FRANCISCO JAVIER AND ROMAN OZAETA, PLAINTIFFS AND APPELLANTS, VS. TOMAS EARNSHAW, MAYOR OF THE CITY OF MANILA, DEFENDANT AND APPELLEE.

The plaintiffs commenced this action in the
Court of First Instance of Manila to restrain the defendant from
cancelling the permit or license issued by him for the installation and
operation of a gasoline pump and underground tank at the corner of
Kansas Avenue and Tennessee Street. They appealed from the judgment
dismissing their, complaint, without costs.

The plaintiffs, being the owners of a parcel of land situated at
the corner of Kansas Avenue and Tennessee Street, Manila, entered into
a contract with the Asiatic Petroleum Co. (P. I.), Ltd., whereby the
latter would provide them with a pump, underground tank and gasoline on
the land in question, for the exclusive use of the motor vehicles of
the Makabayan Taxicab Co., Inc., operated by the plaintiffs, and would
obtain the necessary license from the defendant mayor. On April 25,
1934, the plaintiffs addressed to the mayor a letter, copy of which ia
Exhibit A-l, stating the contract entered into between them and the
Asiatic Petroleum Co. (P. L), Ltd., and applying for the granting of a
license to said company to install in their lot situated at the corner
of Kansas Avenue and Tennessee Street a gasoline pump and an
underground tank for the exclusive use of the motor vehicles of the
Makabayan Taxicab Co., Inc., owned by them. On the following day, the
Asiatic Petroleum Co. (P. I.), Ltd., addressed another communication to
the mayor, copy of which is Exhibit A, applying for a permit to install
in said premises of the plaintiffs a gasoline pump and an underground
tank for the exclusive use of the motor vehicles of the Makabayan
Taxicab Co., Inc. The application was endorsed to the chief of police,
the chief of the Fire Department and the city engineer, and the mayor,
after obtaining favorable endorsements, granted the permit. On May 8,
1934, the mayor and the Asiatic Petroleum Co. (P. I.), Ltd., entered
into a contract in writing, copy of which is Exhibit D, by virtue of
which the City of Manila granted to said company permission to install
a gasoline pump and an underground tank in the premises of the
plaintiffs, for the exclusive use of the motor vehicles of the
Makabayan Taxicab Co., Inc. One of the conditions imposed in the
contract is that the permit was nontransferable and that it was
revocable at the expiration of 30 days from notice to the
concessionaire. The pump and the tank were installed and the plaintiffs
used them for some time to provide gasoline exclusively for the motor
vehicles of the Makabayan Taxicab Co., Inc. Sometime later, however, as
the plaintiffs had succeeded in having the office of the city treasurer
insert the word “sells” (which should read “sales”) in the receipt
issued by it for payment of the license tax, they began to sell
gasoline to the public, thereby giving rise to protests from the
operators of the Socony Gasoline Station situated at the corner of Taft
Avenue and Herran Street. The complaint was investigated and not only
was it proven but the plaintiffs themselves also admitted that they
were really selling gasoline to the public. As a consequence of the
result of the investigation, the mayor, on June 9, 1934, sent a letter
to the Asiatic Petroleum Co. (P. I.), Ltd., copy of which is Exhibit F,
requiring it to show cause within five days why the license issued to
it should not be cancelled for violation of the condition not to sell
gasoline to the public. The requirement “was endorsed to the plaintiffs
who gave their explanations in their letter of June 11, 1934, copy Of
which is Exhibit G. The explanations given by the plaintiffs not having
been satisfactory, and they having admitted the violation of the
condition by acknowledging that they have been selling gasoline to the
public, the mayor, on July 16, 1934, sent another letter to the
plaintiffs advising them that after 15 days from the receipt of said
letter by them, he would order the cancellation of the permit, which he
in fact decided to do, and the permit was cancelled. The plaintiffs
subsequently filed the petition for a writ of preliminary injunction
against the defendant, with the result already stated at the beginning
of this decision. The court, upon the bond filed by the plaintiffs,
issued the writ of preliminary injunction applied for, which continues
to be in force by reason of this appeal.

I. In their first assignment of error, the plaintiffs contend that
the court erred in avoiding the main issue raised by them relative to
their assertion that ordinance No. 1985 of the City of Manila, and
particularly paragraph 3 of section 1 thereof, is invalid. This
assignment of error is without merit because it appears from the
appealed decision, page 19 of the bill of exceptions, that the court
directly resolved the alleged unconstitutionally ..and nullity of the
entire ordinance and declared it to be valid, it not being true, as the
plaintiffs claim, that the sale of gasoline is prohibited thereby but
merely regulated by the imposition of certain conditions. It will
likewise be seen from that part of said decision that the court
declared the ordinance to be valid because the City of Manila
promulgated it in the exercise of its police power and in conformity
with the power vested in it by paragraphs (u), (m) and (ee) of section 2444 of the Revised Administrative Code.

II. In their second assignment of error, the plaintiffs contend
that paragraph 3 of section 1 of ordinance No. 1985 of the City of
Manila is unconstitutional for the following reasons: (a)
because in prohibiting the installation of gasoline stations within a
distance of 500 meters from another, it violates paragraph (m)
of section 2444 of the Revised [Administrative Code, as amsended by Act
No. 3669, which merely empowers the municipal board of the City of
Manila to fix the location of, tax, fix the license fee for and
regulate the business of the storage and sale of gasoline; (b)
because the purpose and effect of said ordinance is to prevent free
competition in the sale of gasoline, and therefore it is detrimental to
the public interest and contrary to the policy laid down by the
Philippine Legislature in Act No. 3247; (c) because to
prohibit the sale of gasoline in a safe and suitable place within the
distance of 500 meters from an existing gasoline station constitutes in
effect an unreasonable restraint of trade; (d) because said
ordinance deprives the people living within the radius of 500 meters
from two gasoline stations of equal opportunity and equal right to
engage in the legitimate business of the sale of gasoline; (e)
because said ordinance deprives the plaintiffs and other persons
similarly situated of the full use and enjoyment of their own property,
and (f) because said ordinance is arbitrary, unreasonable and discriminatory.

The ordinance in question fully reads as follows:

“[ORDINANCE No. 1985]

“AN ORDINANCE PRESCRIBING THE RULES AND REGULATIONS
IN CONNECTION WITH THE GRANTING OF PERMITS FOR THE INSTALLATION OF
GASOLINE PUMPS AND GASOLINE STATIONS IN THE CITY OF MANILA, AND FOR
OTHER PURPOSES.

“Be it ordained by the Municipal Board of the City of Manila, that:

“SECTION 1. The following rules and regulations are hereby prescribed
in connection with the granting of permits for the installation of
gasoline pumps and gasoline stations in the City of Manila:

” (1) That all existing curb pumps and gasoline stations will be
permitted to stay in their present locations, the city reserving the
right to revoke any permit, (a.) when deemed advisable; (b) in case of change of ownership; and (c) in case of violation of the rules and regulations embodied herein;

“(2) That hereafter no curb pumps will be permitted to be installed at the corner of any street in the city;

“(3) That no gasoline station will be permitted to be installed within
a distance of five hundred meters from any existing gasoline station;
and

“(4) That no gasoline pump or station will hereafter be
permitted to be installed on the following streets: Taft Avenue, Muelle
del Banco Nacional, Dasmarinas, Mendiola, A. Mabini, Dewey Boulevard,
Herran, Isaac Peral, Canonigo, Tejeron, Juan Luna, Rizal Avenue, Santa
Mesa, Espafia, Legarda, G. Tuason, Buenavista and P. Sanchez, but
gasoline pumps will be permitted to be installed for private use on
such streets, the location of same to be not less than five meters from
the curb street line.

“SEC. 2. This Ordinance shall take effect on its approval.”

By carefully reading the ordinance, it will be seen that the
purpose thereof, as its title indicates, is to prescribe rules for the
granting of permits for the installation of gasoline pumps and gasoline
stations in the City of Manila. It is not true that the ordinance, as a
whole prohibits the sale of gasoline in the city. The ordinance
classified gasoline pumps into those installed for private use and
those installed for the sale of gasoline to the public, the latter
being denominated by it gasoline stations. While paragraph 3 of section
1 employs the verb “permit” which is the opposite of the verb
“prohibit”, it confines itself to providing a rule for the installation
of gasoline stations within the City of Manila and merely prescribes
that such stations shall not be installed within the distance of 500
meters from each other. Under this provision any inhabitant of the city
may install as many gasoline stations as he wishes provided he keeps
the prescribed distance. Paragraph 4 prohibits the installation of
gasoline stations on the streets enumerated therein but permits the
installation of pumps for private use, not intended for the sale of
gasoline to the public.

The power of the municipal board of the City of Manila to enact
ordinance No. 1985 is derived from the provision of section 2444,
paragraph (m), of the Revised Administrative Code, as amended by Act No. 3669, the pertinent part of which reads as follows:

“SEC. 2444. General powers and duties of the Board.—
Except as otherwise provided by law, and subject to the conditions and
limitations thereof, the Municipal Board shall have the following
legislative powers:

* * * * * * *

“(m) To tax, fix the license fee and
regulate the business of * * * the storage and sale of * * * gasoline;”
said power emanates from the police power of the Philippine Legislature
delegated to the board.

“The police power extends to the
prevention and abatement of nuisances. The legislature, within the
limitations hereinafter noted, may prescribe what shall constitute a
nuisance. It may change the common law as to nuisances and hence it may
make things nuisances which were not so at common law, or nuisances per
se, although by so doing it affects the use or value of property; and
similarly within its constitutional limitations the legislature may
make things lawful which were nuisances at common law, although by so
doing it affects the value or use of property. The legislature may
declare places, where acts forbidden by law are committed, to be
nuisances. It may prescribe the method for the abatement of nuisances,
as, for instance, for summary abatement. Also it may confer
jurisdiction on courts of equity to abate nuisances.” (46 C. J., sec.
14, pp. 651, 652; Northwestern Laundry vs. Des Moines, 239 U. S., 486; U. S. vs. Reisenweber, 288 Fed., 520; Pompano Horse Club, Inc. vs. State, 111 S., 801; Pittsburg, etc., R. Co. vs. Brown, 33 Am., Rep., 73, Fevoid vs. Webster County, 210 N. W., 139.)

“The keeping or storage of gasoline may constitute a nuisance, either
private or public. Whether or not it becomes a nuisance depends upon
the location, the quantity, and other surrounding circumstances. While
it would not necessarily depend upon the degree of care used in the
storage, the manner in which the tanks are constructed and operated may
be considered.” (46 C. J., p. 710; Whittemore vs. Baxter Laundry Co., 148 N. W., 437; McGuffey vs. Pierce-Fordyce Oil Assoc, 211 S. W., 335.)

“It is a weir recognized function of the police power to promote the
public safety by regulating dangerous occupations, restraining
dangerous practices, and prohibiting dangerous structures.” (12 C. J.,
sec. 426, p. 916; Lawton vs. Steele, 152 U. S., 133; Barbier vs. Connolly, 113 U. S., 27; Patterson vs. Kentucky, 97 U. S., 501; Boston Beer Co. vs. Massachusetts, 97 U. S., 25; Hannibal, etc., R. Co. vs. ffusen, 96 U. S., 465; Electric Impr. Co. vs. San Francisco, 45 Fed., 593; State vs. Kansas City, etc., R. Co., 32 Fed., 722.)

“The storing, handling, and use of inflammable and explosive
substances, being attended with danger, may be regulated under the
police power. Thus the explosion of fireworks may be prohibited; and it
is within the police power of a municipality, when it is deemed
necessary for public safety, to prohibit the blasting of rocks with
gunpowder within the city limits without the written consent of the
board of aldermen.” (12 C. J., p. 917; Union Oil Co. vs. Portland, 198 Fed., 441; Tannenbaum vs. Rehn, 44 S., 532; Standard Oil Co. vs. Danville, 64 N. E., 1110; Standard Oil Co. vs. Com., 82 S. W., 1020; Peo. vs. Lichtman, 65 N. E., 854; New York City Fire Dept. vs. Gilmour, 44 N. E., 177; Foote vs. New York Fire Dept, 5 Hill [N. Y., 99.)

“Cities and towns have power, under the general welfare provisions of
statutes and charters, to enact reasonable ordinances relating to the
selling and distribution of oil, gasoline, and other petroleum
products, within their boundaries, defining where and how filling
stations may be constructed and operated, and regulating the use of
driveways across sidewalks to such stations; and a vested right cannot
be asserted against the proper exercise of such police power.” (42 C.
J., sec. 1213, p. 1305; Mclntosh vs. Johnson, 105 N. E., 414; Gulf Refining Co. vs. McKernan, 102 S. E., 505; Herring vs. Stannus, 275 S. W., 321; Sander vs. Blytheville, 262 S. W., 23; State vs. Fleming, 225 Pac, 647.)

“An ordinance forbidding the granting of a permit or license for such
& station in any location where, by reason of traffic conditions or
fire hazards, it would imperil the public safety, or authorizing the
denial of the same if such station is found to be against the public
interest, is a proper exercise of the police power, and is not invalid
as denying the equal protection of the law or leaving the granting or
refusal of the permit to the arbitrary will of the municipal officials
charged with the issuance thereof.” (42 C. J., p. 1306; State vs. Fleming, supra.)

According to the above-cited authorities, it is evident that the
municipal board of the City of Manila had the power to enact ordinance
No. 1985 by virtue of the police power delegated to it by the
Legislature, and, consequently, said ordinance is valid and binding.

The plaintiffs claim that the mayor of Manila had no power either
to enforce the ordinance in question or to cancel the permit granted by
him to the Asiatic Petroleum Co. (P. I.), Ltd. Their contention,
however, is in conflict with the provisions of section 2434 (b), paragraphs (a) and (m)
of the Revised Administrative Code, as amended, which expressly confer
upon him said powers. Said legal provisions read as follows :

“SEC. 2434 (b). General duties and powers of the Mayor.—The general duties and powers of the mayor shall be:

” (a) To comply with and enforce and give the necessary orders for the
faithful enforcement and execution of the laws and ordinances in effect
within the jurisdiction of the city.

* * * * * * *

” (m) To grant and refuse municipal
licenses or permits of all classes and to revoke the same for violation
of the conditions upon which they were granted, or if’ acts prohibited
by law or municipal ordinance are being committed under the protection
of such licenses or in the premises in which the business for which the
same have been granted is carried on, or for any other good reason of
general interest.”

It will be remembered that the permit was granted with the express
condition1 that the gasoline to be facilitated by the pump and the tank
would be for the exclusive use of the motor vehicles of Makabayan
Taxicab Co., Inc., and that it would not be sold to the public because
the place where the pump and the tank were installed was within the
prohibited zone of 500 meters from the Shell Gasoline Station, the
nearest gasoline station. Inasmuch as said condition was openly
violated and the City of Manila having reserved the right to revoke the
permit for violation of any of the conditions imposed, it is clear that
the mayor, in compliance with his duties, had the power to cancel the
permit.

The ordinance in question does not prevent reasonable and free
competition in the sale of gasoline and, therefore is not in conflict
with the purposes of Act No. 3247. Under it, everybody may engage in
the sale of gasoline and may install gasoline stations provided the
same are established outside the prohibited distance of 500 meters.

Neither does it constitute an unreasonable and arbitrary restraint
of trade because it does not absolutely prohibit the sale of gasoline
by means of appropriate pumps and stations within the City of Manila.
What it prohibits is the installation of pumps and stations for the
sale of gasoline to the public within the distance of 500 meters from
each other, and this constitutes a reasonable regulation (U. S. vs.
Ling Su Fan, 10 Phil., 104; 278 U. S., 302; 54 Law. ed., 1049). But
granting that it has such effect, the measure is valid and legal
because it is reasonable, tends to protect the public and is based upon
the police power vested in the municipal board of the City of Manila.
“On the ground of preventing or abating nuisances, the state or
municipality may, in the exercise of the police power, prohibit or
regulate the transaction of business in such places or manner as
constitutes a nuisance, although it may not by mere fiat make that a
nuisance which is not in its real nature a nuisance. The power of the
state, however, to regulate occupations and business is not based
exclusively on its authority to prevent and abate nuisances. A business
or occupation is not exempt from regulation by the mere fact that it is
lawful, or that its exercise or conduct does not constitute a nuisance
per se. It is within the province of the police power to regulate all
professions, trades, occupations, and business enterprises that are of
a quasi public nature, or that may, if exercised or conducted without
restriction, prove injurious to the public health, safety, or morals,
or to the general welfare. The doctrine is well established that to the
extent that property or business is devoted to the public use or is
affected with a public interest, it is subject to regulation under the
police power.” (12 C. J., sec. 431, pp. 922, 923; Yick Wo vs. Hopkins, 118 U. S., 356; Stockton Laundry Case, 26 Fed., 611; Ex parte Hadacheck, 165 Cal., 416; Ex parte Lacey, 108 Cal., 326; Houston, etc., R. Co. vs. Dallas, 84 S. W., 648; Terr vs. Denver, etc., R. Co., 203 U. S1., 38; Munn vs. Illinois, 94 U. S., 113; Union Oil Co. vs. Portland, 198 Fed., 441; Arkansas vs. Kansas, etc., Coal Co., 96 Fed., 353; Humes vs. Ft. Smith, 93 Fed., 857; Louisville, etc., R. Co. vs. Tennessee R. Commn., 19 Fed., 679; New Orleans Water-Works Co. vs. St. Tammany Water-Works Co., 14 Fed., 194.)

The municipal board of the City of Manila, in the exercise of the
police power, may reasonably regulate professions and business
enterprises within its territorial limits when the public health,
safety and welfare so demand. The ordinance in question is of this
nature and, therefore, is not illegal. “The conduct of particular kinds
of business which may injuriously affect the health, safety, comfort,
or morals of the people of the community may be forbidden within
certain territorial limits; and a state may prohibit the sale of any
goods near a place in which a religious society is holding an outdoor
meeting, or may forbid traffic of a harmful nature near institutions of
learnings, asylums, prisons, soldiers’ homes, state capitol grounds,
and kindred places.” (12 C. J., sec. 1076, p. 1275; Hadacheck vs. Sebastian, 239 U. S., 394; Ex parte Quong Wo, 161 Cal., 220.)

Likewise, the municipal board of the City of Manila, by virtue of
the police power, may reasonably regulate the use of private property
whenever such measure is required by the public health and safety, and
the welfare of its inhabitants (Fabie vs. City of Manila, 21 Phil., 486; Kwong Sing vs. City of Manila, 41 Phil., 103; Manigault vs. Ward, 123 Fed., 707′; Ex parte Yun Quong, 114 Pac, 835; Sierra County vs. Flanigan, 87 Pac, 913; Plumasi County vs.
Wheeler, 87 Pac, 909). The ordinance under consideration prohibits the
installation of gasoline stations within the distance of 500 meters
from each other not only to prevent ruinous competition among merchants
engaged in this kind of business but also to protect the public from
any harm or danger that may be occasioned by said inflammable substance.

Lastly, the ordinance is not arbitrary, unreasonable or
discriminatory because, as already stated, it was enacted by the City
of Manila in the exercise of the police power delegated to it by the
Legislature, it tends to protect the inhabitants thereof from the
dangers and injuries that may arise from the inflammable substance, and
the measure is general and applicable to all persons in the same
situation as the plaintiffs.

III. After measurements had been made, it was found out that the
distance from the station operated by the plaintiffs to the Shell
Gasoline Station, on Taft Avenue, is only 440.26 meters, such
measurement having been made along the streets and not in a straight
line, and that the distance from the same station to the Socony Service
Station situated at the corner of Taft Avenue and Herran Street is
501.16 meters, such distance having been measured along the streets and
not in a straight line. Upon this result, the plaintiffs maintain in
their third assignment of error that, granting paragraph 3 of section 1
of the ordinance in question to be valid, their gasoline station does
not violate the provisions thereof. The contention is untenable because
it is evident that the Shell Gasoline Station on Taft Avenue is within
the prohibited distance. It is of no avail to argue that the latter
station also belongs to the Asiatic Petroleum Co. (P. I.), Ltd.,
because, as already stated, the purpose of the ordinance is not solely
to prevent ruinous competition among merchants, but also, and more
principally, to protect the public health, safety and welfare.
Furthermore, it is not true that there can be no ruinous competition
between the two neighboring1 stations because, although they belong to
one and the same owner, the fact is that they are operated and managed
by different persons or entities who, independently of the Asiatic
Petroleum Co. (P. I.), Ltd., work for the purpose of obtaining profits
for themselves.

IV. The plaintiffs allege that Title 10 of the Revised Ordinances,
which deals with the sale of gasoline within the City of Manila, does
not require the holding of a license for said kind of business. They
likewise invoke the testimony of Tomas Corpus, an employee of the
office of the city treasurer, who testified that in practice said
office requires no license when collecting a privilege tax. The
plaintiffs conclude therefrom that in the City of Manila it is not
necessary to obtain a license to sell gasoline and on this theory they
base their fourth assignment of error. To obtain a permit or license to
sell gasoline is one thing, and to pay the fees corresponding to said
license is another. According ,to section 2434 (b), paragraph (w), of
the Revised Administrative Code, as amended, the issuance of a permit
or license to sell gasoline rests with the mayor while the collection
of the fees for the license so issued devolves upon the city treasurer.
For this reason, the fact that the plaintiffs, through error, succeeded
in having the word “storage” crossed out and the word “sells”, which
should correctly read “sales”, substituted in lieu thereof in the
receipt of payment by the employee; Corpus, is of no importance or
value. Said employee had no authority to issue a license. His entire
duty consisted in collecting the fees fixed by the ordinances. That the
plaintiffs themselves recognized the authority of the mayor to issue
licenses and to revoke them for just causes is shown by the fact that
they applied to him, through the Asiatic Petroleum Co. (P. I.), Ltd.,
to secure said license and to avoid the revocation thereof.

V. The court held that the plaintiffs were not the ones called upon
to bring the action instituted by them because they were not the
concessionaires, but the Asiatic Petroleum Co. (P. I.), Ltd., in whose
favor the license was issued. The fifth assignment of error of the
plaintiffs is directed against this ruling. Without entering upon
lenghty considerations, which this court deems unnecessary, it is
hereby held that the assignment of error is well taken. This court
holds that the plaintiffs may maintain this action because they are a
necessary and interested party to the case, being the direct
beneficiaries of the license issued in favor of the Asiatic Petroleum
Co. (P. I.), Ltd.

VI. The sixth and last assignment of error requires no further
discussion. It is a corollary of the former ones and is decided by
inference.

For all the foregoing considerations, and upon the ground
above-stated, the appealed judgment is affirmed, and the writ of
preliminary injunction issued by the court is set aside, with the costs
of this instance to the plaintiffs-appellants. So ordered.

Avancena, C. J., Villa-Real, Abad Santos, Diaz, Laurel, and Concepcion, JJ., concur.