GR 135337; (October, 2000) (Digest)
G.R. No. 135337 ; October 19, 2000
THE CITY OF OLONGAPO, petitioner, vs. THE STALLHOLDERS OF THE EAST BAJAC-BAJAC PUBLIC MARKET OF OLONGAPO CITY, et al., respondents.
FACTS
The City of Olongapo enacted Ordinance No. 14, Series of 1993, fixing new monthly rental fees for stalls in the public market. The stallholder-respondents appealed to the Secretary of Justice under Section 187 of the Local Government Code, alleging the ordinance was unjust, excessive, oppressive, confiscatory, and violated statutory requirements for equity and ability to pay. The Secretary of Justice upheld the ordinance’s validity. Respondents moved for reconsideration, but the Secretary, citing a pending Supreme Court case on the constitutionality of Section 187, refrained from acting and advised respondents to file in court.
Respondents then filed a complaint with the Regional Trial Court (RTC) for declaratory relief with prayer for a preliminary injunction. The RTC dismissed the case, ruling that declaratory relief was improper as the ordinance was already effective and being enforced, and that the proper remedy was an ordinary civil action. The Court of Appeals reversed the RTC, holding that declaratory relief was appropriate. The City of Olongapo appealed to the Supreme Court.
ISSUE
Whether the Court of Appeals erred in ruling that an action for declaratory relief is the proper remedy to challenge the validity of Ordinance No. 14.
RULING
No. The Supreme Court affirmed the Court of Appeals. The Court clarified the nature of a declaratory relief action under Rule 63 of the Rules of Court. It is a special civil action for the settlement of rights and to afford relief from uncertainty, requiring that there be no breach of the instrument or statute in question. The Court distinguished the case from Tolentino v. Board of Accountancy, where an administrative regulation was already being enforced, making declaratory relief improper.
Here, while the ordinance was effective, the stallholders’ action was filed precisely to contest its validity before any enforcement action (like ejectment) was undertaken against them for non-payment. The complaint sought a judicial declaration of the ordinance’s illegality, not a remedy for a past wrong or violation. The Court found the issues raised—whether the rental rates were unjust, excessive, and confiscatory—involved questions of law and fact ideally resolved through declaratory relief to prevent future litigation. The necessity of a trial on the merits to examine the ordinance’s factual basis, such as construction costs and operational expenses, confirmed that declaratory relief was the appropriate procedural vehicle to determine the parties’ rights before any actual breach occurred.