G.R. No. 122846 January 20, 2009
WHITE LIGHT CORPORATION, TITANIUM CORPORATION and STA. MESA TOURIST & DEVELOPMENT CORPORATION, Petitioners, vs. CITY OF MANILA, represented by DE CASTRO, MAYOR ALFREDO S. LIM, Respondent.

FACTS

On December 3, 1992, Manila Mayor Alfredo S. Lim signed into law City Ordinance No. 7774, entitled “An Ordinance Prohibiting Short-Time Admission, Short-Time Admission Rates, and Wash-Up Rate Schemes in Hotels, Motels, Inns, Lodging Houses, Pension Houses, and Similar Establishments in the City of Manila.” The Ordinance defined “short-time admission” as admittance and charging of a room rate for less than twelve hours or the renting out of rooms more than twice a day. Violators faced a fine, imprisonment, or both, and subsequent conviction would result in the automatic cancellation of the business license.
Petitioners White Light Corporation, Titanium Corporation, and Sta. Mesa Tourist & Development Corporation, operators of drive-in hotels and motels in Manila, challenged the Ordinance’s validity. They filed a complaint-in-intervention in a declaratory relief case initially brought by Malate Tourist and Development Corporation (which later withdrew) before the Regional Trial Court (RTC) of Manila. The RTC declared the Ordinance null and void, stating it struck at personal liberty and was an invalid exercise of police power, akin to the law annulled in Ynot v. Intermediate Appellate Court. The RTC issued a permanent injunction against the Ordinance’s enforcement.
The City of Manila appealed to the Court of Appeals, which reversed the RTC decision and affirmed the constitutionality of the Ordinance. The appellate court held that the Ordinance did not violate the right to privacy or freedom of movement, as it only penalized establishment owners/operators; that it was a valid exercise of police power with the lawful objective of curbing immoral activities; and that any adverse effect on businesses was justified by public welfare. Petitioners then elevated the case to the Supreme Court via a petition for review on certiorari.

ISSUE

Whether or not Manila City Ordinance No. 7774 is constitutional.

RULING

The Supreme Court GRANTED the petition and REVERSED the decision of the Court of Appeals. The Court declared Manila City Ordinance No. 7774 UNCONSTITUTIONAL and NULL and VOID.
The Court held that the Ordinance was an invalid exercise of police power. While the state has the authority to regulate liberty and property for the promotion of the general welfare, such power is subject to judicial scrutiny and must be exercised within the confines of the Constitution. The Ordinance failed to meet the substantive requirements for a valid police power measure: a lawful subject and a lawful method.
The lawful subject—the public interest—must be present. The Ordinance aimed to promote public morals by targeting illicit sex. However, the Court found the measure overbroad and infringed on protected liberties. It swept indiscriminately across all establishments and all patrons, regardless of the nature of their stay, making no distinction between illicit and legitimate uses. It imposed a blanket prohibition on all short-time admissions, thereby restricting lawful activities such as providing rooms for rest or prayer for a few hours.
The lawful method requirement was also not met. The means employed—a total ban on short-time admissions—were not reasonably necessary for the accomplishment of the purpose and were unduly oppressive upon the lawful uses of the establishments. The Court noted that the illicit activity the Ordinance sought to prevent could still be consummated by simply paying for a 12-hour stay, rendering the prohibition ineffective to its stated goal while severely restricting legitimate business and personal privacy.
The Ordinance violated the due process clause of the Constitution as it was an unreasonable and arbitrary interference with lawful business, trade, or occupation. It also impaired the right to privacy, which includes the freedom to choose one’s abode and the liberty to move. By prohibiting short-time stays, the Ordinance effectively restricted these freedoms without sufficient justification.
Furthermore, the Court addressed the issue of petitioners’ standing, recognizing it under the overbreadth doctrine, as the Ordinance threatened fundamental personal rights and was susceptible to challenge by those whose legitimate business it impaired. The Court distinguished this case from Ermita-Malate Motel Operators Association v. City Mayor of Manila, noting that the regulation there was a licensing measure, not a total prohibition on a legitimate business activity.
In conclusion, the Ordinance used a broad brush to target illicit sex but in doing so, infringed upon fundamental freedoms and due process rights without a sufficiently reasonable and direct connection between the prohibition and the evil sought to be prevented.