Case Summary (G.R. No. L-29646)
Ordinance No. 6537 — Substance, Exemptions, and Penal Provisions
Ordinance No. 6537 made it unlawful for any non‑citizen to be employed in specified positions or to engage in trade, business or occupation within Manila without first securing an employment permit from the Mayor and paying a prescribed fee of P50.00. The ordinance enumerated covered occupations and employment relationships (consultant, clerk, technician, teacher, theatrical performer, laborer, cook, etc.) and applied regardless of duration, source of compensation, or number of hours. Exemptions included persons employed in diplomatic or consular missions, persons employed under technical assistance programs agreed upon by the national government with foreign governments, household employees, and unpaid members of religious congregations. Violations carried criminal penalties (imprisonment for three to six months and/or fines of P100.00 to P200.00), and juridical persons were made liable through specified officers.
Procedural History
Private respondent Hiu Chiong Tsai Pao Ho, employed in Manila, petitioned the Court of First Instance (Civil Case No. 72797) for a preliminary injunction and declaratory relief to stop enforcement of Ordinance No. 6537 and to declare it null and void. The trial court issued a writ of preliminary injunction and on September 17, 1968 rendered judgment declaring the ordinance null and void and making the injunction permanent. Mayor Villegas appealed to the Supreme Court, assigning errors attacking the trial court’s conclusions on uniformity of taxation, improper delegation of legislative power, and violations of due process and equal protection.
Grounds of Attack by Private Respondent (Trial Court and Affirmed Rationale)
Private respondent’s principal grounds for invalidation were: (1) the ordinance, insofar as it imposed the P50 fee on employed aliens, was a revenue measure that discriminated and violated the rule of uniformity in taxation; (2) as a purported exercise of police power the ordinance made no distinction among occupations and imposed a fixed fee out of proportion to registration costs and without guiding standards, amounting to an unlawful delegation of legislative power; and (3) the ordinance was arbitrary, oppressive and denied aliens rights to life, liberty and property, thereby violating due process and equal protection guarantees.
Petitioner’s Arguments on Appeal and the Court’s Response on Nature of the Measure
Petitioner argued that Ordinance No. 6537 was an exercise of the city’s police power—a regulatory measure—and therefore the rule on uniformity of taxation did not apply. The Supreme Court rejected that characterization in part. The Court treated the permit requirement as containing two distinct elements: (a) a regulatory component (the requirement to secure a permit and the Mayor’s discretion in approval), and (b) a monetary component (the P50.00 fee). The Court held the P50.00 charge to be a revenue measure in substance, not merely incidental to regulation, and concluded that the fee was being exacted primarily to raise money “under the guise of regulation.”
Equal Protection and Uniformity Analysis — Flat Fee and Classification Problems
The Court applied the principle that although classification is permissible, it must rest on real and substantial differences reasonably related to the legislation’s objective. The P50.00 flat fee applied identically to all aliens without regard to status (casual vs. permanent, part‑time vs. full‑time, lowly employee vs. highly paid executive) and therefore failed to account for substantial differences among those taxed. Because the monetary requirement operated as a revenue measure and was imposed indiscriminately, the Court found it unreasonable and violative of the rule of uniformity in taxation and the equal protection component of the constitutional scheme.
Delegation, Lack of Standards, and Due Process Concerns
Beyond the revenue characterization, the Court held the ordinance defective for failing to prescribe standards to guide and limit the Mayor’s discretion in issuing permits. The ordinance neither articulated a policy objective nor set criteria or conditions for grant or refusal, thereby conferring arbitrary and unrestricted power on the Mayor. Relying on precedent, the Court emphasized that where an ordinance lacks standards guiding administrative discretion, it constitutes an unlawful delegation of legislative power and runs afoul of due process. The Court also reasoned that conditioning employment on a mayoral permit susceptible to arbitrary denial effectively deprived an alien of a means of livelihood without due process; consti
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Case Citation and Panel
- 175 Phil. 443 EN BANC; G.R. No. L-29646; Decision rendered November 10, 1978.
- Opinion by Justice Fernandez.
- Justices Barredo, Makasiar, Munoz Palma, Santos, and Guerrero concur.
- Chief Justice Castro, Justices Antonio and Aquino concur in the result.
- Justice Fernando concurs in the result (relying primarily on the ultra vires character of the ordinance and expressing conformity with Justice Teehankee’s concurring opinion).
- Justice Teehankee files a separate concurring opinion.
- Justice Concepcion, Jr. takes no part.
Parties, Case Number and Trial Court
- Petitioner: Mayor Antonio J. Villegas of the City of Manila.
- Private respondent: Hiu Chiong Tsai Pao Ho.
- Respondent judge: Francisco Arca, Judge of the Court of First Instance of Manila, Branch I.
- Trial court docket: Civil Case No. 72797, Court of First Instance of Manila, Branch I.
- Relief sought in trial court: writ of preliminary injunction and judgment declaring Ordinance No. 6537 null and void.
Relevant Ordinance — Title and Nature
- Title of Ordinance No. 6537: "AN ORDINANCE MAKING IT UNLAWFUL FOR ANY PERSON NOT A CITIZEN OF THE PHILIPPINES TO BE EMPLOYED IN ANY PLACE OF EMPLOYMENT OR TO BE ENGAGED IN ANY KIND OF TRADE, BUSINESS OR OCCUPATION WITHIN THE CITY OF MANILA WITHOUT FIRST SECURING AN EMPLOYMENT PERMIT FROM THE MAYOR OF MANILA; AND FOR OTHER PURPOSES."
- Ordinance No. 6537 passed by the Municipal Board of Manila on February 22, 1968, and signed by Mayor Antonio J. Villegas on March 27, 1968.
Ordinance Text (as provided in the source)
- Section 1 (as quoted):
- "It shall be unlawful for any person not a citizen of the Philippines to be employed in any kind of position or occupation or allowed directly or indirectly to participate in the functions, administration or management in any office, corporation, store, restaurant, factory, business firm, or any other place of employment either as consultant, adviser, clerk, employee, technician, teacher, actor, actress, acrobat, singer or other theatrical performer, laborer, cook, etc., whether temporary, casual, permanent or otherwise and irrespective of the source or origin of his compensation or number of hours spent in said office, store, restaurant, factory, corporation or any other place of employment, or to engage in any kind of business and trade within the City of Manila, without first securing an employment permit from the Mayor of Manila, and paying the necessary fee therefor to the City Treasurer: PROVIDED, HOWEVER, That persons employed in diplomatic and consular missions of foreign countries and in technical assistance programs agreed upon by the Philippine Government and any foreign government, and those working in their respective households, and members of different congregations or religious orders of any religion, sect or denomination, who are not paid either monetarily or in kind shall be exempted from the provisions of this Ordinance."
- Section 4 (as quoted):
- "Any violation of this Ordinance shall, upon conviction, be punished by imprisonment of not less than three (3) months but not more than six (6) months or by a fine of not less than one hundred pesos (P100.00) but not more than two hundred pesos (P200.00), or by both such fine and imprisonment, in the discretion of the Court: PROVIDED, HOWEVER, That in case of juridical persons, the President, the Vice-President or the person in charge shall be liable."
Facts (chronology and material facts)
- Ordinance No. 6537 enacted by the Municipal Board of Manila on February 22, 1968; signed by Mayor Villegas on March 27, 1968.
- Ordinance requires non-citizens to secure an employment permit from the Mayor of Manila and to pay a permit fee of P50.00, with enumerated exemptions.
- Penal sanctions provided for violations (see Section 4).
- On May 4, 1968, private respondent Hiu Chiong Tsai Pao Ho, an alien employed in Manila, filed Civil Case No. 72797 in the CFI of Manila, Branch I, seeking a writ of preliminary injunction and a judgment declaring Ordinance No. 6537 null and void.
- On May 24, 1968, respondent Judge Francisco Arca issued a writ of preliminary injunction.
- On September 17, 1968, Judge Arca rendered judgment declaring Ordinance No. 6537 null and void and making the preliminary injunction permanent (dispositive portion quoted in the petition).
- On March 27, 1969, Mayor Antonio J. Villegas filed the present petition for certiorari contesting the trial court’s decision.
Relief Sought and Trial Court Disposition
- Petitioner sought review via certiorari of the CFI decision of September 17, 1968 (Civil Case No. 72797).
- Trial court disposition (as quoted): "WHEREFORE, judgment is hereby rendered in favor of the petitioner and against the respondents, declaring Ordinance No. 6537 of the City of Manila null and void. The preliminary injunction is hereby made permanent. No pronouncement as to cost. SO ORDERED. Manila, Philippines, September 17, 1968. (SGD.) FRANCISCO ARCA Judge."
Grounds and Arguments of Private Respondent (as pleaded in trial court)
- Ordinance No. 6537, as a revenue measure imposed on aliens employed in the City of Manila, is discriminatory and violates the rule of uniformity in taxation.
- As a police power measure, it makes no distinction between useful and non-useful occupations, imposes a fixed P50.00 employment permit out of proportion to the cost of registration, and fails to prescribe any standard to guide or limit the action of the Mayor, thus violating the principle against illegal delegation of legislative powers.
- Ordinance No. 6537 is arbitrary, oppressive and unreasonable, being applied only to aliens, thereby depriving them of rights to life, liberty and property and violating the due process and equal protection clauses of the Constitutio