G.R. No. L-1440 - Co Chiong vs. Cuaderno, Sr.

Case Digest (G.R. No. L-1440)
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Facts:

Enactment of Republic Act No. 37 and its operative purpose
On October 1, 1946, Congress enacted Republic Act No. 37, entitled “AN ACT GRANTING PREFERENCE TO FILIPINO CITIZENS IN THE LEASE OF PUBLIC MARKET STALLS.”
Section 1 of Republic Act No. 37 provided that all citizens of the Philippines shall have preference in the lease of public market stalls.
Section 2 empowered the Secretary of Finance to promulgate the necessary rules to carry into effect the purposes of the Act.
Section 3 repealed all existing laws or parts thereof contrary to the Act.
Section 4 stated that the Act shall take effect on the first day of January, nineteen hundred and forty-seven.

Issuance of Department of Finance Order No. 32 and its vacancy-and-award mechanism
On November 29, 1946, purporting to carry into effect Republic Act No. 37, the Secretary of Finance promulgated Department of Finance Order No. 32.
Department Order No. 32 declared that all stalls or booths in all public markets were vacated by their occupants and that their leases were terminated on January 1, 1947.
Section 2 of Department Order No. 32 provided, in substance, that:

All stalls or booths in any public market shall be deemed vacated by their present occupants and their lease terminated on January 1, 1947.
Notice of the general vacancy shall be posted on the bulletin board in each public market and other conspicuous places immediately upon promulgation of the Order.
If the occupants or holders on December 31, 1946 were citizens of the Philippines and had occupied or held their stalls for not less than thirty (30) days before that date, and they filed applications to continue occupying the same, they were to be given the lease of their respective stalls, subject to conditions in the regulations.
If occupants on December 31, 1946 were not Filipino citizens, the stalls affected were to be awarded for occupancy to the Filipino applicant who first filed an application in accordance with the provisions.
Where two or more applications from Filipino citizens were filed at the same time for the same stall, or it could not be ascertained which was filed first, the lease would be awarded by lot under the supervision of the Market Committee.
The award of market stalls to an alien applicant could be made only in the absence of a Filipino applicant.

Filing of a petition for prohibition and issuance of preliminary injunction by the lower court
On December 27, 1946, petitioners and appellees filed with the lower court a petition for prohibition to restrain appellants from enforcing Republic Act No. 37 and Department Order No. 32, alleging unconstitutionality.
On December 28, 1946, the lower court issued a writ of preliminary injunction ordering appellants to desist from ejecting appellees from the leased public market stalls mentioned in the petition.
The writ was dissolved by order of January 7, 1947.

Supreme Court petition for certiorari and mandamus and subsequent dismissal
Appellees filed with the Supreme Court a petition for certiorari and mandamus, L-1266, to annul the order of dissolution of the writ of preliminary injunction.
The petition was dismissed on August 29, 1947.
The dismissal was based, among other reasons, on the fact that the Secretary of Finance suspended the operation of Department Order No. 32, which respondents were about to enforce.

Trial in the lower court and testimony of market stall holders
Trial was held in the lower court where appellees called to testify three market stall holders: Yee Shi, Go Hong, and Uy Ho.
Yee Shi testified:

She was Chinese, a widow, and forty-six years old.
She continuously occupied her stalls in Divisoria Market since June, 1932, upon the death of her husband, a former lessee.
She signed contracts of lease for occupancy of the stalls, but the market authorities did not give her a copy.
On December 24, 1946, she received notice to vacate the stalls not later than 4 p.m. of December 31, 1946.
She had no means of livelihood other than her business conducted at the stall.
If ejected, she would have no means to support her five children.
There were no other alien market vendors other than the Chinese.

Go Hong testified:

He was Chinese, forty-nine years old.
He occupied his stalls at Quiapo Market since 1916.
He signed contracts of lease, but the market authorities did not give him a copy.
If ejected, he would have no means of supporting his Filipino wife and four children.
There were no alien vendors other than the Chinese.
Approximately fifty Chinese vendors occupied about nine per cent of the stalls in Quiapo Market.

Uy Ho testified:

He was Chinese, forty-eight years old.
He continuously occupied his stalls at Divisoria Market since 1928, except for a period from 1943 to 1944 when he joined the Marking guerrillas.
He signed contracts of lease, but no copy was given him by the market authorities.
If ejected, he would have no means of supporting his wife and six children.
His youngest child was only ten months old.
On December 21, 1946, he received notice to vacate the stalls not later than 4 p.m. of December 31, 1946.

Documentary evidence presented by appellees
Appellees presented documentary proofs consisting of Exhibits A to T, including:

Exhibit A: Market Code of Manila or Ordinance No. 2898.
Exhibit B: Department of Finance Order No. 32.
Exhibit C: Notice given by the City Treasurer to appellees to vacate the public market stalls not later than 4 o’clock p.m. December 31, 1946, pursuant to Republic Act No. 37 and Department Order No. 32.
Exhibit D: Record of Mendoza vs. Nolasco, civil case No. 72532 of the Court of First Instance of Manila.
Exhibit E: Opinion of the City Fiscal to the Mayor of Manila dated November 15, 1946.
Exhibit F: Records of Sy Choc Chay vs. Market Master, civil case No. 915 of the Court of First Instance of Manila.
Exhibit G: Portion of the transcript of the stenographic notes taken on December 28, 1946.
Exhibit H: Section 653 of Ordinance No. 1600 of Manila.
Exhibit I: Sections 795, 801, and 809(c) of Ordinance Order No. 1600 of Manila.
Exhibit J to J-19: Treaties of the United States with several foreign countries.
Exhibits K to K-3: Opinion of the Atty. General.
Exhibits L to L-5: Decisions of the Supreme Court.
Exhibit M: Philippine Immigration law of 1940.
Exhibit N: Order of the Military Governor of September 20, 1898.
Exhibit O: Note of the Secretary of State Hay of December 5, 1898.
Exhibit O-1: Note of Secretary of State Knox.
Exhibit O-2: Lobinger, *American Courts in China*.
Exhibit P: Charter of the United Nations.
Exhibit Q: Certificate of the City Treasurer of Manila showing that only 13.02% of the public market stalls of Manila are occupied by aliens.
Exhibits R and S: Identification cards issued to Yee Shi.
Exhibit T: Certificate of delegation of the Republic of China to the Philippines, to show exhaustion of administrative remedies to secure repeal or modification of Republic Act No. 37 and Department Order No. 32.

Evidence presented by appellants and the lower court’s disposition
Appellants presented as their only evidence Exhibit 1, showing:

All market stalls in Manila had already been applied for by citizens of the Philippines.
There were 3,479 applications from Filipino citizens, or an average of five applications to every two stalls and almost eight Filipinos to every alien occupant.
The stalls were being awarded to Filipinos pursuant to Republic Act No. 37.

The lower court rendered judgment:

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