POLIC POWER

POLIC POWER

WALTER LUTZ, as Judicial Administrator of the Intestate Estate of the deceased Antonio Jayme Ledesma, plaintiff-appellant,

vs.

J. ANTONIO ARANETA, as the Collector of Internal Revenue, defendant-appellee.

This case was initiated in the Court of First Instance of Negros Occidental to test the legality of the taxes imposed by Commonwealth Act No. 567, otherwise known as the Sugar Adjustment Act.

Promulgated in 1940, the law in question opens (section 1) with a declaration of emergency, due to the threat to our industry by the imminent imposition of export taxes upon sugar as provided in the Tydings-McDuffe Act, and the "eventual loss of its preferential position in the United States market"; wherefore, the national policy was expressed "to obtain a readjustment of the benefits derived from the sugar industry by the component elements thereof" and "to stabilize the sugar industry so as to prepare it for the eventuality of the loss of its preferential position in the United States market and the imposition of the export taxes."

In section 2, Commonwealth Act 567 provides for an increase of the existing tax on the manufacture of sugar, on a graduated basis, on each picul of sugar manufactured; while section 3 levies on owners or persons in control of lands devoted to the cultivation of sugar cane and ceded to others for a consideration, on lease or otherwise

a tax equivalent to the difference between the money value of the rental or consideration collected and the amount representing 12 per centum of the assessed value of such land.

According to section 6 of the law

SEC. 6. All collections made under this Act shall accrue to a special fund in the Philippine Treasury, to be known as the 'Sugar Adjustment and Stabilization Fund,' and shall be paid out only for any or all of the following purposes or to attain any or all of the following objectives, as may be provided by law.

First, to place the sugar industry in a position to maintain itself, despite the gradual loss of the preferntial position of the Philippine sugar in the United States market, and ultimately to insure its continued existence notwithstanding the loss of that market and the consequent necessity of meeting competition in the free markets of the world;

Second, to readjust the benefits derived from the sugar industry by all of the component elements thereof the mill, the landowner, the planter of the sugar cane, and the laborers in the factory and in the field so that all might continue profitably to engage therein;lawphi1.net

Third, to limit the production of sugar to areas more economically suited to the production thereof; and

Fourth, to afford labor employed in the industry a living wage and to improve their living and working conditions: Provided, That the President of the Philippines may, until the adjourment of the next regular session of the National Assembly, make the necessary disbursements from the fund herein created (1) for the establishment and operation of sugar experiment station or stations and the undertaking of researchers (a) to increase the recoveries of the centrifugal sugar factories with the view of reducing manufacturing costs, (b) to produce and propagate higher yielding varieties of sugar cane more adaptable to different district conditions in the Philippines, (c) to lower the costs of raising sugar cane, (d) to improve the buying quality of denatured alcohol from molasses for motor fuel, (e) to determine the possibility of utilizing the other by-products of the industry, (f) to determine what crop or crops are suitable for rotation and for the utilization of excess cane lands, and (g) on other problems the solution of which would help rehabilitate and stabilize the industry, and (2) for the improvement of living and working conditions in sugar mills and sugar plantations, authorizing him to organize the necessary agency or agencies to take charge of the expenditure and allocation of said funds to carry out the purpose hereinbefore enumerated, and, likewise, authorizing the disbursement from the fund herein created of the necessary amount or amounts needed for salaries, wages, travelling expenses, equipment, and other sundry expenses of said agency or agencies.

Plaintiff, Walter Lutz, in his capacity as Judicial Administrator of the Intestate Estate of Antonio Jayme Ledesma, seeks to recover from the Collector of Internal Revenue the sum of P14,666.40 paid by the estate as taxes, under section 3 of the Act, for the crop years 1948-1949 and 1949-1950; alleging that such tax is unconstitutional and void, being levied for the aid and support of the sugar industry exclusively, which in plaintiff's opinion is not a public purpose for which a tax may be constitutioally levied. The action having been dismissed by the Court of First Instance, the plaintifs appealed the case directly to this Court (Judiciary Act, section 17).

The basic defect in the plaintiff's position is his assumption that the tax provided for in Commonwealth Act No. 567 is a pure exercise of the taxing power. Analysis of the Act, and particularly of section 6 (heretofore quoted in full), will show that the tax is levied with a regulatory purpose, to provide means for the rehabilitation and stabilization of the threatened sugar industry. In other words, the act is primarily an exercise of the police power.

This Court can take judicial notice of the fact that sugar production is one of the great industries of our nation, sugar occupying a leading position among its export products; that it gives employment to thousands of laborers in fields and factories; that it is a great source of the state's wealth, is one of the important sources of foreign exchange needed by our government, and is thus pivotal in the plans of a regime committed to a policy of currency stability. Its promotion, protection and advancement, therefore redounds greatly to the general welfare. Hence it was competent for the legislature to find that the general welfare demanded that the sugar industry should be stabilized in turn; and in the wide field of its police power, the lawmaking body could provide that the distribution of benefits therefrom be readjusted among its components to enable it to resist the added strain of the increase in taxes that it had to sustain (Sligh vs. Kirkwood, 237 U. S. 52, 59 L. Ed. 835; Johnson vs. State ex rel. Marey, 99 Fla. 1311, 128 So. 853; Maxcy Inc. vs. Mayo, 103 Fla. 552, 139 So. 121).

As stated in Johnson vs. State ex rel. Marey, with reference to the citrus industry in Florida

The protection of a large industry constituting one of the great sources of the state's wealth and therefore directly or indirectly affecting the welfare of so great a portion of the population of the State is affected to such an extent by public interests as to be within the police power of the sovereign. (128 Sp. 857).

Once it is conceded, as it must, that the protection and promotion of the sugar industry is a matter of public concern, it follows that the Legislature may determine within reasonable bounds what is necessary for its protection and expedient for its promotion. Here, the legislative discretion must be allowed fully play, subject only to the test of reasonableness; and it is not contended that the means provided in section 6 of the law (above quoted) bear no relation to the objective pursued or are oppressive in character. If objective and methods are alike constitutionally valid, no reason is seen why the state may not levy taxes to raise funds for their prosecution and attainment. Taxation may be made the implement of the state's police power (Great Atl. & Pac. Tea Co. vs. Grosjean, 301 U. S. 412, 81 L. Ed. 1193; U. S. vs. Butler, 297 U. S. 1, 80 L. Ed. 477; M'Culloch vs. Maryland, 4 Wheat. 316, 4 L. Ed. 579).

That the tax to be levied should burden the sugar producers themselves can hardly be a ground of complaint; indeed, it appears rational that the tax be obtained precisely from those who are to be benefited from the expenditure of the funds derived from it. At any rate, it is inherent in the power to tax that a state be free to select the subjects of taxation, and it has been repeatedly held that "inequalities which result from a singling out of one particular class for taxation, or exemption infringe no constitutional limitation" (Carmichael vs. Southern Coal & Coke Co., 301 U. S. 495, 81 L. Ed. 1245, citing numerous authorities, at p. 1251).

From the point of view we have taken it appears of no moment that the funds raised under the Sugar Stabilization Act, now in question, should be exclusively spent in aid of the sugar industry, since it is that very enterprise that is being protected. It may be that other industries are also in need of similar protection; that the legislature is not required by the Constitution to adhere to a policy of "all or none." As ruled in Minnesota ex rel. Pearson vs. Probate Court, 309 U. S. 270, 84 L. Ed. 744, "if the law presumably hits the evil where it is most felt, it is not to be overthrown because there are other instances to which it might have been applied;" and that "the legislative authority, exerted within its proper field, need not embrace all the evils within its reach" (N. L. R. B. vs. Jones & Laughlin Steel Corp. 301 U. S. 1, 81 L. Ed. 893).

Even from the standpoint that the Act is a pure tax measure, it cannot be said that the devotion of tax money to experimental stations to seek increase of efficiency in sugar production, utilization of by-products and solution of allied problems, as well as to the improvements of living and working conditions in sugar mills or plantations, without any part of such money being channeled directly to private persons, constitutes expenditure of tax money for private purposes, (compare Everson vs. Board of Education, 91 L. Ed. 472, 168 ALR 1392, 1400).

The decision appealed from is affirmed, with costs against appellant. So ordered.POWER OF TAXATIONANTERO M. SISON, JR., petitioner,

vs.

RUBEN B. ANCHETAThe success of the challenge posed in this suit for declaratory relief or prohibition proceeding 1 on the validity of Section I of Batas Pambansa Blg. 135 depends upon a showing of its constitutional infirmity. The assailed provision further amends Section 21 of the National Internal Revenue Code of 1977, which provides for rates of tax on citizens or residents on (a) taxable compensation income, (b) taxable net income, (c) royalties, prizes, and other winnings, (d) interest from bank deposits and yield or any other monetary benefit from deposit substitutes and from trust fund and similar arrangements, (e) dividends and share of individual partner in the net profits of taxable partnership, (f) adjusted gross income. 2 Petitioner 3 as taxpayer alleges that by virtue thereof, "he would be unduly discriminated against by the imposition of higher rates of tax upon his income arising from the exercise of his profession vis-a-vis those which are imposed upon fixed income or salaried individual taxpayers. 4 He characterizes the above sction as arbitrary amounting to class legislation, oppressive and capricious in character 5 For petitioner, therefore, there is a transgression of both the equal protection and due process clauses 6 of the Constitution as well as of the rule requiring uniformity in taxation. 7

The Court, in a resolution of January 26, 1982, required respondents to file an answer within 10 days from notice. Such an answer, after two extensions were granted the Office of the Solicitor General, was filed on May 28, 1982. 8 The facts as alleged were admitted but not the allegations which to their mind are "mere arguments, opinions or conclusions on the part of the petitioner, the truth [for them] being those stated [in their] Special and Affirmative Defenses." 9 The answer then affirmed: "Batas Pambansa Big. 135 is a valid exercise of the State's power to tax. The authorities and cases cited while correctly quoted or paraghraph do not support petitioner's stand." 10 The prayer is for the dismissal of the petition for lack of merit.

This Court finds such a plea more than justified. The petition must be dismissed.

1.It is manifest that the field of state activity has assumed a much wider scope, The reason was so clearly set forth by retired Chief Justice Makalintal thus: "The areas which used to be left to private enterprise and initiative and which the government was called upon to enter optionally, and only 'because it was better equipped to administer for the public welfare than is any private individual or group of individuals,' continue to lose their well-defined boundaries and to be absorbed within activities that the government must undertake in its sovereign capacity if it is to meet the increasing social challenges of the times." 11 Hence the need for more revenues. The power to tax, an inherent prerogative, has to be availed of to assure the performance of vital state functions. It is the source of the bulk of public funds. To praphrase a recent decision, taxes being the lifeblood of the government, their prompt and certain availability is of the essence. 12

2.The power to tax moreover, to borrow from Justice Malcolm, "is an attribute of sovereignty. It is the strongest of all the powers of of government." 13 It is, of course, to be admitted that for all its plenitude 'the power to tax is not unconfined. There are restrictions. The Constitution sets forth such limits . Adversely affecting as it does properly rights, both the due process and equal protection clauses inay properly be invoked, all petitioner does, to invalidate in appropriate cases a revenue measure. if it were otherwise, there would -be truth to the 1803 dictum of Chief Justice Marshall that "the power to tax involves the power to destroy." 14 In a separate opinion in Graves v. New York, 15 Justice Frankfurter, after referring to it as an 1, unfortunate remark characterized it as "a flourish of rhetoric [attributable to] the intellectual fashion of the times following] a free use of absolutes." 16 This is merely to emphasize that it is riot and there cannot be such a constitutional mandate. Justice Frankfurter could rightfully conclude: "The web of unreality spun from Marshall's famous dictum was brushed away by one stroke of Mr. Justice Holmess pen: 'The power to tax is not the power to destroy while this Court sits." 17 So it is in the Philippines.

3.This Court then is left with no choice. The Constitution as the fundamental law overrides any legislative or executive, act that runs counter to it. In any case therefore where it can be demonstrated that the challenged statutory provision as petitioner here alleges fails to abide by its command, then this Court must so declare and adjudge it null. The injury thus is centered on the question of whether the imposition of a higher tax rate on taxable net income derived from business or profession than on compensation is constitutionally infirm.

4,The difficulty confronting petitioner is thus apparent. He alleges arbitrariness. A mere allegation, as here. does not suffice. There must be a factual foundation of such unconstitutional taint. Considering that petitioner here would condemn such a provision as void or its face, he has not made out a case. This is merely to adhere to the authoritative doctrine that were the due process and equal protection clauses are invoked, considering that they arc not fixed rules but rather broad standards, there is a need for of such persuasive character as would lead to such a conclusion. Absent such a showing, the presumption of validity must prevail. 18

5.It is undoubted that the due process clause may be invoked where a taxing statute is so arbitrary that it finds no support in the Constitution. An obvious example is where it can be shown to amount to the confiscation of property. That would be a clear abuse of power. It then becomes the duty of this Court to say that such an arbitrary act amounted to the exercise of an authority not conferred. That properly calls for the application of the Holmes dictum. It has also been held that where the assailed tax measure is beyond the jurisdiction of the state, or is not for a public purpose, or, in case of a retroactive statute is so harsh and unreasonable, it is subject to attack on due process grounds. 19

6.Now for equal protection. The applicable standard to avoid the charge that there is a denial of this constitutional mandate whether the assailed act is in the exercise of the lice power or the power of eminent domain is to demonstrated that the governmental act assailed, far from being inspired by the attainment of the common weal was prompted by the spirit of hostility, or at the very least, discrimination that finds no support in reason. It suffices then that the laws operate equally and uniformly on all persons under similar circumstances or that all persons must be treated in the same manner, the conditions not being different, both in the privileges conferred and the liabilities imposed. Favoritism and undue preference cannot be allowed. For the principle is that equal protection and security shall be given to every person under circumtances which if not Identical are analogous. If law be looked upon in terms of burden or charges, those that fall within a class should be treated in the same fashion, whatever restrictions cast on some in the group equally binding on the rest." 20 That same formulation applies as well to taxation measures. The equal protection clause is, of course, inspired by the noble concept of approximating the Ideal of the laws benefits being available to all and the affairs of men being governed by that serene and impartial uniformity, which is of the very essence of the Idea of law. There is, however, wisdom, as well as realism in these words of Justice Frankfurter: "The equality at which the 'equal protection' clause aims is not a disembodied equality. The Fourteenth Amendment enjoins 'the equal protection of the laws,' and laws are not abstract propositions. They do not relate to abstract units A, B and C, but are expressions of policy arising out of specific difficulties, address to the attainment of specific ends by the use of specific remedies. The Constitution does not require things which are different in fact or opinion to be treated in law as though they were the same." 21 Hence the constant reiteration of the view that classification if rational in character is allowable. As a matter of fact, in a leading case of Lutz V. Araneta, 22 this Court, through Justice J.B.L. Reyes, went so far as to hold "at any rate, it is inherent in the power to tax that a state be free to select the subjects of taxation, and it has been repeatedly held that 'inequalities which result from a singling out of one particular class for taxation, or exemption infringe no constitutional limitation.'" 23

7.Petitioner likewise invoked the kindred concept of uniformity. According to the Constitution: "The rule of taxation shag be uniform and equitable." 24 This requirement is met according to Justice Laurel in Philippine Trust Company v. Yatco, 25 decided in 1940, when the tax "operates with the same force and effect in every place where the subject may be found. " 26 He likewise added: "The rule of uniformity does not call for perfect uniformity or perfect equality, because this is hardly attainable." 27 The problem of classification did not present itself in that case. It did not arise until nine years later, when the Supreme Court held: "Equality and uniformity in taxation means that all taxable articles or kinds of property of the same class shall be taxed at the same rate. The taxing power has the authority to make reasonable and natural classifications for purposes of taxation, ... . 28 As clarified by Justice Tuason, where "the differentiation" complained of "conforms to the practical dictates of justice and equity" it "is not discriminatory within the meaning of this clause and is therefore uniform." 29 There is quite a similarity then to the standard of equal protection for all that is required is that the tax "applies equally to all persons, firms and corporations placed in similar situation." 30

8.Further on this point. Apparently, what misled petitioner is his failure to take into consideration the distinction between a tax rate and a tax base. There is no legal objection to a broader tax base or taxable income by eliminating all deductible items and at the same time reducing the applicable tax rate. Taxpayers may be classified into different categories. To repeat, it. is enough that the classification must rest upon substantial distinctions that make real differences. In the case of the gross income taxation embodied in Batas Pambansa Blg. 135, the, discernible basis of classification is the susceptibility of the income to the application of generalized rules removing all deductible items for all taxpayers within the class and fixing a set of reduced tax rates to be applied to all of them. Taxpayers who are recipients of compensation income are set apart as a class. As there is practically no overhead expense, these taxpayers are e not entitled to make deductions for income tax purposes because they are in the same situation more or less. On the other hand, in the case of professionals in the practice of their calling and businessmen, there is no uniformity in the costs or expenses necessary to produce their income. It would not be just then to disregard the disparities by giving all of them zero deduction and indiscriminately impose on all alike the same tax rates on the basis of gross income. There is ample justification then for the Batasang Pambansa to adopt the gross system of income taxation to compensation income, while continuing the system of net income taxation as regards professional and business income.

9.Nothing can be clearer, therefore, than that the petition is without merit, considering the (1) lack of factual foundation to show the arbitrary character of the assailed provision; 31 (2) the force of controlling doctrines on due process, equal protection, and uniformity in taxation and (3) the reasonableness of the distinction between compensation and taxable net income of professionals and businessman certainly not a suspect classification,

WHEREFORE, the petition is dismissed. Costs against petitionerDUE PROCESS

A. PUBLICATION

TAADA VS. TUVERA

136 SCRA 27 (April 24, 1985)

Publication in the Official Gazette (Enforceability of a Statute)

FACTS:

Invoking the right of the people to be informed on matters of public concern as well as the principle that laws to be valid and enforceable must be published in the Official Gazette, petitioners filed for writ of mandamus to compel respondent public officials to publish and/or cause to publish various presidential decrees, letters of instructions, general orders, proclamations, executive orders, letters of implementations and administrative orders.

The Solicitor General, representing the respondents, moved for the dismissal of the case, contending that petitioners have no legal personality to bring the instant petition.

ISSUE:

Whether or not publication in the Official Gazette is required before any law or statute becomes valid and enforceable.

HELD:

Art. 2 of the Civil Code does not preclude the requirement of publication in the Official Gazette, even if the law itself provides for the date of its effectivity. The clear object of this provision is to give the general public adequate notice of the various laws which are to regulate their actions and conduct as citizens. Without such notice and publication, there would be no basis for the application of the maxim ignoratia legis nominem excusat. It would be the height of injustive to punish or otherwise burden a citizen for the transgression of a law which he had no notice whatsoever, not even a constructive one.

The very first clause of Section 1 of CA 638 reads: there shall be published in the Official Gazette. The word shall therein imposes upon respondent officials an imperative duty. That duty must be enforced if the constitutional right of the people to be informed on matter of public concern is to be given substance and validity.

The publication of presidential issuances of public nature or of general applicability is a requirement of due process. It is a rule of law that before a person may be bound by law, he must first be officially and specifically informed of its contents. The Court declared that presidential issuances of general application which have not been published have no force and effect.

B. ADMINISTRATIVE AND QUASI JUDICIAL PROCEEDINGS

ANG TIBAY, represented by TORIBIO TEODORO, manager and propietor, and

NATIONAL WORKERS BROTHERHOOD, petitioners,

vs.

THE COURT OF INDUSTRIAL RELATIONS and NATIONAL LABOR UNION, INC., respondents.

Office of the Solicitor-General Ozaeta and Assistant Attorney Barcelona for the Court of Industrial Relations.

Antonio D. Paguia for National Labor Unon.

Claro M. Recto for petitioner "Ang Tibay".

Jose M. Casal for National Workers' Brotherhood.

LAUREL, J.:

The Solicitor-General in behalf of the respondent Court of Industrial Relations in the above-entitled case has filed a motion for reconsideration and moves that, for the reasons stated in his motion, we reconsider the following legal conclusions of the majority opinion of this Court:

1. Que un contrato de trabajo, asi individual como colectivo, sin termino fijo de duracion o que no sea para una determinada, termina o bien por voluntad de cualquiera de las partes o cada vez que ilega el plazo fijado para el pago de los salarios segun costumbre en la localidad o cunado se termine la obra;

2. Que los obreros de una empresa fabril, que han celebrado contrato, ya individual ya colectivamente, con ell, sin tiempo fijo, y que se han visto obligados a cesar en sus tarbajos por haberse declarando paro forzoso en la fabrica en la cual tarbajan, dejan de ser empleados u obreros de la misma;

3. Que un patrono o sociedad que ha celebrado un contrato colectivo de trabajo con sus osbreros sin tiempo fijo de duracion y sin ser para una obra determiminada y que se niega a readmitir a dichos obreros que cesaron como consecuencia de un paro forzoso, no es culpable de practica injusta in incurre en la sancion penal del articulo 5 de la Ley No. 213 del Commonwealth, aunque su negativa a readmitir se deba a que dichos obreros pertenecen a un determinado organismo obrero, puesto que tales ya han dejado deser empleados suyos por terminacion del contrato en virtud del paro.

The respondent National Labor Union, Inc., on the other hand, prays for the vacation of the judgement rendered by the majority of this Court and the remanding of the case to the Court of Industrial Relations for a new trial, and avers:

1. That Toribio Teodoro's claim that on September 26, 1938, there was shortage of leather soles in ANG TIBAY making it necessary for him to temporarily lay off the members of the National Labor Union Inc., is entirely false and unsupported by the records of the Bureau of Customs and the Books of Accounts of native dealers in leather.

2. That the supposed lack of leather materials claimed by Toribio Teodoro was but a scheme to systematically prevent the forfeiture of this bond despite the breach of his CONTRACT with the Philippine Army.

3. That Toribio Teodoro's letter to the Philippine Army dated September 29, 1938, (re supposed delay of leather soles from the States) was but a scheme to systematically prevent the forfeiture of this bond despite the breach of his CONTRACT with the Philippine Army.

4. That the National Worker's Brotherhood of ANG TIBAY is a company or employer union dominated by Toribio Teodoro, the existence and functions of which are illegal. (281 U.S., 548, petitioner's printed memorandum, p. 25.)

5. That in the exercise by the laborers of their rights to collective bargaining, majority rule and elective representation are highly essential and indispensable. (Sections 2 and 5, Commonwealth Act No. 213.)

6. That the century provisions of the Civil Code which had been (the) principal source of dissensions and continuous civil war in Spain cannot and should not be made applicable in interpreting and applying the salutary provisions of a modern labor legislation of American origin where the industrial peace has always been the rule.

7. That the employer Toribio Teodoro was guilty of unfair labor practice for discriminating against the National Labor Union, Inc., and unjustly favoring the National Workers' Brotherhood.

8. That the exhibits hereto attached are so inaccessible to the respondents that even with the exercise of due diligence they could not be expected to have obtained them and offered as evidence in the Court of Industrial Relations.

9. That the attached documents and exhibits are of such far-reaching importance and effect that their admission would necessarily mean the modification and reversal of the judgment rendered herein.

The petitioner, Ang Tibay, has filed an opposition both to the motion for reconsideration of the respondent National Labor Union, Inc.

In view of the conclusion reached by us and to be herein after stead with reference to the motion for a new trial of the respondent National Labor Union, Inc., we are of the opinion that it is not necessary to pass upon the motion for reconsideration of the Solicitor-General. We shall proceed to dispose of the motion for new trial of the respondent labor union. Before doing this, however, we deem it necessary, in the interest of orderly procedure in cases of this nature, in interest of orderly procedure in cases of this nature, to make several observations regarding the nature of the powers of the Court of Industrial Relations and emphasize certain guiding principles which should be observed in the trial of cases brought before it. We have re-examined the entire record of the proceedings had before the Court of Industrial Relations in this case, and we have found no substantial evidence that the exclusion of the 89 laborers here was due to their union affiliation or activity. The whole transcript taken contains what transpired during the hearing and is more of a record of contradictory and conflicting statements of opposing counsel, with sporadic conclusion drawn to suit their own views. It is evident that these statements and expressions of views of counsel have no evidentiary value.

The Court of Industrial Relations is a special court whose functions are specifically stated in the law of its creation (Commonwealth Act No. 103). It is more an administrative than a part of the integrated judicial system of the nation. It is not intended to be a mere receptive organ of the Government. Unlike a court of justice which is essentially passive, acting only when its jurisdiction is invoked and deciding only cases that are presented to it by the parties litigant, the function of the Court of Industrial Relations, as will appear from perusal of its organic law, is more active, affirmative and dynamic. It not only exercises judicial or quasi-judicial functions in the determination of disputes between employers and employees but its functions in the determination of disputes between employers and employees but its functions are far more comprehensive and expensive. It has jurisdiction over the entire Philippines, to consider, investigate, decide, and settle any question, matter controversy or dispute arising between, and/or affecting employers and employees or laborers, and regulate the relations between them, subject to, and in accordance with, the provisions of Commonwealth Act No. 103 (section 1). It shall take cognizance or purposes of prevention, arbitration, decision and settlement, of any industrial or agricultural dispute causing or likely to cause a strike or lockout, arising from differences as regards wages, shares or compensation, hours of labor or conditions of tenancy or employment, between landlords and tenants or farm-laborers, provided that the number of employees, laborers or tenants of farm-laborers involved exceeds thirty, and such industrial or agricultural dispute is submitted to the Court by the Secretary of Labor or by any or both of the parties to the controversy and certified by the Secretary of labor as existing and proper to be by the Secretary of Labor as existing and proper to be dealth with by the Court for the sake of public interest. (Section 4, ibid.) It shall, before hearing the dispute and in the course of such hearing, endeavor to reconcile the parties and induce them to settle the dispute by amicable agreement. (Paragraph 2, section 4, ibid.) When directed by the President of the Philippines, it shall investigate and study all industries established in a designated locality, with a view to determinating the necessity and fairness of fixing and adopting for such industry or locality a minimum wage or share of laborers or tenants, or a maximum "canon" or rental to be paid by the "inquilinos" or tenants or less to landowners. (Section 5, ibid.) In fine, it may appeal to voluntary arbitration in the settlement of industrial disputes; may employ mediation or conciliation for that purpose, or recur to the more effective system of official investigation and compulsory arbitration in order to determine specific controversies between labor and capital industry and in agriculture. There is in reality here a mingling of executive and judicial functions, which is a departure from the rigid doctrine of the separation of governmental powers.

In the case of Goseco vs. Court of Industrial Relations et al., G.R. No. 46673, promulgated September 13, 1939, we had occasion to joint out that the Court of Industrial Relations et al., G. R. No. 46673, promulgated September 13, 1939, we had occasion to point out that the Court of Industrial Relations is not narrowly constrained by technical rules of procedure, and the Act requires it to "act according to justice and equity and substantial merits of the case, without regard to technicalities or legal forms and shall not be bound by any technicalities or legal forms and shall not be bound by any technical rules of legal evidence but may inform its mind in such manner as it may deem just and equitable." (Section 20, Commonwealth Act No. 103.) It shall not be restricted to the specific relief claimed or demands made by the parties to the industrial or agricultural dispute, but may include in the award, order or decision any matter or determination which may be deemed necessary or expedient for the purpose of settling the dispute or of preventing further industrial or agricultural disputes. (section 13, ibid.) And in the light of this legislative policy, appeals to this Court have been especially regulated by the rules recently promulgated by the rules recently promulgated by this Court to carry into the effect the avowed legislative purpose. The fact, however, that the Court of Industrial Relations may be said to be free from the rigidity of certain procedural requirements does not mean that it can, in justifiable cases before it, entirely ignore or disregard the fundamental and essential requirements of due process in trials and investigations of an administrative character. There are primary rights which must be respected even in proceedings of this character:

(1) The first of these rights is the right to a hearing, which includes the right of the party interested or affected to present his own case and submit evidence in support thereof. In the language of Chief Hughes, in Morgan v. U.S., 304 U.S. 1, 58 S. Ct. 773, 999, 82 Law. ed. 1129, "the liberty and property of the citizen shall be protected by the rudimentary requirements of fair play.

(2) Not only must the party be given an opportunity to present his case and to adduce evidence tending to establish the rights which he asserts but the tribunal must consider the evidence presented. (Chief Justice Hughes in Morgan v. U.S. 298 U.S. 468, 56 S. Ct. 906, 80 law. ed. 1288.) In the language of this court in Edwards vs. McCoy, 22 Phil., 598, "the right to adduce evidence, without the corresponding duty on the part of the board to consider it, is vain. Such right is conspicuously futile if the person or persons to whom the evidence is presented can thrust it aside without notice or consideration."

(3) "While the duty to deliberate does not impose the obligation to decide right, it does imply a necessity which cannot be disregarded, namely, that of having something to support it is a nullity, a place when directly attached." (Edwards vs. McCoy, supra.) This principle emanates from the more fundamental is contrary to the vesting of unlimited power anywhere. Law is both a grant and a limitation upon power.

(4) Not only must there be some evidence to support a finding or conclusion (City of Manila vs. Agustin, G.R. No. 45844, promulgated November 29, 1937, XXXVI O. G. 1335), but the evidence must be "substantial." (Washington, Virginia and Maryland Coach Co. v. national labor Relations Board, 301 U.S. 142, 147, 57 S. Ct. 648, 650, 81 Law. ed. 965.) It means such relevant evidence as a reasonable mind accept as adequate to support a conclusion." (Appalachian Electric Power v. National Labor Relations Board, 4 Cir., 93 F. 2d 985, 989; National Labor Relations Board v. Thompson Products, 6 Cir., 97 F. 2d 13, 15; Ballston-Stillwater Knitting Co. v. National Labor Relations Board, 2 Cir., 98 F. 2d 758, 760.) . . . The statute provides that "the rules of evidence prevailing in courts of law and equity shall not be controlling.' The obvious purpose of this and similar provisions is to free administrative boards from the compulsion of technical rules so that the mere admission of matter which would be deemed incompetent inn judicial proceedings would not invalidate the administrative order. (Interstate Commerce Commission v. Baird, 194 U.S. 25, 44, 24 S. Ct. 563, 568, 48 Law. ed. 860; Interstate Commerce Commission v. Louisville and Nashville R. Co., 227 U.S. 88, 93 33 S. Ct. 185, 187, 57 Law. ed. 431; United States v. Abilene and Southern Ry. Co. S. Ct. 220, 225, 74 Law. ed. 624.) But this assurance of a desirable flexibility in administrative procedure does not go far as to justify orders without a basis in evidence having rational probative force. Mere uncorroborated hearsay or rumor does not constitute substantial evidence. (Consolidated Edison Co. v. National Labor Relations Board, 59 S. Ct. 206, 83 Law. ed. No. 4, Adv. Op., p. 131.)"

(5) The decision must be rendered on the evidence presented at the hearing, or at least contained in the record and disclosed to the parties affected. (Interstate Commence Commission vs. L. & N. R. Co., 227 U.S. 88, 33 S. Ct. 185, 57 Law. ed. 431.) Only by confining the administrative tribunal to the evidence disclosed to the parties, can the latter be protected in their right to know and meet the case against them. It should not, however, detract from their duty actively to see that the law is enforced, and for that purpose, to use the authorized legal methods of securing evidence and informing itself of facts material and relevant to the controversy. Boards of inquiry may be appointed for the purpose of investigating and determining the facts in any given case, but their report and decision are only advisory. (Section 9, Commonwealth Act No. 103.) The Court of Industrial Relations may refer any industrial or agricultural dispute or any matter under its consideration or advisement to a local board of inquiry, a provincial fiscal. a justice of the peace or any public official in any part of the Philippines for investigation, report and recommendation, and may delegate to such board or public official such powers and functions as the said Court of Industrial Relations may deem necessary, but such delegation shall not affect the exercise of the Court itself of any of its powers. (Section 10, ibid.)

(6) The Court of Industrial Relations or any of its judges, therefore, must act on its or his own independent consideration of the law and facts of the controversy, and not simply accept the views of a subordinate in arriving at a decision. It may be that the volume of work is such that it is literally Relations personally to decide all controversies coming before them. In the United States the difficulty is solved with the enactment of statutory authority authorizing examiners or other subordinates to render final decision, with the right to appeal to board or commission, but in our case there is no such statutory authority.

(7) The Court of Industrial Relations should, in all controversial questions, render its decision in such a manner that the parties to the proceeding can know the various issues involved, and the reasons for the decision rendered. The performance of this duty is inseparable from the authority conferred upon it.

In the right of the foregoing fundamental principles, it is sufficient to observe here that, except as to the alleged agreement between the Ang Tibay and the National Worker's Brotherhood (appendix A), the record is barren and does not satisfy the thirst for a factual basis upon which to predicate, in a national way, a conclusion of law.

This result, however, does not now preclude the concession of a new trial prayed for the by respondent National Labor Union, Inc., it is alleged that "the supposed lack of material claimed by Toribio Teodoro was but a scheme adopted to systematically discharged all the members of the National Labor Union Inc., from work" and this avernment is desired to be proved by the petitioner with the "records of the Bureau of Customs and the Books of Accounts of native dealers in leather"; that "the National Workers Brotherhood Union of Ang Tibay is a company or employer union dominated by Toribio Teodoro, the existence and functions of which are illegal." Petitioner further alleges under oath that the exhibits attached to the petition to prove his substantial avernments" are so inaccessible to the respondents that even within the exercise of due diligence they could not be expected to have obtained them and offered as evidence in the Court of Industrial Relations", and that the documents attached to the petition "are of such far reaching importance and effect that their admission would necessarily mean the modification and reversal of the judgment rendered herein." We have considered the reply of Ang Tibay and its arguments against the petition. By and large, after considerable discussions, we have come to the conclusion that the interest of justice would be better served if the movant is given opportunity to present at the hearing the documents referred to in his motion and such other evidence as may be relevant to the main issue involved. The legislation which created the Court of Industrial Relations and under which it acts is new. The failure to grasp the fundamental issue involved is not entirely attributable to the parties adversely affected by the result. Accordingly, the motion for a new trial should be and the same is hereby granted, and the entire record of this case shall be remanded to the Court of Industrial Relations, with instruction that it reopen the case, receive all such evidence as may be relevant and otherwise proceed in accordance with the requirements set forth hereinabove. So ordered.C. ACADEMIC DISCIPLINE

ALCUAZ VS PSBA

PARAS, J.:

On May 2, 1988, this Court through its Second Division rendered a Decision in the instant case which prodded the Intervenor Union (hereinafter referred to as the Union) to file a motion for reconsideration. Its argument hinges on the pronouncement that

x x x. Likewise, it is provided in the Manual, that the "written contracts" required for college teachers are for one semester. It is thus evident that after the close of the first semester, the PSBA-QC no longer has any existing contract either with the students or with intervening teachers. Such being the case, charge of denial of due process is untenable. It is time-honored principle that contracts are respected as the law between the contracting parties. x x x (p. 12, Decision, italics supplied).(p. 874-875, Rollo)

with the allegedly inevitable consequence of extenuating the pernicious practice of management to arbitrarily and wantonly terminate teachers simply because their contracts of employment have already lapsed.

The motion likewise points out the fact that two of the faculty members, namely Mr. Asser (Bong) Tamayo, and Mr. Rene Encarnacion, supposedly found guilty by the Investigating Committee headed by Mr. Antonio M. Magtalas (p. 342, Rollo), had been issued permanent appointments (not mere temporary contracts) by no less than the President of the School himself. The appointment of Mr. Asser (Bong) Tamayo dated August 9, 1986 (p. 887, Rollo) can attest to this claim.

It is on the basis of the foregoing that We hereby amend Our previous statements on the matter.

In a recent Decision, 1 this Court had the opportunity to quite emphatically enunciate the precept that full-time teachers who have rendered three (3) years of satisfactory service shall be considered permanent (par. 75 of the Manual of Regulations for Private Schools). Thus, having attained a permanent status, they cannot be removed from office except for just cause and after due process.

Now applying the same principle in the case at bar, Mr. Asser (Bong) Tamayo having stayed in the Philippine School of Business Administration, Quezon City Branch (PSBA, for brevity) for three and one-half (3 1/2) years (in a full-time capacity) may be deemed a permanent faculty member provided, of course, the services rendered have been satisfactory to the school. However, because the investigation showed that Mr. Tamayo had participated in the unlawful demonstration, his services cannot be deemed satisfactory.

In the case of Mr. Rene Encarnacion, and Mr. Severino Cortes, Jr. who taught in PSBA for two and one-half (2 1/2) years and one and one-half (1 1/2) years respectively, to them a permanent status cannot be accorded for failure to meet the minimum requirement of three (3) years set by the aforementioned Manual of Regulations. Of equal importance, at this point, is the fact that the letter of appointment had been extended only to Mr. Tamayo and not to Mr. Encarnacion, neither to Mr. Cortes, Jr.

WHEREFORE, for the reasons adverted to hereinabove, the motion for reconsideration, except insofar as We have made the aforementioned clarificatory statements about the tenure of full-time teachers and professors, is hereby DENIED.

In conclusion, We wish to reiterate that while We value the right of students to complete their education in the school or university of their choice, and while We fully respect their right to resort to rallies and demonstrations for the redress of their grievances and as a part of their freedom of speech and their right to assemble, still such rallies, demonstrations, and assemblies must always be conducted peacefully, and without resort to intimidation, coercion, or violence. Academic freedom in all its forms, demands the full display of discipline. To hold otherwise would be to subvert freedom into degenerate license.

SO ORDERED.SUBSTANTIVE DUE PROCESS

THE UNITED STATES, plaintiff-appellee,

vs.

LUIS TORIBIO, defendant-appellant.

Rodriguez & Del Rosario, for appellant.

Attorney-General Villamor, for appellee.

CARSON, J.:

The evidence of record fully sustains the findings of the trial court that the appellant slaughtered or caused to be slaughtered for human consumption, the carabao described in the information, without a permit from the municipal treasure of the municipality wherein it was slaughtered, in violation of the provisions of sections 30 and 33 of Act No. 1147, an Act regulating the registration, branding, and slaughter of large cattle.

It appears that in the town of Carmen, in the Province of Bohol, wherein the animal was slaughtered there is no municipal slaughterhouse, and counsel for appellant contends that under such circumstances the provisions of Act No. 1147 do not prohibit nor penalize the slaughter of large cattle without a permit of the municipal treasure. Sections 30, 31, 32, and 33 of the Act are as follows:

SEC. 30. No large cattle shall be slaughtered or killed for food at the municipal slaughterhouse except upon permit secured from the municipal treasure. Before issuing the permit for the slaughter of large cattle for human consumption, the municipal treasurer shall require for branded cattle the production of the original certificate of ownership and certificates of transfer showing title in the person applying for the permit, and for unbranded cattle such evidence as may satisfy said treasurer as to the ownership of the animals for which permit to slaughter has been requested.

SEC. 31. No permit to slaughter has been carabaos shall be granted by the municipal treasurer unless such animals are unfit for agricultural work or for draft purposes, and in no event shall a permit be given to slaughter for food any animal of any kind which is not fit for human consumption.

SEC. 32. The municipal treasurer shall keep a record of all permits for slaughter issued by him, and such record shall show the name and residence of the owner, and the class, sex, age, brands, knots of radiated hair commonly know as remolinos or cowlicks, and other marks of identification of the animal for the slaughter of which permit is issued and the date on which such permit is issued. Names of owners shall be alphabetically arranged in the record, together with date of permit.

A copy of the record of permits granted for slaughter shall be forwarded monthly to the provincial treasurer, who shall file and properly index the same under the name of the owner, together with date of permit.

SEC. 33. Any person slaughtering or causing to be slaughtered for human consumption or killing for food at the municipal slaughterhouse any large cattle except upon permit duly secured from the municipal treasurer, shall be punished by a fine of not less than ten nor more than five hundred pesos, Philippine currency, or by imprisonment for not less than one month nor more than six months, or by both such fine and imprisonment, in the discretion of the court.

It is contended that the proper construction of the language of these provisions limits the prohibition contained in section 30 and the penalty imposed in section 33 to cases (1) of slaughter of large cattle for human consumption in a municipal slaughter without a permit duly secured from the municipal treasurer, and (2) cases of killing of large cattle for food in a municipal slaughterhouse without a permit duly secured from the municipal treasurer; and it is urged that the municipality of Carmen not being provided with a municipal slaughterhouse, neither the prohibition nor the penalty is applicable to cases of slaughter of large cattle without a permit in that municipality.

We are of opinion, however, that the prohibition contained in section 30 refers (1) to the slaughter of large cattle for human consumption, anywhere, without a permit duly secured from the municipal treasurer, and (2) expressly and specifically to the killing for food of large cattle at a municipal slaughterhouse without such permit; and that the penalty provided in section 33 applies generally to the slaughter of large cattle for human consumption, anywhere, without a permit duly secured from the municipal treasurer, and specifically to the killing for food of large cattle at a municipal slaughterhouse without such permit.

It may be admitted at once, that the pertinent language of those sections taken by itself and examined apart from the context fairly admits of two constructions: one whereby the phrase "at the municipal slaughterhouse" may be taken as limiting and restricting both the word "slaughtered" and the words "killed for food" in section 30, and the words "slaughtering or causing to be slaughtered for human consumption" and the words "killing for food" in section 33; and the other whereby the phrase "at the municipal slaughterhouse" may be taken as limiting and restricting merely the words "killed for food" and "killing for food" as used in those sections. But upon a reading of the whole Act, and keeping in mind the manifest and expressed purpose and object of its enactment, it is very clear that the latter construction is that which should be adopted.

The Act primarily seeks to protect the "large cattle" of the Philippine Islands against theft and to make easy the recovery and return of such cattle to their proper owners when lost, strayed, or stolen. To this end it provides an elaborate and compulsory system for the separate branding and registry of ownership of all such cattle throughout the Islands, whereby owners are enabled readily and easily to establish their title; it prohibits and invalidates all transfers of large cattle unaccompanied by certificates of transfer issued by the proper officer in the municipality where the contract of sale is made; and it provides also for the disposition of thieves or persons unlawfully in possession, so as to protect the rights of the true owners. All this, manifestly, in order to make it difficult for any one but the rightful owner of such cattle to retain them in his possession or to dispose of them to others. But the usefulness of this elaborate and compulsory system of identification, resting as it does on the official registry of the brands and marks on each separate animal throughout the Islands, would be largely impaired, if not totally destroyed, if such animals were requiring proof of ownership and the production of certificates of registry by the person slaughtering or causing them to be slaughtered, and this especially if the animals were slaughtered privately or in a clandestine manner outside of a municipal slaughterhouse. Hence, as it would appear, sections 30 and 33 prohibit and penalize the slaughter for human consumption or killing for food at a municipal slaughterhouse of such animals without a permit issued by the municipal treasurer, and section 32 provides for the keeping of detailed records of all such permits in the office of the municipal and also of the provincial treasurer.

If, however, the construction be placed on these sections which is contended for by the appellant, it will readily be seen that all these carefully worked out provisions for the registry and record of the brands and marks of identification of all large cattle in the Islands would prove in large part abortion, since thieves and persons unlawfully in possession of such cattle, and naturally would, evade the provisions of the law by slaughtering them outside of municipal slaughterhouses, and thus enjoy the fruits of their wrongdoing without exposing themselves to the danger of detection incident to the bringing of the animals to the public slaughterhouse, where the brands and other identification marks might be scrutinized and proof of ownership required.

Where the language of a statute is fairly susceptible of two or more constructions, that construction should be adopted which will most tend to give effect to the manifest intent of the lawmaker and promote the object for which the statute was enacted, and a construction should be rejected which would tend to render abortive other provisions of the statute and to defeat the object which the legislator sought to attain by its enactment. We are of opinion, therefore, that sections 30 and 33 of the Act prohibit and penalize the slaughtering or causing to be slaughtered for human consumption of large cattle at any place without the permit provided for in section 30.

It is not essential that an explanation be found for the express prohibition in these sections of the "killing for food at a municipal slaughterhouse" of such animals, despite the fact that this prohibition is clearly included in the general prohibition of the slaughter of such animals for human consumption anywhere; but it is not improbable that the requirement for the issue of a permit in such cases was expressly and specifically mentioned out of superabundance of precaution, and to avoid all possibility of misunderstanding in the event that some of the municipalities should be disposed to modify or vary the general provisions of the law by the passage of local ordinances or regulations for the control of municipal slaughterhouse.

Similar reasoning applied to the specific provisions of section 31 of the Act leads to the same conclusion. One of the secondary purposes of the law, as set out in that section, is to prevent the slaughter for food of carabaos fit for agricultural and draft purposes, and of all animals unfit for human consumption. A construction which would limit the prohibitions and penalties prescribed in the statute to the killing of such animals in municipal slaughterhouses, leaving unprohibited and unpenalized their slaughter outside of such establishments, so manifestly tends to defeat the purpose and object of the legislator, that unless imperatively demanded by the language of the statute it should be rejected; and, as we have already indicated, the language of the statute is clearly susceptible of the construction which we have placed upon it, which tends to make effective the provisions of this as well as all the other sections of the Act.

It appears that the defendant did in fact apply for a permit to slaughter his carabao, and that it was denied him on the ground that the animal was not unfit "for agricultural work or for draft purposes." Counsel for appellant contends that the statute, in so far as it undertakes to penalize the slaughter of carabaos for human consumption as food, without first obtaining a permit which can not be procured in the event that the animal is not unfit "for agricultural work or draft purposes," is unconstitutional and in violation of the terms of section 5 of the Philippine Bill (Act of Congress, July 1, 1902), which provides that "no law shall be enacted which shall deprive any person of life, liberty, or property without due process of law."

It is not quite clear from the argument of counsel whether his contention is that this provision of the statute constitutes a taking of property for public use in the exercise of the right of eminent domain without providing for the compensation of the owners, or that it is an undue and unauthorized exercise of the police power of the State. But whatever may be the basis of his contention, we are of opinion, appropriating, with necessary modifications understood, the language of that great jurist, Chief Justice Shaw (in the case of Com. vs. Tewksbury, 11 Met., 55, where the question involved was the constitutionality of a statute prohibiting and penalizing the taking or carrying away by any person, including the owner, of any stones, gravel, or sand, from any of the beaches in the town of Chesea,) that the law in question "is not a taking of the property for public use, within the meaning of the constitution, but is a just and legitimate exercise of the power of the legislature to regulate and restrain such particular use of the property as would be inconsistent with or injurious to the rights of the public. All property is acquired and held under the tacit condition that it shall not be so used as to injure the equal rights of others or greatly impair the public rights and interest of the community."

It may be conceded that the benificial use and exclusive enjoyment of the property of all carabao owners in these Islands is to a greater or less degree interfered with by the provisions of the statute; and that, without inquiring what quantum of interest thus passes from the owners of such cattle, it is an interest the deprivation of which detracts from their right and authority, and in some degree interferes with their exclusive possession and control of their property, so that if the regulations in question were enacted for purely private purpose, the statute, in so far as these regulations are concerned, would be a violation of the provisions of the Philippine Bill relied on be appellant; but we are satisfied that it is not such a taking, such an interference with the right and title of the owners, as is involved in the exercise by the State of the right of eminent domain, so as to entitle these owners to compensation, and that it is no more than "a just restrain of an injurious private use of the property, which the legislature had authority to impose."

In the case of Com. vs. Alger (7 Cush., 53, 84), wherein the doctrine laid down in Com. vs. Tewksbury (supra) was reviewed and affirmed, the same eminent jurist who wrote the former opinion, in distinguishing the exercise of the right of eminent domain from the exercise of the sovereign police powers of the State, said:

We think it is settled principle, growing out of the nature of well-ordered civil society, that every holder of property, however absolute and unqualified may be his title, holds it under the implied liability that his use of it may be so regulated that is shall not be injurious to the equal enjoyment of others having an equal right to the enjoyment of their property, nor injurious to the rights of the community. . . . Rights of property, like all other social and conventional rights, are subject to such reasonable limitations in their enjoyment as shall prevent them from being injurious, and to such reasonable restrain and regulations establish by law, as the legislature, under the governing and controlling power vested in them by the constitution, may think necessary and expedient.

This is very different from the right of eminent domain, the right of a government to take and appropriate private property to public use, whenever the public exigency requires it; which can be done only on condition of providing a reasonable compensation therefor. The power we allude to is rather the police power, the power vested in the legislature by the constitution, to make, ordain, and establish all manner of wholesome and reasonable laws, statutes, and ordinances, either with penalties or without, not repugnant to the constitution, as they shall judge to be for the good and welfare of the commonwealth, and of the subjects of the same.

It is much easier to perceive and realize the existence and sources of this power than to mark its boundaries or prescribe limits to its exercise.

Applying these principles, we are opinion that the restrain placed by the law on the slaughter for human consumption of carabaos fit for agricultural work and draft purpose is not an appropriation of property interests to a "public use," and is not, therefore, within the principle of the exercise by the State of the right of eminent domain. It is fact a mere restriction or limitation upon a private use, which the legislature deemed to be determental to the public welfare. And we think that an examination of the general provisions of the statute in relation to the public interest which it seeks to safeguard and the public necessities for which it provides, leaves no room for doubt that the limitations and restraints imposed upon the exercise of rights of ownership by the particular provisions of the statute under consideration were imposed not for private purposes but, strictly, in the promotion of the "general welfare" and "the public interest" in the exercise of the sovereign police power which every State possesses for the general public welfare and which "reaches to every species of property within the commonwealth."

For several years prior to the enactment of the statute a virulent contagious or infectious disease had threatened the total extinction of carabaos in these Islands, in many sections sweeping away seventy, eighty, and in some cases as much as ninety and even one hundred per cent of these animals. Agriculture being the principal occupation of the people, and the carabao being the work animal almost exclusively in use in the fields as well as for draft purposes, the ravages of the disease with which they were infected struck an almost vital blow at the material welfare of the country. large areas of productive land lay waste for years, and the production of rice, the staple food of the inhabitants of the Islands, fell off to such an extent that the impoverished people were compelled to spend many millions of pesos in its importation, notwithstanding the fact that with sufficient work animals to cultivate the fields the arable rice lands of the country could easily be made to produce a supply more that sufficient for its own needs. The drain upon the resources of the Islands was such that famine soon began to make itself felt, hope sank in the breast of the people, and in many provinces the energies of the breadwinners seemed to be paralyzed by the apparently hopeless struggle for existence with which they were confronted.

To meet these conditions, large sums of money were expended by the Government in relieving the immediate needs of the starving people, three millions of dollars were voted by the Congress of the United States as a relief or famine fund, public works were undertaken to furnish employment in the provinces where the need was most pressing, and every effort made to alleviate the suffering incident to the widespread failure of the crops throughout the Islands, due in large measure to the lack of animals fit for agricultural work and draft purposes.

Such measures, however, could only temporarily relieve the situation, because in an agricultural community material progress and permanent prosperity could hardly be hoped for in the absence of the work animals upon which such a community must necessarily rely for the cultivation of the fields and the transportation of the products of the fields to market. Accordingly efforts were made by the Government to increase the supply of these animals by importation, but, as appears from the official reports on this subject, hope for the future depended largely on the conservation of those animals which had been spared from the ravages of the diseased, and their redistribution throughout the Islands where the need for them was greatest.

At large expense, the services of experts were employed, with a view to the discovery and applications of preventive and curative remedies, and it is hoped that these measures have proved in some degree successful in protecting the present inadequate supply of large cattle, and that the gradual increase and redistribution of these animals throughout the Archipelago, in response to the operation of the laws of supply and demand, will ultimately results in practically relieving those sections which suffered most by the loss of their work animals.

As was to be expected under such conditions, the price of carabaos rapidly increase from the three to five fold or more, and it may fairly be presumed that even if the conservative measures now adopted prove entirely successful, the scant supply will keep the price of these animals at a high figure until the natural increase shall have more nearly equalized the supply to the demand.

Coincident with and probably intimately connected with this sudden rise in the price of cattle, the crime of cattle stealing became extremely prevalent throughout the Islands, necessitating the enactment of a special law penalizing with the severest penalties the theft of carabaos and other personal property by roving bands; and it must be assumed from the legislative authority found that the general welfare of the Islands necessitated the enactment of special and somewhat burdensome provisions for the branding and registration of large cattle, and supervision and restriction of their slaughter for food. It will hardly be questioned that the provisions of the statute touching the branding and registration of such cattle, and prohibiting and penalizing the slaughter of diseased cattle for food were enacted in the due and proper exercise of the police power of the State; and we are of opinion that, under all the circumstances, the provision of the statute prohibiting and penalizing the slaughter for human consumption of carabaos fit for work were in like manner enacted in the due and proper exercise of that power, justified by the exigent necessities of existing conditions, and the right of the State to protect itself against the overwhelming disaster incident to the further reduction of the supply of animals fit for agricultural work or draft purposes.

It is, we think, a fact of common knowledge in these Islands, and disclosed by the official reports and records of the administrative and legislative departments of the Government, that not merely the material welfare and future prosperity of this agricultural community were threatened by the ravages of the disease which swept away the work animals during the years prior to the enactment of the law under consideration, but that the very life and existence of the inhabitants of these Islands as a civilized people would be more or less imperiled by the continued destruction of large cattle by disease or otherwise. Confronted by such conditions, there can be no doubt of the right of the Legislature to adopt reasonable measures for the preservation of work animals, even to the extent of prohibiting and penalizing what would, under ordinary conditions, be a perfectly legitimate and proper exercise of rights of ownership and control of the private property of the citizen. The police power rests upon necessity and the right of self-protection and if ever the invasion of private property by police regulation can be justified, we think that the reasonable restriction placed upon the use of carabaos by the provision of the law under discussion must be held to be authorized as a reasonable and proper exercise of that power.

As stated by Mr. Justice Brown in his opinion in the case of Lawton vs. Steele (152 U.S., 133, 136):

The extent and limits of what is known as the police power have been a fruitful subject of discussion in the appellate courts of nearly every State in the Union. It is universally conceded to include everything essential to the public safely, health, and morals, and to justify the destruction or abatement, by summary proceedings, of whatever may be regarded as a public nuisance. Under this power it has been held that the State may order the destruction of a house falling to decay or otherwise endangering the lives of passers-by; the demolition of such as are in the path of a conflagration; the slaughter of diseased cattle; the destruction of decayed or unwholesome food; the prohibition of wooden buildings in cities; the regulation of railways and other means of public conveyance, and of interments in burial grounds; the restriction of objectionable trades to certain localities; the compulsary vaccination of children; the confinement of the insane or those afficted with contagious deceases; the restraint of vagrants, beggars, and habitual drunkards; the suppression of obscene publications and houses of ill fame; and the prohibition of gambling houses and places where intoxicating liquors are sold. Beyond this, however, the State may interfere wherever the public interests demand it, and in this particular a large discretion is necessarily vested in the legislature to determine, not only what the interests of the public require, but what measures are necessary for the protection of such interests. (Barbier vs. Connolly, 113 U. S., 27; Kidd vs. Pearson, 128 U. S., 1.) 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. The legislature may not, under the guise of protecting the public interests, arbitrarily interfere with private business, or impose unusual and unnecessary restrictions upon lawful occupations. In other words, its determination as to what is a proper exercise of its police powers is not final or conclusive, but is subject to the supervision of the court.

From what has been said, we think it is clear that the enactment of the provisions of the statute under consideration was required by "the interests of the public generally, as distinguished from those of a particular class;" and that the prohibition of the slaughter of carabaos for human consumption, so long as these animals are fit for agricultural work or draft purposes was a "reasonably necessary" limitation on private ownership, to protect the community from the loss of the services of such animals by their slaughter by improvident owners, tempted either by greed of momentary gain, or by a desire to enjoy the luxury of animal food, even when by so doing the productive power of the community may be measurably and dangerously affected.

Chief Justice Redfield, in Thorpe vs. Rutland & Burlington R. R. Co. (27 Vt., 140), said (p. 149) that by this "general police power of the State, persons and property are subjected to all kinds of restraints and burdens, in order to secure the general comfort, health, and prosperity of the State; of the perfect right in the legislature to do which no question ever was, or, upon acknowledge and general principles, ever can be made, so far as natural persons are concerned."

And Cooley in his "Constitutional Limitations" (6th ed., p. 738) says:

It would be quite impossible to enumerate all the instances in which the police power is or may be exercised, because the various cases in which the exercise by one individual of his rights may conflict with a similar exercise by others, or may be detrimental to the public order or safety, are infinite in number and in variety. And there are other cases where it becomes necessary for the public authorities to interfere with the control by individuals of their property, and even to destroy it, where the owners themselves have fully observed all their duties to their fellows and to the State, but where, nevertheless, some controlling public necessity demands the interference or destruction. A strong instance of this description is where it becomes necessary to take, use, or destroy the private property of individuals to prevent the spreading of a fire, the ravages of a pestilence, the advance of a hostile army, or any other great public calamity. Here the individual is in no degree in fault, but his interest must yield to that "necessity" which "knows no law." The establishment of limits within the denser portions of cities and villages within which buildings constructed of inflammable materials shall not be erected or repaired may also, in some cases, be equivalent to a destruction of private property; but regulations for this purpose have been sustained notwithstanding this result. Wharf lines may also be established for the general good, even though they prevent the owners of water-fronts from building out on soil which constitutes private property. And, whenever the legislature deem it necessary to the protection of a harbor to forbid the removal of stones, gravel, or sand from the beach, they may establish regulations to that effect under penalties, and make them applicable to the owners of the soil equally with other persons. Such regulations are only "a just restraint of an injurious use of property, which the legislature have authority" to impose.

So a particular use of property may sometimes be forbidden, where, by a change of circumstances, and without the fault of the power, that which was once lawful, proper, and unobjectionable has now become a public nuisance, endangering the public health or the public safety. Milldams are sometimes destroyed upon this grounds; and churchyards which prove, in the advance of urban population, to be detrimental to the public health, or in danger of becoming so, are liable to be closed against further use for cemetery purposes.

These citations from some of the highest judicial and text-book authorities in the United States clearly indicate the wide scope and extent which has there been given to the doctrine us in our opinion that the provision of the statute in question being a proper exercise of that power is not in violation of the terms of section 5 of the Philippine Bill, which provide that "no law shall be enacted which shall deprive any person of life, liberty, or property without due process of law," a provision which itself is adopted from the Constitution of the United States, and is found in substance in the constitution of most if not all of the States of the Union.

The judgment of conviction and the sentence imposed by the trial court should be affirmed with the costs of this instance against the appellant. So ordered.