G.R. No. L-42571-72 July 25, 1983
VICENTE DE LA CRUZ, ET AL., petitioners, vs. THE HONORABLE EDGARDO L. PARAS, MATIAS RAMIREZ, MARIO MENDOZA, and THE MUNICIPAL COUNCIL OF BOCAUE, BULACAN, respondents.

FACTS

Petitioners, operators and employees of night clubs in Bocaue, Bulacan, assailed Municipal Ordinance No. 84, Series of 1975, which prohibited the operation of night clubs, cabarets, and dance halls and revoked existing licenses. The ordinance defined these establishments and the employment of hostesses, declaring them a principal cause of moral decadence. It prohibited the issuance and renewal of all relevant licenses and revoked existing ones after a 30-day winding-up period, with violations punishable by fine or imprisonment.
Petitioners filed cases for prohibition with preliminary injunction before the Court of First Instance of Bulacan, arguing the municipality lacked authority to prohibit a lawful business, that the ordinance violated due process and equal protection by withdrawing licenses without a hearing, and that regulatory power over such tourist-oriented businesses had been transferred to the Department of Tourism under Presidential Decree No. 189. The lower court upheld the ordinance, prompting this certiorari proceeding.

ISSUE

Whether a municipal corporation has the power to enact an ordinance that absolutely prohibits the lawful business of operating night clubs and the lawful occupation of employment therein.

RULING

No. The Supreme Court granted the petition and declared Ordinance No. 84 void and unconstitutional. The Court clarified that municipal corporations, as agents of the state, possess only such powers as are expressly granted to them by law or are necessarily implied therefrom. The power to regulate a business or occupation does not encompass the power to prohibit it outright, unless such power is expressly conferred by statute. The Court examined the relevant laws, including the Revised Administrative Code and Republic Act No. 938 (the Municipal License Tax Law), and found no legislative grant authorizing a municipality to prohibit a lawful trade like operating night clubs.
The Court distinguished between regulation and prohibition, citing precedents like United States v. Abendan and Salaveria v. Yturralde. While a municipality may regulate to address potential evils associated with a business, it cannot suppress the business itself if it is not intrinsically illegal. The ordinance’s sweeping prohibition, based on a generalized claim of moral decadence, overstepped municipal authority. The Court did not reach the constitutional due process and equal protection arguments, as the ordinance was invalidated for ultra vires enactment. The temporary restraining order was made permanent.