PIL#7 G.R. No. L-7995, May 31, 1957
PIL#7 G.R. No. L-7995, May 31, 1957
L-7995, May 31, 1957 indirectly in the retail trade; (2) an exception from the above prohibition in
favor of aliens actually engaged in said business on May 15, 1954, who
LAO H. ICHONG, IN HIS OWN BEHALF AND IN BEHALF OF OTHER
ALIEN RESIDENTS, CORPORATIONS AND PARTNERSHIPS are allowed to continue to engage therein, unless their licenses are forfeited
ADVERSELY AFFECTED BY REPUBLIC ACT NO. 1180, PETITIONER, in accordance with the law, until their death or voluntary retirement in case of
VS. JAIME HERNANDEZ, SECRETARY OF FINANCE, AND MARCELINO natural persons, and for ten years after the approval of the Act or until the
SARMIENTO, CITY TREASURER OF MANILA, RESPONDENTS.
expiration of term in case of juridical persons; (3) an exception therefrom in
LABRADOR, J.: favor of citizens and juridical entities of the United States; (4) a provision for
the forfeiture of licenses (to engage in the retail business) for violation of the
laws on nationalization, economic control weights and measures and labor
I. The case and the issue, in general and other laws relating to trade, commerce and industry; (5) a prohibition
against the establishment or opening by aliens actually engaged in the retail
This Court has before it the delicate task of passing upon the validity and business of additional stores or branches of retail business, (6) a provision
constitutionality of a legislative enactment, fundamental and far-reaching requiring aliens actually engaged in the retail business to present for
in significance. The enactment poses questions of due process, police registration with the proper authorities a verified statement concerning
power and equal protection of the laws. It also poses an important issue of their businesses, giving, among other matters, the nature of the business,
fact, that is whether the conditions which the disputed law purports to their assets and liabilities and their offices and principal offices of juridical
remedy really or actually exist. Admittedly springing from a deep, militant, entities; and (7) a provision allowing the heirs of aliens now negated in the
and positive nationalistic impulse, the law purports to protect citizen and retail business who die, to continue such business for a period of six
country from the alien retailer. Through it, and within the field of economy months for purposes of liquidation,
it regulates, Congress attempts to translate national aspirations for economic
independence and national security, rooted in the drive and urge for national III. Grounds upon which petition is based—Answer thereto
survival and welfare, into a concrete and tangible measures designed to free
the national retailer from the competing dominance of the alien, so that the Petitioner, for and in his own behalf and on behalf of other alien residents,
country and the nation may be free from a supposed economic corporations and partnerships adversely affected by the provisions of
dependence and bondage. Do the facts and circumstances justify the Republic Act No. 1180, brought this action to obtain a judicial declaration
enactment? that said Act is unconstitutional, and to enjoin the Secretary of Finance
and all other persons acting under him, particularly city and municipal
II. Pertinent 'provisions of Republic Act No. 1180 treasurers, from enforcing its provisions. Petitioner attacks the
constitutionality of the Act, contending that: (1) it denies to alien residents the
Republic Act No. 1180 is entitled "An Act to Regulate the Retail Business." equal protection of the laws and deprives them of their liberty and property
In effect it nationalizes the retail trade business. The main provisions of the without due process of law; (2) the subject of the Act is not expressed or
Act are: (1) a prohibition against persons, not citizens of the Philippines, and comprehended in the title thereof; (3) the Act violates international and
against associations, partnerships, or corporations the capital of which are treaty obligations of the Republic of the Philippines; (4) the provisions of the
not wholly owned by citizens of the Philippines, from engaging directly or Act against the transmission by aliens of their retail business thru
hereditary succession, and those requiring 100% Filipino capitalization for under a modern democratic framework where the demands of society and of
a corporation or entity to entitle it to engage in the retail business, violate nations have multiplied to almost unimaginable proportions; the field and
the spirit of Sections 1 and 5, Article XIII and Section 8 of Article XIV of scope of police power has become almost boundles3, just as the fields of
the Constitution. In answer, the Solicitor-General and the Fiscal of the City public interest and public welfare have become almost all-embracing and
of Manila contend that: (1) the Act was passed in the valid exercise of have transcended human foresight. Otherwise stated, as we cannot
the police power of the State, which exercise is authorized in the foresee the needs and demands of public interest and welfare in this
Constitution in the interest of national economic survival; (2) the Act has constantly changing and progressive world, so we cannot delimit
only one subject embraced in the title; (3) no treaty or international beforehand the extent or scope of police power by which and through which
obligations are infringed; (4) as regards hereditary succession, only the the State seeks to attain or achieve public interest or welfare. So it is that
form is affected but the value of the property is not impaired, and the Constitutions do not define the scope or extent of the police power of the
institution of inheritance is only of statutory origin. State; what they do is to set forth the limitations thereof. The most
important of these are the due process clause and the equal protection
IV. Preliminary consideration of legal principles involved clause.
a. The police power.—There is no question that the Act was approved in the b. Limitations on police power.—The basic limitations of due process and
exercise of the police power, but petitioner claims that its exercise in this equal protection are found in the following provisions of our Constitution:
instance is attended by a violation of the constitutional requirements of due "SECTION 1.(1) No person shall be deprived of life, liberty or property
process and equal protection of the laws. But before proceeding to the without due process of law, nor shall any person be denied the equal
consideration and resolution of the ultimate issue- involved, it would be well protection of the laws." (Article III, Phil. Constitution)These constitutional
to bear in mind certain basic and fundamental, albeit preliminary, guarantees which embody the essence of individual liberty and freedom in
considerations in the determination of the ever recurrent conflict between democracies, are not limited to citizens alone but are admittedly universal in
police power and the guarantees of due process and equal protection of the their application, without regard to any differences of race, of color, or of
laws. What is the scope of police power, and how are the due process nationality. (Yick Wo vs. Hopkins, SO, L. ed. 220, 226.)
and equal protection clauses related to it V What is the province and power c. The equal protection clause.—
of the legislature, and what is the function and duty of the courts? These The equal protection of the law clause is against undue favor and individual
consideration must be clearly and correctly understood that their or class privilege, as well as hostile discrimination or the oppression of
application to the facts of the case may be brought forth with clarity and the inequality. It is not intended to prohibit legislation, which is limited either in
issue accordingly resolved. the object to which it is directed or by territory within which it is to operate. It
does not demand absolute equality among residents; it merely requires
It has been said that police power is so far-reaching in scope, that it has that all persons shall be treated alike, under like circumstances and
become almost impossible to limit its sweep. As it derives its existence conditions both as to privileges conferred and liabilities enforced. The
from the very existence of the State itself, it does not need to be expressed equal protection clause is not infringed by legislation which applies only to
or defined in its scope; it is said to be co-extensive with self- protection and those persons falling within a specified class, if it applies alike to all persons
survival, and as such it is the most positive and active of all governmental within such class, and reasonable grounds exists for making" a distinction
processes, the most essential, insistent and illimitable. Especially is it so between those who fall within such class and those who do not. (2
Cooley, Constitutional Limitations, 824-825.) adopted to implement the public policy or to achieve public interest. On the
d. The due process clause.—The due process clause has to do with the other hand, courts, although zealous guardians of individual liberty and
reasonableness of legislation enacted in pursuance of the police power. Is right, have nevertheless evinced a reluctance to interfere with the exercise
there public interest, a public purpose; is public welfare involved? Is the Act of the legislative prerogative. They have done so early where there has
reasonably necessary for the accomplishment of the legislature's purpose; been a clear, patent or palpable arbitrary and unreasonable abuse of the
is it not unreasonable, arbitrary or oppressive? Is. there sufficient legislative prerogative. Moreover, courts are not supposed to override
foundation or reason in connection with the matter involved ; or has there legitimate policy, and courts never inquire into the wisdom of the law.
not been a capricious use of the legislative power? Can the aims conceived V. Economic problems sought to be remedied
be achieved by the means used, or is it not merely an unjustified With the above considerations in mind, we will now proceed to delve
interference with private interest? These are the questions that we ask directly into the issue involved. If the disputed legislation were merely a
when the due process test is applied. regulation, as its title indicates, there would be no question that it falls
within the legitimate scope of legislative power. But it goes further and
The conflict, therefore, between police power and the guarantees of due prohibits a group of residents, the aliens, from engaging therein. The
process and equal protection of the laws is more apparent than real. problem becomes more complex because its subject is a common, trade or
Properly related, the power and the guarantees are supposed to coexist. occupation, as old as society itself, which from time immemorial has always
The balancing is the essence or, shall it be said, the indispensable means been open to residents, irrespective of race, color or citizenship.
for the attainment of legitimate aspirations of any democratic society. a. Importance of retail trade in the economy of the nation.—In a primitive
There can be no absolute power, whoever exercise it, for that would be economy where families produce all that they consume and consume all that
tyranny. Yet there can neither be absolute liberty, for that would mean they produce, the dealer, of course, is unknown. But as group life develops
license and anarchy. So the State can deprive persons of life, liberty and and families begin to live in communities producing more than what they
property, provided there is due process of law; and persons may be consume and needing an infinite number of things they do not produce,
classified into classes and groups, provided everyone is given the equal the dealer comes into existence.
protection of the law. The test or standard, as always, is reason. The
police power legislation must be firmly grounded on public interest and As villages develop into big communities and specialization in production
welfare, and a reasonable relation must exist between purposes and begins, the dealer's importance is enhanced. Under modern conditions and
means. And if distinction and classification has been made, there must be standards of living, in which man's needs have multiplied and diversified to
a reasonable basis for said distinction. unlimited extents and proportions, the retailer comes as essential as the
e. Legislative discretion not subject to judicial review.—Now, in this matter of producer, because thru him the infinite variety of articles, goods and
equitable balancing1, what is the proper place and role of the courts? It must commodities needed for daily life are placed within the easy reach of
not be overlooked, in the first place, that the legislature, which is the consumers. Retail dealers perform the functions of capillaries in the
constitutional repository of police power and exercises the prerogative of human body, thru which all the needed food and supplies are ministered to
determining the policy of the State, is by force of circumstances primarily the members of the communities comprising the nation.
judge of necessity, adequacy or reasonableness and wisdom, of any law
promulgated in the exercise of the police power, or of the measures There cannot be any question about the importance of the retailer in the life
of the community. He ministers to the resident's daily needs, food in all its
increasing forms, and the various little gadgets and things needed for Petitioner denies that there is alien predominance and control in the retail
home and daily life. He provides his customers around his store with the trade. In one breath it is said that the fear is unfounded and the threat is
rice or corn, the fish, the salt, the vinegar, the spices needed for the daily imagined; in another, it is charged that the law is merely the result of
cooking. He has cloths to sell, even the needle and the thread to sew racialism and pure and unabashed nationalism. Alienage, it is said, is not an
them or darn the clothes that wear out. The retailer, therefore, from the element of control; also so many unmanageable factors in the retail
lowly peddler, the owner of a small sari-sari store, to the operator of a business make control virtually impossible. The first argument which brings
department store or a supermarket is so much a part of day-to-day up an issue of fact merits serious consideration. The others are matters of
existence. opinion within the exclusive competence of the legislature and beyond our
b. The alien retailer's, traits.—The alien retailer must have started plying prerogative to pass upon and decide.
his trade in this country in the bigger centers of population (Time there was
when he was unknown in provincial towns and villages). Slowly but The best evidence are the statistics on the retail trade, which put down the
gradually he invaded towns and villages; now he predominates in the cities figures in black and white. Between the constitutional convention year
and big centers of population. He even pioneers in far away nooks where (1935), when the fear of alien domination and control of the retail trade
the beginnings of community life appear, ministering to the daily needs of already filled the minds of our leaders with fears and misgivings, and the
the residents and purchasing their agricultural produce for sale in the year of the enactment of the nationalization of the retail trade act (1954),
towns. It is an undeniable fact that in many communities the alien has official statistics unmistakably point out to the ever-increasing dominance
replaced the native retailer. He has shown in this trade, industry without and control by the alien of the retail trade, as witness the following tables:
limit, and the patience and forbearance of a slave. Derogatory epithets are
Assets Gross Sales
hurled at him, but he laughs these off without murmur; insults of ill-bred and Year and Retailer's Nationality No. Pesos Per cent Distribution Pesos Per cent
insolent neighbors and customers are made in his face, but he heeds -Establishme Distribution
nts
them not, and he forgets, and forgives. The community takes no note of 1941:
Filipino ............... 106,671 200,323,138 55.82 174,181,924 5174
Chinese .............. 15,356 118,348,692 32.98 148,8.13,239 44.21
him, as he appears to be harmless and extremely useful. Others ................ 1,646 40,187,090 11.20 13,630,289 4.05
c. Alleged alien control and dominance.—There is a general feeling on the 1947:
Filipino .............. 111,107 208,658,946 65.05 279,583,888 57.03
part of the public, which appears to be true to fact, about the controlling and Chinese ................ 13,774 106,156,218 33.56 205,701,134 41.96
Otters ................ 354 8,761,260 ..49 4,927,168 1.01
dominant position that the alien retailer holds in the nation's economy. Food
1948: (Census)
and other essentials, clothing, almost all articles of daily life reach the Filipino.............. 118,681 213,842,264 67.30 467,161,667 60.51
Chinese.............. 12,087 93,155,459 29.38 294,894,227 38.20
residents mostly through him. In big cities and centers of population he Others.................. 422 10,514,675 3.32 9,995,402 1.29
has acquired not only predominance, but apparent control aver distribution 1949:
of almost all kinds of goods, such as lumber, hardware, textiles, groceries,
Filipino ..............
Chinese ..............
113,659 213,461,602
16,248 125,223,886
60.30
35.72
462,532,901
392,414,876
53.47
45.36
Others ................ 486 12,066,365 3.39 10,078,364 1.17
drugs, sugar, flour, garlic, and scores of other goods and articles. And
1951:
were it not for some national corporations like the Naric, the Namarco, the
Filipino ................ 119,362 224,053,620 61.09 466,058,052 53.07
Facomas and the Accfa, his control over principal foods and products Chinese .............. 17,429 134,325,303 36.60 404,481,384 46.06
Others ............... 347 8,614,026 2.31 7,645,327 .87
would easily become full and complete.
AVERAGE
ASSETS AND GROSS SALES PER ESTABLISHMENT
Item Gross Sales
It is this domination and control, which we believe has been sufficiently
Year and Retailer's Assets (Pesos)
Nationality (Pesos) shown to exist, that is the legislature's target in the enactment of the
1941:
Filipino .............................................................................. 1,878 1,638 disputed nationalization law. If they did not exist as a fact the sweeping
Chinese................................................................................ 7,707 9,691
Others..................................................................................
1947:
24,416 8,281 remedy of nationalization would never have been adopted. The framers
Filipino................................................................................ 1,878 2,516
Chinese ................................................................................ 7,707 14,934 of our Constitution also believed in the existence of this alien dominance
Others ................................................................................. 24,749 13,919
1948: (Census) and control when they approved a resolution categorically declaring among
Filipino................................................................................ 1,878 4,111
Chinese ................................................................................ 7,707 24,398 other things, that "it is the sense of the Convention that the public interest
Others.................................................................................. 24,916 23,686
1949:
Filipino................................................................................ 1,878 4,069
requires the nationalization of the retail trade; * * *." (II Aruego, The
Chinese ................................................................................ 7,707 24,152
Others ................................................................................ 24,807 20,737 Framing of the Philippine Constitution, 662— 663, quoted on page 67 of
1951:
Filipino................................................................................. 1,877 3,905 Petitioner.) That was twenty- two years ago; and the events since then
Chinese ................................................................................ 7,707 33,207
Others .............................................................................. 24,824 22,033 have not been either pleasant or comforting. Dean Sinco of the University
(Estimated Assets and Gross Sales of Retail Establishments, By Year and Nationality of Owners, Benchmark: 1948 Census, issued of the Philippines College of Law, commenting on the patrimony clause of
by the Bureau of Census and Statistics, Department of Commerce and Industry; pp. 18-19 of Answer.)
the Preamble opines that the fathers of our Constitution were merely
The above statistics do not include corporations and partnerships, while the translating the general preoccupation of Filipinos "of the dangers from
figures on Filipino establishments already include mere market vendors, alien interests that had already brought under their control the commercial
whose capital is necessarily small. and other economic activities of the country" (Sinco, Phil. Political Law, 10th
ed., p. 114); and analyzing the concern of the members of the constitutional
The above figures reveal that in percentage distribution of assets and of convention for the economic life of the citizens, in connection with the
gross sales, alien participation has steadily increased during the years. It is nationalistic provisions of the Constitution, he says:
true, of course, that Filipinos have the edge in the number of retailers, but "But there has been a general feeling that alien dominance over the
aliens more than make up for the numerical gap through their assets and economic life of the country is not desirable and that if such a situation
gross sales which average between six and seven times those of the should remain, political independence alone is no guarantee to national
very many Filipino retailers. Numbers in retailers, here, do not imply stability and strength. Filipino private capital is not big enough to wrest
superiority; the alien invests more capital, buys and sells six to seven from alien hands the control of the national economy. Moreover, it is but of
times more, and gains much more. The same official report, pointing out to recent formation and hence, largely inexperienced, timid and hesitant.
the known predominance of foreign elements in the retail trade, remarks Under such conditions, the government as the instrumentality of the
that the Filipino retailers were largely engaged in minor retailer enterprises. national will, has to step in and assume the initiative, if not the leadership,
As observed by respondents, the native investment is thinly spread, and in the struggle for the economic freedom of the nation in somewhat the
the Filipino retailer is practically helpless in matters of capital, credit, price" same way that it did in the crusade for political freedom. Thus * * * it (the
and supply. Constitution) envisages an organized movement for the protection of the
nation not only against the possibilities of armed invasion but also against its
d. Alien control and threat, subject of apprehension in Constitutional economic subjugation by alien interests in the economic field." (Phil.
Convention.— 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 the dangers coming influences of alien domination. Grave abuses have characterized the
from alien control, and they express sentiments of economic exercise of the retail trade by aliens. It is a fact within judicial notice,
independence. Witness thereto is Resolution No. 1, approved on July IS, which courts of justice may not properly overlook or ignore in the
1958, of the Fifth National Convention of Filipino Businessmen, and. a interests of truth and justice, that there exists a general feeling on the part
similar resolution, approved on March 20, 1954, of the Second National of the public that alien participation in the retail trade has been attended by
Convention of Manufacturers and Producers. The man in the street also a pernicious and intolerable practices, the mention of a few of which would
believes, and fears, alien predominance and control; so our newspapers, suffice for our purposes; that at some time or other they have cornered the
which have editorially pointed out not only to control but to alien market of essential commodities, like corn and rice, creating artificial
stranglehold. We, therefore, find alien domination and control to be a scarcities to justify and enhance profits to unreasonable proportions; that
fact, a reality proved by official statistics, and felt by all the sections and they have hoarded essential foods to the inconvenience and prejudice of the
groups that compose the Filipino community. consuming public, so much so that the Government has had to establish the
e. Dangers of alien control and dominance in retail.—But the dangers National Rice and Corn Corporation to save the public from their
arising from alien participation in the retail trade does not seem to lie in continuous hoarding practices and tendencies; that they have violated price
the predominance alone; there is a prevailing feeling that such control laws, especially on foods and essential commodities, such that the
predominance may truly endanger the national interest. With ample legislature had to enact a law (See. 9, Republic Act No. 1168), authorizing
capital, unity of purpose and action and thorough organization, alien their immediate and automatic deportation for price control convictions; that
retailers and merchants can act in such complete unison and concert on they have secret combinations among themselves to control prices,
such vital matters as the fixing of prices, the determination of the amount of cheating the operation of the law of supply and demand; that they have
goods or articles to be made available in the market, and even the choice of connived to boycott honest merchants and traders who would not cater or
the goods or articles they would or would not patronize or distribute, that yield to their demands, in unlawful restraint of freedom of trade and
fears of dislocation of the national economy and of the complete enterprise. They are believed by the public to have evaded tax laws,
subservience of national retailers and of the consuming public are not smuggled goods and money into and out of the land, violated import and
entirely unfounded. Nationals, producers and consumers alike, can be export prohibitions, control laws and the like, in derision and contempt of
placed completely at their mercy. This is easily illustrated. Suppose an lawful authority. It is also believed that they have engaged in corrupting
article of daily use is desired to be prescribed by the aliens, because the public officials with fabulous bribes, indirectly causing the prevalence of
producer or importer does not offer them sufficient profits, or because a new graft and corruption in the Government. As a matter of fact appeals to
competing article offers bigger profits for its introduction. All that aliens unscrupulous aliens have been made both by the Government and by their
would do is to agree to refuse to sell the first article, eliminating it from their own lawful diplomatic representatives, action which impliedly admits a
stocks, offering the new one as a substitute. Hence, the producers or prevailing feeling about the existence of many of the above practices.
importers of the prescribed article, or its consumers, find the article suddenly
out of circulation. Freedom of trade is thus curtailed and free enterprise The circumstances above set forth create well founded fears that worse
correspondingly suppressed. things may come in the future. The present dominance of the alien
retailer, especially in the big' centers of population, therefore, becomes a
We can even go farther than theoretical illustrations to show the pernicious potential source of danger on occasions of war or other calamity. We do
not have here in this country isolated groups of harmless aliens retailing shown such utter disregard for his customers and the people on whom he
goods among nationals ; what we have are well organized and powerful makes his profit, that it has been found necessary to adopt the legislation,
groups that dominate the distribution of goods and commodities in the radical as it may seem.
communities and big centers of population. They owe no allegiance or loyalty
to the State, and the State cannot rely upon them in times of crisis or Another objection to the alien retailer in this country is that he never really
emergency. While the national holds his life, his person and his property makes a genuine contribution to national income and wealth. He
subject to the needs of his country, the alien may even become the undoubtedly contributes to general distribution, but the gains and profits
potential enemy of the State. he makes are not invested in industries that would help the country's
f. Law enacted in interest of national economic survival and security.—We economy and increase national wealth. The alien's interest in this country
are fully satisfied upon a consideration of all the facts and circumstances being merely transient and temporary, it would indeed be ill-advised to
that the disputed law is not the product of racial hostility, prejudice or continue entrusting the very important function of retail distribution to his
discrimination, but the expression of the legitimate desire and determinetion hands.
of the people, thru their authorized representatives, to free the nation from
the economic situation that has •unfortunately been saddled upon it rightly The practices resorted to by aliens in the control of distribution, as already
or wrongly, to its disadvantage. The law is clearly in the interest of the pointed out above, their secret manipulations of stocks of commodities and
public, nay of the national security itself, and indisputably falls within the prices, their utter disregard of the welfare of their customers and of the
scope of police power, thru which and by which the State insures its ultimate happiness of the people of the nation of which they are mere
existence and security and the supreme welfare of its citizens. guests, which practices, manipulations and disregard do not attend the
exercise of the trade by the nationals, show the existence of real and
VI. The Equal Protection Limitation actual, positive and fundamental differences between an alien and a
a. Objections to alien participation in retail trade.—The next question that national which fully justify the legislative classification adopted in the retail
now poses solution is, Does the law deny the equal protection of the laws? trade measure. These differences are certainly a valid reason for the
As pointed out above, the mere fact of alienage is the root and cause of State to prefer the national over the alien in the retail trade.
the distinction between the alien and the national as a trader. The alien
resident owes allegiance to the country of his birth or his adopted country; We would be doing violence to fact and reality were we to hold that no
his stay here is for personal convenience; he is attracted by the lure of reason or ground for a legitimate distinction can be found between one
gain and profit. His aim or purpose of stay, we admit, is neither illegitimate and the other.
nor immoral, but he is naturally lacking in that spirit of loyalty and b. Difference in alien aims and purposes sufficient basis for distinction.—
enthusiasm for this country where he temporarily stays and makes his The above objectionable characteristics of the exercise of the retail trade
living, or of that spirit' of regard, sympathy and consideration for his by the aliens, which are actual and real, furnish sufficient grounds for
Filipino customers as would prevent him from taking advantage of their legislative classification of retail traders into nationals and aliens. Some
weakness and exploiting them. The faster he makes his pile, the earlier can may disagree with the wisdom of the legislature's classification. To this we
the alien go back to his beloved country and his beloved kin and answer, that this is the prerogative of the law-making power. Since the
countrymen. The experience of the country is that the alien retailer has Court finds that the classification is actual, real and reasonable, and all
persons of one class are treated alike, and as it cannot be said that the the Philippine Legislature was in issue, because of a condition therein
classification is patently unreasonable and unfounded, it is in duty bound limiting the ownership of vessels engaged in coastwise trade to
to declare that the legislature acted within its legitimate prerogative and it corporations formed by citizens of the Philippine Islands or the United
cannot declare that the act transcends the limit of equal protection States, thus denying the right to aliens, it was held that the Philippine
established by the Constitution. Legislature did not violate the equal protection clause of the Philippine Bill
of Rights. The Legislature in enacting the law had as ultimate purpose
Broadly speaking, the power of the legislature to make distinctions and the encouragement of Philippine shipbuilding and the safety for these
classifications among persons is not curtailed or denied by the equal Islands from foreign interlopers. We held that this was a valid exercise of
protection of the laws clause. The legislative power admits of a wide scope of the police power, and all presumptions are in favor of its
discretion, and a law can be violative of the constitutional limitation only constitutionality. In substance, we held that the limitation of domestic
when the classification is without reasonable basis. In addition to the ownership of vessels engaged in coastwise trade to citizens of the
authorities we have earlier cited, we can also refer to the case of Lindsley Philippines does not violate the equal protection of the law and due
vs. Natural Carbonic Gas Co. (1911), 55 L. ed., 369, which clearly and process of law clauses of the Philippine Bill of Rights. In rendering said
succinctly defined the application of equal protection clause to a law sought decision we quoted with approval the concurring opinion of Justice
to be voided as contrary thereto: Johnson in the case of Gibbons vs. Ogden, 9 Wheat., I, as follows:
'* * *1. the equal protection clause of the Fourteenth Amendment does not " 'Licensing acts, intact, in legislation, are universally restraining acts; as,
take from the state the power to classify in the adoption of police laws, but for example, acts licensing1 gaming houses, retailers of spirituous liquors,
admits of the exercise of the wide scope of discretion m that regard, and etc. The act, in this instance, is distinctly of that character, and forms part
avoids what is done only when it is without any reasonable basis, and of an extensive system, the object of which is to encourage American
therefore is purely arbitrary. shipping, and place them on an equal footing with, the shipping of other
nations. Almost every commercial 'nation reserves to its own subjects a
2. A classification having some reasonable basis does not offend against monopoly of its coasting trade; and a countervailing privilege in favor of
that clause merely because it is not made with mathematical nicety, or American snipping is contemplated, in the whole legislation of the United
because in practice it results in some inequality. 3. When the classification States on this subject. It is not to give the vessel an American character,
in such a law is called in question, if any state of facts reasonably can be that the license is granted; that effect has been correctly attributed to the act
conceived that would sustain it, the existence of that state of facts at the of her enrollment. But it is to confer on her American privileges, as
time the law was enacted must be assumed. 4. One who assails the contradistinguished from foreign; and to preserve the Government from
classification in such a law must carry the burden of showing that it does fraud by foreigners; in surreptitiously intruding themselves into the American
not rest upon any reasonable basis, but is essentially arbitrary.'"c. commercial marine,, as well as frauds upon the revenue in the trade
Authorities recognizing citizenship as basis for classification.—The coastwise, that this whole system is projected.' "The rule in general is as
question as to whether or not citizenship is a legal and valid ground follows:
for classification has already been affirmatively decided in this jurisdiction "Aliens are raider no special constitutional protection which forbids n
as well as in various courts in the United States. In the case of Smith Bell classification otherwise justified simply because the limitation of the class
& Co. vs. Natividad, 40 Phil, 136, where the validity of Act No. 2761 of falls along the lines of nationality. That would be requiring a higher degree
of protection for aliens as a class than for similar classes of American Winkle, 297 V. 340 (Oregon, 1924), the court said that aliens are judicially
citizens. Broadly speaking, the difference in status between citizens and known to have different interests, knowledge, attitude, psychology and
aliens constitutes a basis for reasonable classification in the exercise of loyalty, hence the prohibition of issuance of licenses to them for the business
police power," (2 Am. Jur. 468-469.)In Commonwealth vs. Hana, 81 N. E. of pawnbroker, pool, billiard, card room, dance hall, is not an infringement of
149, (Massachusetts, 1907), a statute on the licensing of hawkers and constitutional rights. In Templar vs. Michigan State Board of Examiners, 90
peddlers, which provided that no one can obtain a license unless he is, or N.W. 1058 (Michigan, 1902), a law prohibiting the licensing of aliens as
has declared his intention, to become a citizen of the United States, was barbers was held void, but the reason for the decision was the court's
held valid, for the following reason: It may seem wise to the legislature to finding that the exercise of the business by the aliens does not in any way
limit the business of those who are supposed to have regard for' the affect the morals, the health, or even the convenience of the community. In
welfare, good order and happiness of the community, and the court cannot Takahashi vs. Fish and Game Commission, 92 L. ed. 1479 (1947), a
question this judgment and conclusion. In Bloomfield vs. State, 99 N.E. California statute banning the issuance of commercial fishing licenses to
309 (Ohio, 1912), a statute which prevented certain persons, among them persons ineligible to citizenship was held void, because the law conflicts
aliens, from engaging in the traffic of liquors, was found not to be the result with Federal power over immigration, and because there is no public
of race hatred, or in hospitality, or a deliberate purpose to discriminate, interest in the mere claim of ownership' of the waters and the fish in
but was based on the belief that an alien cannot be sufficiently them, so there was no adequate justification for the discrimination. It
acquainted with 'our institutions and our life as to enable him to appreciate further added that the law was the outgrowth of antagonism toward
the relation of this particular business to our entire social fabric", and was persons of Japanese ancestry. However, two Justices dissented on the
not, therefore, invalid. In Ohio ex rel. Clarke vs. Deckebach, 274 U.S. 392, theory that fishing rights have been treated traditionally as natural
71 L. ed. 1115 (1926), the U. S. Supreme Court had under consideration an resources. In Fraser vs. McConway & Tarley Co., 82 Fed. 257
ordinance of the city of Cincinnati prohibiting the issuance of licenses (Pennsylvania, 1897), a state law which imposed a tax on every employer
(pools and billiard rooms) to aliens. It held that plainly irrational of foreign-born unnaturalized male persons over 21 years of age, was
discrimination against aliens is prohibited, but it does not follow that alien declared void because the court found that there was no reason for the
race and allegiance may not bear in some instances such a relation to a classification and the tax was an arbitrary deduction from the daily wage of
legitimate object of legislation as to be made the basis of permitted an employee.
classification, and that it could not state that the legislation is clearly wrong; d. Authorities contra explained.—It is true that some decisions of the
and that latitude must be allowed for the legislative appraisement of local Federal court and of the State courts in the United States hold that the
conditions and for the legislative choice of methods for controlling an distinction between aliens and citizens is not a valid ground for
apprehended evil. The case of State vs. Carrol, 124 N. E. 129 (Ohio, classification. But in these decisions the laws declared invalid were found
1919) is a parallel case to the one at bar. In Asakura, vs. City of Seattle, to be either arbitrary, unreasonable or capricious, or were the result or
210 P. SO (Washington, 1922), the business of pawnbroking was product of racial antagonism and hostility, and there was no question of
considered as having tendencies injuring public interest, and limiting it to public interest involved or pursued. In Yu Cong Eng vs. Trinidad, 70 L. ed.
citizens is within the scope of police power. A similar statute denying 1059 (1925), the United States Supreme Court declared invalid a Philippine
aliens the right to engage in auctioneering was also sustained in Wright vs. law making unlawful the keeping of books of account in any language other
May, L. R. A., 1915 P. 151 (Minnesota, 1914). So also in Anton vs. Van than English, Spanish or any other local dialect, but the main reasons for
the decisions are: (1) that if Chinese were driven out of business there under entirely different regimes and political systems, have not the same
would be no other system of distribution, and (2) that the Chinese1 would inspiration for the public weal, nor are they as well disposed toward the
fall prey to all kinds of fraud, because they would be deprived of their United States, as those who by citizenship, are a part of the government
right to be advised of their business and to direct its conduct. The real itself. Further enlargement, is unnecessary. I have said enough so that
reason for the decision, therefore, is the court's belief that no public benefit obviously it cannot be affirmed with absolute confidence that the Legislature
would be derived from the operation of the law and on the other hand it was without plausible reason for making the classification, and therefore
would deprive Chinese of something indispensable for carrying on their appropriate discrimination against aliens as it relates to the subject of
business. In Yick Wo vs. Hopkins, 30 L. ed. 220 (1885) an ordinance legislation. * * *."
conferring power on officials to withhold consent in the operation of VII The Due Process of Law Limitation
laundries both as to persons and place, was declared invalid, but the court a. Reasonability, the test of the limitation; determination by legislature
said that the power granted was arbitrary, that there was no reason for the decisive.—
discrimination which attended the administration and implementation of the We now come to due process as a limitation on the exercise of the police
law, and that the motive thereof was mere racial hostility. In State vs. power. It has been stated by the highest authority in the United States
Montgomery, 47 A. 165 (Maine, 1900), a law prohibiting aliens to engage that:
as hawkers and peddlers was declared void, because the discrimination "* * *. And the guaranty of due process, as has often been held, demands
bore no reasonable and just relation to the act in respect to which the only that the law shall not be unreasonable, arbitrary or capricious, and that
classification was proposed. The case at bar is radically different, and the the means selected shall, have a real and substantial relation to the subject
facts make them so. As we already have said, aliens do, not naturally sought to be attained. * * *."
possess the sympathetic consideration and regard for customers with
whom they come in daily contact, nor the patriotic desire to help bolster * * * * * * *
the nation's economy, except in so far as it enhances their profit, nor
the loyalty and allegiance which the national owes to the land. These "So far as the requirement of due process is concerned and in the absence
limitations on the qualifications of aliens have been shown on many of other constitutional restriction a state is free to adopt whatever
occasions and instances, especially in times of crisis and emergency. We economic policy may reasonably be deemed to promote public welfare,
can do no better than borrow the language of Anton vs. "Van Winkle, 297 and to enforce that policy by legislation adapted to its purposed. The
F. 340, 342, to drive home the reality and significance of the distinction courts are without authority either to declare such policy, or, when it is
between the alien and the national, thus: declared by the legislature, to override it. If the laws passed are seen to have
"* * *. It may be judicially known, however, that aliens coming into this a reasonable relation to a proper legislative purposed, and are neither
country are without the intimate knowledge of our laws, customs, and arbitrary nor discriminatory, the requirements of due process are satisfied,
usages that our own, people have. So it is likewise known that certain, and judicial determination to that effect renders a court functus officio. * * *."
classes of aliens are of different psychology from our fellow countrymen. (Nebbia vs New York, 78 L. ed. 940, 950, 957.)Another authority states the
Furthermore, it is natural and reasonable to suppose that the foreign born, principle thus:
whose allegiance is first to their own country, and whose ideals of "* * *. Too much significance cannot be given to the word 'reasonable' in
governmental environment and control have been engendered and formed considering the scope of the police power in a constitutional sense, for the
test used to determine the constitutionality of the means employed by the manner, without harm or injury to the citizens and without ultimate danger
legislature is to inquire whether the restrictions it imposes on rights secured to their economic peace, tranquility and welfare. But the Legislature has
to individuals by the Bill of Eights are unreasonable, and not whether it found, as we have also found and indicated, that the 'privilege has been so
imposes any restrictions on such rights. * * *." grossly abused by the alien, thru the illegitimate use of pernicious designs
and practices, that he now enjoys a monopolistic control of the occupation
* * * * * * * and threatens a deadly stranglehold on the nation's economy
endangering the national security in times of crisis and emergency.
"* * *. A statute to be "within this power must also be reasonable in its
operation upon the persons whom it affects, must not be for the annoyance The real question at issue, therefore, is not that posed by petitioner, which
of a particular class, and must not be unduly oppressive." (11 Am. Jur. overlooks and ignores the facts and circumstances, but this, Is the
Sec. 302, pp. 1074-1075.)In the case of Lawton vs. Steele, 38 L. ed. 385, exclusion in the future of aliens from the retail trade unreasonable, arbitrary
388, it was also held: and capricious, taking into account the illegitimate and pernicious form and
"* * *. To justify the state in thus interposing1 its authority in behalf of the manner in which the aliens have heretofore engaged therein? As thus
public, it must appear, first, that the interests of the public generally, as correctly stated the answer is clear. The law in question is deemed
distinguished from those of a particular class, require such interference; and absolutely necessary to bring about the desired legislative objective, i.e., to
second, that the means are reasonably necessary for the accomplishment of free national economy from alien control and dominance. It is not
the purpose, and not unduly oppressive upon individuals.* * *."Prata necessarily unreasonable because it affects private rights and. privileges
Undertaking Co. vs. State Board of Embalming, 104 ALR, 389, 395, fixes (11 Am. Jur. pp. 1080-1081.) The test of reasonableness of a law is the
this lest of constitutionality: appropriateness or adequacy under all circumstances of the means adopted
"In determining" whether a given act of the Legislature, passed in the to carry out its purpose into effect (Id.) Judged by this test, disputed
exercise of the police power to regulate the operation of a business, is or legislation, which is not merely reasonable but actually necessary, must be
is not constitutional, one of the first questions to be considered by the court considered not to have infringed the constitutional limitation of
is whether the power as exercised has a sufficient foundation in reason in reasonableness.
connection with the matter involved, or is an arbitrary, oppressive, and
capricious use of that power, without substantial relation to the health, The necessity of the law in question is explained in the explanatory
safety, morals, comfort, and general "welfare of the public."b. Petitioner's note that accompanied the bill, which later was enacted into law:
argument considered.—Petitioner's main argument is that retail is a "This bill proposes to regulate the retail business. Its purpose is to
common, ordinary occupation, one of those privileges long ago recognized prevent persons who are not citizens of the Philippines from having a
as essential to the orderly pursuit of happiness by free men; that it is a strangle hold upon our economic life. If the persons who control this vital
gainful and honest occupation and therefore beyond the power of the artery of our economic life are the ones who owe no allegiance to this
legislature to prohibit and penalize. This argument overlooks fact and Republic, who have no profound devotion to our free institutions, and who
reality and rests on an incorrect assumption and premise, i.e., that in this have no permanent stake in our people's welfare, we are not really the
country where the occupation is engaged in by petitioner, it has been so masters of our own destiny. All aspects of our life, even our national
engaged by him, by the alien, in an honest creditable and unimpeachable security, will be at the mercy of other people.
promulgate a law which limits to Filipino and American citizens the
"In seeking to accomplish the foregoing purpose, we do not propose to privilege to engage in the retail trade.' " (II Aruego, The Framing of the
deprive persons who are not citizens of the Philippines of their means of Philippine Constitution, 662-663, quoted on pages 66 and 67 of the
livelihood. While this bill seeks to take away from the hands of persons Memorandum for the Petitioner.)It would do well to refer to the nationalistic
who are not citizens of the Philippines a power that can bo wielded to tendency manifested in various provisions of the Constitution. Thus in the
paralyze all aspects of our national life and endanger our national security it preamble, a principal objective is the conservation of the patrimony of the
respects existing rights. nation and as corollary thereto the provision limiting to citizens of the
Philippines the exploitation, development and utilization of its natural
"The approval of this bill is ¦necessary for our national survival."If political resources. And in Section 8 of Article XIV, it is provided that "no
independence is a legitimate aspiration of a people, then economic franchise, certificate, or any other form of authorization for the operation of
independence is none the less legitimate. Freedom and liberty are not a public utility shall be granted except to citizens of the Philippines." The.
real and positive if the people are subject to the economic control and nationalization of the retail trade is only a continuance of the nationalistic
domination of others, especially if not of their own race or country. . The protective policy laid down as a primary objective of the Constitution.
removal and eradication of the shackles of foreign economic control and Can it be said that a law imbued with the same purpose and spirit
domination,, is one of the noblest motives that a national legislature may underlying many of the provisions of the Constitution is unreasonable,
pursue. It is impossible to conceive that legislation that seeks to bring it invalid and unconstitutional?
about can infringe the constitutional limitation of due process.. The
attainment of a. legitimate aspiration of a people can never be beyond the The seriousness of the Legislature's concern for the plight of the '
limits of legislative authority. nationals as manifested in the approval of the radical measure is, therefore,
c. Law expressly held by Constitutional .Convention to be within the fully justified. It would have been recreant to its duties towards the country
sphere of legislative action.—The framers of the Constitution could not and its people would it view the sorry plight of the nationals with
have intended to impose the constitutional restrictions of due process on complacency and refuse or neglect to adopt a remedy commensurate with
the attainment of such a noble motive as freedom from economic control the demands of public interest and national survival. As the repository of
and domination, thru the exercise of the police power. The fathers of the . the sovereign power of legislation, the Legislature was in duty bound to
Constitution must have given to the legislature full authority and power to face the problem and meet, through adequate measures, the danger and
enact legislation that would promote the supreme happiness of the people, threat that alien domination of retail trade poses to national economy.
their freedom and liberty. On the precise issue now before us, they d. Provisions of law not unreasonable.—.A cursory study of the provisions
expressly made their voice clear; they adopted a resolution expressing of the law immediately reveals how tolerant, how reasonable the Legislature
their belief that the legislation in question is within the scope of the has been. The law is made prospective and recognizes the right and
legislative power. Thus they declared' in their Resolution: privilege of those already engaged in the occupation to continue therein
" 'That it is the sense of the Convention that the public interest requires the during the rest of their lives; and similar recognition of the right to continue
nationalization of retail trade; but it abstains from approving the amendment is accorded associations of alians. The right or privilege is denied to
introduced by the Delegate for Manila, Mr. Araneta, and others on this matter those only upon conviction of certain offenses. In the deliberations of the
because it is convinced that the National Assembly is authorized to Court on this case, attention was called to the fact that the privilege should
not have been denied to children and heirs of aliens now engaged in the and may not readily and at first glance convey the idea of "nationalization"
retail trade. Such provision would defeat the law itself, its aims and and "prohibition", which terms express the two main purposes and
purposes. Besides, the exercise of legislative discretion is not subject to objectives of the law. But "regulate" is a broader term than either
judicial review. It is well settled that the Court will not inquire into the prohibition or nationalization. Both of these have always been included
motives of the Legislature, nor pass upon general matters of legislative within the term regulation.
judgment. The Legislature is primarily the judge of the necessity of an "Under the. title of an act to 'regulate', the sale of intoxicating liquors, the
enactment or of any of its provisions, and every presumption is in favor of Legislature may prohibit the sale of intoxicating liquors." (Sweet vs. City of
its validity, and though the Court may hold views inconsistent with the Wabash, 41 Ind., 7; quoted in page AX of Answer.)
wisdom of the law, it may not annul the legislation if not palpably in excess of
the legislative power. Furthermore, the test of the validity of a law "Within the meaning of the Constitution requiring that the subject of every act
attacked as a violation of due process, is not its reasonableness, but its, of the Legislature shall he stated in the title, the title 'To regulate the sale of
unreasonableness, and we find the provisions are not unreasonable. intoxicating liquors, etc." sufficiently expresses the subject of an act
These principles also answer various other arguments raised against the prohibiting the sale of such liquors to minors and to persons in the habit of
law, some of which are: that the law does not promote general welfare; getting intoxicated; such matters being properly included within the subject
that thousands of aliens would be thrown out of employment; that prices will of regulating the sale." (Williams vs. State, 48 Ind. 306, 308, quoted in p.
increase because of the elimination of competition; that there is no need for 42 of Answer.)
the legislation; that adequate replacement is problematical; that there may
be general breakdown; that there would be repercussions from "The word 'regulate' is of broad import, and necessarily implies some
foreigners; etc. Many of these arguments are directed against the degree of restraint and prohibition of acts usually done in connection with
supposed wisdom of the law which lies solely within the legislative the thing to be regulated. While word regulate' does not ordinarily convey
prerogative; they do not import invalidity. meaning of prohibit, there is no absolute reason why it should not have such
VIII. Alleged defect in the title of the lawA subordinate ground or reason for meaning when used in delegating police power in connection with a thing the
the alleged invalidity of the law is the claim that the title thereof is misleading best or only efficacious regulation of which involves suppression." (State
or deceptive, as it conceals the real purpose of the bill, which is to vs. Morton, 162 So. 718, 182 La. 887, quoted in p. 42 of Answer.)The
nationalize the retail business and prohibit aliens from engaging therein. general rule is for the use of general terms, in the title of a bill; it has also
The constitutional provision which is claimed to be violated in Section 21 (1) been said that the title need not be an index to the entire contents of the
of Article VI, which reads: law (I Sutherland, Statutory Construction, Sec. 4803, p. 345.) The above
"No bill which may be enacted into law shall embrace more than one subject rule was followed when the title of the Act in question adopted the more
which shall be expressed in the title of the bill."What the above provision general term "regulate" instead of "nationalize" or "prohibit". Furthermore,
prohibits is duplicity, that is, if its title completely fails to apprise the the law also contains other rules for the regulation of the retail trade, which
legislators or the public of the nature, scope and consequences of the law may not be included in the terms "nationalization" or "prohibition"; so were
or its operation (I Sutherland, Statutory Construction, Sec. 1707, p. 297.) A the title changed from "regulate" to "nationalize" or "prohibit", there would
cursory consideration of the title and the provisions of the bill fails to have been many provisions not falling within the scope of the title which
show the presence of duplicity. It is true that the term "regulate" does not would have made the Act invalid. The use of the term "regulate",
therefore, is in accord with the principle governing the drafting of statutes, Republic of China of April 18, 1947 is also claimed, to be violated by the law
under which a simple or general term should be adopted in the title, which in question. All that the treaty guarantees is equality of treatment to the
would include all other provisions found in the body of the Act. Chinese nationals "upon the same terms as the nationals of any other
country." But the nationals of China are not discriminated against because
One purpose of the constitutional directive that the subject of a bill should be nationals of all other countries, except those of the United States, who are
embraced in its title is to apprise the legislators of the purposes, the nature granted special rights by the Constitution, are all prohibited from engaging in
and scope of its provisions, and prevent the enactment into law of matters the retail trade. But even supposing that the law infringes upon the said
which have not received the notice, action and study of the legislators or of treaty, the treaty is always subject to qualification or amendment by a
the public. In the case at bar it cannot be claimed that the legislators have subsequent law (U. S. vs. Thompson, 258, Fed. 257, 260), and the same
not been apprised of the nature of the law, especially the nationalization and may never curtail or restrict the scope of the police power of the State
prohibition provisions. The legislators took active interest in the discussion (Palston vs. Pennsylvania, 58 L. ed. 539.)
of the law, and a great many of the persons affected by the prohibition in the
law conducted a campaign against its approval. It cannot be claimed, X. Conclusion
therefore, that the reasons for declaring the law invalid ever existed. The
objection must therefore, be overruled. Resuming what we have set forth above we hold that the disputed law was
enacted to remedy a real actual threat and danger to national economy
IX. Alleged violation of international treaties and obligations posed by alien dominance and control of the retail business and free citizens
and country from such dominance and control; that the enactment clearly
Another subordinate argument against the validity of the law is the supposed falls within the scope of the police power of the State, thru which and by
violation thereby of the Charter of the United Nations and of the Declaration which it protects its own personality and insures its security and future; that
of Human Eights adopted by the United Nations General Assembly. We find the law does not violate the equal protection clause of the Constitution
no merit in the above contention. The United Nations Charter imposes no because sufficient grounds exist for the distinction between alien and citizen
strict or legal obligations regarding the rights and freedom of their subjects in the exercise of the occupation regulated, nor the due process of law
(Hans Kelsen, The Law of the United Nations, 1951 ed. pp. 29- 32), and the clause, because the law is prospective in operation and recognizes the
Declaration of Human Rights contains nothing more than a mere privilege of aliens already engaged in the occupation and reasonably
recommendation, or a common standard of achievement for all peoples and protects their privilege; that the wisdom and efficacy of the law to carry out
all nations (Id. p. 39.) That such is the import of the United Nations Charter its objectives appear to us to be plainly evident—as a matter of fact it seems
aid of the Declaration of Human Rights can be inferred from the fact that not only appropriate but actually necessary—and that in any case such
members of the United Nations Organization, such as Norway and matter falls within the prerogative of the Legislature, with whose power and
Denmark, prohibit foreigners from engaging in retail trade, and in most discretion the Judicial department of the Government may not interfere;
nations of the world laws against foreigners engaged in domestic trade are that the provisions of the law are clearly embraced in the title, and this
adopted. suffers from no duplicity and has not misled the legislators or the segment
of the population affected; and that it cannot be said to be void for supposed
The Treaty of Amity between the Republic of the Philippines and the conflict with treaty obligations because no treaty has actually been entered
into on the subject and the police power may not be curtailed or
surrendered by any treaty or any other conventional agreement.
Some members of the Court are of the opinion that the radical effects of
the law could have been made less harsh in its impact on the aliens. Thus
it is stated that more time should have been given in the law for the
liquidation of existing businesses when the time comes for them to dose.
Our legal duty, however, is merely to determine if the law falls within the
scope of legislative authority and does not transcend the limitations of due
process and equal protection guaranteed in the Constitution. Remedies
against the harshness of the law should be addressed to the Legislature;
they are beyond our power and jurisdiction.