Case Summary (G.R. No. L-23979)
Ordinance Challenged — Essential Provisions
Municipal Ordinance No. 4841: (1) Declared a municipal “state of emergency” due to scarcity of residential lands and buildings and high cost of living; (2) Section 1 limited increases in rent of leased lands to no more than the proportionate increase in assessed value of the land; (3) Section 2 limited increases in rent of residential buildings (and the land on which they stand) to 10% per annum of assessed value; (4) Section 3 exempted existing leases at approval but subjected renewals/modifications after approval to the ordinance; (5) Section 4 provided criminal penalties (fines and imprisonment) and vicarious liability for officers of juridical persons.
Lower Court Ruling and Grounds
The Court of First Instance declared Ordinance No. 4841 ultra vires, unconstitutional, illegal and void ab initio, without pronouncement as to costs. The trial judge relied on several grounds: (a) the power to “declare a state of emergency” belongs exclusively to Congress; (b) there was no existing state of emergency to justify rental regulation; (c) the ordinance unreasonably and unjustifiably limited the use of private property and arbitrarily encroached on constitutional property rights; (d) the city’s power to regulate letting or subletting does not include the authority to impose prohibitions embodied in the ordinance; and (e) the general welfare clause in the City Charter did not sanction the measure.
Issues the Supreme Court Addressed and Those Reserved
The Supreme Court stated it was unnecessary to decide whether (i) the City of Manila had constitutional power to declare a state of emergency, or (ii) a state of emergency in fact existed. The Court expressly declined to decide or express an opinion on these particular contentions, observing that even assuming both the power and the existence of an emergency, the ordinance would still be illegal and unconstitutional for other reasons explained in the decision.
Legal Principle: Police Power and Constitutional Limits
The Court reiterated that municipal regulatory authority is an exercise of the police power, which necessarily curtails certain private liberties and property rights. Such exercise is constitutionally limited: regulations affecting individual rights must be “reasonable” and may only restrict rights to the extent “fairly required by the legitimate demands of public interest or public welfare.” When regulation is adopted to meet an emergency, the interference with private rights must be coextensive and coterminous with the emergency; emergency measures must be temporary and reasonably limited in time according to the nature and duration of the crisis.
Temporal Limitation Requirement for Emergency Measures
Relying on prior precedents (including Rutter v. Esteban and other cases), the Court emphasized that legislation or ordinances enacted to meet emergencies must specify a definite and reasonable period of effectivity. Without such a limitation, a temporary measure risks becoming a de facto permanent law, contrary to constitutional design, and thereby unconstitutional. The decision cited prior invalidations of laws and executive orders that lacked reasonable time limits or perpetuated temporary powers beyond the emergency for which they were granted. The Court reasoned that the framers’ insistence on limited duration for emergency delegations reflects the broader constitutional principle that extraordinary powers granted for temporary causes must themselves be temporary.
Application to the Ordinance — Indefiniteness and Unreasonableness
Applying these principles, the Court found that Ordinance No. 4841 lacked the necessary temporal limitation and was indefinite in scope. Even accepting for argument that an emergency existed, the ordinance did not confine its restrictions in time, rendering it susceptible to becoming permanent despite its ostensible emergency purpose. The Court held that such indefiniteness as to duration and breadth made the ordinance an invalid exercise of police power because it exceeded the permissible interference with private property and contractual freedom. The Court also referred to prior statutory practice (commonwealth and republic acts that imposed time-limited emergency measures) to underscore the accepted norm that emergency regulations be explicitly time-bound.
On Delegation, Municipal Power and Analogy to National Practice
The Court observed that the limitations applicable to the national government’s exercise of police power in emergencies naturally constrain powers delegated to municipal corporations. It noted that Philippine municipal law is in principle patterned after U.S. practice, where emergency municipal legislation must, in
...continue readingCase Syllabus (G.R. No. L-23979)
Nature of the Action and Parties
- Action: Declaratory relief instituted to annul a municipal ordinance.
- Petitioners-Appellees: Homeowners' Association of the Philippines, Inc., and its President, Vicente A. Rufino.
- Respondents: The Municipal Board of the City of Manila, et al.; Respondent-Appellant: Antonio Villegas, Mayor of the City of Manila.
- Forum below: Court of First Instance of Manila rendered judgment declaring the ordinance invalid; the Mayor of Manila appealed to the Supreme Court.
Instrument Challenged: Municipal Ordinance No. 4841
- Approval and effectivity: Approved on December 31, 1963; provided to take effect on January 1, 1964.
- Title/Subject: "AN ORDINANCE REGULATING RENTALS OF LOTS AND BUILDING FOR RESIDENTIAL PURPOSES."
- Declared purpose in preamble: Finding a "state of emergency" due to scarcity of lands and buildings for residential purposes and high cost of living; objective to provide housing accommodations especially for the poor at reasonable rates.
Textual Components of the Ordinance (as recited)
- Section 1:
- Prohibits lessors/sublessors of lands primarily devoted to residential purposes, and those claiming title or color of title from them, from increasing rental in excess of the proportion (percentagewise) of the increase in the assessed value of the land leased/subleased.
- If only a portion is leased, the proportionate value of the leased premises is the basis for determining the maximum rental increase.
- Section 2:
- Prohibits lessors/sublessors of buildings primarily devoted to residential purposes, and those claiming title or color of title from them, from increasing rentals in excess of ten percent per annum of the assessed value of the building leased/subleased and the land on which the building stands.
- If only a portion of the building is leased/subleased, the proportionate assessed value of the building and land is the basis for the maximum rental increase.
- Section 3:
- Ordinance does not apply to contracts of lease/sublease existing upon approval and to rooms of boarding and lodging houses; but renewals or modifications of such contracts made on or after approval are governed by the ordinance.
- Section 4:
- Penalties: Fine between P100.00 and P200.00 and imprisonment from 1 to 6 months for violators; juridical persons subject to liability of general manager, director, or other person in control.
- Section 5:
- Ordinance to take effect on January 1, 1964.
Judgment Below and Grounds for Invalidity at Trial Court
- Trial court ruling: Declared Ordinance No. 4841 "ultra vires, unconstitutional, illegal and void ab initio," and did not award costs.
- Grounds articulated by trial judge (as reported):
- The power to "declare a state of emergency . . . exclusively pertains to Congress."
- There was "no longer any state of emergency" to justify regulation of house rentals.
- The ordinance constituted an unreasonable and unjustified limitation on the use of private property and arbitrarily encroached on property owners' constitutional rights.
- The city's power to "regulate the business of ... letting or subletting of lands and buildings" does not include the authority to enact the prohibitions contained in the ordinance.
- The ordinance could not be sustained under the general welfare clause in the City Charter.
Issues the Supreme Court Did Not Decide
- Whether the City of Manila had the power to declare a state of emergency.
- Whether a state of emergency in fact existed supporting the ordinance.
- The Supreme Court explicitly declined to pass upon these questions and expressed no opinion on the soundness of the other points relied upon by the trial judge.
Supreme Court’s Controlling Reasoning: Police Power and Reasonableness
- Fundamental principle: Municipal authority exercised through police power is subject to constitutional limitations in the Bill of Rights; police power measures must be "reasonable."
- Scope of permissible interference: Individual rights may be limited only to the extent "fairly required by the legitimate demands of public interest or public welfare."
- Emergency limitation rule:
- If regulations are adopted because of a state of emergency, interference with individual rights must be coextensive, coeval, or coterminous with the existence of the emergency.
- Because emergencies are by nature tempo