GR L 19136; (February, 1963) (Digest)
G.R. No. L-19136; February 28, 1963
KAMUNING THEATER, INC. doing business under the name and style of Project 4 Market, and LORETO F. STEWART, petitioners, vs. QUEZON CITY and NORBERTO S. AMORANTO, Mayor of Quezon City, respondents.
FACTS
On January 20, 1956, the Quezon City Council approved Resolution No. 2496, authorizing petitioner Loreto F. Stewart to operate a supermarket in Project 4. The resolution contained conditions, including a requirement for the installation of refrigeration equipment for perishable goods. Subsequently, it was discovered that the supermarket was selling fresh fish, meat, and other perishable goods without refrigeration. On May 5, 1959, the City Council passed Resolution No. 4761, which amended the earlier resolution by withdrawing the privilege to sell such unrefrigerated perishable goods, citing public health concerns and the recent opening of a public market in the vicinity.
Petitioners filed an injunction suit, arguing that Resolution No. 4761 was unconstitutional for impairing contractual obligations, violating due process by depriving a vested right, and denying equal protection by favoring a competing market. The Court of First Instance of Rizal ruled in favor of the petitioners, finding that they had installed an adequate refrigeration system. The Court of Appeals reversed this decision, holding that the core issue was whether Resolution No. 2496 ever authorized the sale of unrefrigerated perishables in the first place, which it answered in the negative.
ISSUE
Whether Resolution No. 4761 of the Quezon City Council is valid and constitutional.
RULING
The Supreme Court affirmed the decision of the Court of Appeals with a crucial qualification. The legal logic centered on interpreting the scope of the original permission granted. The Court agreed with the appellate court that Resolution No. 2496 did not authorize the sale of unrefrigerated perishable goods; the requirement for refrigeration was a condition for such sales. Therefore, the subsequent Resolution No. 4761, insofar as it prohibited the sale of unrefrigerated perishables, was a valid exercise of police power to safeguard public health and did not constitute an impairment of contract or a denial of due process, as no vested right to sell goods without refrigeration was ever granted.
However, the Supreme Court clarified the scope of Resolution No. 4761. The resolution’s text broadly withdrew the sale of perishable goods without qualification. To the extent it could be construed as prohibiting the sale of these goods even if refrigerated, it would be invalid, as it would impair the rights granted under the original resolution without due process. Since the lower court found the petitioners had installed refrigeration, the prohibition could only validly apply to unrefrigerated sales. Thus, the Court held petitioners could continue selling perishable goods, provided they are refrigerated. The petitioners’ argument for a grace period to comply was irrelevant, as the original resolution never permitted unrefrigerated sales at all.