Allied Broadcasting Center, Inc. vs. Republic of the Philippines

A petition seeking a declaration that a presidential decree is unconstitutional is a petition for declaratory relief that must be brought before the Regional Trial Court, not the Supreme Court, even if only questions of law are involved; judicial review cannot be exercised in vacuo. A party that complies with the decree without protest and fails to challenge it is estopped from later assailing its constitutionality.

Petitioner Allied Broadcasting Center, Inc. held a legislative franchise under Republic Act No. 3001 to construct, maintain, and operate radio broadcasting stations. Section 10 of that franchise made it subject to amendment, alteration, or repeal by Congress when public interest required. Presidential Decree No. 576-A regulated ownership and operation of radio and television stations, imposing limits on the number of stations that may be owned or operated and providing for divestiture and termination of broadcast franchises. Respondents are the Republic of the Philippines, the Department of Transportation and Communications, and the National Telecommunications Commission.

On January 19, 1960, Republic Act No. 3001 was passed granting petitioner Allied Broadcasting Center, Inc. the permit or franchise to construct, maintain, and operate radio broadcasting stations in the Philippines. Petitioner constructed, maintained, and operated ten radio broadcasting stations all over the country. Through these stations, petitioner provided adequate public service that enabled the government to reach the population on important public issues and assist the government in programs relating to public information and education. Its radio stations had never been used for broadcasting obscene or indecent language or speech, for disseminating misleading information or willful misrepresentation, to the detriment of public health, or to incite, encourage, or assist in subversion or treasonable acts. Under Section 10 of Republic Act No. 3001, petitioner’s franchise or permit was subject to amendment, alteration, or repeal by Congress when public interest required.

On November 11, 1974, Presidential Decree No. 576-A, entitled “Decree Regulating The Ownership And Operation Of Radio And Television Stations And For Other Purposes,” was issued and published in the December 2, 1974 supplemental issue of the Official Gazette. Sections 3, 4, 5, and 6 of the decree provided that no person or corporation may own, operate, or manage more than one radio or television station in one municipality or city, nor more than five AM and FM radio stations, nor more than five television channels in the entire country, and that no radio or television station shall be utilized by any single-interest group to disseminate information or otherwise influence the public or the government to serve or support the ends of such group. Any person or corporation owning more than the authorized number of stations was required to divest itself of the excess stations, which were to be sold through the Board of Communications, not later than December 31, 1981, and thereafter within one year from discovery of the offense. Failure to divest would subject the person or corporation to cancellation of the franchise of every excess station and confiscation of the station and its facilities without compensation, in addition to penalties under Section 6. Section 6 also provided that all franchises, grants, licenses, permits, certificates, or other forms of authority to operate radio or television broadcasting systems would terminate on December 31, 1981; thereafter, irrespective of any such authority, no radio or television station could operate without the authority of the Board of Communications and the Secretary of Public Works and Communications or their successors, who had the right and authority to assign frequencies, channels, or other means of identifying broadcast systems, subject to appeal to the Office of the President within fifteen days from receipt of the decision.

Pursuant to Section 6, all franchises, grants, licenses, permits, certificates, or other forms of authority to operate radio or television broadcasting systems/stations, including petitioner’s franchise or permit under Republic Act No. 3001, were deemed terminated or revoked effective December 31, 1981. Petitioner was thus left with only three radio stations located in Iloilo City, Bacolod City, and Roxas City. Petitioner alleged that the decree caused it great and irreparable damage because (a) it divested petitioner of its franchise without due process of law and forced it to divest itself of some radio stations; (b) it deprived petitioner of its right to further construct, maintain, and operate radio broadcasting stations in other cities or municipalities; (c) it deprived petitioner of its right to avail of loan facilities or renew existing loan availments from banks or financial institutions to expand and continue its radio broadcasting business; and (d) petitioner suffered loss of income.

Petitioner therefore filed the present petition to declare Presidential Decree No. 576-A unconstitutional and null and void ab initio. The petition raised four grounds: the issuance of the decree summarily terminating petitioner’s franchise or permit on December 31, 1981 constituted an unlawful taking or deprivation of its property rights without due process of law and/or payment of just compensation; the issuance of the decree forced petitioner to divest itself of some radio stations and the termination of its congressional franchise violated or impaired petitioner’s or the people’s right or freedom of speech, expression, and/or of the press; the forced divestiture and arbitrary termination of its congressional franchise constituted an unlawful impairment of the obligation of contract between the State and petitioner; and the issuance of the decree restricting petitioner or any other person or entity to operate a certain number of radio or television stations in one city or municipality, or in the entire country, and terminating petitioner’s congressional franchise constituted an unlawful restraint of trade.

• Due Process and Just Compensation: Petitioner argued that the issuance of Presidential Decree No. 576-A summarily terminating its franchise or permit on December 31, 1981 constituted an unlawful taking or deprivation of its property rights (franchise or permit) without due process of law and/or payment of just compensation.
• Freedom of Speech, Expression, and Press: Petitioner argued that the decree forced it to divest itself of some radio stations and that the termination of its congressional franchise violated or impaired its or the people’s right or freedom of speech, expression, and/or of the press.
• Impairment of Contract: Petitioner argued that the forced divestiture and arbitrary termination of its congressional franchise constituted an unlawful impairment of the obligation of contract between the State and petitioner.
• Restraint of Trade: Petitioner argued that the decree’s restrictions on the number of radio or television stations a person or entity may operate in one city or municipality, or in the entire country, and the termination of its congressional franchise constituted an unlawful restraint of trade.
• Prohibition as Remedy: Petitioner alleged that its petition should be treated as a petition for prohibition.

• Jurisdiction Over Declaratory Relief: Whether the Supreme Court has original jurisdiction over a petition seeking a declaration that Presidential Decree No. 576-A is unconstitutional, where the petition is in the nature of declaratory relief.
• Actual Case or Controversy: Whether there is an actual case or controversy involving Presidential Decree No. 576-A that warrants the exercise of judicial review.
• Estoppel by Acquiescence: Whether petitioner is estopped from challenging Presidential Decree No. 576-A after complying with its divestiture requirements without protest and failing to challenge the decree since it took effect.
• Prohibition as Procedural Vehicle: Whether the petition may be treated as one for prohibition and whether it is premature or improper.
• Substantive Constitutional Grounds: Whether Presidential Decree No. 576-A is unconstitutional for unlawful taking or deprivation without due process and/or just compensation, violation or impairment of freedom of speech, expression, and press, impairment of the obligation of contract, and unlawful restraint of trade.

• Jurisdiction Over Declaratory Relief: No. A petition for declaratory relief must be brought before the Regional Trial Court and is not among the petitions within the Supreme Court’s original jurisdiction even if only questions of law are involved.
• Actual Case or Controversy: No. Judicial review cannot be exercised in vacuo; no actual case or controversy existed because petitioner did not allege denial of an application, penalty, confiscation, or shutdown under Presidential Decree No. 576-A.
• Estoppel by Acquiescence: Yes. Petitioner’s compliance with the divestiture requirement without protest and its failure to challenge the decree since effectivity estopped it under the principle that one who sleeps on his rights shall not be heard to complain.
• Prohibition as Procedural Vehicle: No. The petition cannot be considered one for prohibition because it did not seek to prohibit further proceedings by a tribunal, corporation, board, or person exercising judicial or ministerial functions; it was premature, and reinstatement is an affirmative remedy not obtainable through prohibition.
• Substantive Constitutional Grounds: Not reached. The petition was dismissed on jurisdictional and justiciability grounds, so no ruling was made on the due process, free speech, impairment, or restraint-of-trade challenges.

• Jurisdiction Over Declaratory Relief: The petition sought a declaration of the unconstitutionality and/or nullity of Presidential Decree No. 576-A. As such, it had to be treated as one seeking declaratory relief under Rule 64 of the Rules of Court. Such an action should be brought before the Regional Trial Court and not before the Supreme Court. A petition for declaratory relief is not among the petitions within the original jurisdiction of the Supreme Court even if only questions of law are involved. The Court cited Section 17 of Republic Act No. 296, Section 19(b) of Batas Pambansa Blg. 129, and Alliance of Government Workers vs. Minister of Labor and Employment, 124 SCRA 1 (1983). Thus, the petition was dismissed on this score.
• Actual Case or Controversy: There was no actual case or controversy involving the law sought to be annulled. Petitioner did not allege that it had filed an application for a license to operate a radio or television station in excess of the authorized number and that the application was denied or refused on the basis of the restrictions under Presidential Decree No. 576-A. It did not allege that it had been penalized or was being penalized for a violation under the decree. It also did not allege that any of its stations had been confiscated or shut down pursuant to the decree. The constitutional challenge was therefore not raised in the context of a specific case or controversy in which petitioner asserted its rights; all it sought was the nullification of the decree and the reinstatement of its rights under Republic Act No. 3001. Judicial review cannot be exercised in vacuo. Judicial power is the right to determine actual controversies arising between adverse litigants, and the function of courts is to determine controversies between litigants and not to give advisory opinions. The power of judicial review can only be exercised in connection with a bona fide case or controversy involving the statute sought to be reviewed. The Court cited Muskrat vs. United States, 219 U.S. 346 (1911); In Re: Workmen’s Compensation Fund, 119 N.E. 1027 (1918), cited in Director of Prisons vs. Ang Chio Kio, 33 SCRA 494, 509 (1970); and PACU vs. Secretary of Education, 97 Phil. 806, 810 (1955).
• Estoppel by Acquiescence: Petitioner alleged that it used to maintain and operate at least ten radio broadcasting stations but, pursuant to Sections 3, 4, 5, and 6 of Presidential Decree No. 576-A, it divested itself of the excess stations, leaving it with three stations in Iloilo City, Bacolod City, and Roxas City. Petitioner did not allege that it challenged the constitutionality of the decree at any time since it took effect on December 31, 1981. It did not appear that petitioner’s compliance was made under protest. In view of its acquiescence with the decree, petitioner was estopped from challenging it under the principle that one who sleeps on his rights shall not be heard to complain.
• Prohibition as Procedural Vehicle: Petitioner’s allegation that its petition should be treated as a petition for prohibition did not place it in a better position. The petition could not be considered one for prohibition because it did not seek to prohibit further proceedings being conducted by any tribunal, corporation, board, or person exercising judicial or ministerial functions, as required by Section 2, Rule 65 of the Rules of Court. Petitioner did not seek to prohibit any proceeding being conducted by a public respondent that adversely affected its interest. It did not claim that it had a pending application for a broadcast license that was about to be denied under the decree. What it apparently sought to prohibit was the possible denial of an application it might make to operate radio or television stations based on the restrictions imposed by the decree, making the petition premature. Petitioner prayed for reinstatement of its rights under its original franchise, but reinstatement is an affirmative remedy and cannot be secured through a writ of prohibition, which is essentially a preventive and not a corrective remedy. It cannot correct an act that is a fait accompli. The Court cited Agustin vs. de la Fuente, 84 Phil. 515 (1949).
• Substantive Constitutional Grounds: Because the petition was dismissed for lack of jurisdiction over the declaratory relief, absence of an actual case or controversy, estoppel, and the impropriety of prohibition, the Court did not reach the merits of the due process, just compensation, freedom of speech and press, impairment of contract, and restraint of trade arguments.

• Judicial Review Cannot Be Exercised In Vacuo — Judicial review may be exercised only in connection with a bona fide case or controversy involving the statute sought to be reviewed; courts determine actual controversies between adverse litigants and do not render advisory opinions. In this case, no actual controversy existed because petitioner did not allege that it had been denied a license, penalized, confiscated, or shut down under Presidential Decree No. 576-A; it merely sought nullification of the decree and reinstatement of its franchise.
• Declaratory Relief Must Be Filed Before the Regional Trial Court — A petition seeking a declaration that a statute or presidential decree is unconstitutional is treated as one for declaratory relief under Rule 64. Such an action must be brought before the Regional Trial Court and is not within the original jurisdiction of the Supreme Court even if only questions of law are involved. The Court applied this rule to dismiss the petition.
• Estoppel by Acquiescence / Sleeping on Rights — One who sleeps on his rights shall not be heard to complain. A party that complies with a decree’s requirements without protest and fails to challenge its constitutionality from the time it takes effect is estopped from later assailing it. The Court applied this to petitioner, which divested its excess stations without protest and did not challenge the decree since December 31, 1981.
• Prohibition Is Preventive, Not Corrective — Prohibition under Rule 65 lies to prohibit further proceedings by a tribunal, corporation, board, or person exercising judicial or ministerial functions. It is a preventive remedy, not a corrective one, and cannot be used to secure affirmative relief such as reinstatement or to correct a fait accompli. The Court held that the petition could not be treated as one for prohibition and was premature.

• "Judicial review cannot be exercised in vacuo." — This one-sentence formulation states the justiciability principle applied to dismiss the petition for lack of an actual case or controversy.
• "The function of the courts is to determine controversies between litigants and not to give advisory opinions." — This passage defines the limits of judicial power and explains why the Court would not rule on the constitutionality of Presidential Decree No. 576-A absent a concrete dispute.
• "A petition for declaratory relief is not among the petitions within the original jurisdiction of the Supreme Court even if only questions of law are involved." — This states the jurisdictional ground for dismissing the petition.
• "Reinstatement is an affirmative remedy and cannot be secured through a writ of prohibition which is essentially a preventive and not a corrective remedy. It cannot correct an act that is a fait accompli." — This explains why the petition could not be treated as one for prohibition.

• Alliance of Government Workers vs. Minister of Labor and Employment, 124 SCRA 1 (1983) — Cited in support of the jurisdictional ruling that a petition for declaratory relief is not within the original jurisdiction of the Supreme Court and should be brought before the Regional Trial Court.
• Muskrat vs. United States, 219 U.S. 346 (1911) — Cited for the definition of judicial power as the right to determine actual controversies arising between adverse litigants.
• Director of Prisons vs. Ang Chio Kio, 33 SCRA 494, 509 (1970) — Cited, through In Re: Workmen’s Compensation Fund, for the principle that the function of courts is to determine controversies between litigants and not to give advisory opinions.
• PACU vs. Secretary of Education, 97 Phil. 806, 810 (1955) — Cited for the rule that the power of judicial review can only be exercised in connection with a bona fide case or controversy involving the statute sought to be reviewed.
• Agustin vs. de la Fuente, 84 Phil. 515 (1949) — Cited for the proposition that prohibition is a preventive, not corrective, remedy and cannot correct an act that is a fait accompli.

• Section 10, Republic Act No. 3001 — Provided that petitioner’s franchise or permit was subject to amendment, alteration, or repeal by Congress when public interest required. The Court referenced it as the legislative franchise provision affected by the challenged decree.
• Sections 3, 4, 5, and 6, Presidential Decree No. 576-A — The challenged decree. Section 3 limited ownership or operation of radio and television stations; Section 4 required divestiture of excess stations through the Board of Communications by December 31, 1981; Section 5 imposed cancellation of franchise and confiscation without compensation for failure to divest; Section 6 terminated all broadcast franchises, grants, licenses, permits, certificates, or other authority on December 31, 1981 and required authority from the Board of Communications and the Secretary of Public Works and Communications thereafter.
• Rule 64, Rules of Court — The Court treated the petition for declaration of unconstitutionality as one for declaratory relief under Rule 64, which must be brought before the Regional Trial Court.
• Section 17, Republic Act No. 296 — Cited in support of the rule that a petition for declaratory relief is not within the original jurisdiction of the Supreme Court.
• Section 19(b), Batas Pambansa Blg. 129 — Cited in support of the same jurisdictional rule.
• Section 2, Rule 65, Rules of Court — Cited for the requisites of prohibition; the petition could not be considered one for prohibition because it did not seek to prohibit further proceedings by a tribunal, corporation, board, or person exercising judicial or ministerial functions.

Fernan, C.J.; Narvasa; Melencio-Herrera; Gutierrez, Jr.; Cruz; Padilla; Bidin; Sarmiento; Cortes; Griño-Aquino; Medialdea; and Regalado, JJ. Paras and Feliciano, JJ., were on leave.