol. 27, 1917-1918, pp. 529-531. The pertinent parts of the article arequoted herein below:

The recognition of the renvoi theory implies that the rules of the conflictof laws are to be understood as incorporating not only the ordinary orinternal law of the foreign state or country, but its rules of the conflict of

laws as well. According to this theory 'the law of a country' means thewhole of its law.

x x x x x x x x x

Von Bar presented his views at the meeting of the Institute ofInternational Law, at Neuchatel, in 1900, in the form of the followingtheses:

(1) Every court shall observe the law of its country as regards theapplication of foreign laws.

(2) Provided that no express provision to the contrary exists, the courtshall respect:

(a) The provisions of a foreign law which disclaims the right tobind its nationals abroad as regards their personal statute, anddesires that said personal statute shall be determined by thelaw of the domicile, or even by the law of the place where theact in question occurred.

(b) The decision of two or more foreign systems of law,

provided it be certain that one of them is necessarilycompetent, which agree in attributing the determination of aquestion to the same system of law.

x x x x x x x x x

If, for example, the English law directs its judge to distribute thepersonal estate of an Englishman who has died domiciled in Belgium inaccordance with the law of his domicile, he must first inquire whetherthe law of Belgium would distribute personal property upon death in

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We therefore find that as the domicile of the deceased Christensen, a citizen ofCalifornia, is the Philippines, the validity of the provisions of his will depriving hisacknowledged natural child, the appellant, should be governed by the PhilippineLaw, the domicile, pursuant to Art. 946 of the Civil Code of California, not by theinternal law of California..

WHEREFORE, the decision appealed from is hereby reversed and the casereturned to the lower court with instructions that the partition be made as the

Philippine law on

SUPREME COURT Manila

EN BANC

G.R. No. L-7995 May 31, 1957

LAO H. ICHONG, in his own behalf and in behalf of other alien residents,corporations and partnerships adversely affected. by Republic Act No.1180, petitioner,vs.JAIME HERNANDEZ, Secretary of Finance, and MARCELINO SARMIENTO, CityTreasurer of Manila,respondents.

Ozaeta, Lichauco and Picazo and Sycip, Quisumbing, Salazar and Associates forpetitioner.Office of the Solicitor General Ambrosio Padilla and Solicitor Pacifico P. de Castrofor respondent Secretary of Finance.City Fiscal Eugenio Angeles and Assistant City Fiscal Eulogio S. Serrano forrespondent City Treasurer.

Dionisio Reyes as Amicus Curiae.Marcial G. Mendiola as Amicus Curiae.Emiliano R. Navarro as Amicus Curiae.

LABRADOR, J.:

I. The case and issue, in general

This Court has before it the delicate task of passing upon the validity andconstitutionality of a legislative enactment, fundamental and far-reaching in

significance. The enactment poses questions of due process, police power andequal protection of the laws. It also poses an important issue of fact, that iswhether the conditions which the disputed law purports to remedy really oractually exist. Admittedly springing from a deep, militant, and positivenationalistic impulse, the law purports to protect citizen and country from thealien retailer. Through it, and within the field of economy it regulates, Congressattempts to translate national aspirations for economic independence andnational security, rooted in the drive and urge for national survival and welfare,

into a concrete and tangible measures designed to free the national retailer fromthe competing dominance of the alien, so that the country and the nation may befree from a supposed economic dependence and bondage. Do the facts andcircumstances justify the enactment?

II. Pertinent provisions of Republic Act No. 1180

Republic Act No. 1180 is entitled "An Act to Regulate the Retail Business." Ineffect it nationalizes the retail trade business. The main provisions of the Act are:(1) a prohibition against persons, not citizens of the Philippines, and againstassociations, partnerships, or corporations the capital of which are not wholly

owned by citizens of the Philippines, from engaging directly or indirectly in theretail trade; (2) an exception from the above prohibition in favor of aliensactually engaged in said business on May 15, 1954, who are allowed to continueto engaged therein, unless their licenses are forfeited in accordance with the law,until their death or voluntary retirement in case of natural persons, and for tenyears after the approval of the Act or until the expiration of term in case ofjuridical persons; (3) an exception therefrom in favor of citizens and juridicalentities of the United States; (4) a provision for the forfeiture of licenses (toengage in the retail business) for violation of the laws on nationalization, controlweights and measures and labor and other laws relating to trade, commerce andindustry; (5) a prohibition against the establishment or opening by aliens actuallyengaged in the retail business of additional stores or branches of retail business,(6) a provision requiring aliens actually engaged in the retail business to presentfor registration with the proper authorities a verified statement concerning theirbusinesses, giving, among other matters, the nature of the business, their assetsand liabilities and their offices and principal offices of judicial entities; and (7) aprovision allowing the heirs of aliens now engaged in the retail business who die,to continue such business for a period of six months for purposes of liquidation.

III. Grounds upon which petition is based-Answer thereto

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Petitioner, for and in his own behalf and on behalf of other alien residentscorporations and partnerships adversely affected by the provisions of RepublicAct. No. 1180, brought this action to obtain a judicial declaration that said Act isunconstitutional, and to enjoin the Secretary of Finance and all other personsacting under him, particularly city and municipal treasurers, from enforcing itsprovisions. Petitioner attacks the constitutionality of the Act, contending that: (1)it denies to alien residents the equal protection of the laws and deprives of theirliberty and property without due process of law ; (2) the subject of the Act is not

expressed or comprehended in the title thereof; (3) the Act violates internationaland treaty obligations of the Republic of the Philippines; (4) the provisions of theAct against the transmission by aliens of their retail business thru hereditarysuccession, and those requiring 100% Filipino capitalization for a corporation orentity to entitle it to engage in the retail business, violate the spirit of Sections 1and 5, Article XIII and Section 8 of Article XIV of the Constitution.

In answer, the Solicitor-General and the Fiscal of the City of Manila contend that:(1) the Act was passed in the valid exercise of the police power of the State,which exercise is authorized in the Constitution in the interest of nationaleconomic survival; (2) the Act has only one subject embraced in the title; (3) no

treaty or international obligations are infringed; (4) as regards hereditarysuccession, only the form is affected but the value of the property is notimpaired, and the institution of inheritance is only of statutory origin.

IV. Preliminary consideration of legal principles involved

a. The police power. —

There is no question that the Act was approved in the exercise of the policepower, but petitioner claims that its exercise in this instance is attended by aviolation of the constitutional requirements of due process and equal protection

of the laws. But before proceeding to the consideration and resolution of theultimate issue involved, it would be well to bear in mind certain basic andfundamental, albeit preliminary, considerations in the determination of the everrecurrent conflict between police power and the guarantees of due process andequal protection of the laws. What is the scope of police power, and how are thedue process and equal protection clauses related to it? What is the province andpower of the legislature, and what is the function and duty of the courts? Theseconsideration must be clearly and correctly understood that their application tothe facts of the case may be brought forth with clarity and the issue accordinglyresolved.

It has been said the police power is so far - reaching in scope, that it has becomealmost impossible to limit its sweep. As it derives its existence from the veryexistence of the State itself, i t does not need to be expressed or defined in itsscope; it is said to be co-extensive with self-protection and survival, and as such itis the most positive and active of all governmental processes, the most essential,insistent and illimitable. Especially is it so under a modern democratic frameworkwhere the demands of society and of nations have multiplied to almostunimaginable proportions; the field and scope of police power has become

almost boundless, just as the fields of public interest and public welfare havebecome almost all-embracing and have transcended human foresight. Otherwisestated, as we cannot foresee the needs and demands of public interest andwelfare in this constantly changing and progressive world, so we cannot delimitbeforehand the extent or scope of police power by which and through which theState seeks to attain or achieve interest or welfare. So it is that Constitutions donot define the scope or extent of the police power of the State; what they do isto set forth the limitations thereof. The most important of these are the dueprocess clause and the equal protection clause.

b. Limitations on police power. —

The basic limitations of due process and equal protection are found in thefollowing provisions of our Constitution:

SECTION 1.(1) No person shall be deprived of life, liberty or propertywithout due process of law, nor any person be denied the equalprotection of the laws. (Article III, Phil. Constitution)

These constitutional guarantees which embody the essence of individual libertyand freedom in democracies, are not limited to citizens alone but are admittedlyuniversal in their application, without regard to any differences of race, of color,

or of nationality. (Yick Wo vs. Hopkins, 30, L. ed. 220, 226.)

c. The, equal protection clause. —

The equal protection of the law clause is against undue favor and individual orclass privilege, as well as hostile discrimination or the oppression of inequality. Itis not intended to prohibit legislation, which is limited either in the object towhich it is directed or by territory within which is to operate. It does not demandabsolute equality among residents; it merely requires that all persons shal l betreated alike, under like circumstances and conditions both as to privilegesconferred and liabilities enforced. The equal protection clause is not infringed by

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small sari-sari store, to the operator of a department store or, a supermarket isso much a part of day-to-day existence.

b. The alien retailer's trait. —

The alien retailer must have started plying his trades in this country in the biggercenters of population (Time there was when he was unknown in provincial townsand villages). Slowly but gradually be invaded towns and villages; now he

predominates in the cities and big centers of population. He even pioneers, in f araway nooks where the beginnings of community life appear, ministering to thedaily needs of the residents and purchasing their agricultural produce for sale inthe towns. It is an undeniable fact that in many communities the alien hasreplaced the native retailer. He has shown in this trade, industry without limit,and the patience and forbearance of a slave.

Derogatory epithets are hurled at him, but he laughs these off without murmur;insults of ill-bred and insolent neighbors and customers are made in his face, buthe heeds them not, and he forgets and forgives. The community takes note ofhim, as he appears to be harmless and extremely useful.

c. Alleged alien control and dominance. —

There is a general feeling on the part of the public, which appears to be true tofact, about the controlling and dominant position that the alien retailer holds inthe nation's economy. Food and other essentials, clothing, almost all articles ofdaily life reach the residents mostly through him. In big cities and centers ofpopulation he has acquired not only predominance, but apparent control overdistribution of almost all kinds of goods, such as lumber, hardware, textiles,groceries, drugs, sugar, flour, garlic, and scores of other goods and articles. Andwere it not for some national corporations like the Naric, the Namarco, the

Facomas and the Acefa, his control over principal f oods and products wouldeasily become full and complete.

Petitioner denies that there is alien predominance and control in the retail trade.In one breath it is said that the fear is unfounded and the threat is imagined; inanother, it is charged that the law is merely the result of radicalism and pure andunabashed nationalism. Alienage, it is said, is not an element of control; also somany unmanageable factors in the retail business make control virtuallyimpossible. The first argument which brings up an issue of fact merits seriousconsideration. The others are matters of opinion within t he exclusive

competence of the legislature and beyond our prerogative to pass upon anddecide.

The best evidence are the statistics on the retail trade, which put down thefigures in black and white. Between the constitutional convention year (1935),when the fear of alien domination and control of the retail trade already filledthe minds of our leaders with fears and misgivings, and the year of theenactment of the nationalization of the retail trade act (1954), official statistics

unmistakably point out to the ever-increasing dominance and control by the alienof the retail trade, as witness the following tables:

Assets Gross S

Year and RetailersNationality

No.-Establishments

PesosPer cent

DistributionPesos

1941:

Filipino .......... 106,671 200,323,138 55.82 174,181,924

Chinese ........... 15,356 118,348,692 32.98 148,813,239

Others ............ 1,646 40,187,090 11.20 13,630,2391947:

Filipino .......... 111,107 208,658,946 65.05 279,583,333

Chinese ........... 13,774 106,156,218 33.56 205,701,134

Others ........... 354 8,761,260 .49 4,927,168

1948: (Census)

Filipino .......... 113,631 213,342,264 67.30 467,161,667

Chinese .......... 12,087 93,155,459 29.38 294,894,227

Others .......... 422 10,514,675 3.32 9,995,402

1949:

Filipino .......... 113,659 213,451,602 60.89 462,532,901

Chinese .......... 16,248 125,223,336 35.72 392,414,875

Others .......... 486 12,056,365 3.39 10,078,364

1951:

Filipino ......... 119,352 224,053,620 61.09 466,058,052

Chinese .......... 17,429 134,325,303 36.60 404,481,384

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Others .......... 347 8,614,025 2.31 7,645,327 87

AVERAGEASSETS AND GROSS SALES PER ESTABLISHMENT

Year and Retailer'sNationality

ItemAssets(Pesos)

GrossSales

(Pesos)

1941:

Filipino ................. .................. .......... 1,878 1,633

Chinese ................ .................. ............ 7,707 9,691

Others ................ .................. ............. 24,415 8,281

1947:

Filipino ................ ................. ............ 1,878 2,516

Chinese ................ .................. ......... 7,707 14,934

Others ................ .................. ............ 24,749 13,919

1948: (Census)

Filipino ................ ................. ............ 1,878 4,111

Chinese ................ .................. ........... 7,707 24,398Others ................ .................. ............ 24,916 23,686

1949:

Filipino ................ ................. ............ 1,878 4,069

Chinese ................ .................. ............ 7,707 24,152

Others ................ .................. ............ 24,807 20,737

1951:

Filipino ................. ................. ........... 1,877 3,905

Chinese ................. .................. .......... 7,707 33,207

Others ................ ................... ............ 24,824 22,033

(Estimated Assets and Gross Sales of Retail Establishments, By Year andNationality of Owners, Benchmark: 1948 Census, issued by the Bureau ofCensus and Statistics, Department of Commerce and Industry; pp. 18-19of Answer.)

The above statistics do not include corporations and partnerships, while thefigures on Filipino establishments already include mere market vendors, whosecapital is necessarily small..

The above figures reveal that in percentage distribution of assests and grosssales, alien participation has steadily increased during the years. It is true, ofcourse, that Filipinos have the edge in the number of retailers, but aliens morethan make up for the numerical gap through their assests and gross sales whichaverage between six and seven times those of the very many Filipino retailers.Numbers in retailers, here, do not imply superiority; the alien invests morecapital, buys and sells six to seven times more, and gains much more. The sameofficial report, pointing out to the known predominance of foreign elements inthe retail trade, remarks that the Fi lipino retailers were largely engaged in minorretailer enterprises. As observed by respondents, the native investment is thinlyspread, and the Filipino retailer is practically helpless in matters of capital, credit,price and supply.

d. Alien control and threat, subject of apprehension in Constitutional convention.—

It is this domination and control, which we believe has been sufficiently shown toexist, that is the legislature's target in the enactment of the disputednationalization would never have been adopted. The framers of our Constitutionalso believed in the existence of this alien dominance and control when theyapproved a resolution categorically declaring among other things, that "it is thesense of the Convention that the public interest requires t he nationalization ofthe retail trade; . . . ." (II Aruego, The Framing of the Philippine Constitution, 662-

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663, quoted on page 67 of Petitioner.) That was twenty-two years ago; and theevents since then have not been either pleasant or comforting. Dean Sinco of theUniversity of the Philippines College of Law, commenting on the patrimonyclause of the Preamble opines that the fathers of our Constitution were merelytranslating the general preoccupation of Filipinos "of the dangers from alieninterests that had already brought under their control the commercial and othereconomic activities of the country" (Sinco, Phil. Political Law, 10th ed., p. 114);and analyzing the concern of the members of the constitutional convention for

the economic life of the citizens, in connection with the nationalistic provisionsof the Constitution, he says:

But there has been a general feeling that alien dominance over theeconomic life of the country is not desirable and that if such a situationshould remain, political independence alone is no guarantee to nationalstability and strength. Filipino private capital is not big enough to wrestfrom alien hands the control of the national economy. Moreover, it isbut of recent formation and hence, largely inexperienced, timid andhesitant. Under such conditions, the government as the instrumentalityof the national will, has to step in and assume the initiative, if not the

leadership, in the struggle for the economic freedom of the nation insomewhat the same way that it did in the crusade for political freedom.Thus . . . it (the Constitution) envisages an organized movement for theprotection of the nation not only against the possibilities of armedinvasion but also against its economic subjugation by alien interests inthe economic field. (Phil. Political Law by Sinco, 10th ed., p. 476.)

Belief in the existence of alien control and predominance is felt in other quarters.Filipino businessmen, manufacturers and producers believe so; they fear thedangers coming from alien control, and they express sentiments of economicindependence. Witness thereto is Resolution No. 1, approved on July 18, 1953, ofthe Fifth National convention of Filipino Businessmen, and a similar resolution,approved on March 20, 1954, of the Second National Convention ofManufacturers and Producers. The man in the street also believes, and fears,alien predominance and control; so our newspapers, which have editoriallypointed out not only to control but to alien stranglehold. We, therefore, findalien domination and control to be a fact, a reality proved by official statistics,and felt by all the sections and groups that compose the Filipino community.

e. Dangers of alien control and dominance in retail. —

But the dangers arising from alien participation in the retail trade does not seemto lie in the predominance alone; there is a prevailing feeling that suchpredominance may truly endanger the national interest. With ample capital, unityof purpose and action and thorough organization, alien retailers and merchantscan act in such complete unison and concert on such vital matters as the fixing ofprices, the determination of the amount of goods or articles to be made availablein the market, and even the choice of the goods or articles they would or wouldnot patronize or distribute, that fears of dislocation of the national economy and

of the complete subservience of national economy and of the consuming publicare not entirely unfounded. Nationals, producers and consumers alike can beplaced completely at their mercy. This is easily illustrated. Suppose an article ofdaily use is desired to be prescribed by the aliens, because the producer orimporter does not offer them sufficient profits, or because a new competingarticle offers bigger profits f or its introduction. All that aliens would do is toagree to refuse to sell the first article, eliminating it from their stocks, offeringthe new one as a substitute. Hence, the producers or importers of the prescribedarticle, or its consumers, find the article suddenly out of the prescribed article, orits consumers, find the article suddenly out of circulation. Freedom of trade isthus curtailed and free enterprise correspondingly suppressed.

We can even go farther than theoretical illustrations to show the perniciousinfluences of alien domination. Grave abuses have characterized the exercise ofthe retail trade by aliens. It is a fact within judicial notice, which courts of justicemay not properly overlook or ignore in the interests of truth and justice, thatthere exists a general feeling on the part of the public that alien participation inthe retail trade has been attended by a pernicious and intolerable practices, themention of a few of which would suffice for our purposes; that at some time orother they have cornered the market of essential commodities, like corn and rice,creating artificial scarcities to justify and enhance profits to unreasonableproportions; that they have hoarded essential foods to the inconvenience andprejudice of the consuming public, so much so that the Government has had toestablish the National Rice and Corn Corporation to save the public from theircontinuous hoarding practices and tendencies; that they have violated pricecontrol laws, especially on foods and essential commodities, such that thelegislature had to enact a law (Sec. 9, Republic Act No. 1168), authorizing theirimmediate and automatic deportation for price control convictions; that theyhave secret combinations among themselves to control prices, cheating theoperation of the law of supply and demand; that they have connived to boycotthonest merchants and traders who would not cater or yield to their demands, inunlawful restraint of freedom of trade and enterprise. They are believed by thepublic to have evaded tax laws, smuggled goods and money into and out of the

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land, violated import and export prohibitions, control laws and the like, inderision and contempt of lawful authority. It is also believed that they haveengaged in corrupting public officials with fabulous bribes, indirectly causing theprevalence of graft and corruption in the Government. As a matter of factappeals to unscrupulous aliens have been made both by the Government and bytheir own lawful diplomatic representatives, action which impliedly admits aprevailing feeling about the existence of many of the above practices.

The circumstances above set forth create well founded fears that worse thingsmay come in the future. The present dominance of the alien retailer, especially inthe big centers of population, therefore, becomes a potential source of dangeron occasions of war or other calamity. We do not have here in this countryisolated groups of harmless aliens retailing goods among nationals; what wehave are well organized and powerful groups that dominate the distribution ofgoods and commodities in the communities and big centers of population. Theyowe no allegiance or loyalty to the State, and the State cannot rely upon them intimes of crisis or emergency. While the national holds his life, his person and hisproperty subject to the needs of his country, the alien may even become thepotential enemy of the State.

f. Law enacted in interest of national economic survival and security . —

We are fully satisfied upon a consideration of all the facts and circumstances thatthe disputed law is not the product of racial hostility, prejudice or discrimination,but the expression of the legitimate desire and determination of the people, thrutheir authorized representatives, to free the nation from the economic situationthat has unfortunately been saddled upon it rightly or wrongly, to itsdisadvantage. The law is clearly in the interest of the public, nay of the nationalsecurity itself, and indisputably falls within the scope of police power, thru whichand by which the State insures its existence and security and the supreme

welfare of its citizens.

VI. The Equal Protection Limitation

a. Objections to alien participation in retail trade. — The next question that nowposes solution is, Does the law deny the equal protection of the laws? As pointedout above, the mere fact of alienage is the root and cause of the distinctionbetween the alien and the national as a trader. The alien resident owes allegianceto the country of his birth or his adopted country; his stay here is for personalconvenience; he is attracted by the lure of gain and profit. His aim or purpose ofstay, we admit, is neither illegitimate nor immoral, but he is naturally lacking in

that spirit of loyalty and enthusiasm for this country where he temporarily staysand makes his living, or of that spirit of regard, sympathy and consideration forhis Filipino customers as would prevent him from taking advantage of theirweakness and exploiting them. The faster he makes his pile, the earlier can thealien go back to his beloved country and his beloved kin and countrymen. Theexperience of the country is that the alien retailer has shown such utterdisregard for his customers and the people on whom he makes his profit, that ithas been found necessary to adopt the legislation, radical as it may seem.

Another objection to the alien retailer in this country is that he never reallymakes a genuine contribution to national income and wealth. He undoubtedlycontributes to general distribution, but the gains and profits he makes are notinvested in industries that would help the country's economy and increasenational wealth. The alien's interest in this country being merely transient andtemporary, it would indeed be ill-advised to continue entrusting the veryimportant function of retail distribution to his hands.

The practices resorted to by aliens in the control of distribution, as alreadypointed out above, their secret manipulations of stocks of commodities and

prices, their utter disregard of the welfare of their customers and of the ultimatehappiness of the people of the nation of which they are mere guests, whichpractices, manipulations and disregard do not attend the exercise of the trade bythe nationals, show the existence of real and actual, positive and fundamentaldifferences between an alien and a national which fully justify the legislativeclassification adopted in the retail trade measure. These differences are certainlya valid reason for the State to prefer the national over the alien in the retailtrade. We would be doing violence to fact and reality were we to hold that noreason or ground for a legitimate distinction can be found between one and theother.

b. Difference in alien aims and purposes sufficient basis for distinction . —

The above objectionable characteristics of the exercise of the retail trade by thealiens, which are actual and real, furnish sufficient grounds for legislativeclassification of retail traders into nationals and aliens. Some may disagree withthe wisdom of the legislature's classification. To this we answer, that this is theprerogative of the law-making power. Since the Court finds that the classificationis actual, real and reasonable, and all persons of one class are treated alike, andas it cannot be said that the classification is patently unreasonable andunfounded, it is in duty bound to declare that the legislature acted within i ts

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legitimate prerogative and it can not declare that the act transcends the limit ofequal protection established by the Constitution.

Broadly speaking, the power of the legislature to make distinctions andclassifications among persons is not curtailed or denied by the equal protectionof the laws clause. The legislative power admits of a wide scope of discretion,and a law can be violative of the constitutional limitation only when theclassification is without reasonable basis. In addition to the authorities we have

earlier cited, we can also refer to the case of Linsey vs. Natural Carbonic Fas Co .(1911), 55 L. ed., 369, which clearly and succinctly defined the application of equalprotection clause to a law sought to be voided as contrary thereto:

. . . . "1. The equal protection clause of the Fourteenth Amendment doesnot take from the state the power to classify in the adoption of policelaws, but admits of the exercise of the wide scope of discretion in thatregard, and avoids what is done only when it is without any reasonablebasis, and therefore is purely arbitrary. 2. A classification having somereasonable basis does not offend against that clause merely because it isnot made with mathematical nicety, or because in practice it results in

some inequality. 3. When the classification in such a law is called inquestion, if any state of facts reasonably can be conceived that wouldsustain it, the existence of that state of facts at the time the law wasenacted must be assumed. 4. One who assails the classification in such alaw must carry the burden of showing that it does not rest upon anyreasonable basis but is essentially arbitrary."

c. Authorities recognizing citizenship as basis for classification. —

The question as to whether or not citizenship is a legal and valid ground forclassification has already been affirmatively decided in this jurisdiction as well as

in various courts in the United States. In the case of Smith Bell & Co. vs. Natividad,40 Phil. 136, where the validity of Act No. 2761 of the Philippine Legislature was inissue, because of a condition therein limiting the ownership of vessels engagedin coastwise trade to corporations formed by citizens of the Philippine Islands orthe United States, thus denying the right to aliens, it was held that the PhilippineLegislature did not violate the equal protection clause of the Philippine Bill ofRights. The legislature in enacting the law had as ultimate purpose theencouragement of Philippine shipbuilding and the safety for these Islands fromforeign interlopers. We held that this was a valid exercise of the police power,and all presumptions are in favor of its constitutionality. In substance, we heldthat the limitation of domestic ownership of vessels engaged in coastwise trade

to citizens of the Philippines does not violate the equal protection of the law anddue process or law clauses of the Philippine Bill of Rights. In rendering saiddecision we quoted with approval the concurring opinion of Justice Johnson inthe case of Gibbons vs. Ogden, 9 Wheat., I, as follows:

"Licensing acts, in fact, in legislation, are universally restraining acts; as,for example, acts licensing gaming houses, retailers of spirituous liquors,etc. The act, in this instance, is distinctly of that character, and forms

part of an extensive system, the object of which is to encourageAmerican shipping, and place them on an equal footing with theshipping of other nations. Almost every commercial nation reserves toits own subjects a monopoly of its coasting trade; and a countervailingprivilege in favor of American shipping is contemplated, in the wholelegislation of the United States on this subject. It is not to give the vesselan American character, that the license is granted; that effect has beencorrectly attributed to the act of her enrollment. But it is to confer onher American privileges, as contra distinguished from foreign; and topreserve the Government from fraud by foreigners; in surreptitiouslyintruding themselves into the American commercial marine, as well as

frauds upon the revenue in the trade coastwise, that this whole systemis projected."

The rule in general is as follows:

Aliens are under no special constitutional protection which forbids aclassification otherwise justified simply because the limitation of theclass falls along the lines of nationality. That would be requiring a higherdegree of protection for aliens as a class than for similar classes than forsimilar classes of American citizens. Broadly speaking, the difference instatus between citizens and aliens constitutes a basis for reasonable

classification in the exercise of police power. (2 Am., Jur. 468-469.)

In Commonwealth vs. Hana, 81 N. E. 149 (Massachusetts, 1907), a statute on thelicensing of hawkers and peddlers, which provided that no one can obtain alicense unless he is, or has declared his intention, to become a citizen of theUnited States, was held valid, for the following reason: It may seem wise to thelegislature to limit the business of those who are supposed to have regard forthe welfare, good order and happiness of the community, and the court cannotquestion this judgment and conclusion. In Bloomfield vs. State, 99 N. E. 309(Ohio, 1912), a statute which prevented certain persons, among them aliens, f romengaging in the traffic of liquors, was found not to be the result of race hatred,

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classes of aliens are of different psychology from our fellowcountrymen. Furthermore, it is natural and reasonable to suppose thatthe foreign born, whose allegiance is first to their own country, andwhose ideals of governmental environment and control have beenengendered and formed under entirely different regimes and politicalsystems, have not the same inspiration for the public weal, nor are theyas well disposed toward the United States, as those who by citizenship,are a part of the government itself. Further enlargement, is unnecessary.

I have said enough so that obviously it cannot be affirmed with absoluteconfidence that the Legislature was without plausible reason for makingthe classification, and therefore appropriate discriminations againstaliens as it relates to the subject of legislation. . . . .

VII. The Due Process of Law Limitation.

a. Reasonability, the test of the limitation; determination by legislature decisive . —

We now come to due process as a limitation on the exercise of the police power.It has been stated by the highest authority in the United States that:

. . . . And the guaranty of due process, as has often been held, demandsonly that the law shall not be unreasonable, arbitrary or capricious, andthat the means selected shall have a real and substantial relation to thesubject sought to be attained. . . . .

x x x x x x x x x

So far as the requirement of due process is concerned and in theabsence of other constitutional restriction a state is free to adoptwhatever economic policy may reasonably be deemed to promote

public welfare, and to enforce that policy by legislation adapted to itspurpose. The courts are without authority either to declare such policy,or, when it is declared by the legislature, to override it. If the lawspassed are seen to have a reasonable relation to a proper legislativepurpose, and are neither arbitrary nor discriminatory, the requirementsof due process are satisfied, and judicial determination to that effectrenders a court functus officio. . . . (Nebbia vs. New York, 78 L. ed. 940,950, 957.)

Another authority states the principle thus:

. . . . Too much significance cannot be given to the word "reasonable" inconsidering the scope of the police power in a constitutional sense, forthe test used to determine the constitutionality of the means employedby the legislature is to inquire whether the restriction it imposes onrights secured to individuals by the Bill of Rights are unreasonable, andnot whether it imposes any restrictions on such rights. . . .

x x x x x x x x x

. . . . A statute to be within this power must also be reasonable in itsoperation upon the persons whom it affects, must not be for theannoyance of a particular class, and must not be unduly oppressive. (11Am. Jur. Sec. 302., 1:1)- 1074-1075.)

In the case of Lawton vs. Steele, 38 L. ed. 385, 388. it was also held:

. . . . To justify the state in thus interposing its authority in behalf of thepublic, it must appear, first, that the interests of the public generally, asdistinguished from those of a particular class, require such interference;

and second, that the means are reasonably necessary for theaccomplishment of the purpose, and not unduly oppressive uponindividuals. . . .

Prata Undertaking Co. vs. State Board of Embalming , 104 ALR, 389, 395, fixes thistest of constitutionality:

In determining whether a given act of the Legislature, passed in theexercise of the police power to regulate the operation of a business, isor is not constitutional, one of the f irst questions to be considered bythe court is whether the power as exercised has a sufficient foundation

in reason in connection with the matter involved, or is an arbitrary,oppressive, and capricious use of that power, without substantialrelation to the health, safety, morals, comfort, and general welfare ofthe public.

b. Petitioner's argument considered. —

Petitioner's main argument is that retail is a common, ordinary occupation, oneof those privileges long ago recognized as essential to the orderly pursuant ofhappiness by free men; that it is a gainful and honest occupation and therefore

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limiting to citizens of the Philippines the exploitation, development andutilization of its natural resources. And in Section 8 of Article XIV, it is providedthat "no franchise, certificate, or any other form of authorization for theoperation of the public utility shall be granted except to citizens of thePhilippines." The nationalization of the retail trade is only a continuance of thenationalistic protective policy laid down as a primary objective of theConstitution. Can it be said that a law imbued with the same purpose and spiritunderlying many of the provisions of the Constitution is unreasonable, invalid

and unconstitutional?

The seriousness of the Legislature's concern for the plight of the nationals asmanifested in the approval of the radical measures is, therefore, fully justified. Itwould have been recreant to its duties towards the country and its people wouldit view the sorry plight of the nationals with the complacency and refuse orneglect to adopt a remedy commensurate with the demands of public interestand national survival. As the repository of the sovereign power of legislation, theLegislature was in duty bound to face the problem and meet, through adequatemeasures, the danger and threat that alien domination of retail trade poses tonational economy.

d. Provisions of law not unreasonable. —

A cursory study of the provisions of the law immediately reveals how tolerant,how reasonable the Legislature has been. The law is made prospective andrecognizes the right and privilege of those already engaged in the occupation tocontinue therein during the rest of their lives; and similar recognition of the rightto continue is accorded associations of aliens. The right or privilege is denied tothose only upon conviction of certain offenses. In the deliberations of the Courton this case, attention was called to the fact that the privilege should not havebeen denied to children and heirs of al iens now engaged in the retail trade. Suchprovision would defeat the law itself, its aims and purposes. Beside, the exerciseof legislative discretion is not subject to judicial review. It is well settled that theCourt will not inquire into the motives of the Legislature, nor pass upon generalmatters of legislative judgment. The Legislature is primarily the judge of thenecessity of an enactment or of any of its provisions, and every presumption is infavor of its validity, and though the Court may hold views inconsistent with thewisdom of the law, it may not annul the legislation if not palpably in excess ofthe legislative power. Furthermore, the test of the v alidity of a law attacked as aviolation of due process, is not its reasonableness, but its unreasonableness, andwe find the provisions are not unreasonable. These principles also answervarious other arguments raised against the law, some of which are: that the law

does not promote general welfare; that thousands of aliens would be thrownout of employment; that prices will increase because of the elimination ofcompetition; that there is no need for the legislation; that adequate replacementis problematical; that there may be general breakdown; that there would berepercussions from foreigners; etc. Many of these arguments are directedagainst the supposed wisdom of the law which lies solely within the legislativeprerogative; they do not import invalidity.

VIII. Alleged defect in the title of the law

A subordinate ground or reason for the alleged invalidity of the law is the claimthat the title thereof is misleading or deceptive, as it conceals the real purpose ofthe bill which is to nationalize the retail business and prohibit aliens f romengaging therein. The constitutional provision which is claimed to be violated inSection 21 (1) of Article VI, which reads:

No bill which may be enacted in the law shall embrace more than onesubject which shall be expressed in the title of the bill.

What the above provision prohibits is duplicity, that is, if its title completely failsto appraise the legislators or the public of the nature, scope and consequencesof the law or its operation (I Sutherland, Statutory Construction, Sec. 1707, p.297.) A cursory consideration of the title and the provisions of the bill fails toshow the presence of duplicity. It is true that the term "regulate" does not andmay not readily and at first glance convey the idea of "nationalization" and"prohibition", which terms express the two main purposes and objectives of thelaw. But "regulate" is a broader term than either prohibition or nationalization.Both of these have always been included within the term regulation.

Under the title of an act to "regulate", the sale of intoxicating liquors,

the Legislature may prohibit the sale of intoxicating liquors. (Sweet vs.City of Wabash, 41 Ind., 7; quoted in page 41 of Answer.)

Within the meaning of the Constitution requiring that the subject ofevery act of the Legislature shall be stated in the tale, the title toregulate the sale of intoxicating liquors, etc." sufficiently expresses thesubject of an act prohibiting the sale of such liquors to minors and topersons in the habit of getting intoxicated; such matters being properlyincluded within the subject of regulating the sale. (Williams vs. State, 48Ind. 306, 308, quoted in p. 42 of Answer.)

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The word "regulate" is of broad import, and necessarily implies somedegree of restraint and prohibition of acts usually done in connectionwith the thing to be regulated. While word regulate does not ordinarilyconvey meaning of prohibit, there is no absolute reason why it shouldnot have such meaning when used in delegating police power inconnection with a thing the best or only efficacious regulation of whichinvolves suppression. (State vs. Morton, 162 So. 718, 182 La. 887, quotedin p. 42 of Answer.)

The general rule is for the use of general terms in the title of a bill; it has alsobeen said that the title need not be an index to the entire contents of the law (ISutherland, Statutory Construction, See. 4803, p. 345.) The above rule wasfollowed the title of the Act in question adopted the more general term"regulate" instead of "nationalize" or "prohibit". Furthermore, the law alsocontains other rules for the regulation of the retail trade which may not beincluded in the terms "nationalization" or "prohibition"; so were the titlechanged from "regulate" to "nationalize" or "prohibit", there would have beenmany provisions not falling within the scope of the title which would have madethe Act invalid. The use of the term "regulate", therefore, is in accord with the

principle governing the drafting of statutes, under which a simple or generalterm should be adopted in the title, which would include all other provisionsfound in the body of the Act.

One purpose of the constitutional directive that the subject of a bill should beembraced in its title is to apprise the legislators of the purposes, the nature andscope of its provisions, and prevent the enactment into law of matters whichhave received the notice, action and study of the legislators or of the public. Inthe case at bar it cannot be claimed that the legislators have been appraised ofthe nature of the law, especially the nationalization and the prohibitionprovisions. The legislators took active interest in the discussion of the law, and agreat many of the persons affected by the prohibitions in the law conducted acampaign against its approval. It cannot be claimed, therefore, that the reasonsfor declaring the law invalid ever existed. The objection must therefore, beoverruled.

IX. Alleged violation of international treaties and obligations

Another subordinate argument against the validity of the law is the supposedviolation thereby of the Charter of the United Nations and of the Declaration ofthe Human Rights adopted by the United Nations General Assembly. We find nomerit in the Nations Charter imposes no strict or legal obligations regarding the

rights and freedom of their subjects (Hans Kelsen, The Law of the UnitedNations, 1951 ed. pp. 29-32), and the Declaration of Human Rights containsnothing more than a mere recommendation or a common standard ofachievement for all peoples and all nations (Id. p. 39.) That such is the import ofthe United Nations Charter aid of the Declaration of Human Rights can beinferred the fact that members of the United Nations Organizations, such asNorway and Denmark, prohibit foreigners from engaging in retail trade, and inmost nations of the world laws against foreigners engaged in domestic trade are

adopted.

The Treaty of Amity between the Republic of the Philippines and the Republic ofChina of April 18, 1947 is also claimed to be violated by the law in question. Allthat the treaty guarantees is equality of treatment to the Chinese nationals"upon the same terms as the nationals of any other country." But the nationalsof China are not discriminating against because nationals of all other countries,except those of the United States, who are granted special rights by theConstitution, are all prohibited from engaging in the retai l trade. But evensupposing that the law infringes upon the said treaty, the treaty is always subjectto qualification or amendment by a subsequent law (U. S. vs. Thompson, 258,

Fed. 257, 260), and the same may never curtail or restrict the scope of the policepower of the State (plaston vs. Pennsylvania, 58 L. ed. 539.)

X. Conclusion

Resuming what we have set forth above we hold that the disputed law wasenacted to remedy a real actual threat and danger to national economy posed byalien dominance and control of the retail business and free citizens and countryfrom dominance and control; that the enactment clearly falls within the scope ofthe police power of the State, thru which and by which it protects its ownpersonality and insures its security and future; that the law does not violate theequal protection clause of the Constitution because sufficient grounds exist forthe distinction between alien and citizen in the exercise of the occupationregulated, nor the due process of law clause, because the law is prospective inoperation and recognizes the privilege of aliens already engaged in theoccupation and reasonably protects their privilege; that the wisdom and efficacyof the law to carry out its objectives appear to us to be plainly evident — as amatter of fact it seems not only appropriate but actually necessary — and that inany case such matter falls within the prerogative of the Legislature, with whosepower and discretion the Judicial department of the Government may notinterfere; that the provisions of the law are clearly embraced in the title, and thissuffers from no duplicity and has not misled the legislators or the segment of the

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The authors of the Constitution were vigilant, careful and zealous in thesafeguard of the ownership of private agricultural lands which together with thelands of the public domain constitute the priceless patrimony and mainstay ofthe nation; yet, they did not deem it wise and prudent to deprive aliens and theirheirs of such lands.4

For these reasons, I am of the opinion that section 1 of the Act, insofar as itcompels associations and partnership referred to therein to wind up their retail

business within ten years from the date of the approval of the Act even beforethe expiry of the term of their existence as agreed upon by the associates andpartners and section 3 of the Act, insofar as it compels the aliens engaged in theretail business in his lifetime his executor or administrator, to liquidate thebusiness, are invalid, for they violate the due process of law and the equalprotection of the laws clauses of the Constitution.

Footnotes


Manila

EN BANC

G.R. No. L-21897 October 22, 1963

RAMON A. GONZALES, petitioner,vs.

RUFINO G. HECHANOVA, as Executive Secretary, MACARIO PERALTA, JR., asSecretary of Defense, PEDRO GIMENEZ, as Auditor General, CORNELIOBALMACEDA, as Secretary of Commerce and Industry, and SALVADOR MARINO,Secretary of Justice, respondents.

Ramon A. Gonzales in his own behalf as petitioner.Office of the Solicitor General and Estanislao Fernandez for respondents.

CONCEPCION, J.:

This is an original action for prohibition with preliminary injunction.

It is not disputed that on September 22, 1963, respondent Executive Secretaryauthorized the importation of 67,000 tons of foreign rice to be purchased fromprivate sources, and created a rice procurement committee composed of theother respondents herein1 for the implementation of said proposed importation.Thereupon, or September 25, 1963, herein petitioner, Ramon A. Gonzales — arice planter, and president of the Iloilo Palay and Corn Planters Association,

whose members are, likewise, engaged in the production of rice and corn — filedthe petition herein, averring that, in making or attempting to make saidimportation of foreign rice, the aforementioned respondents "are acting withoutjurisdiction or in excess of jurisdiction", because Republic Act No. 3452 whichallegedly repeals or amends Republic Act No. 220 — explicitly prohibits theimportation of rice and corn "the Rice and Corn Administration or any other

government agency;" that petitioner has no other plain, speedy and adequateremedy in the ordinary course of law; and that a preliminary injunction isnecessary for the preservation of the rights of the parties during the pendencythis case and to prevent the judgment therein from coming ineffectual.Petitioner prayed, therefore, that said petition be given due course; that a writ of

preliminary injunction be forthwith issued restraining respondent their agents orrepresentatives from implementing the decision of the Executive Secretary toimport the aforementioned foreign rice; and that, after due hearing, judgmentbe rendered making said injunction permanent.

Forthwith, respondents were required to file their answer to the petition whichthey did, and petitioner's pray for a writ of preliminary injunction was set forhearing at which both parties appeared and argued orally. Moreover, amemorandum was filed, shortly thereafter, by the respondents. Considering,later on, that the resolution said incident may require some pronouncementsthat would be more appropriate in a decision on the merits of the case, the samewas set for hearing on the merits thereafter. The parties, however, waived theright to argue orally, although counsel for respondents filed their memoranda.

I. Sufficiency of petitioner's interest.

Respondents maintain that the status of petitioner as a rice planter does not givehim sufficient interest to file the petition herein and secure the relief thereinprayed for. We find no merit in this pretense. Apart from prohibiting theimportation of rice and corn "by the Rice and Corn Administration or any othergovernment agency". Republic Act No. 3452 declares, in Section 1 thereof, that"the policy of the Government" is to "engage in the purchase of these basic

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foods directly from those tenants, farmers, growers, producers andlandowners in the Philippines who wish to dispose of their products at a pricethat will afford them a fair and just return for their labor and capital investment.... ." Pursuant to this provision, petitioner, as a planter with a rice land ofsubstantial proportion,2 is entitled to a chance to sell to the Government the riceit now seeks to buy abroad. Moreover, since the purchase of said commodity willhave to be effected with public funds mainly raised by taxation, and as a riceproducer and landowner petitioner must necessarily be a taxpayer, it follows

that he has sufficient personality and interest to seek judicial assistance with aview to restraining what he believes to be an attempt to unlawfully disburse saidfunds.

II. Exhaustion of administrative remedies.

Respondents assail petitioner's right to the reliefs prayed for because he "hasnot exhausted all administrative remedies available to him before coming tocourt". We have already held, however, that the principle requiring the previousexhaustion of administrative remedies is not applicable where the question indispute is purely a legal one",3 or where the controverted act is "patently illegal"

or was performed without jurisdiction or in excess of jurisdiction,4

or where therespondent is a department secretary, whose acts as an alter-ego of thePresident bear the implied or assumed approval of the latter,5 unless actuallydisapproved by him,6 or where there are circumstances indicating the urgency ofjudicial intervention.7 The case at bar fails under each one of the foregoingexceptions to the general rule. Respondents' contention is, therefore, untenable.

III. Merits of petitioner's cause of action.

Respondents question the sufficiency of petitioner's cause of action upon thetheory that the proposed importation in question is not governed by Republic

Acts Nos. 2207 and 3452, but was authorized by the President as Commander-in-Chief "for military stock pile purposes" in the exercise of his alleged authorityunder Section 2 of Commonwealth Act No. 1;8 that in cases of necessity, thePresident "or his subordinates may take such preventive measure for therestoration of good order and maintenance of peace"; and that, as Commander-in-Chief of our armed forces, "the President ... is duty-bound to prepare for thechallenge of threats of war or emergency withoutwaiting for any specialauthority".

Regardless of whether Republic Act No. 3452 repeals Republic Act No. 2207, ascontended by petitioner herein - on which our view need not be expressed — we

are unanimously of the opinion - assuming that said Republic Act No. 2207 is stillin force — that the two Acts are applicable to the proposed importation inquestion because the language of said laws is such as to include within thepurview thereof all importations of rice and corn into the Philippines". Pursuantto Republic Act No. 2207, "it shall be unlawful for any person, association,corporation or government agency to import rice and corn into any point in thePhilippines", although, by way of exception, it adds, that "the President of thePhilippines may authorize the importation of these commodities through any

government agency that he may designate", is the conditions prescribed inSection 2 of said Act are present. Similarly, Republic Act No. 3452 explicitlyenjoins "the Rice and Corn Administration or any government agency" fromimporting rice and corn.

Respondents allege, however, that said provisions of Republic Act Nos. 2207 and3452, prohibiting the importation of rice and corn by any "government agency",do not apply to importations "made by the Government itself", because thelatter is not a "government agency". This theory is devoid of merit. TheDepartment of National Defense and the Armed Forces of the Philippines, as wellas respondents herein, and each and every officer and employee of our

Government, our government agencies and/or agents. The applicability of saidlaws even to importations by the Government as such, becomes more apparentwhen we consider that:

1. The importation permitted in Republic Act No. 2207 is to be authorized by the"President of the Philippines" and, hence, by or on behalf of the Government ofthe Philippines;

2. Immediately after enjoining the Rice and Corn administration and any othergovernment agency from importing rice and corn, Section 10 of Republic Act No.3452 adds "that the importation of rice and corn is left to private parties uponpayment of the corresponding taxes", thus indicating that only "private parties"may import rice under its provisions; and

3. Aside from prescribing a fine not exceeding P10,000.00 and imprisonment ofnot more than five (5) years f or those who shall violate any provision of RepublicAct No. 3452 or any rule and regulation promulgated pursuant thereto, Section 15of said Act provides that "if the offender is a public official and/or employees", heshall be subject to the additional penalty specified therein. A public official is anofficer of the Government itself , as distinguished from officers or employees ofinstrumentalities of the Government. Hence, the duly authorized acts of theformer are those of the Government, unlike those of a government

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instrumentality which may have a personality of its own, distinct and separatefrom that of the Government, as such. The provisions of Republic Act No. 2207are, in this respect, even more explicit. Section 3 thereof provides a similaradditional penalty for any "officer or employee of the Government" who"violates, abets or tolerates the violation of any provision" of said Act. Hence,the intent to apply the same to transactions made by the very government ispatent.

Indeed, the restrictions imposed in said Republic Acts are merely additional tothose prescribed in Commonwealth Act No. 138, entitled "An Act to give nativeproducts and domestic entities the preference in the purchase of articles for theGovernment." Pursuant to Section 1 thereof:

The Purchase and Equipment Division of the Government of thePhilippines and other officers and employees of the municipal andprovincial governments and the Government of the Philippines and ofchartered cities, boards, commissions, bureaus, departments, offices,agencies, branches, and bodies of any description, including government-owned companies, authorized to requisition, purchase, or contract or

make disbursements for articles, materials, and supplies for public use,public buildings, or public works shall give preference to materials ...produced ... in the Philippines or in the United States, and to domesticentities, subject to the conditions hereinbelow specified. (Emphasissupplied.)

Under this provision, in all purchases by the Government, including those madeby and/or for the armed forces,preference shall be given to materials produced inthe Philippines. The importation involved in the case at bar violates this generalpolicy of our Government, aside from the provisions of Republic Acts Nos. 2207and 3452.

The attempt to justify the proposed importation by invoking reasons of nationalsecurity — predicated upon the "worsening situation in Laos and Vietnam", and"the recent tension created by the Malaysia problem" - and the alleged powersof the President as Commander-in-Chief of all armed forces in the Philippines,under Section 2 of the National Defense Act (Commonwealth Act No. 1),overlooks the fact that the protection of local planters of rice and corn in amanner that would foster and accelerate self-sufficiency in the local productionof said commodities constitutes a factor that is vital to our ability to meetpossible national emergency. Even if the intent in importing goods in anticipationof such emergency were to bolster up that ability, the latter would, instead, be

impaired if the importation were so made as to discourage our farmers fromengaging in the production of rice.

Besides, the stockpiling of rice and corn for purpose of national security and/ornational emergency is within the purview of Republic Act No. 3452. Section 3thereof expressly authorizes the Rice and Corn Administration "to accumulatestocks as a national reserve in such quantities as it may deem proper andnecessary to meet any contingencies". Moreover, it ordains that "the buffer

stocks held as a national reserve ... be deposited by the administration throughoutthe country under the proper dispersal plans ... and may be released only upon theoccurrence of calamities or emergencies ...". (Emphasis applied.)

Again, the provisions of Section 2 of Commonwealth Act No. 1, upon whichrespondents rely so much, are not self-executory. They merely outline thegeneral objectives of said legislation. The means for the attainment of thoseobjectives are subject to congressional legislation. Thus, the conditions underwhich the services of citizens, as indicated in said Section 2, may be availed of,are provided for in Sections 3, 4 and 51 to 88 of said Commonwealth Act No. 1.Similarly, Section 5 thereof specifies the manner in which resources necessary for

our national defense may be secured by the Government of the Philippines, butonly "during a national mobilization",9which does not exist. Inferentially,therefore, in the absence of a national mobilization, said resources shall beproduced in such manner as Congress may by other laws provide from time totime. Insofar as rice and corn are concerned, Republic Acts Nos. 2207 and 3452,and Commonwealth Act No. 138 are such laws.

Respondents cite Corwin in support of their pretense, but in vain. Anexamination of the work cited10 shows that Corwin referred to the powers of thePresident during "war time"11 or when he has placed the country or a partthereof under "martial law".12 Since neither condition obtains in the case at bar,said work merely proves that respondents' theory, if accepted, would, in eff ect,place the Philippines under martial law, without a declaration of the Executive tothat effect. What is worse, it would keep us perpetually under martial law.

It has been suggested that even if the proposed importation violated RepublicActs Nos. 2207 and 3452, it should, nevertheless, be permitted because "itredounds to the benefit of the people". Salus populi est suprema lex, it is said.

If there were a local shortage of rice, the argument might have some value. Butthe respondents, as officials of this Government, have expressly affirmed again

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and again that there is no rice shortage. And the importation is avowedly forstockpile of the Army — not the civilian population.

But let us follow the respondents' trend of thought. It has a more seriousimplication that appears on the surface. It implies that i f an executive officerbelieves that compliance with a certain statute will not benefit the people, he isat liberty to disregard it. That idea must be rejected - we still live under a rule oflaw.

And then, "the people" are either producers or consumers. Now — asrespondents explicitly admit — Republic Acts Nos. 2207 and 3452 were approvedby the Legislature for the benefit of producers and consumers, i.e., the people, itmust follow that the welfare of the people lies precisely in the compliance withsaid Acts.

It is not for respondent executive officers now to set their own opinions againstthat of the Legislature, and adopt means or ways to set those Acts at naught.Anyway, those laws permit importation — but under certain conditions, whichhave not been, and should be complied with.

IV. The contracts with Vietnam and Burma —

It is lastly contended that the Government of the Philippines has already enteredinto two (2) contracts for the Purchase of rice, one with the Republic of Vietnam,and another with the Government of Burma; that these contracts constitutevalid executive agreements under international law; that such agreementsbecame binding effective upon the signing thereof by representatives the partiesthereto; that in case of conflict between Republic Acts Nos. 2207 and 3452 on theone hand, and aforementioned contracts, on the other, the latter should prevail,because, if a treaty and a statute are inconsistent with each other, the conflict

must be resolved — under the American jurisprudence — in favor of the onewhich is latest in point of time; that petitioner herein assails the validity of acts ofthe Executive relative to foreign relations in the conduct of which the SupremeCourt cannot interfere; and the aforementioned contracts have already beenconsummated, the Government of the Philippines having already paid the priceof the rice involved therein through irrevocable letters of credit in favor of thesell of the said commodity. We find no merit in this pretense.

The Court is not satisfied that the status of said tracts as alleged executiveagreements has been sufficiently established. The parties to sai d contracts donot pear to have regarded the same as executive agreements. But, even

assuming that said contracts may properly considered as executive agreements,the same are unlawful, as well as null and void, from a constitutional viewpoint,said agreements being inconsistent with the provisions of Republic Acts Nos.2207 and 3452. Although the President may, under the American constitutionalsystem enter into executive agreements without previous legislative authority,he may not, by executive agreement, enter into a transaction whichis prohibited by statutes enacted prior thereto. Under the Constitution, the mainfunction of the Executive is to enforce laws enacted by Congress. The former

may not interfere in the performance of the legislative powers of the latter,except in the exercise of his veto power. He may not defeat legislativeenactments that have acquired the status of law, by indirectly repealing the samethrough an executive agreement providing for the performance of the very actprohibited by said laws.

The American theory to the effect that, in the event of conflict betweena treaty and a statute, the one which is latest in point of time shall prevail, is notapplicable to the case at bar, for respondents not only admit, but, alsoinsist thatthe contracts adverted to are not treaties. Said theory may be justified upon theground that treaties to which the United States is signatory require the adviceand consent of its Senate, and, hence, of a branch of the legislative department.No such justification can be given as regards executive agreements notauthorized by previous legislation, without completely upsetting the principle ofseparation of powers and the system of checks and balances which arefundamental in our constitutional set up and that of the United States.

As regards the question whether an international agreement may be invalidatedby our courts, suffice it to say that the Constitution of the Philippines has clearlysettled it in the affirmative, by providing, in Section 2 of Article VIII thereof, thatthe Supreme Court may not be deprived "of its jurisdiction to review, revise,reverse, modify, or affirm on appeal, certiorari, or writ of error as the law or therules of court may provide, final judgments and decrees of inferior courts in — (1)

All cases in which the constitutionality or validity of any treaty, law, ordinance, orexecutive order or regulation is in question". In other words, our Constitutionauthorizes the nullification of a treaty, not only when it conflicts with thefundamental law, but, also, when it runs counter to an act of Congress .

The alleged consummation of the aforementioned contracts with Vietnam andBurma does not render this case academic, Republic Act No. 2207 enjoins ourGovernment not from entering into contracts for the purchase of rice, butfrom importing rice, except under the conditions Prescribed in said Act. Upon theother hand, Republic Act No. 3452 has two (2) main features, namely: (a) it

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(a) The preservation of the State is the obligation of every citizen. Thesecurity of the Philippines and the freedom, independence andperpetual neutrality of the Philippine Republic shall be guaranteed bythe employment of all citizens, without distinction of sex or age, and allresources.

(b) The employment of the nation's citizens and resources for nationaldefense shall be effected by a national mobilization.

(c) The national mobilization shall include the execution of all measuresnecessary to pass from a peace to a war footing.

(d) The civil authority shall always be supreme. The President of thePhilippines as the Commander-in-Chief of all military forces, shall beresponsible that mobilization measures are prepared at alltimes.(Emphasis supplied)

Indeed, I find in that declaration of policy that the security of the Philippines andits freedom constitutes the core of the preservation of our State which is the

basic duty of every citizen and that to secure which it is enjoined that thePresident employ all the resources at his command. But over and above all thatpower and duty, fundamental as they may seem, there is the injunction that thecivil authority shall always be supreme. This injunction can only mean that whileall precautions should be taken to insure the security and preservation of theState and to this effect the employment of all resources may be resorted to, theaction must always be taken within the framework of the civil authority. Militaryauthority should be harmonized and coordinated with civil authority, the onlyexception being when the law clearly ordains otherwise. Neither Republic Act2207, nor Republic Act 3452, contains any exception in favor of military actionconcerning importation of rice and corn. An exception must be strictly

construed.

A distinction is made between the government and government agency in anattempt to take the former out of the operation of Republic Act 2207. I disagree.The Government of the Republic of the Philippines under the RevisedAdministrative Code refers to that entity through which the functions ofgovernment are exercised, including the various arms through which politicalauthority is made effective whether they be provincial, municipal or other formof local government, whereas a government instrumentality refers tocorporations owned or controlled by the government to promote certainaspects of the economic life of our people. A government agency, therefore,

must necessarily refer to the government itself of the Republic, as distinguishedfrom any government instrumentality which has a personality distinct andseparate from it (Section 2).

The important point to determine, however, is whether we should enjoinrespondents from carrying out the importation of the rice which according to therecord has been authorized to be imported on government to government level, itappearing that the arrangement to this effect has al ready been concluded, the

only thing lacking being its implementation. This is evident from themanifestation submitted by the Solicitor General wherein it appears that thecontract for the purchase of 47,000 tons of rice from had been sign on October5, 1963, and for the purchase of 20,000 tons from Burma on October 8, 1963, bythe authorized representatives of both our government and the governments ofVietnam and Burma, respectively. If it is true that, our government has alreadymade a formal commitment with the selling countries there arises the questionas to whether the act can still be impeded at this stage of the negotiations.Though on this score there is a divergence of opinion, it is gratifying to note thatthe majority has expressed itself against it. This is a plausible attitude for, had thewrit been issued, our government would have been placed in a predicamentwhere, as a necessary consequence, it would have to repudiate a duly formalizedagreement to its great embarrassment and loss of face. This was avoided by thejudicial statesmanship evinced by the Court.


Manila

EN BANC

G.R. No. L-2855 July 30, 1949

BORIS MEJOFF, petitioner,vs.DIRECTOR OF PRISONS, respondent.

First Assistant Solicitor General Roberto A. Gianzon and Solicitor Lucas Lacson forrespondent.

BENGZON, J.:

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Fact:The petitioner was a Russian national who was brought into the country as a

secret operative of the Japanese forces. Upon liberation, he was arrested as a

Japanese spy by the U.S Army. Thereafter, the People’s Court ordered his release

but the Board of Commissioners of Immigration declared that the he had entered

the country illegally and ordered his deportation. After repeated failures to have

have him deported, the authorities moved him to Bilibid where he was detained

up to time of petition.

Issue: Whether or not an alien person who claims to be stateless may indefinitely

kept in detention.

Ruling: The Court decides that an alien who illegally stayed in the Philippines

have no right of asylum even if they claimed as stateless. Foreign nationals, not

enemies, against whom no charge had been made other than their permission to

stay has expired, may not be indefinitely kept in detention for the reason that

protection against deprivation of liberty without due process of law and exceptfor crimes committed against the laws of the land is not limited to Philippine

citizen citizens but extends to all residents, except enemy aliens.

Mejoff entry to our country was not unlawful; he was brought by the armed

forces of a de factogovernment whose decrees were law during the occupation.

He has the right to life and liberty and all other fundamental rights as applied to

human beings, as proclaimed in the “Universal Declaration of Human Rights”

approved by the General Assembly of the United Nation, of our country is a

member. The theory on which the court is given the power to act is that thewarrant for his deportation which was not executed is functus officio and the

alien is being held without any authority of law. The possibility that he might join

or aid disloyal elements if turned out at large does not justify prolonged

detention, the remedy in that case being to impose conditions in the order of

release and exact bail in reasonable amount with sufficient sureties.

The petition was denied.

KURODA VS. JALANDONI 83 PHIL 171

FACTS:

Shigenori Kuroda, formerly a Lieutenant-General of the Japanese Imperial Army

and Commanding General of the Japanese Imperial Forces in The Philippines

during a period covering 1943 and 1944 who is now charged before a military

Commission convened by the Chief of Staff of the Armed forces of the

Philippines with having unlawfully disregarded and failed "to discharge his duties

as such command, permitting them to commit brutal atrocities and other high

crimes against noncombatant civilians and prisoners of the Imperial Japanese

Forces in violation of the laws and customs of war" comes before this Court

seeking to establish the illegality of Executive Order No. 68 of the President of

the Philippines: to enjoin and prohibit respondents Melville S. Hussey and Robert

Port from participating in the prosecution of petitioner's case before the Military

Commission and to permanently prohibit respondents from proceeding with thecase of petitioners.

In support of his case petitioner tenders the following principal arguments.

First. "That Executive Order No. 68 is illegal on the ground that it violates not

only the provision of our constitutional law but also our local laws to say nothing

of the fact (that) the Philippines is not a signatory nor an adherent to the Hague

Convention on Rules and Regulations covering Land Warfare and therefore

petitioners is charged of 'crimes' not based on law, national and international."

Hence petitioner argues "That in view off the fact that this commission has been

empanelled by virtue of an unconstitutional law an illegal order this commission

is without jurisdiction to try herein petitioner."

RULING:

Executive Order No. 68, establishing a National War Crimes Office prescribing

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warning device at the rate of P 56.00 to P72.00 per set." 14 are unlawful andunconstitutional and contrary to the precepts of a compassionate New Society[as being] compulsory and confiscatory on the part of the motorists who couldvery well provide a practical alternative road safety device, or a bettersubstitute to the specified set of EWD's."

Held: Petitioner’s contention is erroneous because the Letter of Instruction was

issued in the exercise of the police power which is “nothing more or less thanthe powers of government inherent in every sovereignty.” In the leading caseofCalalang v. Williams, Justice Laurel identified police power with stateauthority to enact legislation that may interfere with personal liberty orproperty in order to promote the general welfare. Persons and property couldthus ‘be subjected to all kinds of restraints and burdens in order for the generalcomfort, health and prosperity of the state.’ This doctrine was later reiteratedagain in Primicias v. Fugoso which referred police power as ‘the power toprescribe regulations to promote the health, morals, peace, education, goodorder or safety, and general welfare of the people.’ The concept was set forthin negative terms by Justice Malcolm in a pre-Commonwealth decision as ‘thatinherent and plenary power in the State which enables it to prohibit all things

hurtful to the comfort, safety and welfare of society .’ Its scope, ever-expandingto meet the exigencies of the times, even to anticipate the future where it couldbe done, provides enough room for an efficient and flexible response toconditions and circumstances thus assuring the greatest benefits. In thelanguage of Justice Cardozo: ‘Needs that were narrow or parochial in the pastmay be interwoven in the present with the well-being of the nation. What arecritical or urgent changes with the time.’ The police power is thus a dynamicagency, suitably vague and far from precisely defined, rooted in the conceptionthat men in organizing the state and imposing upon its government limitationsto safeguard constitutional rights did not intend thereby to enable an individualcitizen or a group of citizens to obstruct unreasonably the enactment of such

salutary measures calculated to communal peace, safety, good order, andwelfare.”

Agustin vs. Edu, 88 SCRA 195 L- 49112 February 22, 1979

Facts: The petitioner was an owner of a volkswagen bettle car, model 13035,

already properly equipped when it came out from the assembly lines with

blinking lights fore and aft, which could very well serve as an early warning

devise in case of emergencies mentioned in Letter of Instructions No.229, as

amended as well as the Land Transportation Commission.

Respondent Land Transportation Commissioner Romeo Edu issued

Memorandum Circular No. 32 pursuant to Letter of Instruction NO. 229 as

amended. It required the use of Early Warning Devices on motor vehicles.

Issue: Whether or not the Letter of Instructions as well as the implementing rules

and regulations were unlawful and constitutional.

Ruling: The court held that the letter of instructions No. 229 as amended as well

as the implementing rules and regulations were valid and constitutional as a valid

police power measure.

The petition itself quoted these two whereas clauses of the assailed Letter of

Instruction. Whereas the hazards posed by such obstructions to traffic have been

recognized by international bodies concerned with traffic safety, the ViennaConvention on Road Signs and Signals and the United Nation ratified by the

Philippine local legislation for the installation of road safety sign and devices. It

cannot be disputed then that this declaration of principle found in the

constitution possesses relevance because our country adopts the generally

accepted principle, thus become part of the law of the land.


Manila

EN BANC

G.R. No. L-65366 November 9, 1983

JOSE B.L. REYES, in behalf of the ANTI-BASES COALITION (ABC), petitioner,vs.RAMON BAGATSING, as Mayor of the City of Manila, respondent.

Lorenzo M. Tañada Jose W. Diokno and Haydee B. Yorac for petitioner.

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The Solicitor General for respondent.

FERNANDO, C.J.:ñé+.£ªwph!1

This Court, in this case of fi rst impression, at least as to some aspects, is calledupon to delineate the boundaries of the protected area of the cognate rights to

free speech and peaceable assembly, 1 against an alleged intrusion byrespondent Mayor Ramon Bagatsing. Petitioner, retired Justice JB L. Reyes, onbehalf of the Anti-Bases Coalition sought a permit from the City of Manila to holda peaceful march and rally on October 26, 1983 from 2:00 to 5:00 in theafternoon, starting from the Luneta, a public park, to the gates of the UnitedStates Embassy, hardly two blocks away. Once there, and in an open space ofpublic property, a short program would be held. 2 During the course of the oralargument, 3 it was stated that after the delivery of two brief speeches, a petitionbased on the resolution adopted on the last day by the International Conferencefor General Disbarmament, World Peace and the Removal of All Foreign MilitaryBases held in Manila, would be presented to a representative of the Embassy or

any of its personnel who may be there so that it may be delivered to the UnitedStates Ambassador. The march would be attended by the local and foreignparticipants of such conference. There was likewise an assurance in the petitionthat in the exercise of the constitutional rights to f ree speech and assembly, allthe necessary steps would be taken by it "to ensure a peaceful march andrally." 4

The filing of this suit f or mandamus with alternative prayer for writ of preliminarymandatory injunction on October 20, 1983 was due to the fact that as of thatdate, petitioner had not been informed of any action taken on his request onbehalf of the organization to hold a rally. On October 25, 1983, the answer ofrespondent Mayor was filed on his behalf by Assistant Solicitor General EduardoG. Montenegro. 5 It turned out that on October 19, such permit was denied.Petitioner was unaware of such a fact as t he denial was sent by ordinary mail.The reason for refusing a permit was due to police intelligence reports whichstrongly militate against the advisability of issuing such permit at this time and atthe place applied for." 6 To be more specific, reference was made to persistentintelligence reports affirm[ing] the plans of subversive/criminal elements toinfiltrate and/or disrupt any assembly or congregations where a large number ofpeople is expected to attend." 7 Respondent Mayor suggested, however, inaccordance with the recommendation of the police authorities, that "a permitmay be issued for the rally if it is to be held at the Rizal Coliseum or any other

enclosed area where the safety of the participants themselves and the generalpublic may be ensured." 8

The oral argument was heard on October 25, 1983, the very same day the answerwas filed. The Court then deliberated on the matter. That same afternoon, aminute resolution was issued by the Court granting the mandatory injunctionprayed for on the ground that there was no showing of the existence of a clearand present danger of a substantive evil that could justify the denial of a permit.

On this point, the Court was unanimous, but there was a dissent by JusticeAquino on the ground that the holding of a rally in front of the US Embassywould be violative of Ordinance No. 7295 of the City of Manila. The last sentenceof such minute resolution reads: "This resolution is without prejudice to a moreextended opinion." 9 Hence this detailed exposition of the Court's stand on thematter.

1. It is thus clear that the Court is called upon to protect the exercise of thecognate rights to free speech and peaceful assembly, aris ing from the denial of apermit. The Constitution is quite explicit: "No law shall be passed abridging thefreedom of speech, or of the press, or the right of the people peaceably to

assemble and petition the Government for redress of grievances."

10

Free speech,like free press, may be Identified with the liberty to discuss publicly and truthfullyany matter of public concern without censorship or punishment. 11 There is to bethen no previous restraint on the communication of views or subsequent liabilitywhether in libel suits, 12prosecution for sedition, 13 or action for damages, 14 orcontempt proceedings 15 unless there be a clear and present danger of asubstantive evil that [the State] has a right to prevent." 16 Freedom of assemblyconnotes the right people to meet peaceably for consultation and discussion ofmatters Of public concern. 17 It is entitled to be accorded the utmost deferenceand respect. It is hot to be limited, much less denied, except on a showing, as 'sthe case with freedom of expression, of a clear and present danger of asubstantive evil that the state has a right to prevent. 18 Even prior to the 1935

Constitution, Justice Maicolm had occasion to stress that it is a necessaryconsequence of our republican institutions and complements the right of freespeech. 19 To paraphrase opinion of Justice Rutledge speaking for the majority ofthe American Supreme Court Thomas v. Collins, 20 it was not by accident orcoincidence that the right to freedom of speech and of the press were toupled ina single guarantee with the and to petition the rights of the people peaceably t oassemble and to petition the government for redress of grievances. All theserights, while not Identical, are inseparable. the every case, therefo re there is alimitation placed on the exercise of this right, the judiciary is called upon toexamine the effects of the challenged governmental actuation. The sole

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justification for a limitation on the exercise of this right, so fundamental to themaintenance of democratic institutions, is the danger, of a character both graveand imminent, of a serious evil to public safety, public morals, public health, orany other legitimate public interest. 21

2. Nowhere is the rationale that underlies the f reedom of expression andpeaceable assembly better expressed than in this excerpt from an opinion ofJustice Frankfurter: "It must never be forgotten, however, that the Bill of Rights

was the child of the Enlightenment. Back of the guaranty of free speech lay faithin the power of an appeal to reason by all the peaceful means for gaining accessto the mind. It was in order to avert force and explosions due to restrictionsupon rational modes of communication that the guaranty of free speech wasgiven a generous scope. But utterance in a context of violence can lose itssignificance as an appeal to reason and become part of an instrument of force.Such utterance was not meant to be sheltered by the Constitution." 22 What wasrightfully stressed is the abandonment of reason, the utterance, whether verbalor printed, being in a context of violence. It must always be remembered thatthis right likewise provides for a safety valve, allowing parties the opportunity togive vent to their-views, even if contrary to the prevailing climate of opinion. Forif the peaceful means of communication cannot be availed of, resort to non-peaceful means may be the only alternative. Nor is this the sole reason for theexpression of dissent. It means more than just the right to be heard of theperson who feels aggrieved or who is dissatisfied with things as they are. Itsvalue may lie in the fact that there may be something worth hearing from thedissenter. That is to ensure a true ferment of Ideas. There are, of course, well-defined limits. What is guaranteed is peaceable assembly. One may not advocatedisorder in the name of protest, much less preach rebellion under the cloak ofdissent. The Constitution frowns on disorder or tumult attending a rally orassembly. resort to force is ruled out and outbreaks of violence to be avoided.The utmost calm though is not required. As pointed out in an early Philippinecase, penned in 1907 to be precise, United States v. Apurado: 23 "It is rather to be

expected that more or less disorder will mark the public assembly of the peopleto protest against grievances whether real or imaginary, because on suchoccasions feeling is always wrought to a high pitch of excitement, and thegreater the grievance and the more intense the feeling, the less perfect, as a rule,will be the disciplinary control of the leaders over their irresponsiblefollowers." 24 It bears repeating that for the constitutional right to be invoked,riotous conduct, injury to property, and acts of vandalism must be avoided, Togive free rein to one's destructive urges is to call for condemnation. It is to makea mockery of the high estate occupied by intellectual liberty in our scheme ofvalues.

3. There can be no legal objection, absent the existence of a clear and presentdanger of a substantive evil, on the choice of Luneta as the place where thepeace rally would start. The Philippines is committed to the view expressed inthe plurality opinion, of 1939 vintage, of Justice Roberts in Hague v.CIO: 25 Whenever the title of streets and parks may rest, they have immemoriallybeen held in trust for the use of the public and, time out of mind, h ave been usedfor purposes of assembly, communicating thoughts between citizens, anddiscussing public questions. Such use of the streets and public places has, from

ancient times, been a part of the privileges, immunities, rights, and liberties ofcitizens. The privilege of a citizen of the United States to use the streets andparks for communication of views on national questions may be regulated in theinterest of all; it is not absolute, but relative, and must be exercised insubordination to the general comfort and convenience, and in consonance withpeace and good order; but it must not, in the guise of regulation, be abridged ordenied. 26 The above excerpt was quoted with approval in Primicias v.Fugoso. 27 Primicias made explicit what was implicit in Municipality of Cavite v.Rojas," 28 a 1915 decision, where this Court categorically affirmed that plazas orparks and streets are outside the commerce of man and thus nullified a contractthat leased Plaza Soledad of plaintiff-municipality. Reference was made to suchplaza "being a promenade for public use," 29 which certainly is not the only

purpose that it could serve. To repeat, there can be no valid reason why a permitshould not be granted for the or oposed march and rally starting from a publicdark that is the Luneta.

4. Neither can there be any valid objection to the use of the streets, to the gatesof the US Embassy, hardly two block-away at the Roxas Boulevard. Primicias v.Fugoso has resolved any lurking doubt on the matter. In holding that the thenMayor Fugoso of the City of Manila should grant a permit for a public meeting atPlaza Miranda in Quiapo, this Court categorically declared: "Our conclusion findssupport in the decision in the case of Willis Cox vs. State of New Hampshire , 312U.S., 569. In that case, the statute of New Hampshire P. L. chap. 145, section 2,

providing that 'no parade or procession upon any ground abutting thereon, shall'De permitted unless a special license therefor shall first be explained from theselectmen of the town or from licensing committee,' was construed by theSupreme Court of New Hampshire as not conferring upon the licensing boardunfettered discretion to refuse to grant the license, and held valid. And theSupreme Court of the United States, in its decision (1941) penned by Chief JusticeHughes affirming the judgment of the State Supreme Court, held that 'a statuterequiring persons using the public streets for a parade or procession to procure aspecial license therefor from the local authorities is not an unconstitutionalabridgment of the rights of assembly or of freedom of speech and press, where,

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as the statute is construed by the state courts, the licensing authorities arestrictly limited, in the issuance of licenses, to a consideration of the time, place,and manner of the parade or procession, with a view to conserving the publicconvenience and of affording an opportunity to provide proper policing, and arenot invested with arbitrary discretion to issue or refuse license, ... " 30 Nor shouldthe point made by Chief Justice Hughes in a subsequent portion of the opinionbe ignored, "Civil liberties, as guaranteed by the Constitution, imply the existenceof an organized society maintaining public order without which liberty itself

would be lost in the excesses of unrestricted abuses. The authority of amunicipality to impose regulations in order to assure the safety and convenienceof the people in the use of public highways has never been regarded asinconsistent with civil liberties but rather as one of the means of safeguardingthe good order upon which they ultimately depend. The control of travel on thestreets of cities is the most familiar illustration of this recognition of social need.Where a restriction of the use of highways in that relation is designed topromote the public convenience in the interest of all, it cannot be disregarded bythe attempted exercise of some civil right which in other circumstances would beentitled to protection." 31

5. There is a novel aspect to this case, If the rally were confined to Luneta, noquestion, as noted, would have arisen. So, too, if the march would end atanother park. As previously mentioned though, there would be a short programupon reaching the public space between the two gates of the United StatesEmbassy at Roxas Boulevard. That would be followed by the handing over of apetition based on the resolution adopted at the closing session of the Anti-BasesCoalition. The Philippines is a signatory of the Vienna Convention on DiplomaticRelations adopted in 1961. It was concurred in by the then Philippine Senate onMay 3, 1965 and the instrument of ratification was signed by the President onOctober 11, 1965, and was thereafter deposited with the Secretary General of theUnited Nations on November 15. As of that date then, it was binding on thePhilippines. The second paragraph of the Article 22 reads: "2. The receiving State

is under a special duty to take appropriate steps to protect the premises of themission against any intrusion or damage and to prevent any disturbance of thepeace of the mission or impairment of its dignity. " 32 The Constitution "adoptsthe generally accepted principles of international law as part of the law of theland. ..." 33 To the extent that the Vienna Convention is a restatement of thegenerally accepted principles of international law, it should be a part of the lawof the land. 34 That being the case, if there were a clear and present danger ofany intrusion or damage, or disturbance of the peace of the mission, orimpairment of its dignity, there would be a justification f or the denial of thepermit insofar as the terminal point would be the Embassy. Moreover,

respondent Mayor relied on Ordinance No. 7295 of the City of Manila prohibitingthe holding or staging of rallies or demonstrations within a radius of five hundred(500) feet from any foreign mission or chancery and for other purposes. Unlessthe ordinance is nullified, or declared ultra vires, its invocation as a defense isunderstandable but not decisive, in view of the primacy accorded theconstitutional rights of free speech and peaceable assembly. Even if shown thento be applicable, that question the confronts this Court.

6. There is merit to the observation that except as to the novel aspects of alitigation, the judgment must be confined within the limits of previous decisions.The law declared on past occasions is, on the whole, a safe guide, So it has beenhere. Hence, as noted, on the afternoon of the hearing, October 25, 1983, thisCourt issued the minute resolution granting the mandatory injunction allowingthe proposed march and rally scheduled for the next day. That conclusion wasinevitable ill the absence of a clear and present danger of a substantive, evil to alegitimate public interest. There was no justification then to deny the exercise ofthe constitutional rights of tree speech and peaceable assembly. These rights areassured by our Constitution and the Universal Declaration of HumanRights. 35 The participants to such assembly, composed primarily of those inattendance at the International Conference for General Disbarmament, WorldPeace and the Removal of All Foreign Military Bases would start from the Luneta.proceeding through Roxas Boulevard to the gates of the United States Embassylocated at the same street. To repeat, it is settled law that as to public places,especially so as to parks and streets, there is freedom of access. Nor is their usedependent on who is the applicant for the permit, whether an individual or agroup. If it were, then the freedom of access becomes discriminatory access,giving rise to an equal protection question. The principle under Americandoctrines was given utterance by Chief Justice Hughes in these words: "Thequestion, if the rights of free speech and peaceable assembly are to bepreserved, is not as to the auspices under which the meeting is held but as to i tspurpose; not as to The relations of the speakers, but whether their utterances

transcend the bounds of the freedom of speech which the Constitutionprotects." 36There could be danger to public peace and safety if such a gatheringwere marked by turbulence. That would deprive it of its peaceful character. Eventhen, only the guilty parties should be held accountable. It is true that thelicensing official, here respondent Mayor, is not devoid of discretion indetermining whether or not a permit would be granted. It is not, however,unfettered discretion. While prudence requires that there be a realistic appraisalnot of what may possibly occur but of what may probably occur , given all therelevant circumstances, still the assumption — especially so where the assemblyis scheduled for a specific public — place is that the permit must be f or the

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assembly being held there. The exercise of such a right, in t he language of JusticeRoberts, speaking for the American Supreme Court, is not to be "abridged on theplea that it may be exercised in some other place."37

7. In fairness to respondent Mayor, he acted on the belief that Navarro v.Villegas 38 and Pagkakaisa ng Manggagawang Pilipino (PMP.) v. Bagatsing, 39 calledfor application. While the General rule is that a permit should recognize the rightof the applicants to hold their assembly at a public place of their choice, another

place may be designated by the licensing authority if it be shown that there is aclear and present danger of a substantive evil if no such change were made. Inthe Navarro and the Pagkakaisa decisions, this Court was persuaded that theclear and present danger test was satisfied. The present situation is quitedifferent. Hence the decision reached by the Court. The mere assertion thatsubversives may infiltrate the ranks of the demonstrators does not suffice. Notthat it should be overlooked. There was in this case, however, the assurance ofGeneral Narciso Cabrera, Superintendent, Western Police District, MetropolitanPolice Force, that the police force is in a position to cope with such emergencyshould it arise That is to comply with its duty to extend protection to theparticipants of such peaceable assembly. Also from him came the commendableadmission that there were the least five previous demonstrations at the Bayviewhotel Area and Plaza Ferguson in front of the United States Embassy where nountoward event occurred. It was made clear by petitioner, through counsel, thatno act offensive to the dignity of the United States Mission in the Philippineswould take place and that, as mentioned at the outset of this opinion, "all thenecessary steps would be taken by it 'to ensure a peaceful march and rally.'" 40Assistant Solicitor General Montenegro expressed the view that the presenceof policemen may in itself be a provocation. It is a sufficient answer that theyshould stay at a discreet distance, but ever ready and alert to cope with anycontingency. There is no need to repeat what was pointed out by Chief JusticeHughes in Cox that precisely, it is the duty of the city authorities to provide theproper police protection to those exercising their right to peaceable assembly

and freedom of expression.

8. By way of a summary The applicants for a permit to hold an assembly shouldinform the licensing authority of the date, the public place where and the timewhen it will take place. If it were a private place, only the consent of the owneror the one entitled to its legal possession is required. Such application should befiled well ahead in time to enable the public official concerned to appraisewhether there may be valid objections to the grant of the permit or to its grantbut at another public place. It is an indispensable condition to such refusal ormodification that the clear and present danger test be the standard for the

decision reached. If he is of the view that there is such an imminent and gravedanger of a substantive evil, the applicants must be heard on the matter.Thereafter, his decision, whether favorable or adverse, must be transmitted tothem at the earliest opportunity. Thus if so minded, then, can have recourse tothe proper judicial authority. Free speech and peaceable assembly, along withthe other intellectual freedoms, are highly ranked in our scheme of constitutionalvalues. It cannot be too strongly stressed that on the judiciary, — even more sothan on the other departments — rests the grave and delicate responsibility of

assuring respect for and deference to such preferred rights. No verbal formula,no sanctifying phrase can, of course, dispense with what has been so felicitiouslytermed by Justice Holmes "as the sovereign prerogative of judgment."Nonetheless, the presumption must be to incline the weight of the scales ofjustice on the side of such rights, enjoying as they do precedence and primacy.Clearly then, to the extent that there may be inconsistencies between thisresolution and that of Navarro v. Villegas, that case is pro tanto modified. So itwas made clear in the original resolution of October 25, 1983.

9. Respondent Mayor posed the issue of the applicability of Ordinance No. 7295of the City of Manila prohibiting the holding or staging of rallies ordemonstrations within a radius of five hundred (500) feet from any foreignmission or chancery and for other purposes. It is to be admitted that it findssupport In the previously quoted Article 22 of the Vienna Convention onDiplomatic Relations. There was no showing, however, that the distancebetween the chancery and the embassy gate is less than 500 feet. Even if it couldbe shown that such a condition is satisfied. it does not follow that respondentMayor could legally act the way he did. The validity of his denial of the permitsought could still be challenged. It could be argued that a case ofunconstitutional application of such ordinance to the exercise of the r ight ofpeaceable assembly presents itself. As in this case there was no proof that thedistance is less than 500 feet, the need to pass on that issue was obviated,Should it come, then the qualification and observation of Justices Makasiar and

Plana certainly cannot be summarily brushed aside. The high estate accorded therights to free speech and peaceable assembly demands nothing less.

10. Ordinarily, the remedy in cases of this character is to set aside the denial orthe modification of the permit sought and order the respondent official, to grantit. Nonetheless, as there was urgency in this case, the proposed march and rallybeing scheduled for the next day after the hearing, this Court. in the exercise ofits conceded authority, granted the mandatory injunction in the resolution ofOctober 25, 1983. It may be noted that the peaceful character of the peacemarch and rally on October 26 was not marred by any untoward incident. So it

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retaliation, from other states. However, for a variety of reasons, including itsnon-ratification by the United States, the ITO, unlike the IMF and WB, never tookoff. What remained was only GATT -- the General Agreement on Tariffs andTrade. GATT was a collection of treaties governing access to the economies oftreaty adherents with no institutionalized body administering the agreements ordependable system of dispute settlement.

After half a century and several dizzying rounds of negotiations, principallythe Kennedy Round, the Tokyo Round and the Uruguay Round, the world finally

gave birth to that administering body -- the World Trade Organization -- with thesigning of the “Final Act” in Marrakesh, Morocco and the ratification of the WTOAgreement by its members.[1]

Like many other developing countries, the Philippines joined WTO as afounding member with the goal, as articulated by President Fidel V. Ramos intwo letters to the Senate (infra), of improving “Philipp ine access to foreignmarkets, especially its major trading partners, through the reduction of tariffs onits exports, particularly agricultural and industrial products.” The President alsosaw in the WTO the opening of “new opportunities for the services sector x x x,(the reduction of) costs and uncertainty associated with exporting x x x, and (theattraction of) more investments into the country.” Although the Chief Executivedid not expressly mention it in his letter, the Philippines - - and this is of specialinterest to the legal profession - - will benefit from the WTO system of disputesettlement by judicial adjudication through the independent WTO settlementbodies called (1) Dispute Settlement Panels and (2) AppellateTribunal. Heretofore, trade disputes were settled mainly through negotiationswhere solutions were arrived at frequently on the basis of relative bargainingstrengths, and where naturally, weak and underdeveloped countries were at adisadvantage.

The Petition in Brief

Arguing mainly (1) that the WTO requires the Philippines “to place nationalsand products of member-countries on the same footing as Filipinos and localproducts” and (2) that the WTO “intrudes, limits and/or impairs” theconstitutional powers of both Congress and the Supreme Court, the instantpetition before this Court assails the WTO Agreement for violating the mandateof the 1987 Constitution to “develop a self-reliant and independent nationaleconomy effectively controlled by Filipinos x x x (to) give preference to qualified

Filipinos (and to) promote the preferential use of Filipino labor, domesticmaterials and locally produced goods.”

Simply stated, does the Philippine Constitution prohibit Philippineparticipation in worldwide trade liberalization and economic globalization? Doesit prescribe Philippine integration into a global economy that is liberalized,deregulated and privatized? These are the main questions raised in this petitionfor certiorari, prohibition and mandamus under Rule 65 of the Rules of Courtpraying (1) for the nullification, on constitutional grounds, of the concurrence of

the Philippine Senate in the ratification by the President of the Philippines of theAgreement Establishing the World Trade Organization (WTO Agreement, forbrevity) and (2) for the prohibition of its implementation and enforcementthrough the release and utilization of public funds, the assignment of publicofficials and employees, as well as the use of government properties andresources by respondent-heads of various executive offices concernedtherewith. This concurrence is embodied in Senate Resolution No. 97, datedDecember 14, 1994.

The Facts

On April 15, 1994, Respondent Rizalino Navarro, then Secretary ofthe Department of Trade and Industry (Secretary Navarro, for brevity),representing the Government of the Republic of the Philippines, signed inMarrakesh, Morocco, the Final Act Embodying the Results of the Uruguay Roundof Multilateral Negotiations (Final Act, for brevity).

By signing the Final Act,[2] Secretary Navarro on behalf of the Republic ofthe Philippines, agreed:

“(a) to submit, as appropriate, the WTO Agreement for the consideration of their

respective competent authorities, with a view to seeking approval of theAgreement in accordance with their procedures; and

(b) to adopt the Ministerial Declarations and Decisions.”

On August 12, 1994, the members of the Philippine Senate received a letterdated August 11, 1994 from the President of the Philippines,[3] stating amongothers that “the Uruguay Round Final Act is hereby submitted to the Senate forits concurrence pursuant to Section 21, Article VII of the Constitution.”

http://sc.judiciary.gov.ph/jurisprudence/1997/may1997/118295.htm#_edn1












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On August 13, 1994, the members of the Philippine Senate received anotherletter from the President of the Philippines[4] likewise dated August 11, 1994,which stated among others that “the Uruguay Round Final Act, the AgreementEstablishing the World Trade Organization, the Ministerial Declarations andDecisions, and the Understanding on Commitments in Financial Services arehereby submitted to the Senate for its concurrence pursuant to Section 21,Article VII of the Constitution.”

On December 9, 1994, the President of the Philippines certified the

necessity of the immediate adoption of P.S. 1083, a resolution entitled“Concurring in the Ratification of the Agreement Establishing the World TradeOrganization.”[5]

On December 14, 1994, the Philippine Senate adopted Resolution No. 97which “Resolved, as it is hereby resolved, that the Senate concur, as it herebyconcurs, in the ratification by the President of the Philippines of the AgreementEstablishing the World Trade Organization.”[6] The text of the WTO Agreement iswritten on pages 137 et seq. of Volume I of the 36-volumeUruguay Round ofMultilateral Trade Negotiations and includes various agreements and associatedlegal instruments (identified in the said Agreement as Annexes 1, 2 and 3 theretoand collectively referred to as Multilateral Trade Agreements, for brevity) asfollows:

“ANNEX 1

Annex 1A: Multilateral Agreement on Trade in Goods

General Agreement on Tariffs and Trade 1994

Agreement on Agriculture

Agreement on the Application of Sanitary and

Phytosanitary Measures

Agreement on Textiles and Clothing

Agreement on Technical Barriers to Trade

Agreement on Trade-Related Investment Measures

Agreement on Implementation of Article VI ofthe General Agreement on Tariffs and Trade1994

Agreement on Implementation of Article VII of theGeneral on Tariffs and Trade 1994

Agreement on Pre-Shipment Inspection

Agreement on Rules of Origin

Agreement on Imports Licensing Procedures

Agreement on Subsidies and Coordinating Measures

Agreement on Safeguards

Annex 1B: General Agreement on Trade in Services and Annexes

Annex 1C: Agreement on Trade-Related Aspects of Intellectual Property Rights

ANNEX 2

Understanding on Rules and Procedures Governing theSettlement of Disputes

ANNEX 3

Trade Policy Review Mechanism”

On December 16, 1994, the President of the Philippines signed[7] theInstrument of Ratification, declaring:

“NOW THEREFORE, be it known that I, FIDEL V. RAMOS, President of theRepublic of the Philippines, after having seen and considered theaforementioned Agreement Establishing the World Trade Organization and theagreements and associated legal instruments included in Annexes one (1), two(2) and three (3) of that Agreement which are integral parts thereof, signed at
















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Marrakesh, Morocco on 15 April 1994, do hereby ratify and confirm the same andevery Article and Clause thereof.”

To emphasize, the WTO Agreement ratified by the President of thePhilippines is composed of the Agreement Proper and “the associated legalinstruments included in Annexes one (1), two (2) and three (3) of that Agreementwhich are integral parts thereof.”

On the other hand, the Final Act signed by Secretary Navarro embodies notonly the WTO Agreement (and its integral annexes aforementioned) but also (1)the Ministerial Declarations and Decisions and (2) the Understanding onCommitments in Financial Services. In his Memorandum dated May 13,1996,[8] the Solicitor General describes these two latter documents as follows:

“The Ministerial Decisions and Declarations are twenty -five declarations anddecisions on a wide range of matters, such as measures in favor of leastdeveloped countries, notification procedures, relationship of WTO with theInternational Monetary Fund (IMF), and agreements on technical barriers totrade and on dispute settlement.

The Understanding on Commitments in Financial Services dwell on, among otherthings, standstill or limitations and qualifications of commitments to existingnon-conforming measures, market access, national treatment, and definitions ofnon-resident supplier of financial services, commercial presence and newfinancial service.”

On December 29, 1994, the present petition was filed. After carefuldeliberation on respondents’ comment and petitioners’ reply thereto, the Courtresolved on December 12, 1995, to give due course to the petition, and theparties thereafter filed their respective memoranda. The Court also requestedthe Honorable Lilia R. Bautista, the Philippine Ambassador to the United Nations

stationed in Geneva, Switzerland, to submit a paper, hereafter referred to as“Bautista Paper,”[9] for brevity, (1) providing a historical background of and (2)summarizing the said agreements.

During the Oral Argument held on August 27, 1996, the Court directed:

“(a) the petitioners to submit the (1) Senate Committee Report on the matter incontroversy and (2) the transcript of proceedings/hearings in the Senate; and

(b) the Solicitor General, as counsel for respondents, to file (1) a list of Philippinetreaties signed prior to the Philippine adherence to the WTO Agreement, whichderogate from Philippine sovereignty and (2) copies of the multi-volume WTOAgreement and other documents mentioned in the Final Act, as soon aspossible.”

After receipt of the foregoing documents, the Court said it would considerthe case submitted for resolution. In a Compliance dated September 16, 1996,

the Solicitor General submitted a printed copy of the 36-volume Uruguay Roundof Multilateral Trade Negotiations, and in another Compliance dated October 24,1996, he listed the various “bilateral or multilateral treaties or internationalinstruments involving derogation of Philippine sovereignty.” Petitioners, on theother hand, submitted their Compliance dated January 28, 1997, on January 30,1997.

The Issues

In their Memorandum dated March 11, 1996, petitioners summarized theissues as follows:

“A. Whether the petition presents a political question or is otherwise notjusticiable.

B. Whether the petitioner members of the Senate who participated in thedeliberations and voting leading to the concurrence are estopped fromimpugning the validity of the Agreement Establishing the World TradeOrganization or of the validity of the concurrence.

C. Whether the provisions of the Agreement Establishing the World TradeOrganization contravene the provisions of Sec. 19, Article II, and Secs.10 and 12, Article XII, all of the 1987 Philippine Constitution.

D. Whether provisions of the Agreement Establishing the World TradeOrganization unduly limit, restrict and impair Philippine sovereigntyspecifically the legislative power which, under Sec. 2, Article VI, 1987Philippine Constitution is ‘vested in the Congress of the Philippines’;

E. Whether provisions of the Agreement Establishing the World TradeOrganization interfere with the exercise of judicial power.







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F. Whether the respondent members of the Senate acted in grave abuse ofdiscretion amounting to lack or excess of jurisdiction when they votedfor concurrence in the ratification of the constitutionally-infirmAgreement Establishing the World Trade Organization.

G. Whether the respondent members of the Senate acted in grave abuse ofdiscretion amounting to lack or excess of jurisdiction when theyconcurred only in the ratification of the Agreement Establishing the

World Trade Organization, and not with the Presidential submissionwhich included the Final Act, Ministerial Declaration and Decisions, andthe Understanding on Commitments in Financial Services.”

On the other hand, the Solicitor General as counsel for respondents“synthesized the several issues raised by petitioners into the following”:[10]

“1. Whether or not the provisions of the ‘Agreement Establishing the WorldTrade Organization and the Agreements and Associated Legal Instrumentsincluded in Annexes one (1), two (2) and three (3) of that agreement’ cited bypetitioners directly contravene or undermine the letter, spirit and intent of

Section 19, Article II and Sections 10 and 12, Article XII of the 1987 Constitution.

2. Whether or not certain provisions of the Agreement unduly limit, restrict orimpair the exercise of legislative power by Congress.

3. Whether or not certain provisions of the Agreement impair the exercise ofjudicial power by this Honorable Court in promulgating the rules of evidence.

4. Whether or not the concurrence of the Senate ‘in the ratification by thePresident of the Philippines of the Agreement establishing the World TradeOrganization’ implied rejection of the treaty embodied in the Final Act.”

By raising and arguing only four issues against the seven presented bypetitioners, the Solicitor General has effectively ignored three, namely: (1)whether the petition presents a political question or is otherwise not justiciable;(2) whether petitioner-members of the Senate (Wigberto E. Tañada and AnnaDominique Coseteng) are estopped from joining this suit; and (3) whether therespondent-members of the Senate acted in grave abuse of discretion when theyvoted for concurrence in the ratification of the WTO Agreement. The foregoingnotwithstanding, this Court resolved to deal with these three issues thus:

(1) The “political question” issue -- being very fundamental and vital, and being amatter that probes into the very jurisdiction of this Court to hear and decide thiscase -- was deliberated upon by the Court and will thus be ruled upon as the firstissue;

(2) The matter of estoppel will not be taken up because this defense is waivableand the respondents have effectively waived it by not pursuing it in any of theirpleadings; in any event, this issue, even if ruled in respondents’ favor, will not

cause the petition’s dismissal as there are petitioners other than the twosenators, who are not vulnerable to the defense of estoppel; and

(3) The issue of alleged grave abuse of discretion on the part of the respondentsenators will be taken up as an integral part of the disposition of the four issuesraised by the Solicitor General.

During its deliberations on the case, the Court noted that the respondentsdid not question the locus standi of petitioners. Hence, they are also deemed tohave waived the benefit of such issue. They probably realized that graveconstitutional issues, expenditures of public funds and serious international

commitments of the nation are involved here, and that transcendental publicinterest requires that the substantive issues be met head on and decided on themerits, rather than skirted or deflected by procedural matters.[11]

To recapitulate, the issues that will be ruled upon shortly are:

(1) DOES THE PETITION PRESENT A JUSTICIABLECONTROVERSY? OTHERWISE STATED, DOES THE PETITIONINVOLVE A POLITICAL QUESTION OVER WHICH THIS COURT HASNO JURISDICTION?

(2) DO THE PROVISIONS OF THE WTO AGREEMENT AND ITS THREEANNEXES CONTRAVENE SEC. 19, ARTICLE II, AND SECS. 10 AND

12, ARTICLE XII, OF THE PHILIPPINE CONSTITUTION?

(3) DO THE PROVISIONS OF SAID AGREEMENT AND ITS ANNEXESLIMIT, RESTRICT, OR IMPAIR THE EXERCISE OF LEGISLATIVEPOWER BY CONGRESS?

(4) DO SAID PROVISIONS UNDULY IMPAIR OR INTERFERE WITH THEEXERCISE OF JUDICIAL POWER BY THIS COURT INPROMULGATING RULES ON EVIDENCE?

(5) WAS THE CONCURRENCE OF THE SENATE IN THE WTOAGREEMENT AND ITS ANNEXES SUFFICIENT AND/OR VALID,









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CONSIDERING THAT IT DID NOT INCLUDE THE FINAL ACT,MINISTERIAL DECLARATIONS AND DECISIONS, AND THEUNDERSTANDING ON COMMITMENTS IN FINANCIAL SERVICES?

The First Issue: Does the Court Have Jurisdiction Over the Controversy?

In seeking to nullify an act of the Philippine Senate on the ground that itcontravenes the Constitution, the petition no doubt raises a justiciablecontroversy. Where an action of the legislative branch is seriously alleged tohave infringed the Constitution, it becomes not only the right but in fact the dutyof the judiciary to settle the dispute. “The question thus posed is judicial ratherthan political. The duty (to adjudicate) remains to assure that the supremacy ofthe Constitution is upheld.”[12] Once a “controversy as to the application orinterpretation of a constitutional provision is raised before this Court (as in theinstant case), it becomes a legal issue which the Court is bound by constitutionalmandate to decide.”[13]

The jurisdiction of this Court to adjudicate the matters[14] raised in the

petition is clearly set out in the 1987 Constitution,[15]

as follows:

“Judicial power includes the duty of the courts of justice to settle actualcontroversies involving rights which are legally demandable and enforceable,and to determine whether or not there has been a grave abuse of discretionamounting to lack or excess of jurisdiction on the part of any branch orinstrumentality of the government.”

The foregoing text emphasizes the judicial department’s duty and power tostrike down grave abuse of discretion on the part of any branch orinstrumentality of government including Congress. It is an innovation in our

political law.[16]

As explained by former Chief Justice Roberto Concepcion,[17]

“thejudiciary is the final arbiter on the question of whether or not a branch ofgovernment or any of its officials has acted without jurisdiction or in excess ofjurisdiction or so capriciously as to constitute an abuse of discretion amountingto excess of jurisdiction. This is not only a judicial power but a duty to passjudgment on matters of this nature.”

As this Court has repeatedly and firmly emphasized in many cases,[18] it willnot shirk, digress from or abandon its sacred duty and authority to uphold theConstitution in matters that involve grave abuse of discretion brought before it

in appropriate cases, committed by any officer, agency, instrumentality ordepartment of the government.

As the petition alleges grave abuse of discretion and as there is no otherplain, speedy or adequate remedy in the ordinary course of law, we have nohesitation at all in holding that this petition should be given due course and thevital questions raised therein ruled upon under Rule 65 of the Rules ofCourt. Indeed, certiorari, prohibition and mandamus are appropriate remedies toraise constitutional issues and to review and/or prohibit/nullify, when proper,

acts of legislative and executive officials. On this, we have no equivocation.

We should stress that, in deciding to take jurisdiction over this petition, thisCourt will not review the wisdom of the decision of the President and the Senatein enlisting the country into the WTO, or pass upon the merits of tradeliberalization as a policy espoused by said international body. Neither will it ruleon the propriety of the government’s economic policy of reducing/removingtariffs, taxes, subsidies, quantitative restrictions, and other import/tradebarriers. Rather, it will only exercise its constitutional duty “to determinewhether or not there had been a grave abuse of discretion amounting to lack orexcess of jurisdiction” on the part of the Senate in ratifying the WTO Agreementand its three annexes.

Second Issue: The WTO Agreement and Economic Nationalism

This is the lis mota, the main issue, raised by the petition.

Petitioners vigorously argue that the “letter, spirit and intent” of theConstitution mandating “economic nationalism” are violated by the so-called“parity provisions” and “national treatment” clauses scattered in various partsnot only of the WTO Agreement and its annexes but also in the Ministerial

Decisions and Declarations and in the Understanding on Commitments inFinancial Services.

Specifically, the “flagship” constitutional provisions referred to are Sec. 19,Article II, and Secs. 10 and 12, Article XII, of the Constitution, which are worded asfollows:

“Article II

DECLARATION OF PRINCIPLES AND STATE POLICIES

























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xx xxxx xx

Sec. 19. The State shall develop a self-reliant and independent national economyeffectively controlled by Filipinos.

xx xxxx xx

Article XII

NATIONAL ECONOMY AND PATRIMONY

xx xxxx xx

Sec. 10. x x x. The Congress shall enact measures that will encourage theformation and operation of enterprises whose capital is wholly owned byFilipinos.

In the grant of rights, privileges, and concessions covering the national economyand patrimony, the State shall give preference to qualified Filipinos.

xx xxxx xx

Sec. 12. The State shall promote the preferential use of Filipino labor, domesticmaterials and locally produced goods, and adopt measures that help make themcompetitive.”

Petitioners aver that these sacred constitutional principles are desecratedby the following WTO provisions quoted in their memorandum:[19]

“a) In the area of investment measures related to trade in goods (TRIMS, forbrevity):

“Article 2

National Treatment and Quantitative Restrictions.

1. Without prejudice to other rights and obligations under GATT1994. no Member shall apply any TRIM that is inconsistent with theprovisions of Article III or Article XI of GATT 1994.

2. An Illustrative list of TRIMS that are inconsistent with the obligationsof general elimination of quantitative restrictions provided for inparagraph I of Article XI of GATT 1994 is contained in the Annex tothis Agreement.” (Agreement on Trade-Related Investment

Measures, Vol. 27, Uruguay Round, Legal Instruments, p.22121,emphasis supplied).

The Annex referred to reads as follows:

“ANNEX

Illustrative List

1. TRIMS that are inconsistent with the obligation of national treatmentprovided for in paragraph 4 of Article III of GATT 1994 include those

which are mandatory or enforceable under domestic law or underadministrative rulings, or compliance with which is necessary to obtainan advantage, and which require:

(a) the purchase or use by an enterprise of products of domesticorigin or from any domestic source, whether specified in terms ofparticular products, in terms of volume or value of products, or interms of proportion of volume or value of its local production; or

(b) that an enterprise’s purchases or use of imported products belimited to an amount related to the volume or value of local

products that it exports.

2. TRIMS that are inconsistent with the obligations of general elimination ofquantitative restrictions provided for in paragraph 1 of Article XI of GATT1994 include those which are mandatory or enforceable under domesticlaws or under administrative rulings, or compliance with which isnecessary to obtain an advantage, and which restrict:

(a) the importation by an enterprise of products used in or related tothe local production that it exports;





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(b) the importation by an enterprise of products used in or related toits local production by restricting its access to foreign exchangeinflows attributable to the enterprise; or

(c) the exportation or sale for export specified in terms of particularproducts, in terms of volume or value of products, or in terms of apreparation of volume or value of its local production.” (Annex tothe Agreement on Trade-Related Investment Measures, Vol. 27,

Uruguay Round Legal Documents, p.22125, emphasis supplied).

The paragraph 4 of Article III of GATT 1994 referred to is quoted as follows:

The products of the territory of any contracting party imported into the territoryof any other contracting party shall be accorded treatment no less favorablethan that accorded to like products of national origin in respect of laws,regulations and requirements affecting their internal sale, offering for sale,purchase, transportation, distribution or use. the provisions of this paragraphshall not prevent the application of differential internal transportation chargeswhich are based exclusively on the economic operation of the means of

transport and not on the nationality of the product.” (Article III, GATT 1947, asamended by the Protocol Modifying Part II, and Article XXVI of GATT, 14September 1948, 62 UMTS 82-84 in relation to paragraph 1(a) of the GeneralAgreement on Tariffs and Trade 1994, Vol. 1, Uruguay Round, Legal Instrumentsp.177, emphasis supplied).

“b) In the area of trade related aspects of intellectual property rights (TRIPS,for brevity):

Each Member shall accord to the nationals of other Members treatment no lessfavourable than that it accords to its own nationals with regard to theprotection of intellectual property... (par. 1, Article 3, Agreement on Trade-Related Aspect of Intellectual Property rights, Vol. 31, Uruguay Round, LegalInstruments, p.25432 (emphasis supplied)

“(c) In the area of the General Agreement on Trade in Services:

National Treatment

1. In the sectors inscribed in i ts schedule, and subject to any conditionsand qualifications set out therein, each Member shall accord to

services and service suppliers of any other Member, in respect of allmeasures affecting the supply of services, treatment no lessfavourable than it accords to its own like services and servicesuppliers.

2. A Member may meet the requirement of paragraph I by according toservices and service suppliers of any other Member, either formallyidentical treatment or formally different treatment to that it accords

to its own like services and service suppliers.

3. Formally identical or formally different treatment shall beconsidered to be less favourable if it modifies the conditions ofcompletion in favour of services or service suppliers of the Membercompared to like services or service suppliers of any otherMember. (Article XVII, General Agreement on Trade in Services, Vol.28, Uruguay Round Legal Instruments, p.22610 emphasis supplied).”

It is petitioners’ position that the foregoing “national treatment” and“parity provisions” of the WTO Agreement “place nationals and products of

member countries on the same footing as Filipinos and local products,” incontravention of the “Filipino First” policy of the Constitution. They allegedlyrender meaningless the phrase “effectively controlled by Filipinos.” Theconstitutional conflict becomes more manifest when viewed in the context ofthe clear duty imposed on the Philippines as a WTO member to ensure theconformity of its laws, regulations and administrative procedures with itsobligations as provided in the annexed agreements.[20] Petitioners further arguethat these provisions contravene constitutional limitations on the role exportsplay in national development and negate the preferential treatment accorded toFilipino labor, domestic materials and locally produced goods.

On the other hand, respondents through the Solicitor General counter (1)

that such Charter provisions are not self-executing and merely set out generalpolicies; (2) that these nationalistic portions of the Constitution invoked bypetitioners should not be read in isolation but should be related to other relevantprovisions of Art. XII, particularly Secs. 1 and 13 thereof; (3) that read properly,the cited WTO clauses do not conflict with the Constitution; and (4) that theWTO Agreement contains sufficient provisions to protect developing countrieslike the Philippines from the harshness of sudden trade liberalization.

We shall now discuss and rule on these arguments.





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Declaration of Principles Not Self-Executing

By its very title, Article II of the Constitution is a “declaration of principlesand state policies.” The counterpart of this article in the 1935 Constitution [21] iscalled the “basic political creed of the nation” by Dean Vicente Sinco.[22] Theseprinciples in Article II are not intended to be self-executing principles ready forenforcement through the courts.[23] They are used by the judiciary as aids or asguides in the exercise of its power of judicial review, and by the legislature in its

enactment of laws. As held in the leading case of Kilosbayan, Incorporated vs.Morato ,[24] the principles and state policies enumerated in Article II and somesections of Article XII are not “self -executing provisions, the disregard of whichcan give rise to a cause of action in the courts. They do not embody judiciallyenforceable constitutional rights but guidelines for legislation.”

In the same light, we held in Basco vs. Pagcor [25] that broad constitutionalprinciples need legislative enactments to implement them, thus:

“On petitioners’ allegation that P.D. 1869 violates Sections 11 (Personal 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 andpolicies. As such, they are basically not self-executing, meaning a law should bepassed by Congress to clearly define and effectuate such principles.

‘In general, therefore, the 1935 provisions were not intended to be self -executingprinciples ready for enforcement through the courts. They were ratherdirectives addressed to the executive and to the legislature. If the executive andthe legislature failed to heed the directives of the article, the available remedywas not judicial but political. The electorate could express their displeasure withthe failure of the executive and the legislature through the language of theballot. (Bernas, Vol. II, p. 2).”

The reasons for denying a cause of action to an alleged infringement ofbroad constitutional principles are sourced from basic considerations of dueprocess and the lack of judicial authority to wade “into the uncharted ocean ofsocial and economic policy making.” Mr. Justice Florentino P. Feliciano in hisconcurring opinion in Oposa vs. Factoran, Jr .,[26] explained these reasons asfollows:

“My suggestion is simply that petitioner s must, before the trial court, show amore specific legal right -- a right cast in language of a significantly lower order of

generality than Article II (15) of the Constitution -- that is or may be violated bythe actions, or failures to act, imputed to the public respondent by petitioners sothat the trial court can validly render judgment granting all or part of the reliefprayed for. To my mind, the court should be understood as simply saying thatsuch a more specific legal right or rights may well exist in our corpus of law,considering the general policy principles found in the Constitution and theexistence of the Philippine Environment Code, and that the trial court shouldhave given petitioners an effective opportunity so to demonstrate, instead ofaborting the proceedings on a motion to dismiss.

It seems to me important that the legal right which is an essential component ofa cause of action be a specific, operable legal right, rather than a constitutionalor statutory policy, for at least two (2) reasons. One is that unless the legal rightclaimed to have been violated or disregarded is given specification in operationalterms, defendants may well be unable to defend themselves intelligently andeffectively; in other words, there are due process dimensions to this matter.

The second is a broader-gauge consideration -- where a specific violation of lawor applicable regulation is not alleged or proved, petitioners can be expected tofall back on the expanded conception of judicial power in the second paragraphof Section 1 of Article VIII of the Constitution which reads:

‘Section 1. x x x

Judicial power includes the duty of the courts of justice to settle actualcontroversies involving rights which are legally demandable and enforceable,and to determine whether or not there has been a grave abuse of discretionamounting to lack or excess of jurisdiction on the part of any branch orinstrumentality of the Government.’ (Emphases supplied)

When substantive standards as general as ‘the right to a balanced and healthyecology’ and ‘the right to health’ are combined with remedial standards as broadranging as ‘a grave abuse of discretion amounting to lack or excess ofjurisdiction,’ the result will be, i t is respectfully submitted, to propel courts intothe uncharted ocean of social and economic policy making. At least in respect ofthe vast area of environmental protection and management, our courts have noclaim to special technical competence and experience and professionalqualification. Where no specific, operable norms and standards are shown toexist, then the policy making departments -- the legislative and executivedepartments -- must be given a real and effective opportunity to fashion and
























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promulgate those norms and standards, and to implement them before thecourts should intervene.”

Economic Nationalism Should Be Read with Other Constitutional Mandates toAttain Balanced Development of Economy

On the other hand, Secs. 10 and 12 of Article XII, apart from merely layingdown general principles relating to the national economy and patrimony, shouldbe read and understood in relation to the other sections in said article, especiallySecs. 1 and 13 thereof which read:

“Section 1. The goals of the national economy are a more equitable distributionof opportunities, income, and wealth; a sustained increase in the amount ofgoods and services produced by the nation for the benefit of the people; and anexpanding productivity as the key to raising the quality of life for all, especiallythe underprivileged.

The State shall promote industrialization and full employment based on soundagricultural development and agrarian reform, through industries that make fulland efficient use of human and natural resources, and which are competitive inboth domestic and foreign markets. However, the State shall protect Filipinoenterprises against unfair foreign competition and trade practices.

In the pursuit of these goals, all sectors of the economy and all regions of thecountry shall be given optimum opportunity to develop. x x x

x x x x xx x x x

Sec. 13. The State shall pursue a trade policy that serves the general welfare andutilizes all forms and arrangements of exchange on the basis of equality andreciprocity.”

As pointed out by the Solicitor General, Sec. 1 lays down the basic goals ofnational economic development, as follows:

1. A more equitable distribution of opportunities, income and wealth;

2. A sustained increase in the amount of goods and services provided bythe nation for the benefit of the people; and

3. An expanding productivity as the key to raising the quality of life for allespecially the underprivileged.

With these goals in context, the Constitution then ordains the ideals ofeconomic nationalism (1) by expressing preference in favor of qualified Filipinos“in the grant of rights, privileges and concessions covering the national economy

and patrimony”

[27]

and in the use of “Filipino labor, domestic materials andlocally-produced goods”; (2) by mandating the State to “adopt measures thathelp make them competitive;[28] and (3) by requiring the State to “develop a self -reliant and independent national economy effectively controlled byFilipinos.”[29] In similar language, the Constitution takes into account the realitiesof the outside world as it requires the pursuit of “a trade policy that serves thegeneral welfare and utilizes all forms and arrangements of exchange on the basisof equality and reciprocity”;[30] and speaks of industries “which are competitivein both domestic and foreign markets” as well as of the protection of “Filipinoenterprises against unfair foreign competition and trade practices.”

It is true that in the recent case of Manila Prince Hotel vs. Government Service

Insurance System, et al.,[31]

this Court held that “Sec. 10, second par., Art. XII ofthe 1987 Constitution is a mandatory, positive command which is complete initself and which needs no further guidelines or implementing laws or rules for itsenforcement. From its very words the provision does not require any legislationto put it in operation. It is per se judicially enforceable.” However, as theconstitutional provision itself states, it is enforceable only in regard to “thegrants of rights, privileges and concessions covering national economy andpatrimony” and not to every aspect of trade and commerce. It refers toexceptions rather than the rule. The issue here is not whether this paragraph ofSec. 10 of Art. XII is self-executing or not. Rather, the issue is whether, as a rule,there are enough balancing provisions in the Constitution to allow the Senate toratify the Philippine concurrence in the WTO Agreement. And we hold that thereare.

All told, while the Constitution indeed mandates a bias in favor of Filipinogoods, services, labor and enterprises, at the same time, it recognizes the needfor business exchange with the rest of the world on the bases of equality andreciprocity and limits protection of Filipino enterprises only against foreigncompetition and trade practices that are unfair.[32] In other words, theConstitution did not intend to pursue an isolationist policy. It did not shut outforeign investments, goods and services in the development of the Philippineeconomy. While the Constitution does not encourage the unlimited entry of
























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foreign goods, services and investments into the country, it does not prohibitthem either. In fact, it allows an exchange on the basis of equality andreciprocity, frowning only on foreign competition that is unfair.

WTO Recognizes Need to Protect Weak Economies

Upon the other hand, respondents maintain that the WTO itself has somebuilt-in advantages to protect weak and developing economies, which comprisethe vast majority of its members. Unlike in the UN where major states havepermanent seats and veto powers in the Security Council, in the WTO, decisionsare made on the basis of sovereign equality, with each member’s vote equal inweight to that of any other. There is no WTO equivalent of the UN SecurityCouncil.

“WTO decides by consensus whenever possible, otherwise, decisions of theMinisterial Conference and the General Council shall be taken by the majority ofthe votes cast, except in cases of interpretation of the Agreement or waiver ofthe obligation of a member which would require three fourthsvote. Amendments would require two thirds vote in general. Amendments toMFN provisions and the Amendments provision will require assent of allmembers. Any member may withdraw from the Agreement upon the expirationof six months from the date of notice of withdrawals.”[33]

Hence, poor countries can protect their common interests more effectivelythrough the WTO than through one-on-one negotiations with developedcountries. Within the WTO, developing countries can form powerful blocs topush their economic agenda more decisively than outside the Organization. Thisis not merely a matter of practical alliances but a negotiating strategy rooted inlaw. Thus, the basic principles underlying the WTO Agreement recognize the

need of developing countries like the Philippines to “share in the growth ininternational trade commensurate with the needs of their economicdevelopment.” These basic principles are found in the preamble [34] of the WTOAgreement as follows:

“The Parties to this Agreement,

Recognizing that their relations in the field of trade and economic endeavourshould be conducted with a view to raising standards of living, ensuring f ullemployment and a large and steadily growing volume of real income and

effective demand, and expanding the production of and trade in goods andservices, while allowing for the optimal use of the world’s resources inaccordance with the objective of sustainable development, seeking both toprotect and preserve the environment and to enhance the means for doing so ina manner consistent with their respective needs and concerns at dif ferent levelsof economic development,

Recognizing further that there is need for positive efforts designed to ensure

that developing countries, and especially the least developed among them,secure a share in the growth in international trade commensurate with the needsof their economic development,

Being desirous of contributing to these objectives by entering into reciprocal andmutually advantageous arrangements directed to the substantial reduction oftariffs and other barriers to trade and to the elimination of discriminatorytreatment in international trade relations,

Resolved, therefore, to develop an integrated, more viable and durablemultilateral trading system encompassing the General Agreement on Tariffs andTrade, the results of past trade liberalization ef forts, and all of the results of theUruguay Round of Multilateral Trade Negotiations,

Determined to preserve the basic principles and to further the objectivesunderlying this multilateral trading system, x x x.” (underscoring supplied.)

Specific WTO Provisos Protect Developing Countries

So too, the Solicitor General points out that pursuant to and consistent withthe foregoing basic principles, the WTO Agreement grants developing countriesa more lenient treatment, giving their domestic industries some protection fromthe rush of foreign competition. Thus, with respect to tariffs in general,preferential treatment is given to developing countries in terms of the amount oftariff reduction and the period within which the reduction is to be spreadout. Specifically, GATT requires an average tariff reduction rate of 36% fordeveloped countries to be effected within aperiod of six (6) years whiledeveloping countries -- including the Philippines -- are required to effect anaverage tariff reduction of only 24% within ten (10) years .








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In respect to domestic subsidy, GATT requires developed countries toreduce domestic support to agricultural products by 20% over six (6) years, ascompared to only 13% for developing countries to be effected within ten (10)years.

In regard to export subsidy for agricultural products, GATT requiresdeveloped countries to reduce their budgetary outlays for export subsidy by36% and export volumes receiving export subsidy by 21% within a period of six (6)years. For developing countries, however, the reduction rate is only two-

thirds of that prescribed for developed countries and a longer period of ten (10)years within which to effect such reduction.

Moreover, GATT itself has provided built-in protection from unfair foreigncompetition and trade practices including anti-dumping measures, countervailingmeasures and safeguards against import surges. Where local businesses arejeopardized by unfair foreign competition, the Philippines can avail of thesemeasures. There is hardly therefore any basis for the statement that under theWTO, local industries and enterprises will all be wiped out and that Filipinos willbe deprived of control of the economy. Quite the contrary, the weakersituations of developing nations like the Philippines have been taken intoaccount; thus, there would be no basis to say that in joining the WTO, the

respondents have gravely abused their discretion. True, they have made a bolddecision to steer the ship of state into the yet uncharted sea of economicliberalization. But such decision cannot be set aside on the ground of graveabuse of discretion, simply because we disagree with it or simply because webelieve only in other economic policies. As earlier stated, the Court in takingjurisdiction of this case will not pass upon the advantages and disadvantages oftrade liberalization as an economic policy. It will only perform its constitutionalduty of determining whether the Senate committed grave abuse of discretion.

Constitution Does Not Rule Out Foreign Competition

Furthermore, the constitutional policy of a “self -reliant and independentnational economy”[35] does not necessarily rule out the entry of foreigninvestments, goods and services. It contemplates neither “economic seclusion”nor “mendicancy in the international community.” As explained byConstitutional Commissioner Bernardo Villegas, sponsor of this constitutionalpolicy:

“Economic self-reliance is a primary objective of a developing country that is keenlyaware of overdependence on external assistance for even its most basic needs. Itdoes not mean autarky or economic seclusion; rather, it means avoidingmendicancy in the international community. Independence refers to thefreedom from undue foreign control of the national economy, especially in suchstrategic industries as in the development of natural resources and publicutilities.”[36]

The WTO reliance on “most favored nation,” “national treatment,” and“trade without discrimination” cannot be struck down as unconstitutional as infact they are rules of equality and reciprocity that apply to all WTOmembers. Aside from envisioning a trade policy based on “equality andreciprocity,”[37] the fundamental law encourages industries that are “competitivein both domestic and foreign markets,” thereby demonstrating a clear policyagainst a sheltered domestic trade environment, but one in favor of the gradualdevelopment of robust industries that can compete with the best in the foreignmarkets. Indeed, Filipino managers and Filipino enterprises have showncapability and tenacity to compete internationally. And given a free tradeenvironment, Filipino entrepreneurs and managers in Hongkonghave demonstrated the Filipino capacity to grow and to prosper against the best

offered under a policy of laissez faire.

Constitution Favors Consumers, Not Industries or Enterprises

The Constitution has not really shown any unbalanced bias in favor of anybusiness or enterprise, nor does it contain any specific pronouncement thatFilipino companies should be pampered with a totalproscription of foreign competition. On the other hand, respondents claimthat WTO/GATT aims to make available to the Filipino consumer the best goods

and services obtainable anywhere in the world at the most reasonableprices. Consequently, the question boils down to whether WTO/GATT will favorthe general welfare of the public at large.

Will adherence to the WTO treaty bring this ideal (of favoring the generalwelfare) to reality?

Will WTO/GATT succeed in promoting the Filipinos’ general welfare becauseit will -- as promised by its promoters -- expand the country’s exports andgenerate more employment?











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Will it bring more prosperity, employment, purchasing power and qualityproducts at the most reasonable rates to the Filipino public?

The responses to these questions involve “judgment calls” by our policymakers, for which they are answerable to our people during appropriateelectoral exercises. Such questions and the answers thereto are not subject tojudicial pronouncements based on grave abuse of discretion.

Constitution Designed to Meet Future Events and Contingencies

No doubt, the WTO Agreement was not yet in existence when theConstitution was drafted and ratified in 1987. That does not mean however thatthe Charter is necessarily flawed in the sense that its framers might not haveanticipated the advent of a borderless world of business. By the sametoken, the United Nations was not yet in existence when the 1935 Constitutionbecame effective. Did that necessarily mean that the then Constitution mightnot have contemplated a diminution of the absoluteness of sovereignty whenthe Philippines signed the UN Charter, thereby effectively surrendering part of its

control over its foreign relations to the decisions of various UN organs like theSecurity Council?

It is not difficult to answer this question. Constitutions are designed tomeet not only the vagaries of contemporary events. They should be interpretedto cover even future and unknown circumstances. It is to the credit of itsdrafters that a Constitution can withstand the assaults of bigots and infidels butat the same time bend with the refreshing winds of change necessitated byunfolding events. As one eminent political law writer and respectedjurist[38] explains:

“The Constitution must be quintessential rather than superficial, the root and not

the blossom, the base and framework only of the edifice that is yet to rise. It isbut the core of the dream that must take shape, not in a twinkling by mandate ofour delegates, but slowly ‘in the crucible of Filipino minds and hearts,’ where itwill in time develop its sinews and gradually gather its strength and finallyachieve its substance. In fine, the Constitution cannot, like the goddess Athena,rise full-grown from the brow of the Constitutional Convention, nor can itconjure by mere fiat an instant Utopia. It must grow with the society it seeks tore-structure and march apace with the progress of the race, drawing from thevicissitudes of history the dynamism and vitality that will keep it, far from

becoming a petrified rule, a pulsing, living law attuned to the heartbeat of thenation.”

Third Issue: The WTO Agreement and Legislative Power

The WTO Agreement provides that “(e)ach Member shall ensure the

conformity of its laws, regulations and administrative procedures with itsobligations as provided in the annexed Agreements.”[39] Petitioners maintainthat this undertaking “unduly limits, restricts and impairs Philippine sovereignty,specifically the legislative power which under Sec. 2, Article VI of the 1987Philippine Constitution is vested in the Congress of the Philippines. It is anassault on the sovereign powers of the Philippines because this means thatCongress could not pass legislation that will be good for our national interest andgeneral welfare if such legislation will not conform with the WTO Agreement,which not only relates to the trade in goods x x x but also to the flow ofinvestments and money x x x as well as to a whole slew of agreements on socio-cultural matters x x x.”[40]

More specifically, petitioners claim that said WTO proviso derogates fromthe power to tax, which is lodged in the Congress.[41] And while the Constitutionallows Congress to authorize the President to fix tariff rates, import and exportquotas, tonnage and wharfage dues, and other duties or imposts, such authorityis subject to “specified limits and x x x such limitations and restrictions” asCongress may provide,[42] as in fact it did under Sec. 401 of the Tariff and CustomsCode.

Sovereignty Limited by International Law and Treaties

This Court notes and appreciates the ferocity and passion by whichpetitioners stressed their arguments on this issue. However, while sovereigntyhas traditionally been deemed absolute and all-encompassing on the domesticlevel, it is however subject to restrictions and limitations voluntarily agreed to bythe Philippines, expressly or impliedly, as a member of the family ofnations. Unquestionably, the Constitution did not envision a hermit-typeisolation of the country from the rest of the world. In its Declaration of Principlesand State Policies, the Constitution “adopts the generally accepted principles ofinternational law as part of the law of the land, and adheres to the policy ofpeace, equality, justice, freedom, cooperation and amity, with all nations."[43] By
























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the doctrine of incorporation, the country is bound by generally acceptedprinciples of international law, which are considered to be automatically part ofour own laws.[44] One of the oldest and most fundamental rules in internationallaw is pacta sunt servanda -- international agreements must be performed ingood faith. “A treaty engagement is not a mere moral obligation but creates alegally binding obligation on the parties x x x. A state which has contracted validinternational obligations is bound to make in its legislations such modifications asmay be necessary to ensure the fulfillment of the obligations undertaken.”[45]

By their inherent nature, treaties really limit or restrict the absoluteness ofsovereignty. By their voluntary act, nations may surrender some aspects of theirstate power in exchange for greater benefits granted by or derived from aconvention or pact. After all, states, like individuals, live with coequals, and inpursuit of mutually covenanted objectives and benefits, they also commonlyagree to limit the exercise of their otherwise absolute rights. Thus, treaties havebeen used to record agreements between States concerning such widely diversematters as, for example, the lease of naval bases, the sale or cession of territory,the termination of war, the regulation of conduct of hostilities, the formation ofalliances, the regulation of commercial relations, the settling of claims, the layingdown of rules governing conduct in peace and the establishment of international

organizations.

[46]

The sovereignty of a state therefore cannot in fact and in realitybe considered absolute. Certain restrictions enter into the picture: (1) limitationsimposed by the very nature of membership in the family of nations and (2)limitations imposed by treaty stipulations. As aptly put by John F. Kennedy,“Today, no nation can build its destiny alone. The age of self-sufficientnationalism is over. The age of interdependence is here.”[47]

UN Charter and Other Treaties Limit Sovereignty

Thus, when the Philippines joined the United Nations as one of its 51 chartermembers, it consented to restrict its sovereign rights under the “concept ofsovereignty as auto-limitation.”47-AUnder Article 2 of the UN Charter, “(a)llmembers shall give the United Nations every assistance in any action it takes inaccordance with the present Charter, and shall refrain from giving assistance toany state against which the United Nations is taking preventive or enforcementaction.” Such assistance includes payment of its corresponding share not merelyin administrative expenses but also in expenditures for the peace-keepingoperations of the organization. In its advisory opinion of July 20, 1961, theInternational Court of Justice held that money used by the United NationsEmergency Force in the Middle East and in the Congo were “expenses of the

United Nations” under Article 17, paragraph 2, of the UN Charter. Hence, all itsmembers must bear their corresponding share in such expenses. In this sense,the Philippine Congress is restricted in its power to appropriate. It is compelledto appropriate funds whether it agrees with such peace-keeping expenses ornot. So too, under Article 105 of the said Charter, the UN and its representativesenjoy diplomatic privileges and immunities, thereby limiting again the exercise ofsovereignty of members within their own territory. Another example: although“sovereign equality” and “domestic jurisdiction” of all members are set forth asunderlying principles in the UN Charter, such provisos are however subject toenforcement measures decided by the Security Council for the maintenance ofinternational peace and security under Chapter VII of the Charter. A finalexample: under Article 103, “(i)n the event of a conflict between the obligationsof the Members of the United Nations under the present Charter and theirobligations under any other international agreement, their obligation under thepresent charter shall prevail,” thus unquestionably denying the Philippines -- as amember -- the sovereign power to make a choice as to which of conflictingobligations, if any, to honor.

Apart from the UN Treaty, the Philippines has entered into many otherinternational pacts -- both bilateral and multilateral -- that involve limitations on

Philippine sovereignty. These are enumerated by the Solicitor General in hisCompliance dated October 24, 1996, as follows:

“(a) Bilateral convention with the United States regarding taxes on income,where the Philippines agreed, among others, to exempt from tax,income received in the Philippines by, among others, the FederalReserve Bank of the United States, the Export/Import Bank of theUnited States, the Overseas Private Investment Corporation of theUnited States. Likewise, in said convention, wages, salaries andsimilar remunerations paid by the United States to its citizens for laborand personal services performed by them as employees or officials ofthe United States are exempt from income tax by the Philippines.

(b) Bilateral agreement with Belgium, providing, among others, for theavoidance of double taxation with respect to taxes on income.

(c) Bilateral convention with the Kingdom of Sweden for the avoidance ofdouble taxation.

(d) Bilateral convention with the French Republic for the avoidance ofdouble taxation.



















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(e) Bilateral air transport agreement with Korea where the Philippinesagreed to exempt from all customs duties, inspection fees and otherduties or taxes aircrafts of South Korea and the regular equipment,spare parts and supplies arriving with said aircrafts.

(f) Bilateral air service agreement with Japan, where the Philippines agreedto exempt from customs duties, excise taxes, inspection f ees and othersimilar duties, taxes or charges fuel, lubricating oils, spare parts, regular

equipment, stores on board Japanese aircrafts while on Philippine soil.

(g) Bilateral air service agreement with Belgium where the Philippinesgranted Belgian air carriers the same privileges as those granted toJapanese and Korean air carriers under separate air serviceagreements.

(h) Bilateral notes with Israel for the abolition of transit and visitor visaswhere the Philippines exempted Israeli nationals f rom the requirementof obtaining transit or visitor visas for a sojourn in the Philippines notexceeding 59 days.

(I) Bilateral agreement with France exempting French nationals from therequirement of obtaining transit and visitor visa for a sojourn notexceeding 59 days.

(j) Multilateral Convention on Special Missions, where the Philippinesagreed that premises of Special Missions in the Philippines areinviolable and its agents can not enter said premises without consentof the Head of Mission concerned. Special Missions are also exemptedfrom customs duties, taxes and related charges.

(k) Multilateral Convention on the Law of Treaties. In this convention, thePhilippines agreed to be governed by the Vienna Convention on theLaw of Treaties.

(l) Declaration of the President of the Philippines accepting compulsoryjurisdiction of the International Court of Justice. The InternationalCourt of Justice has jurisdiction in all legal disputes concerning theinterpretation of a treaty, any question of international law, theexistence of any fact which, i f established, would constitute a breach ofinternational obligation.”

In the foregoing treaties, the Philippines has effectively agreed to limit theexercise of its sovereign powers of taxation, eminent domain and policepower. The underlying consideration in this partial surrender of sovereignty isthe reciprocal commitment of the other contracting states in granting the sameprivilege and immunities to the Philippines, its officials and its citizens. The samereciprocity characterizes the Philippine commitments under WTO-GATT.

“International treaties, whether relating to nuclear disarmament, human rights,

the environment, the law of the sea, or trade, constrain domestic politicalsovereignty through the assumption of external obligations. But unless anarchyin international relations is preferred as an alternative, in most cases we acceptthat the benefits of the reciprocal obligations involved outweigh the costsassociated with any loss of political sovereignty. (T)rade treaties that structurerelations by reference to durable, well -defined substantive norms and objectivedispute resolution procedures reduce the risks of larger countries exploiting raweconomic power to bully smaller countries, by subjecting power relations t osome form of legal ordering. In addition, smaller countries typically stand to gaindisproportionately from trade liberalization. This is due to the simple fact thatliberalization will provide access to a larger set of potential new tradingrelationship than in case of the larger country gaining enhanced success to the

smaller country’s market.”[48]

The point is that, as shown by the foregoing treaties, a portion ofsovereignty may be waived without violating the Constitution, based on therationale that the Philippines “adopts the generally accepted principles ofinternational law as part of the law of the land and adheres to the policy of x x xcooperation and amity with all nations.”

Fourth Issue: The WTO Agreement and Judicial Power

Petitioners aver that paragraph 1, Article 34 of the General Provisions andBasic Principles of the Agreement on Trade-Related Aspects of IntellectualProperty Rights (TRIPS)[49] intrudes on the power of the Supreme Court topromulgate rules concerning pleading, practice and procedures.[50]

To understand the scope and meaning of Article 34, TRIPS,[51] it will befruitful to restate its full text as follows:

“Article 34
















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Process Patents: Burden of Proof

1. For the purposes of civil proceedings in respect of the infringement of therights of the owner referred to in paragraph 1(b) of Article 28, if the subjectmatter of a patent is a process for obtaining a product, the judicialauthorities shall have the authority to order the defendant to prove thatthe process to obtain an identical product is different from the patentedprocess. Therefore, Members shall provide, in at least one of the following

circumstances, that any identical product when produced without theconsent of the patent owner shall, in the absence of proof to the contrary,be deemed to have been obtained by the patented process:

(a) if the product obtained by the patented process is new;

(b) if there is a substantial likelihood that the identical product wasmade by the process and the owner of the patent has beenunable through reasonable efforts to determine the processactually used.

2. Any Member shall be free to provide that the burden of proof indicated inparagraph 1 shall be on the al leged infringer only if the condition referred toin subparagraph (a) is fulfilled or only if the condition referred to insubparagraph (b) is fulfilled.

3. In the adduction of proof to the contrary, the legitimate interests ofdefendants in protecting their manufacturing and business secrets shall betaken into account.”

From the above, a WTO Member is required to provide a rule of disputable(note the words “in the absence of proof to the contrary”) presumption that aproduct shown to be identical to one produced with the use of a patentedprocess shall be deemed to have been obtained by the (illegal) use of the saidpatented process, (1) where such product obtained by the patented product isnew, or (2) where there is “substantial likelihood” that the identical product wasmade with the use of the said patented process but the owner of the patentcould not determine the exact process used in obtaining such identicalproduct. Hence, the “burden of proof” contemplated by Article 34 shouldactually be understood as the duty of the alleged patent infringer to overthrowsuch presumption. Such burden, properly understood, actually refers to the“burden of evidence” (burden of going forward) placed on the producer of the

identical (or fake) product to show that his product was produced without theuse of the patented process.

The foregoing notwithstanding, the patent owner still has the “burden ofproof” since, regardless of the presumption provided under paragraph 1 ofArticle 34, such owner still has to introduce evidence of the existence of thealleged identical product, the fact that it is “identical” to the genuine oneproduced by the patented process and the fact of “newness” of the genuineproduct or the fact of “substantial likelihood” that the identical product was

made by the patented process.

The foregoing should really present no problem in changing the rules ofevidence as the present law on the subject, Republic Act No. 165, as amended,otherwise known as the Patent Law, provides a similar presumption in cases ofinfringement of patented design or utility model, thus:

“SEC. 60. Infringement. - Infringement of a design patent or of a patent forutility model shall consist in unauthorized copying of the patented design orutility model for the purpose of trade or industry in the article or product and inthe making, using or selling of the article or product copying the patented designor utility model. Identity or substantial identity with the patented design orutility model shall constitute evidence of copying.” (underscoring supplied)

Moreover, it should be noted that the requirement of Article 34 to provide adisputable presumption applies only if (1) the product obtained by the patentedprocess is NEW or (2) there is a substantial likelihood that the identical productwas made by the process and the process owner has not been able throughreasonable effort to determine the process used. Where either of thesetwo provisos does not obtain, members shall be free to determine theappropriate method of implementing the provisions of TRIPS within their owninternal systems and processes.

By and large, the arguments adduced in connection with our disposition ofthe third issue -- derogation of legislative power - will apply to this fourth issuealso. Suffice it to say that the reciprocity clause more than justifies suchintrusion, if any actually exists. Besides, Article 34 does not contain anunreasonable burden, consistent as it is with due process and the concept ofadversarial dispute settlement inherent in our judicial system.

So too, since the Philippine is a signatory to most international conventionson patents, trademarks and copyrights, the adjustment in legislation and rules ofprocedure will not be substantial.[52]





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Fifth Issue: Concurrence Only in the WTO Agreement and Not in Other Documents

Contained in the Final Act

Petitioners allege that the Senate concurrence in the WTO Agreement andits annexes -- but not in the other documents referred to in the Final Act, namelythe Ministerial Declaration and Decisions and the Understanding onCommitments in Financial Services -- is defective and insufficient and thusconstitutes abuse of discretion. They submit that such concurrence in the WTO

Agreement alone is flawed because it is in effect a rejection of the Final Act,which in turn was the document signed by Secretary Navarro, in representationof the Republic upon authority of the President. They contend that the secondletter of the President to the Senate[53] which enumerated what constitutes theFinal Act should have been the subject of concurrence of the Senate.

“A final act, sometimes called protocol de clôture, is an instrument whichrecords the winding up of the proceedings of a diplomatic conference andusually includes a reproduction of the texts of treaties, conventions,recommendations and other acts agreed upon and signed by theplenipotentiaries attending the conference.”[54] It is not the treaty itself. It israther a summary of the proceedings of a protracted conference which may havetaken place over several years. The text of the “Final Act Embodying the Resultsof the Uruguay Round of Multilateral Trade Negotiations” is contained in justone page[55] in Vol. I of the 36-volume Uruguay Round of Multilateral TradeNegotiations. By signing said Final Act, Secretary Navarro as representative of theRepublic of the Philippines undertook:

"(a) to submit, as appropriate, the WTO Agreement for the consideration oftheir respective competent authorities with a view to seeking approvalof the Agreement in accordance with their procedures; and

(b) to adopt the Ministerial Declarations and Decisions."

The assailed Senate Resolution No. 97 expressed concurrence in exactlywhat the Final Act required from its signatories, namely, concurrence of theSenate in the WTO Agreement.

The Ministerial Declarations and Decisions were deemed adopted withoutneed for ratification. They were approved by the ministers by virtue of ArticleXXV: 1 of GATT which provides that representatives of the members can meet “togive effect to those provisions of this Agreement which invoke joint action, and

generally with a view to facilitating the operation and furthering the objectivesof this Agreement.”[56]

The Understanding on Commitments in Financial Services also approved inMarrakesh does not apply to the Philippines. It applies only to those 27 Memberswhich “have indicated in their respective schedules of commitments onstandstill, elimination of monopoly, expansion of operation of existing financialservice suppliers, temporary entry of personnel, free transfer and processing ofinformation, and national treatment with respect to access to payment, clearing

systems and refinancing available in the normal course of business.”[57]

On the other hand, the WTO Agreement itself expresses what multilateralagreements are deemed included as its integral parts,[58] as follows:

“Article II

Scope of the WTO

1. The WTO shall provide the common institutional framework for theconduct of trade relations among its Members in matters to the

agreements and associated legal instruments included in the Annexes tothis Agreement.

2. The Agreements and associated legal instruments included in Annexes 1,2, and 3 (hereinafter referred to as “Multilateral Agreements”) are integralparts of this Agreement, binding on all Members.

3. The Agreements and associated legal instruments included in Annex 4(hereinafter referred to as “Plurilateral Trade Agreements”) are also part ofthis Agreement for those Members that have accepted them, and arebinding on those Members. The Plurilateral Trade Agreements do notcreate either obligation or rights for Members that have not acceptedthem.

4. The General Agreement on Tariffs and Trade 1994 as specified in annex 1A(hereinafter referred to as “GATT 1994”) is legally distinct from the GeneralAgreement on Tariffs and Trade, dated 30 October 1947, annexed to theFinal Act adopted at the conclusion of the Second Session of thePreparatory Committee of the United Nations Conference on Trade andEmployment, as subsequently rectified, amended or modified (hereinafterreferred to as “GATT 1947”).

Ñ
























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It should be added that the Senate was well-aware of what it wasconcurring in as shown by the members’ deliberation on August 25, 1994. Afterreading the letter of President Ramos dated August 11, 1994 ,[59] the senators ofthe Republic minutely dissected what the Senate was concurring in, asfollows: [60]

“THE CHAIRMAN: Yes. Now, the question of the validity of the submission cameup in the first day hearing of this Committee yesterday. Was the observationmade by Senator Tañada that what was submitted to the Senate was not theagreement on establishing the World Trade Organization by the final act of theUruguay Round which is not the same as the agreement est ablishing the WorldTrade Organization? And on that basis, Senator Tolentino raised a point of orderwhich, however, he agreed to withdraw upon understanding that his suggestionfor an alternative solution at that time was acceptable. That suggestion was totreat the proceedings of the Committee as being in the nature of briefings forSenators until the question of the submission could be clarified.

And so, Secretary Romulo, in effect, is the President submitting a new... is hemaking a new submission which improves on the clarity of the first submission?

MR. ROMULO: Mr. Chairman, to make sure that it is clear cut and there shouldbe no misunderstanding, it was his intention to clarify all matters by giving thisletter.

THE CHAIRMAN: Thank you.

Can this Committee hear from Senator Tañada and later on Senator Tolentinosince they were the ones that raised this question yesterday?

Senator Tañada, please.

SEN. TAÑADA: Thank you, Mr. Chairman.

Based on what Secretary Romulo has read, it would now clearly appear thatwhat is being submitted to the Senate for ratification is not the Final Act of theUruguay Round, but rather the Agreement on the World Trade Organization aswell as the Ministerial Declarations and Decisions, and the Understanding andCommitments in Financial Services.

I am now satisfied with the wording of the new submission of President Ramos.

SEN. TAÑADA. . . . of President Ramos, Mr. Chairman.

THE CHAIRMAN. Thank you, Senator Tañada. Can we hear from SenatorTolentino? And after him Senator Neptali Gonzales and Senator Lina.

SEN TOLENTINO, Mr. Chairman, I have not seen the new submission actuallytransmitted to us but I saw the draft of his earlier, and I think it now complieswith the provisions of the Constitution, and with the Final Act itself. The

Constitution does not require us to ratify the Final Act. It requires us to ratify theAgreement which is now being submitted. The Final Act itself specifies what isgoing to be submitted to with the governments of the participants.

In paragraph 2 of the Final Act, we read and I quote:

‘By signing the present Final Act, the representatives agree: (a) to submit asappropriate the WTO Agreement for the consideration of the respectivecompetent authorities with a view to seeking approval of the Agreement inaccordance with their procedures.’

In other words, it is not the Final Act that was agreed to be submitted to thegovernments for ratification or acceptance as whatever their constitutionalprocedures may provide but it is the World Trade Organization Agreement. Andif that is the one that is being submitted now, I think it satisfies both theConstitution and the Final Act itself.

Thank you, Mr. Chairman.

THE CHAIRMAN. Thank you, Senator Tolentino, May I call on Senator Gonzales.

SEN. GONZALES. Mr. Chairman, my views on this matter are already a matter of

record. And they had been adequately reflected in the journal of yesterday’ssession and I don’t see any need for repeating the same.

Now, I would consider the new submission as an act ex abudante cautela.

THE CHAIRMAN. Thank you, Senator Gonzales. Senator Lina, do you want tomake any comment on this?

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SEN. LINA. Mr. President, I agree with the observation just made by SenatorGonzales out of the abundance of question. Then the new submission is, Ibelieve, stating the obvious and therefore I have no f urther comment to make.”

Epilogue

In praying for the nullification of the Philippine ratification of the WTOAgreement, petitioners are invoking this Court’s constitutionally imposed duty“to determine whether or not there has been grave abuse of discretionamounting to lack or excess of jurisdiction” on the part of the Senate in giving itsconcurrence therein via Senate Resolution No. 97. Procedurally, a writof certiorarigrounded on grave abuse of discretion may be issued by the Courtunder Rule 65 of the Rules of Court when it is amply shown that petitioners haveno other plain, speedy and adequate remedy in the ordinary course of law.

By grave abuse of discretion is meant such capricious and whimsicalexercise of judgment as is equivalent to lack of jurisdiction.[61] Mere abuse ofdiscretion is not enough. It must be graveabuse of discretion as when the power

is exercised in an arbitrary or despotic manner by reason of passion or personalhostility, and must be so patent and so gross as to amount to an evasion of apositive duty or to a virtual refusal to perform the duty enjoined or to act at all incontemplation of law.[62] Failure on the part of the petitioner to show graveabuse of discretion will result in the dismissal of the petition.[63]

In rendering this Decision, this Court never forgets that the Senate, whoseact is under review, is one of two sovereign houses of Congress and is thusentitled to great respect in its actions. It is itself a constitutional bodyindependent and coordinate, and thus its actions are presumed regular and donein good faith. Unless convincing proof and persuasive arguments are presentedto overthrow such presumptions, this Court will resolve every doubt in its

favor. Using the foregoing well-accepted definition of grave abuse of discretionand the presumption of regularity in the Senate’s processes, this Court cannotfind any cogent reason to impute grave abuse of discretion to the Senate’sexercise of its power of concurrence in the WTO Agreement granted it by Sec. 21of Article VII of the Constitution.[64]

It is true, as alleged by petitioners, that broad constitutional principlesrequire the State to develop an independent national economy effectivelycontrolled by Filipinos; and to protect and/or prefer Filipino labor, products,domestic materials and locally produced goods. But it is equally true that suchprinciples -- while serving as judicial and legislative guides -- are not in themselves

sources of causes of action. Moreover, there are other equally fundamentalconstitutional principles relied upon by the Senate which mandate the pursuit ofa “trade policy that serves the general welfare and utilizes all forms andarrangements of exchange on the basis of equality and reciprocity” and thepromotion of industries “which are competitive in both domestic and foreignmarkets,” thereby justifying its acceptance of said treaty. So too, the allegedimpairment of sovereignty in the exercise of legislative and judicial powers isbalanced by the adoption of the generally accepted principles of internationallaw as part of the law of the land and the adherence of the Constitution to thepolicy of cooperation and amity with all nations.

That the Senate, after deliberation and voting, voluntarily andoverwhelmingly gave its consent to the WTO Agreement thereby making it “apart of the law of the land” is a legitimate exercise of its sovereign duty andpower. We find no “patent and gross” arbitrariness or despotism “by reason ofpassion or personal hostility” in such exercise. It is not impossible to surmisethat this Court, or at least some of its members, may even agree with petitionersthat it is more advantageous to the national interest to strike down SenateResolution No. 97. But that is not a legal reason to attribute grave abuse ofdiscretion to the Senate and to nullify its decision. To do so would constitute

grave abuse in the exercise of our own judicial power and duty. Ineludably, whatthe Senate did was a valid exercise of its authority. As to whether such exercisewas wise, beneficial or viable is outside the realm of judicial inquiry andreview. That is a matter between the elected policy makers and the people. Asto whether the nation should join the worldwide march toward tradeliberalization and economic globalization is a matter that our people shoulddetermine in electing their policy makers. After all, the WTO Agreement allowswithdrawal of membership, should this be the political desire of a member.

The eminent futurist John Naisbitt, author of the best seller Megatrends,predicts an Asian Renaissance[65] where “the East will become the dominantregion of the world economically, politically and culturally in the next

century.” He refers to the “free market” espoused by WTO as the “catalyst” inthis coming Asian ascendancy. There are at present about 31 countries includingChina, Russia and Saudi Arabia negotiating for membership in theWTO. Notwithstanding objections against possible limitations on nationalsovereignty, the WTO remains as the only viable structure for multilateral tradingand the veritable forum for the development of international trade law. Thealternative to WTO is isolation, stagnation, if not economic self-destruction. Duly enriched with original membership, keenly aware of theadvantages and disadvantages of globalization with its on-line experience, andendowed with a vision of the future, the Philippines now straddles the

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crossroads of an international strategy for economic prosperity and stability inthe new millennium. Let the people, through their duly authorized electedofficers, make their free choice.

WHEREFORE, the petition is DISMISSED for lack of merit.

SO ORDERED.

Narvasa, C.J., Regalado, Davide, Jr., Romero, Bellosillo, Melo, Puno, Kapunan,Mendoza, Francisco, Hermosisima, Jr., and Torres, Jr., JJ., concur.