G.R. No. L-12662; August 18, 1958
CHUA LAO, ETC., ET AL., petitioners-appellants, vs. HON. CIPRIANO A. RAYMUNDO, as Mayor of the Municipality of Pasig, Rizal, ET AL., respondents-appellees.

FACTS

The petitioners, all Chinese citizens, were holders of ten stalls in the meat section of the public market of Pasig, Rizal, which they allegedly occupied even before World War II and were duly licensed for retail business. The meat section had 54 stalls, with 33 occupied (23 by Filipinos, 10 by Chinese) and 21 vacant as of 1955. On January 8, 1955, the Municipal Council of Pasig passed Resolution No. 5, declaring all stalls in the meat section vacant effective February 1, 1955. After objections from Filipino stallholders, the Council amended it with Resolution No. 10 on January 22, 1955, declaring vacant only the stalls held by aliens effective February 10, 1955, for distribution among Filipino applicants, with aliens allowed only if no Filipinos applied. The Municipal Mayor and Treasurer moved to enforce the resolution. The Chinese stallholders filed a petition for prohibition in the Court of First Instance of Rizal, alleging the resolutions were discriminatory, oppressive, and unconstitutional, and obtained a preliminary injunction. The parties submitted a stipulation of facts, which included that the ten stalls occupied by petitioners were declared vacant, twelve Filipino applicants applied for those ten stalls, five of the originally twenty-one vacant stalls were already leased to Filipinos, and the remaining sixteen vacant stalls were applied for by sixteen Filipino applicants. The lower court upheld the resolutions as a valid exercise of municipal power under Republic Act No. 37 and related administrative orders, noting Filipino applicants for the petitioners’ stalls. Petitioners moved for a new trial based on a later statement from the Municipal Treasurer indicating some awarded stalls were not fully paid for or regularly occupied, leaving seventeen stalls vacant as of March 31, 1955. The motion was denied, and the appeal was certified to the Supreme Court due to the constitutional question involved.

ISSUE

1. Whether Resolutions Nos. 5 and 10, series of 1955, of the Municipal Council of Pasig are discriminatory and oppressive, and thus violative of the Constitution.
2. Whether the lower court erred in denying the petitioners’ motion for a new trial.

RULING

1. The resolutions are constitutional and valid. The Supreme Court held that the Municipal Council of Pasig had the power under the Revised Administrative Code to establish and regulate markets. The resolutions were enacted pursuant to Republic Act No. 37 , which nationalizes the occupancy and use of stalls in public markets by giving preference to Filipino citizens in their lease. The Court affirmed the constitutionality of Republic Act No. 37 , citing a previous case (Ichong vs. Hernandez) that upheld such legislation as within legislative authority to promote Filipino economic control, and noted that the operation of public services like markets is reserved to Filipino citizens under the Constitution. The Court found the resolutions were not repugnant to general law and that the preference for Filipinos applies whenever there is a conflict of interest between Filipino and alien applicants. Since the petitioners’ stalls were applied for by Filipinos, the Municipal Council validly enacted the resolutions to implement this preference. The lease for the stalls, being terminable upon expiration (whether daily, monthly, or yearly), could be revoked by the state through the municipal council upon its expiration.
2. The lower court did not err in denying the motion for a new trial. The Supreme Court found no plausible reason to reverse the lower court’s decision and order, affirming that the resolutions were valid and not discriminatory or oppressive. The subsequent information about some stalls not being fully occupied or paid did not undermine the validity of the resolutions or the preference system under Republic Act No. 37 .
The decision of the lower court was affirmed, with costs against the petitioners.