Homeowners' Association of the Philippines, Inc. vs. Municipal Board of the City of Manila

Emergency legislation enacted under police power must be limited to a definite and reasonable period of time commensurate with the nature and duration of the crisis it seeks to address; a law or ordinance that contains no such temporal limitation is unconstitutional, as it permits what was intended as temporary relief to become permanent.

The Homeowners' Association of the Philippines, Inc. and its president, Vicente A. Rufino, brought an action for declaratory relief against the Municipal Board and the Mayor of the City of Manila to nullify Municipal Ordinance No. 4841, approved on December 31, 1963, and slated to take effect on January 1, 1964. The ordinance purported to regulate rentals of lots and buildings for residential purposes by declaring a state of emergency in housing accommodations in the City of Manila and capping rent increases at levels tied to assessed property values. The City of Manila's authority to enact such measures derived from its charter, including the general welfare clause and the power to regulate the business of letting or subletting lands and buildings. The case reached the Supreme Court on appeal by the Mayor of Manila from the lower court's judgment striking down the ordinance.

The Homeowners' Association of the Philippines, Inc. and its president, Vicente A. Rufino, filed an action for declaratory relief against the Municipal Board and the Mayor of the City of Manila to nullify Municipal Ordinance No. 4841, approved on December 31, 1963, and scheduled to take effect on January 1, 1964. The ordinance, entitled "AN ORDINANCE REGULATING RENTALS OF LOTS AND BUILDING FOR RESIDENTIAL PURPOSES," declared a state of emergency in the matter of providing housing accommodations, especially for the poor, at reasonable rates, citing the prevailing scarcity of residential lands and buildings in Manila and the high cost of living.

Under Section 1, lessors or sublessors of lands primarily devoted to residential purposes were prohibited from increasing rental beyond the proportionate percentage increase in the assessed value of the land leased or subleased. Section 2 imposed a similar prohibition on lessors or sublessors of residential buildings, capping increases at ten percent per annum of the assessed value of the building and the land on which it stands. Section 3 exempted existing lease or sublease contracts as of the ordinance's approval, as well as lands used by or rooms in boarding houses and lodging houses, though renewals or modifications of existing contracts made on or after approval would be governed by the ordinance. Section 4 penalized violations with fines of ₱100 to ₱200 and imprisonment of one to six months, with managers or directors of juridical persons held liable. Section 5 fixed the effectivity date at January 1, 1964, but set no terminal date for the ordinance's operation.

The Court of First Instance of Manila struck down the ordinance on several grounds: that the power to declare a state of emergency exclusively pertains to Congress; that no state of emergency existed to justify rent regulation; that the ordinance constituted an unreasonable and unjustified limitation on the use of private properties and arbitrarily encroached on the constitutional rights of property owners; that the City's power to regulate the business of letting or subletting lands and buildings did not include authority to prohibit what the ordinance forbade; and that the ordinance could not be sanctioned by the general welfare clause in the City Charter. The Mayor of Manila appealed, raising both the validity of the ordinance and a procedural objection regarding the alleged failure to notify the Solicitor General.

• Ultra Vires and Unconstitutional: Petitioners assailed Municipal Ordinance No. 4841 not merely as ultra vires but also as unconstitutional, seeking its nullification through declaratory relief.

• Procedural Invalidity: Respondent-appellant argued that the proceedings in the lower court were invalid because, although the ordinance was challenged as unconstitutional, the Solicitor General had been neither heard nor notified, in violation of Section 4 of Rule 64 of the Rules of Court.

• Validity of the Ordinance: Whether Municipal Ordinance No. 4841, which regulates residential rentals and declares a state of emergency without specifying a definite period of effectivity, is constitutional and valid.
• Procedural Due Process: Whether the alleged failure to notify the Solicitor General in proceedings challenging the constitutionality of a municipal ordinance invalidated the lower court's proceedings.

• Validity of the Ordinance: No. The ordinance is unconstitutional and void for failing to limit its period of effectivity to a definite and reasonable term, as required of emergency legislation enacted under police power.
• Procedural Due Process: No. Non-notification of the Solicitor General did not affect the jurisdiction of the trial court or the validity of the proceedings, the requirement being discretionary rather than mandatory.

• Validity of the Ordinance: The authority of municipal corporations to regulate is essentially an exercise of police power, which necessarily entails curtailment of liberty, rights, or property protected by the Constitution. For a police power measure to be valid, it must be "reasonable"—individual rights may be adversely affected only to the extent fairly required by the legitimate demands of public interest or public welfare. When such demands arise from a state of emergency, the interference on individual rights must be co-extensive, co-equal, or co-terminous with the existence of the emergency. Because an emergency is by nature temporary, the regulations promulgated to meet it must likewise be temporary. A law or ordinance affecting individual rights as a means to tide over a critical condition must be for a definite period of time, the length of which must be reasonable in relation to the nature and duration of the crisis. The practical reason is that, without a fixed period of effectivity, a new and different law would be necessary to repeal the emergency measure, and the period would be unlimited, indefinite, and uncertain—so that what was intended to meet a temporary emergency may become permanent law. Municipal Ordinance No. 4841 contained no limitation whatsoever on its period of effectivity. The Court relied on Rutter vs. Esteban, where an eight-year moratorium was struck down as unreasonable and oppressive, and on cases invalidating executive orders issued without temporal limitation (Araneta vs. Dinglasan; Rodriguez vs. Gella). The Court noted that Congress itself, when exercising police power to meet emergencies, has consistently limited the effectivity of such measures—as in Commonwealth Act No. 689, which penalized rent speculation for two years, and Republic Act No. 66, which extended that period to four years. Since the powers of municipal corporations are delegated by the National Government, they cannot escape the inherent limitations to which the latter is subject.

• Procedural Due Process: The appellant did not raise the question of the Solicitor General's non-notification either in his answer or in a motion to dismiss in the lower court, and his motion for reconsideration did not touch upon it; the issue was raised for the first time in a supplement to the motion for reconsideration. Moreover, the City Fiscal of Manila was notified and filed a memorandum. Pursuant to Section 23 of Rule 3 of the Rules of Court, the determination of whether the Solicitor General should be required to appear in an action involving the validity of an ordinance is a matter left to the discretion of the court. The requirement is not mandatory but discretionary, and its non-compliance affected neither the jurisdiction of the trial court nor the validity of the proceedings. In San Buenaventura vs. Municipality of San Jose, the Court held that the notification requirement is not jurisdictional and may be dispensed with when the ordinance is patently illegal and the matter has already been passed upon by a competent court.

• Temporality of Emergency Legislation — Emergency legislation enacted under police power must be limited to a definite and reasonable period of time, the length of which must be reasonable in relation to the nature and duration of the crisis it seeks to overcome. The interference on individual rights resulting from emergency regulations must be co-extensive, co-equal, or co-terminous with the existence of the emergency. Because an emergency is by nature temporary, the regulations promulgated therefor must also be temporary. Without a fixed period of effectivity, what was intended to meet a temporary emergency may become permanent law, rendering the measure unconstitutional. The Court applied this doctrine to invalidate Municipal Ordinance No. 4841, which contained no limitation on its period of effectivity.

• Reasonableness of Police Power Measures — The exercise of police power is necessarily subject to the qualification, limitation, or restriction demanded by regard for the Constitution, particularly the Bill of Rights. Individual rights may be adversely affected by police power only to the extent fairly required by the legitimate demands of public interest or public welfare. A police power measure must be "reasonable."

• Discretionary Nature of Solicitor General Notification — The requirement under Section 4 of Rule 64 that the Solicitor General be notified and entitled to be heard in actions involving the constitutionality of a municipal ordinance is not jurisdictional but discretionary, pursuant to Section 23 of Rule 3. Non-compliance does not affect the jurisdiction of the court or the validity of the proceedings, and the requirement may be dispensed with when the ordinance is patently illegal.

• "And, since an emergency is by nature temporary in character, so must the regulations promulgated therefor be." — This passage articulates the core ratio decidendi: the inherent temporality of emergency measures, which forms the basis for the requirement of a definite period of effectivity.

• "As a consequence a law or ordinance affecting the rights of individuals, as a means to tide over a critical condition, to be valid and legal, must be for a 'definite' period of time, the length of which must be 'reasonable', in relation to the nature and duration of the crisis it seeks to overcome or surmount." — This is the canonical formulation of the temporality requirement for emergency legislation, directly applied to strike down the ordinance.

• "the requirement regarding notification to the Provincial Fiscal of the pendency of an action involving the validity of a municipal ordinance, as provided in Sec. 5, Rule 66 of the Rules of Court (now See. 4, Rule 64 of the Revised Rules of Court), is not jurisdictional; and failure on the part of petitioner to notify the Provincial Fiscal will not be a sufficient ground to throw the case out of court." — Quoted from San Buenaventura vs. Municipality of San Jose, this passage defines the non-jurisdictional character of the fiscal-notification requirement and explains why the procedural challenge failed.

• Rutter vs. Esteban, 93 Phil. 68 (1953) — Controlling precedent followed. The Court declared an eight-year moratorium under Republic Act No. 342 unreasonable and void, and invalidated Executive Orders Nos. 25 and 32 for containing no limitation in point of time. This case established the principle that emergency measures must have a definite and reasonable period of effectivity, which the Court applied to invalidate Ordinance No. 4841.

• Araneta vs. Dinglasan; Araneta vs. Angeles; Rodriguez vs. The Treasurer of the Philippines; Guerrero vs. Commissioner of Customs; Barredo vs. Commission on Elections, 84 Phil. 368 — Followed. These cases established that Commonwealth Act No. 671 (the Emergency Powers Act) became inoperative when Congress met in regular session, and that executive orders issued thereafter were without authority of law, because emergency regulations cannot be in force for an indefinite and unlimited period.

• Rodriguez vs. Gella, 92 Phil. 603 (1953) — Followed. The Court invalidated Executive Orders Nos. 545 and 546 on the ground that making permanent a law intended for temporary emergency relief would be unconstitutional, the duration of which should be fixed in the law itself and not dependent on the arbitrary will of either Congress or the President.

• San Buenaventura vs. Municipality of San Jose, G.R. No. L-19309, January 30, 1965 — Followed. Held that the notification requirement for the provincial or city fiscal in actions involving the validity of a municipal ordinance is not jurisdictional and may be dispensed with when the ordinance is patently illegal.

• Santos vs. Alvarez, 78 Phil. 503 — Cited for the proposition, drawn from American jurisprudence, that "a limit in time to tide over a passing trouble may justify a law that could not be upheld as a permanent change."

• Section 4, Rule 64, Rules of Court — Requires that in any action involving the validity of a municipal or city ordinance, the provincial or city fiscal or attorney shall be notified and entitled to be heard, and if the ordinance is alleged to be unconstitutional, the Solicitor General shall also be notified and entitled to be heard. The Court harmonized this provision with Section 23 of Rule 3, holding the requirement to be discretionary rather than mandatory.

• Section 23, Rule 3, Rules of Court — Provides that in any action involving the validity of any treaty, law, ordinance, or executive order, a superior court, in its discretion, may require the appearance of the Solicitor General. The Court relied on this provision to hold that notification of the Solicitor General is discretionary, not jurisdictional.

• Section 26, Article VI, 1935 Constitution — Authorizes Congress, in times of war or other national emergency, to delegate to the President, for a limited period and subject to specified restrictions, the power to promulgate rules and regulations to carry out a declared national policy. The Court cited this provision as illustrative of the constitutional principle that emergency grants of power must be for a limited period.

Reyes, J.B.L., Dizon, Makalintal, Zaldivar, Sanchez, Castro, Angeles, and Fernando, JJ., concurred.