CARLOS BALACUIT vs. COURT OF FIRST INSTANCE OF AGUSAN DEL NORTE AND BUTUAN CITY, Branch 11, and the CITY OF BUTUAN, G.R. No. L-38429 June 30, 1988

Facts:
Municipal Board of the City of Butuan on April 21, 1969 enacted an ordinance entitled ORDINANCE PENALIZING ANY PERSON, GROUP OF PERSONS, ENTITY OR CORPORATION ENGAGED IN THE BUSINESS OF SELLING ADMISSION TICKETS TO ANY MOVIE OR OTHER PUBLIC EXHIBITIONS, GAMES, CONTESTS OR OTHER PERFORMANCES TO REQUIRE CHILDREN BETWEEN SEVEN (7) AND TWELVE (12) YEARS OF AGE TO PAY FULL PAYMENT FOR TICKETS INTENDED FOR ADULTS BUT SHOULD CHARGE ONLY ONE-HALF OF THE SAID TICKET.

Petitioners are Carlos Balacuit Lamberto Tan, and Sergio Yu Carcel managers of the Maya and Dalisay Theaters, the Crown Theater, and the Diamond Theater, respectively. Aggrieved by the effect of Ordinance filed a complaint before the Court of First Instance of Agusan del Norte and Butuan City praying, inter alia, that the subject ordinance be declared unconstitutional and, therefore, void and unenforceable.

Upon motion of the petitioners, a temporary restraining order by the court a quo enjoining the respondent City of Butuan and its officials from enforcing the Ordinance. Respondents filed their answer sustaining the validity of the ordinance.

The court ruled in favor of the Respondent. Petitioners filed their motion for reconsideration of the decision of the court a quo which was denied
Hence, this petition.

Issue:
Whether the CFI erred in upholding the validity and constitutionality of Ordinance No. 640 despite it is ultra vires and an invalid exercise of police power.

Held:
Yes, To invoke the exercise of police power, not only must it appear that the interest of the public generally requires an interference with private rights, but the means adopted must be 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 interest, arbitrarily interfere with private business, or impose unusual and unnecessary restrictions upon lawful occupations. In other words, the determination as to what is a proper exercise of its police power is not final or conclusive, but is subject to the supervision of the courts.

Petitioners maintain that Ordinance No. 640 violates the due process clause of the Constitution for being oppressive, unfair, unjust, confiscatory, and an undue restraint of trade, and violative of the right of persons to enter into contracts, considering that the theater owners are bound under a contract with the film owners for just admission prices for general admission, balcony and lodge.

The authority of municipal corporations to regulate is essentially police power, Inasmuch as the same generally entails a curtailment of the liberty, the rights and/or the property of persons, which are protected and even guaranteed by the Constitution, the exercise of police power is necessarily subject to a qualification, limitation or restriction demanded by the regard, the respect and the obedience due to the prescriptions of the fundamental law, particularly those forming part of the Constitution of Liberty, otherwise known as the Bill of Rights — the police power measure must be reasonable. In other words, individual rights may be adversely affected by the exercise of police power to the extent only — and only to the extent–that may be fairly required by the legitimate demands of public interest or public welfare.