Ichong V Hernandez

[No. L-7995.
May 31, 1957]

LAO H. ICHONG, in his own behalf and in behalf of other alien residents,
corporations and partnerships adversely affected by Republic Act No. 1180,
petitioner, vs. JAIME HERNANDEZ, Secretary of Finance, and MARCELINO
SARMIENTO, City Treasurer of Manila, respondents.
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PHILIPPINE REPORTS ANNOTATED
Ichong, etc., et al. vs. Hernandez, etc., and Sarmiento
1. 1.CONSTITUTIONAL LAW; POLICE POWER; NATURE AND SCOPE.Police
power is far-reaching in scope, and it is almost impossible to limit its sweep. It
derives its existence from the very existence of the State itself, and does not need to
be expressed or defined in its scope. It is said to be co-extensive with self-protection
and survival, and as such it is the most positive and active of all governmental
processes, the most essential, insistent and illimitable. Especially is it so under a
modern democratic framework where the demands of society and of nations have
multiplied to almost unimaginable proportions; the field and scope of police power
has become almost boundless, just as the fields of public interest and public welfare
have become almost all-embracing and have transcended human foresight.
1. 2.ID.; GUARANTEES IN SECTION I, ARTICLE III OF THE
CONSTITUTION; UNIVERSALITY OF APPLICATION.The constitutional
guarantees in Section I, Article III, of the Constitution, which embody the essence
of individual liberty and freedom in democracies, are not limited to citizens alone
but are admittedly universal in their application, without regard to any differences
of race, of color, or of nationality (Yiek Wo vs. Hopkins, 30 L. ed., 220, 226).
1. 3.ID.; LAW DEPRIVATION OF LIFE, LIBERTY OR PROPERTY; TEST OR
STANDARD.The conflict between police power and the guarantees of due process
and equal protection of the laws is more apparent than real. Properly related, the
power and the guarantees are supposed to coexist. The balancing is the essence, or
the indispensable means for the" attainment of legitimate aspirations of any
democratic society. There can be no absolute power, whoever exercises it, for that
would be tyranny. Yet there can neither be absolute liberty, for that would mean
license and anarchy. So the State can deprive persons of life, liberty or property,
provided there is due process of law; and persons may be classified into classes and
groups, provided everyone is given the equal protection of the law. The test or
standard, as always, is reason. The police power legislation must be firmly
grounded on public interest and welfare, and a reasonable relation must exist
between purposes and means. And if disctinction or classification has been made,
there must be a reasonable basis for said distinction.
1. 4.ID.; EQUAL PROTECTION OF THE LAW CLAUSE;WHEN NOT DEEMED

INFRINGED BY LEGISLATION.The equal protection of the law clause is
against undue favor and individual or class privilege, as well as hostile
discrimination or the oppression of inequality.
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1. It is not intended to prohibit legislation, which is limited either in the object to
which it is directed or by territory within which it is to operate. It does not demand
absolute equality among residents; it merely requires that all persons shall be
treated alike, under like circumstances and conditions both as to privileges
conferred and liabilities enforced. The equal protection clause is not infringed by
legislation which applies only to those persons falling within a specified class, if it
applies alike to all persons within such class, and reasonable grounds exist for
making a distinction between those who fall within such class and those who do not
(2 Cooley, Constitutional Limitations, 824-825).
1. 5.ID. ; ID. ; LEGISLATIVE POWER TO MAKE DISTINCTION AND
CLASSIFICATION AMONG PERSONS; CITIZENSHIP AS GROUND FOR
CLASSIFICATION.The power of the legislature to make distinctions and
classifications among persons is not curtailed or denied by the equal protection of
the laws clause. The legislative power admits of a wide scope of discretion, and a
law can be violative of the constitutional limitation only when the classification is
without reasonable basis. Citizenship is a legal and valid ground for classification.
1. 6.ID.; ID.; NATIONALIZATION OF RETAIL TRADE;CLASSIFICATION IN
REPUBLIC ACT No. 1180 ACTUAL, REAL AND REASONABLE.The
classification in the law of retail traders into nationals and aliens is actual, real
and reasonable. All persons of one class are treated alike, and it cannot be said that
the classification is patently unreasonable and unfounded. Hence, it is the duty of
this Court to declare that the legislature acted within its legitimate prerogative
and it cannot declare that the act transcends the limits of equal protection
established by the Constitution.
1. 7.ID. ; ID. ; ID. ; ID. ; TEST OF REASONABLENESS.The law in question is
deemed absolutely necessary to bring about the desired legislative objective, i.e., to
free the national economy from alien control and dominance. It is not necessarily
unreasonable because it affects private rights and privileges (II Am. Jur., pp. 10801081). The test of reasonableness of a law is the appropriateness or adequacy under
all circumstances of the means adopted to carry out its purpose into effect. Judged
by this test, the disputed legislation, which is not merely reasonable but actually
necessary, must be considered not to have infringed the constitutional limitation of

reasonableness.
1. 8.ID.; ID.; ID.; ID.; ID.; REPUBLIC ACT No. 1180 TOLERANT AND
REASONABLE.A cursory study of the provisions of the law
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1. immediately reveals how tolerant and reasonable the Legislature has been. The law
is made prospective and recognizes the right and privilege of those already engaged
in the occupation to continue therein during the rest of their lives; and similar
recognition of the right to continue is accorded associations of aliens. The right or
privilege is denied only to persons upon conviction of certain offenses.
1. 9.ID.; ID.; ID.; ATTAINMENT OF LEGISLATIVE ASPIRATIONS OF A PEOPLE
NOT BEYOND THE LIMITS OF LEGISLATIVE AUTHORITY.If political
independence is a legitimate aspiration of a people, then economic independence is
none of less legitimate. Freedom and liberty are not real and positive, if the people
are subject to the economic control and domination of others, especially if not of
their own race or country. The removal and eradication of the shackles of foreign
economic control and domination is one of the noblest motives that a national
legislature may pursue. It is impossible to conceive that legislation that seeks to
bring it about can infringe the constitutional limitation of due process. The
attainment of a legitimate aspiration of a people can never be beyond the limits of
legislative authority.
1. 10.ID.; ID.; ID.; NATIONALISTIC TENDENCY MANIFESTED IN THE
CONSTITUTION.Nationalistic tendency is manifested in various provisions of
the Constitution. The nationalization of the retail trade is only a continuance of the
nationalistic protective policy laid down as a primary objective of the Constitution,
It cannot therefore be said that a law imbued with the same purpose and spirit
underlying many of the provisions of the Constitution is unreasonable, invalid or
unconstitutional.
1. 11.ID.; LEGISLATIVE DEPARTMENT; EXERCISE OF LEGISLATIVE
DISCRETION NOT SUBJECT TO JUDICIAL REVIEW.The exercise of
legislative discretion is not subject to judicial review. The Court will not inquire
into the motives of the Legislature, nor pass upon general matters of legislative
judgment. The Legislature is primarily the judge of the necessity of an enactment
or of any of its provisions, and every presumption is in favor of its validity, and
though the Court may hold views inconsistent with the wisdom of the law, it may
not annul the legislation if not palpably in excess of the legislative power.
1. 12.ID.; TITLES OF BILLS; PROHIBITION AGAINST DUPLICITY; PRESENCE OF
DUPLICITY NOT SHOWN IN TlTLE OR PROVISIONS OF REPUBLIC ACT No.
1180.What Section 21(1) of Article VI of the Constitution prohibits is duplicity,
that is, if its title completely fails to apprise the legislators or the public of the
nature.
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1. scope and consequences of the law or its operation (I Sutherland, Statutory
Construction, Sec. 1707, p. 297). A cursory consideration of the title and the
provisions of the bill fails to show the presence of duplicity. It is true that the term
"regulate" does not and may not readily and at first glance convey the idea of
"nationalization" and "prohibition", which terms express the two main purposes
and objectives of the law. But "regulate" is a broader term than either prohibition
or nationalization. Both of these have always been included within the term
"regulation".
1. 13.ID.; ID.; ID.; ID.; USE OF GENERAL TERMS IN TITLE OF BILL.The general
rule is for the use of general terms in the title of a bill; the title need not be an
index to the entire contents of the law (I Sutherland, Statutory Construction, Sec.
4803, p. 345). The above rule was followed when the title of the Act in question
adopted the more general term "regulate" instead of "nationalize" or "prohibit".
1. 14.ID.; ID.; ID.; ID.; PURPOSE OF CONSTITUTIONAL DIRECTIVE REGARDING
SUBJECT OF A BILL.One purpose of the constitutional directive that the
subject of a bill should be embraced in its title is to apprise the legislators of the
purposes, the nature and scope of its provisions, and prevent the enactment into
law of matters which have not received the notice, action and study of the
legislators or of the public. In case at bar it cannot be claimed that the legislators
have not been apprised of the nature of the law, especially the nationalization and
prohibition provisions. The legislators took active interest in the discussion of the
law, and a great many of the persons affected by the prohibition in the law
conducted a campaign against its approval. It cannot be claimed, therefore, that the
reasons for declaring the law invalid ever existed.
1. 15.ID.; INTERNATIONAL TREATIES AND OBLIGATIONS NOT VIOLATED BY
REPUBLIC ACT No. 1180; TREATIES SUBJECT TO QUALIFICATION OR
AMENDMENT BY SUBSEQUENT LAW.The law does not violate international
treaties and obligations. The United Nations Charter imposes no strict or legal
obligations regarding the rights and freedom of their subjects (Jans Kelsen, The
Law of the United Nations, 1951 ed., pp. 29-32), and the Declaration of Human
Rights contains nothing more than a mere recommendation, or a common standard
of achievement for all peoples and all nations. The Treaty of Amity between the
Republic of the Philippines and the Republic of China of April 18, 1947 guarantees
equality of treatment to the Chinese nationals "upon the same terms as the
nationals of any other
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Ichong, etc. et al. vs. Hernandez, etc., and Sarmiento
1. country". But the nationals of China are not discriminated against because nationals
of all other countries, except those of the United States, who are granted special
rights by the Constitution, are all prohibited from engaging in the retail trade. But
even supposing that the law infringes upon the said treaty, the treaty is always
subject to qualification or amendment by a subsequent law (U.S. vs. Thompson,
258, Fed. 257, 260), and the same may never curtail or restrict the scope of the
police power of the State (Palston vs.Pennsylvania 58 L. ed., 539).
ORIGINAL ACTION in the Supreme Court. Injunction and Mandamus.

The facts are stated in the opinion of the Court.
Ozaeta, Lichauco & Picazo and Sycip, Quisumbing,Salazar & Associates for
petitioner.
Solicitor General Ambrosio Padilla and Solicitor Pacifico P. de Castro for
respondent Secretary of Finance.
City Fiscal Eugenio Angeles and Assistant City Fiscal Eulogio S. Serrano for
respondent City Treasurer.
Dionisio Reyes as Amicus Curiae.
Marcial G. Mendiola as Amicus Curiae.
Emiliano R. Navarro as Amicus Curiae.
LABRADOR, J.:
I. The case and the issue, in general
This Court has before it the delicate task of passing upon the validity and
constitutionality of a legislative enactment, fundamental and far-reaching in
significance. The enactment poses questions of due process, police power and equal
protection of the laws. It also poses an important issue of fact, that is whether the
conditions which the disputed law purports to remedy really or actually exist.
Admittedly springing from a deep, militant, and positive nationalistic impulse, the
law purports to protect citizen and country from the alien retailer. Through it, and
within the field of economy it regulates, Congress attempts
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to translate national aspirations for economic independence and national security,
rooted in the drive and urge for national survival and welfare, into a concrete and
tangible measures designed to free the national retailer from the competing
dominance of the alien, so that the country and the nation may be free from a
supposed economic dependence and bondage. Do the facts and circumstances justify
the enactment?
II. Pertinent provisions of Republic Act No. 1180
Republic Act No. 1180 is entitled "An Act to Regulate the Retail Business." In effect
it nationalizes the retail trade business. The main provisions of the Act are: (1) a
prohibition against persons, not citizens of the Philippines, and against
associations, partnerships, or corporations the capital of which are not wholly
owned by citizens of the Philippines, from engaging directly or indirectly in the
retail trade; (2) an exception from the above prohibition in favor of aliens actually
engaged in said business on May 15, 1954, who are allowed to continue to engage
therein, unless their licenses are forfeited in accordance with the law, until their
death or voluntary retirement in case of natural persons, and for ten years after the
approval of the Act or until the expiration of term in case of juridical persons; (3) an
exception therefrom in favor of citizens and juridical entities of the United States;
(4) a provision for the forfeiture of licenses (to engage in the retail business) for
violation of the laws on nationalization, economic control weights and measures and
labor and other laws relating to trade, commerce and industry; (5) a prohibition
against the establishment or opening by aliens actually engaged in the retail
business of additional stores or branches of retail business, (6) a provision requiring
aliens actually engaged in the retail business to present for registration with the
proper authorities a verified statement concerning their businesses, giving, among
other matters, the nature of the business, their assets
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and liabilities and their offices and principal offices of juridical entities; and (7) a
provision allowing the heirs of aliens now engaged in the retail business who die, to
continue such business for a period of six months for purposes of liquidation.
III. Grounds upon which petition is basedAnswer thereto
Petitioner, for and in his own behalf and on behalf of other alien residents,
corporations and partnerships adversely affected by the provisions of Republic Act
No. 1180, brought this action to obtain a judicial declaration that said Act is
unconstitutional, and to enjoin the Secretary of Finance and all other persons acting
under him, particularly city and municipal treasurers, from enforcing its provisions.
Petitioner attacks the constitutionality of the Act, contending that: (1) it denies to
alien residents the equal protection of the laws and deprives them of their liberty
and property without due process of law; (2) the subject of the Act is not expressed
or comprehended in the title thereof; (3) the Act violates international and treaty
obligations of the Republic of the Philippines; (4) the provisions of the Act against
the transmission by aliens of their retail business thru hereditary succession, and
those requiring 100% Filipino capitalization for a corporation or entity to entitle it
to engage in the retail business, violate the spirit of Sections 1 and 5, Article XIII
and Section 8 of Article XIV of the Constitution.
In answer, the Solicitor-General and the Fiscal of the City of Manila contend
that: (1) the Act was passed in the valid exercise of the police power of the State,
which exercise is authorized in the Constitution in the interest of national economic
survival; (2) the Act has only one subject embraced in the title; (3) no treaty or
international obligations are infringed; (4) as regards hereditary succession, only
the form is affected but the value of the property is not impaired, and the institution
of inheritance is only of statutory origin.
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IV. Preliminary consideration of legal principles involved
a. The police power.
There is no question that the Act was approved in the exercise of the police power,
but petitioner claims that its exercise in this instance is attended by a violation of
the constitutional requirements of due process and equal protection of the laws. But
before proceeding to the consideration and resolution of the ultimate issue involved,
it would be well to bear in mind certain basic and f undamental, albeit preliminary,
considerations in the determination of the ever recurrent conflict between police
power and the guarantees of due process and equal protection of the laws. What is
the .scope of police power, and how are the due process and equal protection clauses
related to it? What is the province and power of the legislature, and what is the
function and duty of the courts? These consideration must be clearly and correctly
understood that their application to the f acts of the case may be brought forth with
clarity and the issue accordingly resolved.
It has been said that police power is so far-reaching in scope, that it has become
almost impossible to limit its sweep. As it derives its existence from the very
existence of the State itself, it does not need to be expressed or defined in its scope;
it is said to be co-extensive with selfprotection and survival, and as such it is the
most positive and active of all governmental processes, the most essential, insistent
and illimitable. Especially is it so under a modern democratic framework where the
demands of society and of nations have multiplied to almost unimaginable
proportions; the field and scope of police power has become almost boundless, just
as the fields of public interest and public welfare have become almost all-embracing
and have transcended human foresight. Otherwise stated, as we cannot foresee the
needs and demands of public interest and welfare in this constantly changing and
progressive world, so we cannot delimit beforehand the extent or scope
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of police power by which and through which the State seeks to attain or achieve
public interest or welfare. So it is that Constitutions do not define the scope or
extent of the police power of the State; what they do is to set f orth the limitations
thereof. The most important of these are the due process clause and the equal
protection clause.
b. Limitations on police power.
The basic limitations of due process and equal protection are found in the following
provisions of our Constitution:
"SECTION 1.(1) No person shall be deprived of life, liberty or property without due process
of law, nor shall any person be denied the equal protection of the laws." (Article III, Phil.
Constitution)
These constitutional guarantees which embody the essence of individual liberty and
freedom in democracies, are not limited to citizens alone but are admittedly
universal in their application, without regard to any differences of race, of color, or
of nationality. (Yick Wo vs. Hopkins, 30, L. ed. 220, 226.)
c. The equal protection clause.
The equal protection of the law clause is against undue favor and individual or class
privilege, as well as hostile discrimination or the oppression of inequality. It is not
intended to prohibit legislation, which is limited either in the object to which it is
directed or by territory within which it is to operate. It does not demand absolute
equality among residents; it merely requires that all persons shall be treated
alike, under like circumstances and conditions both as to privileges conferred and
liabilities enforced. The equal protection clause is not infringed by legislation which
applies only to those persons falling within a specified class, if it applies alike to all
persons within such class, and reasonable grounds exists for making a distinction
between those who fall within such class and those who do not. (2 Cooley,
Constitutional Limitations, 824-825.)
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d. The due process clause.
The due process clause has to do with the reasonableness of legislation enacted in
pursuance of the police power. Is there public interest, a public purpose; is public
welf are involved? Is the Act reasonably necessary for the accomplishment of the
legislature's purpose; is it not unreasonable, arbitrary or oppressive? Is there
sufficient foundation or reason in connection with the matter involved; or has there
not been a capricious use of the legislative power? Can the aims conceived be
achieved by the means used, or is it not merely an unjustified interference with
private interest? These are the questions that we ask when the due process test is
applied.
The conflict, therefore, between police power and the guarantees of due process
and equal protection of the laws is more apparent than real. Properly related; the
power and the guarantees are supposed to coexist. The balancing is the essence or,
shall it be said, the indispensable means for the attainment of legitimate
aspirations of any democratic society. There can be no absolute power, whoever
exercise it, for that would be tyranny. Yet there can neither be absolute liberty, for
that would mean license and anarchy. So the State can deprive persons of life,
liberty and property, provided there is due process of law; and persons may be
classified into classes and groups, provided everyone is given the equal protection of
the law. The test or standard, as always, is reason, The police power legislation
must be firmly grounded on public interest and welfare, and a reasonable relation
must exist between purposes and means. And if distinction and classification has
been made, there must be a reasonable basis for said distinction.
e. Legislative discretion not subject to judicial review.
Now, in this matter of equitable balancing, what is the proper place and role of the
courts ? It must not be overlooked, in the first place, that the legislature, which is
the
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constitutional repository of police power and exercises the prerogative of
determining the policy of the State, is by force of circumstances primarily the judge
of necessity, adequacy or reasonableness and wisdom, of any law promulgated in
the exercise of the police power, or of the measures adopted to implement the public
policy or to achieve public interest. On the other hand, courts, although zealous
guardians of individual liberty and right, have nevertheless evinced a reluctance to
interfere with the exercise of the legislative prerogative. They have done so early
where there has been a clear, patent or palpable arbitrary and unreasonable abuse
of the legislative prerogative. Moreover, courts are not supposed to override
legitimate policy, and courts never inquire into the wisdom of the law.
V. Economic problems sought to be remedied
With the above considerations in mind, we will now proceed to delve directly into
the issue involved. If the disputed legislation were merely a regulation, as its title
indicates, there would be no question that it falls within the legitimate scope of
legislative power.. But it goes further and prohibits a group of residents, the aliens,
from engaging therein. The problem becomes more complex because its subject is a
common, trade or occupation, as old as society itself, which from time immemorial
has always been open to residents, irrespective of race, color or citizenship.
a. Importance of retail trade in the economy of the nation.
In a primitive economy where families produce all that they consume and consume
all that they produce, the dealer, of course, is unknown. But as group life develops
and families begin to live in communities producing more than what they consume
and needing an infinite number of things they do not produce, the dealer comes into
existence.
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As villages develop into big communities and specialization in production begins,
the dealer's importance is enhanced. Under modern conditions and standards of
living, in which man's needs have multiplied and diversified to unlimited extents
and proportions, the retailer comes as essential as the producer, because thru him
the infinite variety of articles, goods and commodities needed for daily life are
placed within the easy reach of consumers. Retail dealers perform the functions of
capillaries in the human body, thru which all the needed food and supplies are
ministered to members of the communities comprising the nation.
There cannot be any question about the importance of the retailer in the life of
the community. He ministers to the resident's daily needs, food in all its increasing
forms, and the various little gadgets and things needed for home and daily life. He
provides his customers around his store with the rice or corn, the fish, the salt, the
vinegar, the ,spices needed for the daily cooking. He has cloths to sell, even the
needle and the thread to sew them or darn the clothes that wear out. The retailer,
therefore, from the lowly peddler, the owner of a small sari-sari store, to the
operator of a department store or a supermarket is so much a part of day-to-day
existence.
b. The alien retailer's traits.
The alien retailer must have started plying his trade in this country in the bigger
centers of population (Time there was when he was unknown in provincial towns
and villages). Slowly but gradually he invaded towns and villages; now he
predominates in the cities and big centers of population. He even pioneers in far
away nooks where the beginnings of community life appear, ministering to the daily
needs of the residents and purchasing their agricultural produce for sale in the
towns. It is an undeniable fact that in many communities the alien has replaced the
native retailer. He has shown in this trade, industry without limit, and the patience
and forbearance of a slave.
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Derogatory epithets are hurled at him, but he laughs these off without murmur;
insults of ill-bred and insolent neighbors and customers are made in his face, but he
heeds them not, and he forgets and forgives. The community takes no note of him,
as he appears to be harmless and extremely useful.
c. Alleged alien control and dominance.
There is a general f eeling on the part of the public, which appears to be true to f
act, about the controlling and dominant position that the alien retailer holds in the
nation's economy. Food and other essentials, clothing, almost all articles of daily life
reach the residents mostly through him. In big cities and centers of population he
has acquired not only predominance, but apparent control over distribution of
almost all kinds of goods, such as lumber, hardware, textiles, groceries, drugs,
sugar, flour, garlic, and scores of other goods and articles. And were it not for some
national corporations like the Naric, the Namarco, the Facomas and the Accfa, his
control over principal foods and products would easily become full and complete.
Petitioner denies that there is alien predominance and control in the retail trade.
In one breath it is said that the fear is unfounded and the threat is imagined; in
another, it is charged that the law is merely the result of racialism and pure and
unabashed nationalism. Alienage, it is said, is not an element of control; also so
many unmanageable factors in the retail business make control virtually
impossible. The first argument which brings up an issue of fact merits serious
consideration. The others are matters of opinion within the exclusive competence of
the legislature and beyond our prerogative to pass upon and decide.
The best evidence are the statistics on the retail trade, which put down the
figures in black and white. Between the constitutional convention year (1935), when
the fear of alien domination and control of the retail trade already
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Ichong etc., et al. vs. Hernandez, etc., and Sarmiento
filled the minds of our leaders with fears and misgivings, and the year of the
enactment of the nationalization of the retail trade act (1954), official statistics
unmistakably point out to the ever-increasing dominance and control by the alien of
the retail trade, as witness the following tables;
Year and
Retailer's
Nationality
1941:
Filipino
Chinese
Others
1947:
Filipino
Chinese
Others
1948:
(Census)
Filipino
No.Establishments
Pesos
Assets
Percent
Distribution
106,671
200, 323,
138
15,356 118,348,692
1,646 40,187,090
111,107
208, 658,
946
13,774 106,156,218
354 8,761,260
113,631
213, 342,
264
Pesos
Gross Sales
Percent
Distribution
55.82 174, 181, 924
5174
32.98
11.20
148,813,239
13,630,239
44.21
4.05
65.05 279, 583, 333
57.03
33.56 205, 701, 134

.49
4,927,168
41.96
1.01
67.30 467, 161, 667
60.51
Chinese
Others
1949:
Filipino
Chinese
Others
1951:
Filipino
Chinese
Others
Year and
Retailer's
Nationality
(Pesos)
1941:
Filipino
Chinese
Others
12,087 93,155,459
422 10,514,675
113,659
213, 451,
602
16,248 125,223,336
486 12,056,365
29.38 294, 894, 227

3.32
9,995,402
38.20
1.29
60.89 462, 532, 901
53.47
35.72 392, 414, 875

3.39
10,078,364
45.36
1.17
119,352
224, 053,
61.09 466, 058, 052
53.07
620
17,429 134,325,303
36.60 404, 481, 384
46.06
347 8,614,025
2.31
7,645,327
.87
AVERAGE
ASSETS AND GROSS SALES PER ESTABLISHMENT
Item
Gross Sales
Assets(Pesos)
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1170
1947:
Filipino
1,878 2,516
Chinese
7,707 14,934
Others
....24,749 13,919
1948: (Census)
Filipino
1,878 1,111
Chinese
7,707 24,398
Others
24,916 23,686
1949:
Filipino
1,878 4,069
Chinese
7,707 24,152
Others
24,807 20,737
1951:
Filipino
1,877 3,905
Chinese
7,707 33,207
Others
24,824 22,033
1,878
7,707
24,415
1,633
9,691
8,281
(Estimated Assets and Gross Sales of Retail Establishments, By Year and Nationality of
Owners, Benchmark: 1948 Census, issued by the Bureau of Census and Statistics,
Department of Commerce and Industry; pp. 18-19 of Answer.)
The above statistics do not include corporations and partnerships, while the figures
on Filipino establishments already include mere market vendors, whose capital is
necessarily small.
The above figures reveal that in percentage distribution of assets and of gross
sales, alien participation has steadily increased during the years. It is true, of
course, that Filipinos have the edge in the number of retailers, but aliens more than
make up for the numerical gap through their assets and gross sales which average
between six and seven times those of the very many Filipino retailers. Numbers in
retailers, here, do not imply superiority; the alien invests more capital, buys and
sells six to seven times more, and gains much more. The same official report,
pointing out to the known predominance of foreign elements in the retail trade,
remarks that the Filipino retailers were largely engaged in minor retailer
enterprises. As observed by respondents, the native investment is
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thinly spread, and the Filipino retailer is practically helpless in matters of capital,
credit, price and supply,
d. Alien control and threat, subject of apprehension in Constitutional Convention.
It is this domination and control, which we believe has been sufficiently shown to
exist, that is the legislature's target in the enactment of the disputed
nationalization law. If they did not exist as a fact the sweeping remedy of
nationalization would never have been adopted. The framers of our Constitution
also believed in the existence of this alien dominance and control when they
approved a resolution categorically declaring among other things, that "it is the
sense of the Convention that the public interest requires the nationalization of the
retail trade; * * *." (II Aruego, The Framing of the Philippine Constitution, 662663,
quoted on page 67 of Petitioner.) That was twentytwo years ago; and the events
since then have not been either pleasant or comforting. Dean Sinco of the
University of the Philippines College of Law, commenting on the patrimony clause
of the Preamble opines that the fathers of our Constitution were merely translating
the general preoccupation of Filipinos "of the dangers from alien interests that had
already brought under their control the commercial and other economic activities of
the country" (Sinco, Phil. Political Law, 10th ed., p, 114); and analyzing the concern
of the members of the constitutional convention for the economic life of the citizens,
in connection with the nationalistic provisions of the Constitution, he says:
"But there has been a general feeling that alien dominance over the economic life of the
country is not desirable and that if such a situation should remain, political independence
alone is no guarantee to national stability and strength. Filipino private capital is not big
enough to wrest from alien hands the control of the national economy. Moreover, it is but of
recent formation and hence, largely inexperienced, timid and hesitant. Under such
conditions, the government as the instrumentality of the national will, has to step in and
assume the initiative, if not the leadership, in the struggle for the
1172
1172
economic freedom of the nation in somewhat the same way that it did in the crusade for
political freedom. Thus * * * it (the Constitution) envisages an organized movement for the
protection of the nation not only against the possibilities of armed invasion but also against
its economic subjugation by alien interests in the economic field." (Phil. Political Law by
Sinco, 10th ed., p. 476.)
Belief in the existence of alien control and predominance is felt in other quarters.
Filipino businessmen, manufacturers and producers believe so; they fear the
dangers coming from alien control, and they express sentiments of economic
independence. Witness thereto is Resolution No. 1, approved on July 18, 1953, of
the Fifth National Convention of Filipino Businessmen, and a similar resolution,
approved on March 20, 1954, of the Second National Convention of Manufacturers
and Producers. The man in the street also believes, and fears, alien predominance
and control; so our newspapers, which have editorially pointed out not only to
control but to alien stranglehold. We, therefore, find alien domination and control to
be a fact, a reality proved by official statistics, and felt by all the sections and
groups that compose the Filipino community.
e. Dangers of alien control and dominance in retail.
But the dangers arising from alien participation in the retail trade does not seem to
lie in the predominance alone; there is a prevailing feeling that such predominance
may truly endanger the national interest. With ample capital, unity of purpose and
action and thorough organization, alien retailers and merchants can act in such
complete unison and concert on such vital matters as the fixing of prices, the
determination of the amount of goods or articles to be made available in the market,
and even the choice of the goods or articles they would or would not patronize or
distribute, that fears of dislocation of the national economy and of the complete
subservience of national retailers and of the consuming public are not entirely
unfounded. Nationals, producers
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VOL. 101, MAY 31, 1957

1173
and consumers alike, can be placed completely at their mercy. This is easily
illustrated. Suppose an article of daily use is desired to be prescribed by the aliens,
because the producer or importer does not offer them sufficient profits, or because a
new competing article offers bigger profits for its introduction. All that aliens would
do is to agree to refuse to sell the first article, eliminating it from their stocks,
offering the new one as a substitute. Hence, the producers or importers of the
prescribed article, or its consumers, find the article suddenly out of circulation.
Freedom of trade is thus curtailed and free enterprise correspondingly suppressed.
We can even go farther than theoretical illustrations to show the pernicious
influences of alien domination. Grave abuses have characterized the exercise of the
retail trade by aliens. It is a fact within judicial notice, which courts of justice may
not properly overlook or ignore in the interests of truth and justice, that there exists
a general feeling on the part of the public that alien participation in the retail trade
has been attended by a pernicious and intolerable practices, the mention of a few of
which would suffice for our purposes; that at some time or other they have cornered
the market of essential commodities, like corn and rice, creating artificial scarcities
to justify and enhance profits to unreasonable proportions; that they have hoarded
essential foods to the inconvenience and prejudice of the consuming public, so much
so that the Government has had to establish the National Rice and Corn
Corporation to save the public from their continuous hoarding practices and
tendencies; that they have violated price control laws, especially on foods and
essential commodities, such that the legislature had to enact a law (Sec. 9, Republic
Act No. 1168), authorizing their immediate and automatic deportation for price
control convictions; that they have secret combinations among themselves to control
prices, cheating the operation of the law of supply and demand;
1174
1174
that they have connived to boycott honest merchants and traders who would not
cater or yield to their demands, in unlawful restraint of freedom of trade and
enterprise. They are believed by the public to have evaded tax laws, smuggled goods
and money into and out of the land, violated import and export prohibitions, control
laws and the like, in derision and contempt of lawful authority. It is also believed
that they have engaged in corrupting public officials with fabulous bribes, indirectly
causing the prevalence of graft and corruption in the Government. As a matter of
fact appeals to unscrupulous aliens have been made both by the Government and by
their own lawful diplomatic representatives, action which impliedly admits a
prevailing feeling about the existence of many of the above practices.
The circumstances above set forth create well founded fears that worse things
may come in the future. The present dominance of the alien retailer, especially in
the big centers of population, therefore, becomes a potential source of danger on
occasions of war or other calamity. We do not have here in this country isolated
groups of harmless aliens retailing goods among nationals; what we have are well
organized and powerful groups that dominate the distribution of goods and
commodities in the communities and big centers of population. They owe no
allegiance or loyalty to the State, and the State cannot rely upon them in times of
crisis or emergency. While the national holds his life, his person and his property
subject to the needs of his country, the alien may even become the potential enemy
of the State.
f. Law enacted in interest of national economic survival and security.

We are fully satisfied upon a consideration of all the facts and circumstances that
the disputed law is not the product of racial hostility, prejudice or discrimination,
but the expression of the legitimate desire and determina1175
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1175
tion of the people, thru their authorized representatives, to free the nation from the
economic situation that has unfortunately been saddled upon it rightly or wrongly,
to its disadvantage. The law is clearly in the interest of the public, nay of the
national security itself, and indisputably falls within the scope of police power, thru
which and by which the State insures its existence and security and the supreme
welfare of its citizens.
VI. The Equal Protection Limitation
a.Objections to alien participation in retail trade.
The next question that now poses solution is, Does the law deny the equal
protection of the laws? As pointed out above, the mere fact of alienage is the root
and cause of the distinction between the alien and the national as a trader. The
alien resident owes allegiance to the country of his birth or his adopted country; his
stay here is for personal convenience; he is attracted by the lure of gain and profit.
His aim or purpose of stay, we admit, is neither illegitimate nor immoral, but he is
naturally lacking in that spirit of loyalty and enthusiasm for this country where he
temporarily stays and makes his living, or of that spirit of regard, sympathy and
consideration for his Filipino customers as would prevent him from taking
advantage of their weakness and exploiting them. The faster he makes his pile, the
earlier can the alien go back to his beloved country and his beloved kin and
countrymen. The experience of the country is that the alien retailer has shown such
utter disregard for his customers and the people on whom he makes his profit, that
it has been found necessary to adopt the legislation, radical as it may seem.
Another objection to the alien retailer in this country is that he never really
makes a genuine contribution to national income and wealth. He undoubtedly
contributes to general distribution, but the gains and profits he makes are not
invested in industries that would help the
1176
1176
country's economy and increase national wealth. The alien's interest in this country
being merely transient and temporary, it would indeed be ill-advised to continue
entrusting the very important function of retail distribution to his hands.
The practices resorted to by aliens in the control of distribution, as already
pointed out above, their secret manipulations of stocks of commodities and prices,
their utter disregard of the welfare of their customers and of the ultimate happiness
of the people of the nation of which they are mere guests, which practices,
manipulations and disregard do not attend the exercise of the trade by the
nationals, show the existence of real and actual, positive and fundamental
differences between an alien and a national which fully justify the legislative
classification adopted in the retail trade measure. These differences are certainly a
valid reason for the State to prefer the national over the alien in the retail trade.
We would be doing violence to fact and reality were we to hold that no reason or
ground for a legitimate distinction can be found between one and the other.
b. Difference in alien aims and purposes sufficient basis for distinction.
The above objectionable characteristics of the exercise of the retail trade by the
aliens, which are actual and real, furnish sufficient grounds for legislative
classification of retail traders into nationals and aliens. Some may disagree with the
wisdom of the legislature's classification. To this we answer, that this is the
prerogative of the law-making power. Since the Court finds that the classification is
actual, real and reasonable, and all persons of one class are treated alike, and as it
cannot be said that the classification is patently unreasonable and unfounded, it is
in duty bound to declare that the legislature acted within its legitimate prerogative
and it cannot declare that the act transcends the limit of equal protection
established by the Constitution.
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1177
Broadly speaking, the power of the legislature to make distinctions and
classifications among persons is not curtailed or denied by the equal protection of
the laws clause. The legislative power admits of a wide scope of discretion, and a
law can be violative of the constitutional limitation only when the classification is
without reasonable basis. In addition to the authorities we have earlier cited, we
can also refer to the case of Lindsley vs. Natural Carbonic Gas Co. (1911), 55 L. ed.,
369, which clearly and succinctly defined the application of equal protection clause
to a law sought to be voided as contrary thereto:
"* * *. 1. The equal protection clause of the Fourteenth Amendment does not take from the
state the power to classify in the adoption of police laws, but admits of the exercise of the
wide scope of discretion in that regard, and avoids what is done only when it is without any
reasonable basis, and therefore is purely arbitrary. 2. A classification having some
reasonable basis does not offend against that clause merely because it is not made with
mathematical nicety, or because in practice it results in some inequality. 3. When the
classification in such a law is called in question, if any state of facts reasonably can be
conceived that would sustain it, the existence of that state of facts at the time the law was
enacted must be assumed. 4. One who assails the classification in such a law must carry
the burden of showing that it does not rest upon any reasonable basis, but is essentially
arbitrary.'"
c. Authorities recognizing citizenship as basis for classification.
The question as to whether or not citizenship is a legal and valid ground for
classification has already been affirmatively decided in this jurisdiction as well as in
various courts in the United States. In the case of Smith Bell & Co. vs. Natividad,
40 Phil. 136, where the validity of Act No. 2761 of the Philippine Legislature was in
issue, because of a condition therein limiting the ownership of vessels engaged in
coastwise trade to corporations formed by citizens of the Philippine Islands or the
United States, thus denying the right to aliens, it was held that the Philippine
Legislature did not violate the equal pro1178
1178
tection clause of the Philippine Bill of Rights. The Legislature in enacting the law
had as ultimate purpose the encouragement of Philippine shipbuilding and the
safety for these Islands from foreign interlopers. We held that this was a valid
exercise of the police power, and all presumptions are in favor of its
constitutionality. In substance, we held that the limitation of domestic ownership of
vessels engaged in coastwise trade to citizens of the Philippines does not violate the
equal protection of the law and due process of law clauses of the Philippine Bill of
Rights. In rendering said decision we quoted with approval the concurring opinion
of Justice Johnson in the case of Gibbons vs. Ogden, 9 Wheat., I, as follows:
" 'Licensing acts, in fact, in legislation, are universally restraining acts; as, for example,
acts licensing gaming houses, retailers of spirituous liquors, etc. The act, in this instance, is
distinctly of that character, and forms part of an extensive system, the object of which is to
encourage American shipping, and place them on an equal footing with the shipping of
other nations. Almost every commercial nation reserves to its own subjects a monopoly of
its coasting trade; and a countervailing privilege in favor of American shipping is
contemplated, in the whole legislation of the United States on this subject. It is not to give
the vessel an American character, that the license is granted; that effect has been correctly
attributed to the act of her enrollment. But it is to confer on her American privileges, as
contradistinguished from foreign; and to preserve the Government from fraud by foreigners;
in surreptitiously intruding themselves into the American commercial marine, as well as
frauds upon the revenue in the trade coastwise, that this whole system is projected.'"
The rule in general is as follows:

"Aliens are under no special constitutional protection which forbids a classification
otherwise justified simply because the limitation of the class falls along the lines of
nationality. That would be requiring a higher degree of protection for aliens as a class than
for similar classes of American citizens. Broadly speaking, the difference in status between
citizens and aliens constitutes a basis for reasonable classification in the exercise of police
power." (2 Am. Jur. 468-469.)
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VOL. 101, MAY 31, 1957

1179
In Commonwealth vs. Hana, 81 N. E. 149 (Massachusetts, 1907), a statute on the
licensing of hawkers and peddlers, which provided that no one can obtain a license
unless he is, or has declared his intention, to become a citizen of the United States,
was held valid, for the following reason: It may seem wise to the legislature to limit
the business of those who are supposed to have regard for the welfare, good order
and happiness of the community, and the court cannot question this judgment and
conclusion. In Bloomfield vs.State, 99 N.E. 309 (Ohio, 1912), a statute which
prevented certain persons, among them aliens, from engaging in the traffic of
liquors, was found not to be the result of race hatred, or inhospitality, or a
deliberate purpose to discriminate, but was based on the belief that an alien cannot
be sufficiently acquainted with 'our institutions and our life as to enable him to
appreciate the relation of this particular business to our entire social f abric", and
was not, theref ore, invalid. In Ohio ex rel. Clarke vs. Deckebach, 274 U.S. 392, 71
L. ed. 1115 (1926), the U. S. Supreme Court had under consideration an ordinance
of the city of Cincinnati prohibiting the issuance of licenses (pools and billiard
rooms) to aliens. It held that plainly irrational discrimination against aliens is
prohibited, but it does not follow that alien race and allegiance may not bear in
some instances such a relation to a legitimate object of legislation as to be made the
basis of permitted classification, and that it could not state that the legislation is
clearly wrong; and that latitude must be allowed for the legislative appraisement of
local conditions and for the legislative choice of methods for controlling an
apprehended evil. The case of State vs. Carrol, 124 N. E. 129 (Ohio, 1919) is a
parallel case to the one at bar. In Asakura, vs. City of Seattle, 210 P. 30
(Washington, 1922), the business of pawnbroking was considered as having
tendencies injuring public interest, and limiting it to citizens is within the scope of
police power. A similar statute denying
1180
1180
aliens the right to engage in auctioneering was also sustained in Wright vs. May, L.
R. A., 1915 P. 151 (Minnesota, 1914). So also in Anton vs. Van Winkle, 297 F. 340
(Oregon, 1924), the court said that aliens are judicially known to have different
interests, knowledge, attitude, psychology and loyalty, hence the prohibition of
issuance of licenses to them for the business of pawnbroker, pool, billiard, card
room, dance hall, is not an infringement of constitutional rights.
In Templar vs. Michigan State Board of Examiners, 90 N.W. 1058 (Michigan, 1902),
a law prohibiting the licensing of aliens as barbers was held void, but the reason for
the decision was the court's finding that the exercise of the business by the aliens
does not in any way affect the morals, the health, or even the convenience of the
community. In Takahashi vs. Fish and Game Commission, 92 L. ed. 1479 (1947), a
California statute banning the issuance of commercial fishing licenses to persons
ineligible to citizenship was held void, because the law conflicts with Federal power
over immigration, and because there is no public interest in the mere claim of
ownership of the waters and the fish in them, so there was no adequate justification
for the discrimination. It further added that the law was the outgrowth of
antagonism toward persons of Japanese ancestry. However, two Justices dissented
on the theory that fishing rights have been treated traditionally as natural
resources. In Fraser vs.McConway & Tarley Co., 82 Fed. 257 (Pennsylvania, 1897),
a state law which imposed a tax on every employer of foreign-born unnaturalized
male persons over 21 years of age, was declared void because the court found that
there was no reason for the classification .and the tax was an arbitrary deduction
from the daily wage of an employee.
d. Authorities contra explained.
It is true that some decisions of the Federal court and of the State courts in the
United States hold that the distinction between aliens and citizens is not a valid
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1181
ground for classification. But in these decisions the laws declared invalid were
found to be either arbitrary, unreasonable or capricious, or were the result or
product of racial antagonism and hostility, and there was no question of public
interest involved or pursued. In Yu Cong Eng vs.Trinidad, 70 L. ed. 1059 (1925), the
United States Supreme Court declared invalid a Philippine law making unlawful
the keeping of books of account in any language other than English, Spanish or any
other local dialect, but the main reasons for the decisions are: (1) that if Chinese
were driven out of business there would be no other system of distribution, and (2)
that the Chinese would fall prey to all kinds of fraud, because they would be
deprived of their right to be advised of their business and to direct its conduct. The
real reason for the decision, therefore, is the court's belief that no public benefit
would be derived from the operation of the law and on the other hand it would
deprive Chinese of something indispensable for carrying on their business. InYick
Wo vs. Hopkins, 30 L. ed. 220 (1885) an ordinance conferring power on officials to
withhold consent in the operation of laundries both as to persons and place, was
declared invalid, but the court said that the power granted was arbitrary, that there
was no reason for the discrimination which attended the administration and
implementation of the law, and that the motive thereof was mere racial hostility.
In State vs. Montgomery, 47 A. 165 (Maine, 1900), a law prohibiting aliens to
engage as hawkers and peddlers was declared void, because the discrimination bore
no reasonable and just relation to the act in respect to which the classification was
proposed.
The case at bar is radically different, and the facts make them so. As we already
have said, aliens do not naturally possess the sympathetic consideration and regard
for customers with whom they come in daily contact, nor the patriotic desire to help
bolster the nation's economy, except in so far as it enhances their profit,
1182
1182
Ichong etc.. et al. vs. Hernandez, etc., and Sarmiento
nor the loyalty and allegiance which the national owes to the land. These
limitations on the qualifications of aliens have been shown on many occasions and
instances, especially in times of crisis and emergency. We can do no better than

borrow the language of Anton vs. Van Winkle, 297 F. 340, 342, to drive home the
reality and significance of the distinction between the alien and the national, thus:
"* * *. It may be judicially known, however, that aliens coming into this country are without
the intimate knowledge of our laws, customs, and usages that our own people have. So it is
likewise known that certain classes of aliens are of different psychology from our fellow
countrymen. Furthermore, it is natural and reasonable to suppose that the foreign born,
whose allegiance is first to their own country, and whose ideals of governmental
environment and control have been engendered and formed under entirely different
regimes and political systems, have not the same inspiration for the public weal, nor are
they as well disposed toward the United States, as those who by citizenship, are a part of
the government itself. Further enlargement, is unnecessary. I have said enough so that
obviously it cannot be affirmed with absolute confidence that the Legislature was without
plausible reason for making the classification, and therefore appropriate discrimination
against aliens as it relates to the subject of legislation. * * *."
VII The Due Process of Law Limitation
a. Reasonability, the test of the limitation; determination by legislature decisive.

We now come to due process as a limitation on the exercise of the police power. It
has been stated by the highest authority in the United States that:
"* * * And the guaranty of due process, as has often been held, demands only that the law
shall not be unreasonable, arbitrary or capricious, and that the means selected shall have a
real and substantial relation to the subject sought to be attained. * * *."
*
*
*
*
*
*
*
"So far as the requirement of due process is concerned and in the absence of other
constitutional restriction a state is free to adopt whatever economic policy may reasonably
be deemed to promote public welfare, and to enforce that policy by legislation adapted
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1183
to its purpose. The courts are without authority either to declare such policy, or, when it is
declared by the legislature, to override it. If the laws passed are seen to have a reasonable
relation to a proper legislative purpose, and are neither arbitrary nor discriminatory, the
requirements of due process are satisfied, and judicial determination to that effect renders
a court functus officio. * * *." (Nebbia vs. New York, 78 L. ed. 940, 950, 957.)
Another authority states the principle thus:
"* * *. Too much significance cannot be given to the word 'reasonable' in considering the
scope of the police power in a constitutional sense, for the test used to determine the
constitutionality of the means employed by the legislature is to inquire whether the
restrictions it imposes on rights secured to individuals by the Bill of Rights are
unreasonable, and not whether it imposes any restrictions on such rights. * * *."
*
*
*
*
*
*
*
"* * *. A statute to be within this power must also be reasonable in its operation upon
the persons whom it affects, must not be for the annoyance of a particular class, and must
not be unduly oppressive." (11 Am. Jur. Sec. 302, pp. 1074-1075.)
In the case of Lawton vs. Steele, 38 L. ed. 385, 388, it was also held:
"* * *. To justify the state in thus interposing its authority in behalf of the public, it must
appear, first, that the interests of the public generally, as distinguished from those of a
particular class, require such interference; and second, that the means are reasonably
necessary for the accomplishment of the purpose, and -not unduly oppressive upon
individuals. * * *."
Prata Undertaking Co. vs. State Board of Embalming, 104 ALR, 389, 395, fixes this
test of constitutionality:
"In determining whether a given act of the Legislature, passed in the exercise of the police
power to regulate the operation of a business, is or is not constitutional, one of the first
questions to be considered by the court is whether the power as exercised has a sufficient
foundation in reason in connection with the matter involved, or is an arbitrary, oppressive,
and capricious use of that power, without substantial relation to the health, safety, morals,
comfort, and general welfare of the public."
1184
1184
lchong etc., et al. vs. Hernandez, etc., and Sarmiento
b. Petitioner's argument considered.
Petitioner's main argument is that retail is a common, ordinary occupation, one of
those privileges long ago recognized as essential to the orderly pursuit of happiness
by free men; that it is a gainful and honest occupation and therefore beyond the
power of the legislature to prohibit and penalize. This argument overlooks fact and
reality and rests on an incorrect assumption and premise, i.e., that in this country
where the occupation is engaged in by petitioner, it has been so engaged by him, by
the alien, in an honest creditable and unimpeachable manner, without harm or
injury to the citizens and without ultimate danger to their economic peace,
tranquility and welfare. But the Legislature has found, as we have also found and
indicated, that the privilege has been so grossly abused by the alien, thru the
illegitimate use of pernicious designs and practices, that he now enjoys a
monopolistic control of the occupation and threatens a deadly stranglehold on the
nation's economy endangering the national security in times of crisis and
emergency.
The real question at issue, therefore, is not that posed by petitioner, which
overlooks and ignores the facts and circumstances, but this, Is the exclusion in the
future of aliens from the retail trade unreasonable, arbitrary and capricious, taking
into account the illegitimate and pernicious form and manner in which the aliens
have heretofore engaged therein? As thus correctly stated the answer is clear. The
law in question is deemed absolutely necessary to bring about the desired
legislative objective, i.e., to free national economy from alien control and do
minance. It is not necessarily unreasonable because it affects private rights and
privileges (11 Am. Jur. pp. 1080-1081.) The test of reasonableness of a law is the
appropriateness or adequacy under all circumstances of the means adopted to carry
out its purpose into effect (Id.)Judged by this test, disputed legislation, which is
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not merely reasonable but actually necessary, must be considered not to have
infringed the constitutional limitation of reasonableness.
The necessity of the law in question is explained in the explanatory note that
accompanied the bill, which later was enacted into law:
"This bill proposes to regulate the retail business. Its purpose is to prevent persons who are
not citizens of the Philippines from having a strangle hold upon our economic life. If the
persons who control this vital artery of our economic life are the ones who owe no allegiance
to this Republic, who have no profound devotion to our free institutions, and who have no
permanent stake in our people's welfare, we are not really the masters of our own destiny.
All aspects of our life, even our national security, will be at the mercy of other people.
"In seeking to accomplish the foregoing purpose, we do not propose to deprive persons
who are not citizens of the Philippines of their means of livelihood. While this bill seeks to
take away from the hands of persons who are not citizens of the Philippines a power that
can be wielded to paralyze all aspects of our national life and endanger our national
security it respects existing rights.
"The approval of this bill is 'necessary for our national survival."
If political independence is a legitimate aspiration of a people, then economic

independence is none the less legitimate. Freedom and liberty are not real and
positive if the people are subject to the economic control and domination of others,
especially if not of their own race or country. The removal and eradication of the
shackles of foreign economic control and domination, is one of the noblest motives
that a national legislature may pursue. It is impossible to conceive that legislation
that seeks to bring it about can infringe the constitutional limitation of due process.
The attainment of a legitimate aspiration of a people can never be beyond the limits
of legislative authority.
c. Law expressly held by Constitutional Convention to be within the sphere of

legislative action.
The framers of the Constitution could not have intended to impose the
constitutional restrictions of due
1186
1186
process on the attainment of such a noble motive as freedom from economic control
and domination, thru the exercise of the police power. The fathers of the
Constitution must have given to the legislature full authority and power to enact
legislation that would promote the supreme happiness of the people, their freedom
and liberty. On the precise issue now before us, they expressly made their voice
clear; they adopted a resolution expressing their belief that the legislation in
question is within the scope of the legislative power. Thus they declared in their
Resolution:
" That it is the sense of the Convention that the public interest requires the nationalization
of retail trade; but it abstains from approving the amendment introduced by the Delegate
for Manila, Mr. Araneta, and others on this matter because it is convinced that the
National Assembly is authorized to promulgate a law which limits to Filipino and American
citizens the privilege to engage in the retail trade.'" (II Aruego, The Framing of the
Philippine Constitution, 662-663, quoted on pages 66 and 67 of the Memorandum for the
Petitioner.)
It would do well to refer to the nationalistic tendency manifested in various

provisions of the Constitution. Thus in the preamble, a principal objective is the
conservation of the patrimony of the nation and as corollary thereto the provision
limiting to citizens of the Philippines the exploitation, development and utilization
of its natural resources. And in Section 8 of Article XIV, it is provided that "no
franchise, certificate, or any other form of authorization for the operation of a public
utility shall be granted except to citizens of the Philippines." The nationalization of
the retail trade is only a continuance of the nationalistic protective policy laid down
as a primary objective of the Constitution. Can it be said that a law imbued with the
same purpose and spirit underlying many of the provisions of the Constitution is
unreasonable, invalid and unconstitutional ?
The seriousness of the Legislature's concern for the plight of the nationals as
manifested in the approval
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of the radical measure is, therefore, fully justified. It would have been recreant to
its duties towards the country and its people would it view the sorry plight of the
nationals with complacency and refuse or neglect to adopt a remedy commensurate
with the demands of public interest and national survival. As the repository of the
sovereign power of legislation, the Legislature was in duty bound to face the
problem and meet, through adequate measures, the danger and threat that alien
domination of retail trade poses to national economy.
d. Provisions of law not unreasonable.
A cursory study of the provisions of the law immediately reveals how tolerant, how
reasonable the Legislature has been. The law is made prospective and recognizes
the right and privilege of those already engaged in the occupation to continue
therein during the rest of their lives; and similar recognition of the right to continue
is accorded associations of aliens. The right or privilege is denied to those only upon
conviction of certain offenses. In the deliberations of the Court on this case,
attention was called to the fact that the privilege should not have been denied to
children and heirs of aliens now engaged in the retail trade. Such provision would
defeat the law itself, its aims and purposes. Besides, the exercise of legislative
discretion is not subject to judicial review. It is well settled that the Court will not
inquire into the motives of the Legislature, nor pass upon general matters of
legislative judgment. The Legislature is primarily the judge of the necessity of an
enactment or of any of its provisions, and every presumption is in favor of its
validity, and though the Court may hold views inconsistent with the wisdom of the
law, it may not annul the legislation if not palpably in excess of the legislative
power. Furthermore, the test of the validity of a law attacked as a violation of due
process, is not its reasonableness, but its unreasonableness, and we find
1188
1188
he provisions are not unreasonable. These principles also answer various other
arguments raised against the law, some of which are: that the law does not promote
general welfare; that thousands of aliens would be thrown out of employment; that
prices will increase because of the elimination of competition; that there is no need
for the legislation; that adequate replacement is problematical; that there may be
general breakdown; that there would be repercussions from foreigners; etc. Many of
these arguments are directed against the supposed wisdom of the law which lies
solely within the legislative prerogative; they do not import invalidity.
VIII. Alleged defect in the title of the law
A subordinate ground or reason for the alleged invalidity of the law is the claim that
the title thereof is misleading or deceptive, as it conceals the real purpose of the bill,
which is to nationalize the retail business and prohibit aliens from engaging
therein. The constitutional provision which is claimed to be violated in Section 21
(1) of Article VI, which reads:
"No bill which may be enacted into law shall embrace more than one subject which shall be
expressed in the title of the bill."
What the above provision prohibits is duplicity, that is, if its title completely fails to
apprise the legislators or the public of the nature, scope and consequences of the law
or its operation (I Sutherland, Statutory Construction, Sec. 1707, p. 297.) A cursory
consideration of the title and the provisions of the bill fails to show the presence of
duplicity. It is true that the term "regulate" does not and may not readily and at
first glance convey the idea of "nationalization" and "prohibition", which terms
express the two main purposes and objectives of the law. But "regulate" is a broader
term than either prohibition or nationalization. Both of these have always been
included within the term regulation.
1189
VOL. 101, MAY 31, 1957

1189
lchong etc., et al. vs. Hernandez, etc., and Sarmiento
"Under the title of an act to 'regulate', the sale of intoxicating liquors, the Legislature
may prohibit the sale of intoxicating liquors." (Sweet vs. City of Wabash, 41 Ind., 7; quoted
in page 41 of Answer.)
"Within the meaning of the Constitution requiring that the subject of every act of the
Legislature shall be stated in the title, the title To regulate the sale of intoxicating liquors,
etc." sufficiently expresses the subject of an act prohibiting the sale of such liquors to
minors and to persons in the habit of getting intoxicated; such matters being properly
included within the subject of regulating the sale." (Williams vs. State, 48 Ind. 306, 308,
quoted in p. 42 of Answer.)
"The word 'regulate' is of broad import, and necessarily implies some degree of
restraint and prohibition of acts usually done in connection with the thing to be regulated.
While word regulate' does not ordinarily convey meaning of prohibit, there is no absolute
reason why it should not have such meaning when used in delegating police power in
connection with a thing the best or only efficacious regulation of which involves
suppression." (State vs.Morton, 162 So. 718, 182 La. 887, quoted in p. 42 of Answer.)
The general rule is for the use of general terms in the title of a bill; it has also been
said that the title need not be an index to the entire contents of the law (I
Sutherland, Statutory Construction, Sec. 4803, p. 345.) The above rule was followed
when the title of the Act in question adopted the more general term "regulate"
instead of "nationalize" or "prohibit". Furthermore, the law also contains other rules
for the regulation of the retail trade, which may not be included in the terms
"nationalization" or "prohibition"; so were the title changed from "regulate" to
"nationalize" or "prohibit", there would have been many provisions not f alling
within the scope of the title which would have made the Act invalid. The use of the
term "regulate", therefore, is in accord with the principle governing the drafting of
statutes, under which a simple or general term should be adopted in the title, which
would include all other provisions found in the body of the Act.
One purpose of the constitutional directive that the subject of a bill should be
embraced in its title is to apprise the legislators of the purposes, the nature and
scope of its provisions, and prevent the enactment into law of matters
1190
1190
which have not received the notice, action and study of the legislators or of the
public. In the case at bar it cannot be claimed that the legislators have not been
apprised of the nature of the law, especially the nationalization and prohibition
provisions. The legislators took active interest in the discussion of the law, and a
great many of the persons affected by the prohibition in the law conducted a
campaign against its approval. It cannot be claimed, therefore, that the reasons for
declaring the law invalid ever existed. The objection must therefore, be overruled.
IX. Alleged violation of international treaties and obligations
Another subordinate argument against the validity of the law is the supposed
violation thereby of the Charter of the United Nations and of the Declaration of
Human Rights adopted by the United Nations General Assembly. We find no merit
in the above contention. The United Nations Charter imposes no strict or legal
obligations regarding the rights and freedom of their subjects (Hans Kelsen, The
Law of the United Nations, 1951 ed. pp. 2932), and the Declaration of Human
Rights contains nothing more than a mere recommendation, or a common standard
of achievement for all peoples and all nations (Id. p. 39.) That such is the import of
the United Nations Charter aid of the Declaration of Human Rights can be inferred
from the fact that members of the United Nations Organization, such as Norway
and Denmark, prohibit foreigners from engaging in retail trade, and in most nations
of the world laws against foreigners engaged in domestic trade are adopted.
The Treaty of Amity between the Republic of the Philippines and the Republic of
China of April 18, 1947 is also claimed to be violated by the law in question. All that
the treaty guarantees is equality of treatment to the Chinese nationals "upon the
same terms as the nationals of any other country." But the nationals of China are
not dis1191
VOL. 101, MAY 31, 1957

1191
criminated against because nationals of all other countries, except those of the
United States, who are granted special rights by the Constitution, are all prohibited
f rom engaging in the retail trade. But even supposing that the law infringes upon
the said treaty, the treaty is always subject to qualification or amendment by a
subsequent law (U. S. vs.Thompson, 258, Fed. 257, 260), and the same may never
curtail or restrict the scope of the police power of the State
(Palston vs. Pennsylvania, 58 L. ed. 539.)
X. Conclusion
Resuming what we have set forth above we hold that the disputed law was enacted
to remedy a real actual threat and danger to national economy posed by alien
dominance and control of the retail business and free citizens and country from such
dominance and control; that the enactment clearly falls within the scope of the
police power of the State, thru which and by which it protects its own personality
and insures its security and future; that the law does not violate the equal
protection clause of the Constitution because sufficient grounds exist for the
distinction between alien and citizen in the exercise of the occupation regulated, nor
the due process of law clause, because the law is prospective in operation and
recognizes the privilege of aliens already engaged in the occupation and reasonably
protects their privilege; that the wisdom and efficacy of the law to carry out its
objectives appear to us to be plainly evidentas a matter of f act it seems not only
appropriate but actually necessaryand that in any case such matter falls within
the prerogative of the Legislature, with whose power and discretion the Judicial
department of the Government may not interfere; that the provisions of the law are
clearly embraced in the title, and this suffers from no duplicity and has not misled
the legislators or the segment of the population affected; and that it cannot be said
to be void for supposed conflict with treaty obligations because no treaty has
actually been en1192
1192
tered into on the subject and the police power may not be curtailed or surrendered
by any treaty or any other conventional agreement.
Some members of the Court are of the opinion that the radical effects of the law
could have been made less harsh in its impact on the aliens. Thus it is stated that
more time should have been given in the law for the liquidation of existing
businesses when the time comes for them to close. Our legal duty, however, is
merely to determine if the law falls within the scope of legislative authority and
does not transcend the limitations of due process and equal protection guaranteed
in the Constitution. Remedies against the harshness of the law should be addressed
to the Legislature; they are beyond our power and jurisdiction.
The petition is hereby denied, with costs against petitioner.
Pars, C. J., Bengzon, Reyes, A., Bautista Angelo,Concepcin, Reyes, J. B.

L., Endencia, and Felix, JJ., concur.
PADILLA, J., concurring and dissenting:
I agree to the proposition, principle or rule that courts may not inquire into the
wisdom of an Act passed by the Congress and duly approved by the President of the
Republic. But the rule does not preclude courts from inquiring and determining
whether the Act offends against a provision or provisions of the Constitution. I am
satisfied that the Act assailed as violative of the due process of law and the equal
protection of the laws clauses of the Constitution does not infringe upon them,
insofar as it affects associations, partnerships or corporations, the capital of which
is not wholly owned by citizens of the Philippines, and aliens, who are not and have
not been engaged in the retail business. I am, however, unable to persuade myself
that it does not violate said clauses insofar as the Act applies to associations and
partnerships referred to in the Act and to aliens, who are and have
1193
VOL. 101, MAY 31, 1957

1193
heretofore been engaged in said business. When they did engage in the retail
business there was no prohibition on or against them to engage in it. They assumed
and believed in good faith they were entitled to engage in the business. The Act
allows aliens to continue in business until their death or voluntary retirement f rom
the business or forfeiture of their license; and corporations, associations or
partnerships, the capital of which is not wholly owned by citizens of the Philippines
to continue in the business for a period of ten years from the date of the approval of
the Act (19 June 1954) or until the expiry of the term of the existence of the
association or partnership or corporation, whichever event comes first. The
prohibition on corporations, the capital of which is not wholly owned by citizens of
the Philippines, to engage in the retail business for a period of more than ten years
from the date of the approval of the Act or beyond the term of their corporate
existence, whichever event comes first, is valid and lawful, because the continuance
of the existence of such corporations is subject to whatever the Congress may
impose reasonably upon them by subsequent legislation. But the prohibition to
engage in the retail business by associations and partnerships, the capital of which
is not wholly owned by citizens of the Philippines, after ten years from the date of
the approval of the Act, even bef ore the end of the term of their existence as agreed
upon by the associates and partners, and by alien heirs to whom the retail business
is transmitted by the death of an alien engaged in the business, or by his executor
or administrator, amounts to a deprivation of their property without due process of
law. To my mind, the ten-year period from the date of the approval of the Act or
until the expiration of the term of the existence of the association and partnership,
whichever event comes first, and the sixmonth period granted to alien heirs of a
deceased alien,
1
________________
1
Section 76, Act No. 1459.
1194
1194
Ichong etc., et al. vs. Hernandez, etc,, and Sarmiento
his executor or administrator, to liquidate the business, do not cure the defect of the
law, because the effect of the prohibition is to compel them to sell or dispose of their
business. The price obtainable at such forced sale of the business would be
inadequate to reimburse and compensate the associates or partners of the
association or partnership, and the alien heirs of a deceased alien, engaged in the
retail business for the capital invested in it. The stock of merchandise bought and
sold at retail does not alone constitute the business. The goodwill that the
association, partnership and the alien had built up during a long period of effort,
patience and perseverance forms part of such business. The constitutional
provisions that no person shall be deprived of his property without due process of
law and that no person shall be denied the equal protection of the laws would
have no meaning as applied to associations or partnerships and alien heirs of an
alien engaged in the retail business if they were to be compelled to sell or dispose of
their business within ten years from the date of the approval of the Act and before
the end of the term of the existence of the associations and partnerships as agreed
upon by the associates and partners and within six months after the death of their
predecessorin-interest.
The authors of the Constitution were vigilant, caref ul and zealous in the
safeguard of the ownership of private agricultural lands which together with the
lands of the public domain constitute the priceless patrimony and mainstay of the
nation; yet, they did not deem it wise and prudent to deprive aliens and their heirs
of such lands,
1
For these reasons, I am of the opinion that section 1 of the Act, insofar as it
compels associations and partnerships referred to therein to wind up their retail
business within ten years from the date of the approval of the Act
________________
1
Section 1(1), Article III, of the Constitution.
Ibid.
Section 5, Article XIII, of the Constitution.
1195
VOL. 101, MAY 81. 1957

1195
even before the expiry of the term of their existence as agreed upon by the
associates and partners and section 3 of the Act, insofar as it compels the alien heirs
of a deceased alien engaged in the retail business in his lifetime, his executor or
administrator, to liquidate the business, are invalid, for they violate the due process
of law and the equal protection of the laws clauses of the Constitution.
Petition denied.

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[No. L-7995.

May 31, 1957]

1. 4.ID.; EQUAL PROTECTION OF THE LAW CLAUSE;WHEN NOT DEEMED

VOL. 101, MAY 81, 1957

necessary, must be considered not to have infringed the constitutional limitation of

PHILIPPINE REPORTS ANNOTATED

VOL. 101, MAY 31, 1957

PHILIPPINE REPORTS ANNOTATED

ORIGINAL ACTION in the Supreme Court. Injunction and Mandamus.

VOL. 101, MAY 31, 1957

VOL. 101, MAY 31, 1957

VOL. 101, MAY 31, 1957

VOL. 101, MAY 31, 1957

VOL. 101, MAY 31, 1957

55.82 174, 181, 924

65.05 279, 583, 333

33.56 205, 701, 134

67.30 467, 161, 667

29.38 294, 894, 227

60.89 462, 532, 901

35.72 392, 414, 875

VOL. 101, MAY 31, 1957

e. Dangers of alien control and dominance in retail.

VOL. 101, MAY 31, 1957

f. Law enacted in interest of national economic survival and security.

VOL. 101, MAY 31, 1957

VOL. 101, MAY 31, 1957

c. Authorities recognizing citizenship as basis for classification.

The rule in general is as follows:

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VOL. 101, MAY 81, 1957

instances, especially in times of crisis and emergency. We can do no better than

VII The Due Process of Law Limitation

a. Reasonability, the test of the limitation; determination by legislature decisive.

VOL. 101, MAY 31, 1957

VOL. 101, MAY 31, 1957

If political independence is a legitimate aspiration of a people, then economic

c. Law expressly held by Constitutional Convention to be within the sphere of

It would do well to refer to the nationalistic tendency manifested in various

VOL. 101, MAY 31, 1957

VOL. 101, MAY 31, 1957

VOL. 101, MAY 31, 1957

Pars, C. J., Bengzon, Reyes, A., Bautista Angelo,Concepcin, Reyes, J. B.

VOL. 101, MAY 31, 1957

Section 76, Act No. 1459.

Section 1(1), Article III, of the Constitution.

Section 5, Article XIII, of the Constitution.

VOL. 101, MAY 81. 1957

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