ANTONIO J. VILLEGAS, HIMSELF A FILIPINO CITIZEN AND TAXPAYER, IN HIS OFFICIAL CAPACITY AS THE MAYOR OF THE CITY OF MANILA, PETITIONER, VS. CLAUDIO TEEHANKEE, IN HIS CAPACITY AS …

Villegas versus Teehankee

The Case

This is Villegas versus Teehankee, an original action in the Supreme Court. Antonio Villegas, suing both as a Filipino citizen and taxpayer and in his official capacity as Mayor of the City of Manila, asked the Court to strike down a directive issued by Assistant Executive Secretary Jose Leido Jr. by authority of the President. The directive ordered all departments, offices, and instrumentalities under the Executive Department, national and local, to act in conformity with the opinion of the Department of Justice that American citizens and juridical entities wholly owned by them are exempt from the Retail Trade Nationalization Act, Republic Act Number 1180, until the issues raised by what the parties called the Jarencio decision shall have been resolved by the Supreme Court. The case matters because it fixes the relationship between a local executive official and the President on questions of national policy, and because it shows the Court declining to render what would amount to a declaratory judgment.

Procedural History

The petition was filed directly in the Supreme Court as an original action, not as an appeal from any lower court. The Court heard the parties on the sixteenth of January, nineteen hundred sixty-seven, and the petitioner filed a memorandum. The Court then resolved the petition on its merits. There was no trial court ruling and no intermediate appellate ruling to review; the sole question was the validity of the executive directive as against the petitioner's claim that the Retail Trade Nationalization Act still governed American citizens and corporations wholly owned by them.

Facts

On the thirty-first of December, nineteen hundred sixty-six, Assistant Executive Secretary Jose Leido Jr., by authority of the President, issued a directive. It provided that until the issues raised by the Jarencio decision in the Philippine Packing Corporation case then pending in the Court of First Instance of Manila shall have been resolved by the Supreme Court, all departments, offices, and instrumentalities under the Executive Department, both national and local, shall act in conformity with the opinion of the Department of Justice. That opinion held that American citizens and juridical entities wholly owned by them are exempt from the operation of Republic Act Number 1180, the Retail Trade Nationalization Act.

Villegas, as Mayor of Manila and as a citizen and taxpayer, challenged the directive. He agreed with the Justice Department's opinion only to the extent that it implies that juridical entities controlled but not wholly owned by American citizens remain within the Act. He assailed the directive only insofar as it permits American citizens and corporations wholly owned by them to operate in the retail trade pending final determination by the Supreme Court.

His argument rested on the assumption that Republic Act Number 1180 was not affected by the Revised Trade Agreement between the Philippines and the United States of August first, nineteen hundred fifty-five, the Laurel-Langley Agreement, and by Republic Act Number 1355 authorizing the President to enter into that Agreement. The Court noted that the petitioner asserted only in general terms that the directive was contrary to law, without any specific argument or earnest effort to show that his contention was borne out by the Trade Agreement provision he invoked.

Issues

• Whether or not the directive of the Assistant Executive Secretary, by authority of the President, is valid insofar as it permits American citizens and corporations wholly owned by them to engage in the retail trade pending final resolution by the Supreme Court.
• Whether or not the Supreme Court may, in this original action, determine the issue of whether Republic Act Number 1180 has been affected by the Laurel-Langley Agreement and Republic Act Number 1355.
• Whether or not the petitioner has shown, even prima facie, that the opinion of the executive branch relied upon in the directive is contrary to law or null and void.

Applicable Provisions

Article Seven, paragraph one of the Philippine Trade Agreement of 1955, otherwise known as the Laurel-Langley Agreement, provides:

The Republic of the Philippines and the United States of America each agrees not to discriminate in any manner, with respect to their engaging in business activities, against the citizens or any form of business enterprise owned or controlled by citizens of the other and that new limitations imposed by either Party upon the extent to which aliens are accorded national treatment with respect to carrying on business activities within its territories, shall not be applied as against enterprises owned or controlled by citizens of the other Party which are engaged in such activities therein at the time such new limitations are adopted, nor shall such new limitations be applied to American citizens or corporations or associations owned or controlled by American citizens whose States do not impose like limitations on citizens or corporations or associations owned or controlled by citizens of the Republic of the Philippines.

This is the very provision on which the petitioner rested his claim that the Retail Trade Nationalization Act could not bar American citizens and wholly owned American corporations from the retail trade, and it is the provision the Court found he failed to square with his general assertion that the directive was contrary to law.

Ruling

On the first issue, the Court upheld the directive. It held that Republic Act Number 1180, Republic Act Number 1355, and the Trade Agreement involve national policies the enforcement of which is one of the main duties imposed by the Constitution upon the President. The President's decisions, views, or opinions thereon, unless and until voided or modified by final judgment of a competent court in appropriate cases, should prevail over those of local executive officials such as the Mayor of Manila, and are binding upon the latter.

On the second issue, the Court held that a determination of the issue raised by the petitioner would amount to a declaratory judgment, which is admittedly beyond the original exclusive jurisdiction of the Court to render. Such a determination would also, in effect, foreclose a similar adjudication of the same issue in about twenty cases then pending in courts of first instance, involving corporations which are not parties to this proceeding and which would be denied due process of law if the relief prayed for were granted.

On the third issue, the Court held that the petitioner, apart from merely asserting in general terms that the contested directive is contrary to law, had not adduced any specific argument or even exerted an earnest effort to show that this contention is borne out by the quoted provision of the Philippine Trade Agreement of 1955. He thus failed to show, even prima facie, that the view and opinion of the executive branch is contrary to law, much less null and void.

Doctrine

First, on matters involving national policies, the decisions, views, or opinions of the President prevail over those of local executive officials, such as a city mayor, unless and until voided or modified by final judgment of a competent court in an appropriate case, and are binding upon those officials.

Second, the Supreme Court will not, in an original action, render a declaratory judgment on the proper interpretation of a statute and a trade agreement where that is beyond its original exclusive jurisdiction, especially where the determination would foreclose the adjudication of the same issue in pending cases involving parties not before the Court, who would thereby be denied due process of law.

Third, a party who asserts only in general terms that an executive directive is contrary to law, without specific argument tying his contention to the very provision he invokes, such as Article Seven, paragraph one of the Laurel-Langley Agreement, fails to overcome the presumption that the executive's view is lawful.

Disposition

The petition was dismissed and the writs prayed for were denied, without prejudice to a more extended opinion and to passing, in appropriate proceedings, upon the proper interpretation of the statutes and the Trade Agreement and the merits of the stand taken in the opinion relied upon in the contested directive.

Remember This

Memorize this line: the President's decisions, views, or opinions on national policies prevail over those of local executive officials unless and until voided by final judgment of a competent court, and are binding upon the latter. Examiners use this case on the hierarchy between national and local executive officials, on the Court's refusal to render declaratory judgments in original actions, and on the due process objection to adjudicating issues that would bind non-parties in pending cases.