Title
Destileria Limtuaco and Co., Inc. vs. Advertising Board of the Philippines
Case
G.R. No. 164242
Decision Date
Nov 28, 2008
AdBoard, a private advertising regulator, revoked clearance for a controversial ad by petitioners, who challenged its authority. The Supreme Court dismissed the petition, ruling AdBoard’s self-regulation is voluntary and not subject to prohibition, upholding its actions as non-state, contractual, and constitutional.

Case Digest (G.R. No. L-24069)
Expanded Legal Reasoning Model

Facts:

  • Background of the Parties and the AdBoard
    • Petitioners:
      • Destileria Limtuaco & Co., Inc. – formerly a member of the Philippine Association of National Advertisers (PANA).
      • Convoy Marketing Corporation – through its advertising agency, SLG Advertising, a member of the Association of Accredited Advertising Agencies Philippines (4As).
    • Respondent:
      • Advertising Board of the Philippines (AdBoard) – a non-stock, non-profit umbrella corporation composed of various national advertising organizations (ASAP, 4As, CAAP, IBA, KBP, OAAP, MORES, PANA, PRIMO).
      • Originally formed in 1974 as the Philippine Board of Advertising (PBA).
  • The Advertisement and Clearance Process
    • In January 2004, petitioners submitted an application to the AdBoard for clearance to air a radio advertisement entitled "Ginagabi (Nakatikim ka na ba ng Kinse Anyos)."
    • The AdBoard granted the clearance, allowing the advertisement to be broadcast.
  • Emergence of Controversy and AdBoard’s Intervention
    • Public Complaints:
      • Shortly after the advertisement began airing, numerous complaints were received by the AdBoard from the public.
    • Subsequent Acts by the AdBoard:
      • AdBoard initially requested SLG Advertising to provide a replacement for the advertisement.
      • Upon the continued influx of complaints and lack of response from SLG, the AdBoard demanded the withdrawal of the advertisement.
      • Unable to secure compliance, the AdBoard recalled the previously issued clearance with immediate effect.
      • The decision to revoke the clearance was conveyed to both SLG and the AdBoard’s member organizations.
  • Petitioners’ Legal Actions Against the AdBoard
    • Initial and Amended Complaint:
      • Petitioners filed a Complaint for Dissolution of Corporation, Damages, and a Preliminary Injunction (with a Temporary Restraining Order) before the Regional Trial Court (RTC) of Makati (Civil Case No. 04-277).
      • The amended complaint challenged:
        • The revocation/cancellation of the AdBoard’s registration and its dissolution.
        • The alleged usurpation by the AdBoard of functions reserved for government agencies such as the Department of Trade and Industry (DTI) and the Movie and Television Review and Classification Board (MTRCB), via its power to screen, review, and approve advertisements.
        • The validity of AdBoard’s “Code of Ethics for Advertising” and “ACRC Manual of Procedures for Screening and Filing of Complaints and Appeals.”
    • Filing of Writ of Prohibition:
      • On July 16, 2004, petitioners filed the present petition for a writ of prohibition and a preliminary injunction under Rule 65 of the Rules of Court.
      • Their contention included the claim that requiring clearance constituted a deprivation of their constitutionally protected right to advertise—a claim resembling an argument of property rights and due process infringement.
  • AdBoard’s Defense and Counterarguments
    • Nature of the AdBoard’s Authority:
      • AdBoard claimed its authority is derived from the voluntary submission of its member organizations, not from any specific legislative mandate.
      • It argued that there exists no law prohibiting it from exercising self-regulatory functions or from requiring clearance prior to the airing of advertisements.
    • Procedural Objections:
      • The AdBoard moved to dismiss the petition on grounds including:
        • Failure to observe the rules on the hierarchy of courts.
        • Non-compliance with the requirements for filing (i.e., absence of material dates, a certified true copy of the ACRC Circular No. 2004-02, and a defect in the certification regarding non-forum shopping).

Issues:

  • Whether petitioners’ right to advertise, as a constitutionally protected property right, is infringed by the AdBoard’s requirement that advertisements secure its clearance prior to airing.
    • Consideration of due process: Is the revocation of the clearance without due process of law?
  • Whether the AdBoard’s act of requiring a clearance and subsequently imposing sanctions constitutes the exercise of judicial, quasi-judicial, or ministerial functions.
    • Assessment of the nature and scope of the regulatory functions performed by the AdBoard.
  • Whether the present petition for prohibition is proper given that the disputed issues are already pending in Civil Case No. 04-277.
    • Evaluation of the concept of forum shopping and whether pursuing two actions on the same subject matter is permissible.
  • Whether the petition for prohibition can intervene against a private organization’s self-regulatory mechanisms.

Ruling:

  • (Subscriber-Only)

Ratio:

  • (Subscriber-Only)

Doctrine:

  • (Subscriber-Only)

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