Manila Prince Hotel v. GSIS (1997)

Manila Prince Hotel v. GSIS

G.R. No. 122156

Feb. 3, 1997

Ponente: Justice Bellosillo

Topic: Constitutional Supremacy

PARTIES:

·       Petitioner: Manila Prince Hotel

·       Respondent: GSIS, Manila Hotel Corporation, Committee on Privatization and Office of the Gov’t Corporate Counsel

FACTS:

·       Pursuant to the privatization program of the government under PD No. 50 (1986), GSIS decided to sell through public bidding 30-50% of the issued and outstanding shares of respondent Manila Hotel Corporation (MHC).

·       In the public bidding, only 2 participated: Manila Prince Hotel Corporation (Filipino) which offered to buy 51% of the MHC at P41.58 per share, and Renong Berhad (Malaysian), which bid for the same number of shares at P44.00 (more than the bid of the petitioner.

·       Pending declaration of Renong Berhand as the winning bidder, the petitioner matched the bid price of P44.0 per share tendered by Renong Berhad.

·       On 1995, perhaps apprehensive that GSIS has disregarded the tender of the matching bid, filed a petition on prohibition and mandamus to the SC. The SC issued a TRO enjoining GSIS from perfecting the sale to Renong.

·       Petitioners invoke Sec. 10 Par. 2 Art. XII of the Constitution.

RELEVANT PROVISION

·       Sec. 10, Part. 2, Art. XII of the 1987 Constitution, “Filipino First Policy” – “in the grant of rights, privileges and concessions covering the national economy and patrimony, the State shall give preference to qualified Filipinos.”

ISSUE/S:

·       W/N Sec. 10 Par. 2 of Art. XII is self-executing provision or merely a statement of principle and policy.

RULING

·       Respondents are directed to cease and desist from selling 51% of the shares of the MHC to Renong Berhad and to accept the matching bid of the petitioner.

RATIONALE

·       Sec. 10 Par. 2, Art. XII is a mandatory, positive command which is complete in itself and which needs no further guidelines or implementing laws or rules for its enforcement.  It is per se judicially enforceable.

·       When our Constitution mandates that “in the grant of rights, privileges and concessions covering national economy and patrimony, the State shall give preference to qualified Filipinos,” it means that qualified Filipinos shall be preferred.

·       National Patrimony – in its plain and ordinary meaning, the term “patrimony” pertains to heritage. When the Constitution speaks of “national patrimony,” it refers not only to the natural resources of the PH but also the cultural heritage of the Filipinos.

o   Manila Hotel has become a landmark, a living testimonial of PH Heritage. It was called Cultural Center of the 1930’s. For more than 8 decades, it has been a witness to the triumphs and failures, loves and frustrations of the Filipinos, thus becoming part of our national patrimony and economy.

·       Anyone who acquires/owns the 51% will have actual control and management of the hotel.

·       Adhering to the doctrine of constitutional supremacy, the subject constitutional provision is, as it should be, impliedly written in the bidding rules issued by respondent GSIS, lest the bidding rules be nullified for being violative of the Constitution. It is a basic principle in constitutional law that all laws and contracts must conform with the fundamental law of the land. Those which violate the Constitution lose their reason for being.

DOCTRINE:

·       Definition of a constitution – “a system of fundamental laws for the governance and administration of a nation. It is supreme, imperious, absolute and unalterable except by the authority from which it emanates. It has been defined as the fundamental and paramount law of the nation.

·       Doctrine of Constitutional Supremacy – “if a law or contract violates any norm of the constitution that law or contract whether promulgated by the legislative or by the executive branch or entered into by private persons for private purposes is null and void and without any force and effect. Thus, since the Constitution is the fundamental, paramount and supreme law of the nation, it is deemed written in every statute and contract.

o   “In case of doubt, the Constitution should be considered self-executing rather than non-self-executing unless the contrary is clearly intended.

Ichong v. Hernandez (1957)

Ichong v. Hernandez

No. L-7995

May 31, 1957

Ponente: Justice Labrador

Topic: Police Power

PARTIES:

·       Petitioner: Lao Ichong (on his behalf and in behalf of other alien residents, corporations and partnerships adversely affected by RA. No. 1180

·       Respondent: Jaime Hernandez (Secretary of Finance), Marcelino Sarmiento (City Treasurer of Manila)

FACTS:

·       The main provisions of RA No. 1180 “An Act to Regulate the Retail Business” are: (1) prohibition  against persons, not citizens of the PH, and against associations, partnerships or corporations the capital of which are not wholly owned by citizens of the PH, from engaging directly or indirectly in the retail trade; (2) the forfeiture of licenses (to engage in the retail business) for violation of the laws on nationalization, economic control weights and measures and labor and other laws relating to trade, commerce and industry.

·       Ichong (for and in his own behalf and on behalf of other alien residents, corporations and partnerships adversely affected by the provisions of RA 1180, filed a complaint to obtain a judicial declaration that said act is unconstitutional and to enjoin the Sec of Finance and all other persons under him, from enforcing the provisions. The petitioner argues:

o   The act denies to alien residents the equal protection of laws and deprives them of their liberty and property without due process of law.

·       The respondents, through the SolGen, contend that: (1) the act was passed in the valid exercise of police power of the State, which exercise is authorized in the Constitution in the interest of national economic survival.

RULING:

·       Petition is DENIED.

RATIONALE:

·       The disputed law was enacted to remedy a real actual threat and danger to national economy posed by alien dominance and control of the retail business.

·       Using the test of reasonableness, the law’s objective to remove and eradicate foreign economic domination is one of the noblest motives that a national legislature may pursue. The attainment of a legitimate aspiration of a people can never be beyond the limits of legislative authority.

·       Using the test of “lawful means” – the seriousness of the Legislature’s concern as manifested in the approval of the radical measure is fully justified. It would have been cowardly to its duties towards the country and its people to refuse or neglect to adopt a remedy commensurate with the demands of public interest and survival.

·       There is a general feeling on the part of the public, which appears to be true to fact, about the controlling and dominant position that the alien retailer holds in the nation’s economy. There cannot be any question about the importance of the retailer in the life of the community.

·       The enactment clearly falls within the scope of the police power of the States, thru which and by which it protects its own personality and insures its security and future; that the law does not violate the equal protection clause because sufficient grounds exist for the distinction between alien and citizen in the exercise of the occupation regulated, nor the due process clause because the law is prospective in operation and recognizes the privilege of aliens already engaged in the occupation.

·       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. However, that matter falls within the scope of legislative authority.

DOCTRINE:

·       There is no question that the Act was approved in the exercise of police power. It has been said that police power is so far-reaching in scope, that it has become almost impossible to limit its sweep. As it derives its existence from the very existence of the State itself, it does not need to be expressed or defined in its scope; it is said to be co-extensive with self-protection and survival, and as such it is the most positive and active of all governmental processes, the most essential, insistent and illimitable.

·       As we cannot foresee the needs and demands of public interest and welfare in this constantly changing and progressive world, so we cannot delimit beforehand the extent or scope of police power by which and through which the State seeks to attain or achieve public interest or welfare. Police power and the guarantees of due process and equal protection of laws are supposed to coexist. The police power legislation must be firmly grounded on public interest and welfare, and a reasonable relation must exist between purposes and means.

Limitations on Police Power:

1.      Due process – The reasonableness of legislation enacted in pursuance of the police power.

a.      Is there public interest, a public purpose; is public welfare involved?

b.      Is the act reasonably necessary for the accomplishment of the legislature’s purpose; is it not unreasonable, arbitrary or oppressive?

2.      Equal protection – against undue favor and individual or class privilege, as well as hostile discrimination or the oppression of inequality. It merely requires that all persons shall be treated a like, under like circumstances and conditions both as to privileges conferred and liabilities enforced.