KAMUNING THEATER, INC., DOING BUSINESS UNDER THE NAME AND STYLE OF PROJECT 4 MARKET AND LORETO F. STEWART, PETITIONERS, VS. QUEZON CITY AND NORBERTO S. AMORANTO, MAYOR OF QUEZON…

Appeal by certiorari from a decision of the Court of Appeals, reversing that
of the Court of First Instance of Rizal, in the above entitled case.

The facts are set forth in said decision of the Court of Appeals, from which
we quote:

“It appears that oil January 20, 1956, appellant Quezon City approved
Resolution No. 2496, authorizing petitioner-appellee, Loreto F. Stewart to
operate a ‘supermarket’ in Project 4, Quezon City as defined therein.

“In operating the supermarket, it was discovered that fresh fish, meat and
other perishable goods were sold in various stalls therein, unrefrigerated.

“On May 5, 1959, the respondent-appellant Quezon City Council approved
Resolution No. 4761, withdrawing from Mrs. Stewart the privilege of selling
unrefrigerated foodstuffs, such as fresh fish, meat, fruits, vegetables, poultry
products and other perishable goods, on grounds stated in the Resolution. In
this wise:

‘Whereas, on January 20, 1956, the City Council of Quezon City approved
Resolution No. 2496, authorizing Mrs. Loreto F. Stewart to operate a supermarket
in Project 4, Quezon City, under certain conditions:

‘Whereas, Mrs. Loreto F. Stewart has actually engaged in the sale of
foodstuffs, meat, fish, fresh vegetables, poultry products, and other perishable
goods an her supermarket which should properly be undertaken in a public
market;

‘Whereas, a public market within the vicinity of the Stewart Supermarket
(formerly known as Dimaculangan Market), constructed under the authority of the
City Council, is new open to the public and at which the sale of foodstuffs,
meat, fish, fresh vegetables, poultry products, and other perishable goods may
properly be undertaken;

‘Whereas, Mrs, Loreto F. Stewart has not complied with the provisions of
paragraph 5 of Resolution No. 2496 regarding the installation of equipment or
machinery for the refrigeration of perishable goods in her market, Now,
Therefore, be it

‘RESOLVED BY THE COUNCIL OF QUEZON CITY TO amend as it does hereby amend
Resolution No. 2496, series of 1956 authorizing Mrs. Loreto F. Stewart to
operate a supermarket in Project 4, Quezon City, so as to withdraw from the
operation of the said supermarket the sale of foodstuffs and other commodities
such as fish, fresh fruit, meat, vegetables, poultry products, and other
perishable goods, (pp. 14-15, Rec. on Appeal.)’

“On June 30, 1959, petitioners-appellees filed the present petition for
injunction, alleging that Resolution Numbered 4761 is null and void, it
being:

‘a) In violation of the ‘due process clause’ of Article II, Section 1,
paragraph 1, of the Philippine Constitution, for it deprives, the herein
petitioner, Kamuning Theater, Inc. of its rightful exercise of property rights,
which under the contract executed by and between the herein petitioner, Kamuning
Theater, Inc. and the respondent, Quezon City, the herein petitioner Kamuning
Theater, Inc. for valuable consideration, validity acquired from the respondent
Quezon City, the said right to sell perishable goods in its market; said
property right, therefore, constitutes vested right in favor of the herein
petitioner, Kamuning Theater, Inc.

‘b) In violation, of the equal ‘protection clause’ of Article III, Section 1,
paragraph 1 of the Philippine Constitution for it legislates a legitimate
private enterprise which is the herein petitioner, Kamuning Theater, Inc. cut of
business in favor of another privately owned enterprise engaged along the same
line of business, which is the Dimaculangan Market, although under paragraph 3
of Resolution Numbered 4761 the Dimaculangan Market was falsely, erroneously and
maliciously referred to as a private market; the truth of the matter is that the
Dimaculangan Market is a public market and not a private market, as alleged
under paragraph 3, of Resolution Numbered 4761.

‘c) In violation of Article II, Sestion I, paragraph 10 of the Philippine
Constitution for it impairs the obligation of contracts.

‘d) In violation of the generally accented principles of separaton of powers
of the three branches of the government, namely—the executive, legislative and
the judiciary.’

“On July 6, 1959, respondents resisted the action alleging that:

‘a. There was no contract entered into between her and the City Government.
Resolution Numbered 4761 contains certain conditions which Mrs. Stewart is at
liberty to reject or approve; and the fact that she had paid the annual license
fee of P3,000.00 does create an implied contract because this is not the only
condition imposed in the said resolution.

‘b. Assuming for the sake of argument that there is such a contract between
Mrs. Stewart and the City Government, the sarre did not include the right to
sell perishable goods because under the resolution, Mrs. Stewart was only
authorized to sell grorery goods, foodstuffs, dry goods, liquor and refrigerated
goods.

‘c. Again, assuming for the sake of argument, that there is such a contract.
Mrs. Stewart has consistently violated condition No. 5 of the resolution,
consequently, she cannot violate the contract and at the same time ask for its
enforcement.

‘d. Family, assuming that there is such a contract, Resolution Numbered 4761
whose enforcement is sought to be enjoined in this action is a valid exercise of
the police power, in ths interest of the public health.’

“On July 31, 1959, the lower court rendered judgment declaring Resolution
Numbered 4761 null and void and making the writ of preliminary injunction issued
earlier permanent, on the ground that petitioners had not violated the
conditions set forth in Resolution No. 4709, because the evidence showed that an
adequate refrigeration system had in fact been installed by
petitioners.”

However, the Court of Appeals, held that

“* * * the decisive issue in this case is not whether there was in fact a
refrigeration system in the supermarket of petitioner Mrs. Stewart, but whether
or not she was authorized to undertake the sale of fresh, unrefrigerated meats,
fish and other perishable foodstuffs, under the provisions of Resolution No.
2496.”

and that the latter question should be decided in the negative. Accordingly,
it reversed the decision of the court of first instance and dissolved the
injunction issued by the same, as well as rendered judgment dismissing the
petition, with costs against petitioners Kamuning Theater, Inc. and Loreto F.
Stewart. Hence, the latter have interposed the present appeal by certiorari, and
insist that the aforementioned Resolution No. 4761 violates the due process and
equal protection clause, as well as impairs a contractual obligation and
infringes Article 1191, paragraph 3, of the Civil Code of the Philippines, aside
from asserting that the Court of Appeals had evaded the real issue in this
case.

The last pretense is predicated upon the theory that the true issue is
whether or not petitioners herein had provided their supermarket with the
refrigeration equipment required in Resolution No. 2496. It is true that this
was one of the issues raised in the court of first instance and the Court of
Appeals, and that in an ocular inspection made on July 15, 1959, four (4)
freezers—one of which was not functioning—one refrigerator and (5) coca-cola
coolers, were found in the aforementioned supermarket. But, apart from the fact
that this circumstance does not necessarily show that said equipment were in
petitioners’ supermarket when Resolution No. 4761 was approved on May 5, 1959,
we find that the aforementioned statement of the Court of Appeals, as regards
the decisive issue in the case, is correct.

With respect to the validity of Resolution No. 4761, the Court of Appeals
said:

“Resolution No. 2496 of Quezon City, authorizing Mrs. Stewart to operate a
supermarket in Project 4, defines ‘supermarket’, as follows: ,

‘Supermarket is a place designated by municipal authorities of a city or of
an incorporated town for the sale of grocery goods, food stuffs, dry goods,
liquor, and other commodities such as meat, fresh fruits, poultry products, milk
and vegetables necessary or . convenient for the subsistence of the community
tftfit are refrigerated,’ (Italics supplied.)

“It is noted that Mrs. Stewart was authorized to operate, not a public
market, wherein fresh meat, fresh fish and other fresh perishable food-stuffs
are sold, .but only a ‘supermarket’ as defined in the Resolution. Indeed, even
without such definition, it is a matter of common knowledge that a supermarket
is quite different from what is commonly known as a general public market. A
supermarket is generally understood to be an establishment wherein canned goods,
dry goods and refrigerated meats and fish are sold. From the definition
above-quoted, it is seen that the City Council took pains to state that what may
be sold in said supermarket are, in addition to groceries, dry goods and liquor,
which by their very nature need not be refrigerated, ‘other commodities such as
meat, fresh fruits, poultry products, milk and vegetables * * * that are
refrigerated’. It is thus plain that what Mrs. Stewart was authorized to sell
was merely refrigerated meats, and other refrigerated foodstuffs. It did not
authorize, her to sell unrefrigerated fresh meat or fresh fish. Notwithstanding
lack of authority, however, Mrs. Stewart actually engaged in the sale of
unrefrigerated fresh meat, fish, vegetables and poultry products. It was
precisely to meet the situation that Resolution No. 4761 was enacted to
specifically prohibit Mrs. Stewart from undertaking the sale of such fresh
perishable meats and fish, thus:

RESOLVED BY THE COUNCIL OF QUEZON CITY to amend as it does hereby amend
Resolution No. 2496, series of 1956, authorizing Mrs. Loreto F. Stewart to
operate a supermarket in Project 4, Quezon City, so as to withdraw from the
operation of the said supermarket the sale of foodstuffs, and other commodifies
such as fish, fresh fruit, meat, vegetables, poultry products, and other
perishable goods.

“In prohibiting her from undertaking the sale of said unrefrigerated fresh
meat and other fresh perishable foodstuffs, Mrs. Stewart has absolutely no
reason to complain, because, as hereinabove pointed out, the only privilege
granted to her was to operate a supermarket wherein refrigerated meats and other
refrigerated foodstuffs may be sold. She was never authorized to sell
unrefrigerated fresh meat, fresh fish and other fresh perishable stuffs, the
sale of which is properly undertaken in ordinary public markets. Hence, when
Resolution No. 4761 was approved prohibiting her from selling unrefrigerated
fresh meat, etc. in her supermarket, she was not being deprived, of any right
granted her under Resolution No. 2496.

“Indeed, in the minutes of the session of the Quezon City Council held on May
5, 1959, introduced by petitioners-appeliees as Exhibit ‘G’, the following
remarks were made in connection with the assailed Resolution:

‘COUN. VELUZ:

* * * * * * *

This is not a question of withdrawing, because, really, as contained in the
original resolution, it is not the intention of the City Council for perishable
goods to be sold there and it is a matter of imposing a resolution which has not
been declared illegal. My question now is: Can the City Government just ignore
its own resolution? If it is a matter of accommodation, I believe since the
establishment, of this supermarket in 1954 up to the present, we have already
given so many accommodations. * * *

From the very beginning, this is known already. Precisely, if the City
Council yielded in 1954, it is because we believe that because of the expenses
which the owner had already incurred, the City Council would be fair and
considerate enough, and it has gone beyond the limit. If we perpetuate this, the
city will be deprived of its legitimate earnings from the public market;

* * * * * * *

‘Sapagkat dito naman ay hindi natin inuurong ang karapatan niyang magpalakad.
Ang hinihingi lamang ng resolusyon na ito, para maliwanagan na at katunayan
naman ay hindi sakop ng resolusyon ni Mrs. Stewart, ay ang ‘perishable goods’,
katulad ng karne, isda, itlog, gulay, at ibapa, ay nawala na o maalis sa kanyang
“supermarket” sapagka’t hindi naman kasama sa balak o doon sa unang
pinagkasunduan na ang ‘perishable goods’ ay malagay doon, kaya lamang ay
pinagkalooban siya nang ‘supermarket’.” (pieza of Exhibits, pp- 25-27 and 35.)

We fully agree with this view, with only one qualification. The Court of
Appeals considered Resolution No. 4761 as merely prohibiting petitioners from
selling ‘unrefrigerated fresh meat, fresh fish and other fresh
perishable stuffs”. However, the body of said resolution literally withdraws
“from the operation of the said supermarket the sale of foodstuffs and other
commodities such as fish, fresh fruit, meat, vegetables, poultry products and
other perishable goods”, without any qualification, and, hence, could be
understood as prohibiting the sale of the aforementioned goods, whether
refrigerated or not. To the extent that may be construed as excluding from
petitioners’ right the sale of said goods, even if refrigerated,
Resolution No. 4761 would amount, therefore, to a denial of due process and to
an infringement of the impairment clause, and, since, the alleged violation by
them of the terms of Resolution No. 4761, for failure to install the requisite
refrigeration system, has not been satisfactorily proven, we adopt the view
taken by the Court of Appeals in the sense that petitioners may not, under
Resolutions Nos. 2496 and 4761, sell fresh meat, fresh fish, fresh vegetables,
poultry products, foodstuffs and other perishable goods, but only when
unrefrigerated.

Petitioners invoke paragraph 3 of Article 1191 of the Civil Code of the
Philippines providing that:

“The court shall decree the rescission claimed, unless there be just cause
authorizing the fixing of a period.”

in support of the proposition that they should have been given a period
within which to comply with the requirements of Resolution No. 2496. This
pretense might have a semblance of validity if the issue were limited to whether
or not they had failed to equip their supermarket with the refrigeration system
required in said resolution. But, as already pointed out, the same never
authorized the petitioners to sell foodstuff, meat, fish, vegetables, poultry
products and other perishable goods which are not refrigerated. Hence, there
could be no possible extension of time for the sale of unrefrigerated perishable
goods.

With the aforementioned qualification that petitioners shall not be deemed
deprived of the right to sell foodstuffs, fresh meat, fresh fish, fresh
vegetables, poultry products and other perishable goods if refrigerated, the
decision of the Court of Appeals is hereby affirmed, therefore, without special
pronouncement as to the costs in this instance. It is so ordered.

Bengson, C. J., Padilla, Bautista Angelo, Labrador, Reyes, J.B.L.,
Barrera, Paredes, Dizon, Regala, and Makalintal. JJ., concur.,